Paul Wolfowitz made an unexpected visit to the Chadian capital N’Djamena on Thursday for talks with the country’s president, Idriss Deby.
“I think we found a way to accomplish a common objective to ensuring that the resources of the country are dedicated most of all to alleviating poverty,” Wolfowitz said after the meeting.
It was Wolfowitz’s first visit to the African country since he suspended $124 million loans to Chad in January.
He also froze profits from the Doba oil pipeline in a dispute over the government’s move to scrap a law that ensured oil revenues would be spent on the poor, which is a key condition of World Bank support.
The two sides then signed an interim agreement in April that restored the loans.
Chad signed a memorandum of understanding with the World Bank last week, under which Chad committed itself to allocating 70 percent of all its budgetary resources in 2007 to reducing poverty.
After receiving confirmation that Chad’s government had modified its budget law on Wednesday, Wolfowitz told Reuters he had decided to include N’Djamena at the last minute in a tour of African nations he is making in order to thank Deby personally.
Under the new accord, Chad will also provide for long-term growth by creating a stabilisation fund as well as setting aside money to be used after the oil fields run dry.
Chad began oil production in 2003, but its fields are expected to empty out within the next 26 years.
The poverty reduction programmes cover health, education, agriculture, infrastructure, environment, rural development, land-mine removal and good governance.
Government finances have been strained recently by a rebel insurgency in the east and thousands of Sudan’s Darfurians fleeing into Chad after escaping the conflict in neighbouring Darfur.
Chad’s oil minister, Mahamat Nasser Hasane, said earlier this month that output could reach 200,000 barrels per day by the end of the year, following the start of output at Exxon Mobil’s Maikeri field.
Chad, most of whose ethnically-mixed population remains poor despite the start up of oil production, was last year ranked the world’s most corrupt state in a Transparency International survey.