‘Fool’s bargain’

24 February 2024

‘Fool’s bargain’

The secret payments behind the deal that brought a country to its knees

Glencore’s mega-loan was supposed to supercharge Chad’s faltering economy—but wreaked havoc instead. There was more to the deal than meets the eye.

Even in an industry noted for audacious deals, this one was notorious. 

Chad, one of Africa’s poorest countries, borrowed one and a half billion dollars—equivalent to half its national budget—from the world’s biggest commodities trader, Glencore. The loan was to be repaid in oil. 

When suddenly, just weeks after the agreement in 2014, oil prices crashed, Chad was plunged into crisis. Instead of using a fraction of its oil output to pay Glencore back, the state was now handing over almost all of its national production.

With little left over to pay the bills, the government enacted swingeing austerity measures to stay solvent. Student fees doubled. The health budget was slashed in half. In 2018 police beat and tear-gassed hungry protesters on the streets of the capital, N’Djamena.

Chad had made a “fool’s bargain”, said the president at the time, Idris Déby, questioning publicly whether illegal commissions had been paid to usher through the ruinous deal.    

Now an investigation by SourceMaterial suggests that this may have been the case. Leaked documents reveal millions of dollars in secret payments to a middleman who for official purposes was Chad’s representative in negotiations—but was secretly working for Glencore. 

Payments to the agent, Jacques Ndjamba Mbeleck, through an opaque offshore company would represent “a clear conflict of interest”, said Joseph Sinclair, a barrister and corruption specialist. They raise the possibility that a transaction that nearly bankrupted a nation was sealed with bribes, according to three lawyers consulted by SourceMaterial. 

“The risks of corruption were alarming and the results rotten,” said Helen Taylor, an expert at Spotlight on Corruption, a campaign group. 

“The risks of corruption were alarming and the results rotten”

Glencore has long faced corruption allegations over its relationships with shadowy middlemen. In 2019, SourceMaterial revealed hidden gifts worth millions of dollars to a billionaire friend of Kazakhstan’s president. In 2022 Glencore paid more than $1 billion to settle criminal bribery charges, with a UK court finding that the company transported millions of dollars in cash bribes across Africa by private jet.

Responding to questions from SourceMaterial, a Glencore spokesman said: 

“The investigations committee of the board has overseen Glencore’s response to the various government investigations. Glencore has cooperated extensively with the various government authorities. The group has engaged external legal counsel and forensic experts to assist the group in responding to the various investigations and to perform additional investigations at the request of the investigations committee covering various aspects of the group’s business.”

Property empire

Chad’s oil may not have delivered the wealth its people hoped for. It has, however, brought riches to a clique of advisers and officials.

One of them is Jacques Ndjamba Mbeleck, 53, known to colleagues as Jacques Ndjamba. A native of neighbouring Cameroon, he was a close associate of Naeem Tyab, a Canadian whose company, Griffiths Energy, had in 2011 secured oilfields in Chad.  

Aerial view of N'djamena
N’Djamena, Chad’s capital, became littered with half-finished buildings as the economy crashed (picture: Joerg Boethling/Alamy)

As Griffiths and other international investors poured money into Chad’s booming oil sector, Ndjamba and a small circle of the country’s political elite began discreetly acquiring luxury property abroad.  

While there is no evidence that the assets were bought illegitimately, the transactions caught the attention of campaigners, who raised questions about where the money had originated.    

Early in 2012, Ndjamba bought an apartment in Montreal for C$425,000, records show. The previous day, Mahamat Kasser Younous, the boss of Chad’s state oil and a relative by marriage of President Déby, purchased a flat a short walk away. 

The next year Ndjamba bought a penthouse suite in the city’s Evolo 1 tower for C$578,000 without a mortgage. Another influential figure in the Chadian government, Mahamat Zene Bourma—Younous’s brother-in-law and also a relative of Déby—owned an apartment in the same building. 

Ndjamba’s close ties to Chad’s ruling class are apparent from an official document in which he allowed Bourma to use his address. It was “the least one could do for a friend”, Ndjamba told the Journal de Montreal, which first reported the purchases in a joint investigation with African Arguments and Le Monde Afrique. 

But as Ndjamba continued to expand his portfolio, the fortunes of his associates, Tyab and Griffiths, had turned. 

The company had been taken over by new management, who uncovered suspicious payments and reported them to the authorities. This sparked a series of investigations that culminated last September with Tyab being sentenced to three years in jail after he admitted paying millions of dollars in bribes to Chad’s US ambassador. 

The taint of corruption was not enough to deter Glencore. In 2012 the commodities giant invested in the Griffiths oil wells—and within two years had swallowed Griffiths itself in a corporate buy-out. It also recruited an agent in Chad: Ndjamba.  

White elephants

For Glencore, a company so big that its annual sales are roughly 20 times Chad’s GDP, the oil wells were just the start.

Soon the Swiss-based trader was finalising the ill-fated loan that would mortgage Chad’s future and eventually force its near-bankrupt government into a bail-out from the International Monetary Fund. 

There was a logic to the deal at the time. Déby wanted to buy back oilfields from Chevron, so that profits for them flowed to state coffers rather than the US oil major’s shareholders abroad.  

But impoverished Chad had no obvious means to pay, and Glencore was ready to step in. Glencore’s loan represented half of annual government expenditure—a financial shot in the arm that was supposed to provide a once-in-a-generation boost for the economy. 

Police confront anti-austerity protesters in N’Djamena in January 2018 (picture: Alamy)

Within months the deal turned sour. In mid-2014, when the loan agreement was signed, crude was trading at more than $100 a barrel. By January, prices had nosedived to just $44. A year later, Chad was handing Glencore almost every drop of oil it pumped in order to keep up repayments.

It also took the IMF by surprise. SourceMaterial understands that Glencore’s intervention derailed the fund’s own talks with Chad about bolstering the economy.  

Before long the country was littered with white elephants—a half-built stadium, a dilapidated business park—conceived with economic projections that had suddenly proved badly wrong. 

By 2018, rioters roamed the streets as the United Nations World Food Programme reported that nearly a third of the population was suffering from “chronic malnutrition”.

Offshore payments

Soon Chad was pushing to renegotiate the loan, setting off years of legal wrangling involving not just the government and Glencore but other lenders who backed the deal, as well as the World Bank and the IMF.

For some, however, the arrangement remained lucrative.  

Documents seen by SourceMaterial and Mediapart suggest that in parallel to its official advance to Chad, Glencore made a series of secretive payments totalling $14.5 million—1 per cent of the total loan value—to Vanir Trading, a company registered in the British Virgin Islands.

The islands are a tax haven where shareholdings are kept secret from the public. But the documents show that Vanir was in turn owned by a chain of companies running through Hong Kong and back to the Caribbean, whose ultimate owner was Ndjamba.

Ndjamba had been Glencore’s sole representative in Chad since it first entered the country in 2012—an arrangement that earned him at least $13 million more in cash commissions, a leaked document shows. 

In May 2014 his contract with Glencore was updated to award him half of the net profit from at least 60 shipments of crude, a total of about 54 million barrels. This would have earned him tens of millions of dollars on top of his commissions, a source with knowledge of the Chadian oil industry said.

It was around this time that Ndjamba began to broaden his property portfolio, acquiring apartments in the prestigious 16th arrondissement of Paris, records show. 

Secret role

Ndjamba’s relationship with Glencore was kept secret. 

In public, he was known throughout Chad’s oil industry as the senior oil and gas partner at a consultancy, Cameroun Audit Conseil International.  

CAC’s most prominent role in the country was to act on behalf of the state oil company, Société Hydrocarbures du Tchad. Sources and documents confirm that between 2012 and 2017 CAC carried out day-to-day administrative tasks for SHT, as well as advising it and the government. 

It also was Ndjamba who represented the government in negotiations about production sharing contracts, said David Thompson, an oilman who negotiated with the Chadian administration. 

CAC employees reporting to Ndjamba represented the government when it negotiated Glencore’s loan, according to a source involved in the discussions. That meant that Ndjamba was apparently working for both sides—taking commissions from the company while also advising the state.    

“There are definitely some shades of deep red here”

Even members of Glencore’s negotiating team were unaware of his dual role, according to a source involved in the debt talks. 

Ndjamba’s conflicted position raises “red flags” about whether Glencore’s payments to him were intended to influence Déby’s government corruptly, said Mike Koehler, a law professor and corruption expert.

“There are definitely some shades of deep red here,” he said. “And a lot of the time when the US Department of Justice are bringing an enforcement action, shades of red are what they’re looking at.”

Contacted by SourceMaterial, Ndjamba confirmed that he had worked for Glencore in Chad through Vanir Trading. He did not reply to further requests for information. 

Meanwhile Chad’s debt saga grinds on. Under the original agreement, the government had been due to complete repayments by 2018. But when Glencore agreed to refinance the loan in 2022, Chad still owed around $1 billion.

For ordinary Chadians, the prospect of economic transformation remains a pipe dream. 

“They promised us they would pave the roads, construct hospitals, build schools, provide us with clean water sources,” said Aristote Beninou, an activist from the southern city of Donya, near to the oilfields. “They haven’t built us even one hospital.” 

With assistance from Emmanuel Freudenthal

Headline picture: Chadian dancers celebrate the ascendancy of President Déby (David Keith Jones/Alamy)