"I think it's very much in the interests of the Chadian government to establish in the eyes of everybody that they are honorable parties to the agreements that they undertake," Wolfowitz said.
The parliament voted last week to allow oil revenues to be spent on the military as well as education, roads and other civilian uses. The vote also doubled the percentage that can be spent without oversight.
The World Bank has $124 million in outstanding loans to Chad, including one that helps finance an oil pipeline.
Wolfowitz said that Deby told him Chad has the right, as a sovereign nation, to decide on its own spending.
In spite of money coming in from oil, most of Chad's citizens live on less than a dollar a day.