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Gabon

Gabon

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Key Facts

  • Capital: Libreville
  • Region: Central Africa
  • Official language: French
  • Independence Day: August 17, 1960
  • Area: 267,667 sq km
  • Population (2018): 2.1 million
  • REC membership: ECCAS
  • WTO membership: January 1, 1995
  • GDP (2018): US$ 16.854 billion
  • GNI per capita (2018): US$ 6 830
  • Currency: CFA franc

Economic overview

Gabon’s economic recovery continued in 2019, thanks to the momentum of non-oil activities (mines, timber, rubber, and palm oil), with estimated real GDP growth of 3.4% in 2019 (0.8% in 2018), driven by the exploitation of new oil wells (up 11.8%), non-oil exports (18.6%), and total investment (4.5%). The inflation rate declined from 4.8% in 2018 to 3.4% in 2019, approaching the CEMAC community target of 3%.

Following the slump in hydrocarbon prices in 2014, the government implemented an Economic Recovery Plan for 2017-20. The budget deficit improved from 1.9% of GDP in 2017 to 0.7% in 2019 thanks to the reduction in payroll (48.1% of tax revenues in 2019 versus 85.3% in 2017). The current account deficit deepened to 3.2% of GDP in 2019, from 2.3% in 2018, due to the increase in imports to cover 80% of Gabon’s food needs. To fund its current account deficit, the government had to resort to foreign borrowing, bilateral and multilateral, and cash constraints led to an accumulation of domestic arrears. Total public debt rose from 52.5% of GDP in 2016 to 64.3% in 2018 (and is estimated at 62.2% for 2019). The debt viability analysis by the IMF shows that the debt is sustainable.

Real GDP growth is expected to be 3.7% in 2020 and 3.6% in 2021, driven by renewed activity in the non-oil sector, which should offset a decline in the oil sector. The fiscal surplus should stabilize in 2020 (1.0% of GDP) and in 2021 (1.5%). The external account deficit should ease from 0.6% of GDP in 2020 to equilibrium in 2021. The strategy to diversify the economy fostered development of new sectors of activity, mainly in agribusiness. Thanks to investments by the Singapore Olam Group (€2 billion since 2010, more than 45% of the total FDI in Gabon over the same period), palm oil and rubber plantations have been developed on an industrial scale. In 2018, three new palm oil processing factories started up and produced 27,045 metric tons of oil.

Following a November 2009 ban on the export of unprocessed logs, the country created a fully developed industrial timber sector, now the largest African exporter of veneers and plywood.

The Gabon Special Economic Zone, created in 2010, now has some 60 international and local companies (building materials, metallurgy, chemicals, and so on) and their activities contribute 14% of the country’s exports. The zone has also invested in airports, ports, and roads.

Gabon harbors 25% of the world’s proven reserves of manganese. National exports grew by 47.7% thanks to an increase in world demand (China, Europe, and India). In 2014, the government decided to process some of it locally, and the investments under way for the local conversion of manganese to ferromanganese should eventually triple the value added produced. Gabon dropped from 23 to 41 in the Ibrahim Index of African Governance between 2017 and 2018, and slipped three places in 2019 in the Doing Business report.

The high cost of production factors is a barrier to the growth and competitiveness of firms, and the Trans-Gabon Railway, the only means of shipping out resources, is close to saturation, spurring the government to launch a Gabon Infrastructure Support Program. The lack of skilled labor is also a constraint to economic diversification. Although firms need skilled workers, vocational and technical training reaches only 8% of students in post-primary education. Last, the economy remains heavily dependent on the oil sector, with 79.5% of exports and 25.5% of GDP in 2018.

Last updated: April 2020