Recent Developments & Prospects
Economic Cooperation, Regional Integration & Trade
Economic & Political Governance
Public Sector Management, Institutions & Reform
Natural Resource Management & Environment
Thematic analysis: Structural transformation and natural resources
Authors: Gérard Bizimana, Bakary Dosso
- Gabon’s economic indicators are good, including a growth rate of 5.5% in 2013 and inflation at 0.4%. This performance is projected to improve, with growth rates of 6.7% in 2014 and 7.2% in 2015.
- The planned 2014 budget reflects the government’s goal of accelerating diversification of the country’s economy.
- Despite the resurgence in growth since 2010, driven by the non-oil sector, unemployment remains high, particularly among young people.
Gross domestic product (GDP) grew by an estimated 5.5% in 2013, down slightly from 2012 (5.7%). Gabon enjoys macroeconomic stability and healthy finances, thanks to its membership of the franc zone, rising oil prices and its forestry and mining revenue, and supported by vigorous public and private investment. At the regional level, Gabon has been in compliance with the four convergence criteria set by the Economic and Monetary Community of Central Africa (CEMAC) as part of the multilateral oversight of the economies in the zone, namely the debt-to-GDP ratio, the fiscal deficit, payment of debt arrears and containment of inflation.
Growth prospects for 2014 and 2015 will depend on how international oil prices and manganese production and prices will evolve. Timber processing, which as yet contributes little to GDP (4% in 2013), should see a steady increase, benefiting from both sharply rising world prices and the public policy of processing raw materials domestically in three “special economic zones” (SEZs) currently being established. GDP growth should remain robust at the projected rates of 6.7% in 2014 and 7.2% in 2015, while the annual inflation rate should flatten out at about 2.5%. This strong performance will be driven by public investment, revenue from the country’s main mining resources and revenue from timber processing. In the primary sector, oil production is expected to fall off, as many existing fields are mature and no new economically viable deposits have been discovered. In developing its strategic plan for “emerging Gabon”, the Plan stratégique Gabon émergent (PSGE), the government seeks to accelerate the diversification of the national economy through a strategy based on domestic processing of raw materials and facilitation of foreign direct investment (FDI).
Gabon’s industrialisation strategy is mainly based on the timber sector. Forest covers nearly 85% of the country’s territory and offers Gabon an opportunity to reduce its dependence on oil, fight poverty and improve the living conditions of its people.
The PSGE is accompanied by a sweeping programme of reforms aimed at diversifying the economy and making the industrial and services sectors more competitive, while preserving the country’s huge environmental wealth. Since 2011, implementation of the plan has led to massive public-investment programmes and the formulation of an industrial policy involving the establishment of SEZs to attract FDI, public-private partnerships and acquisition of equity stakes in domestic subsidiaries of large international corporations. In line with this policy, Gabon issued USD 1.5 billion in Euro bonds on 5 December 2013 in order to reduce its borrowing costs and to finance infrastructure in the port, airport, road and energy sectors.
Table 1: Macroeconomic indicators
|Real GDP growth||5.7||5.5||6.7||7.2|
|Real GDP per capita growth||3.3||3.1||4.3||4.9|
|Budget balance % GDP||-1||-1.8||-4.2||-6.3|
|Current account balance % GDP||8.5||7.2||4.3||1.5|
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.