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: Dominique Puthod , Mouhamadou Sy, Bakary Dosso
- The economy grew 5.1% in 2014 but lower oil prices will reduce tax revenue in 2015.
- Treasury problems have led to a major build-up of domestic payment arrears since 2013 that is now being resolved, while unprecedented strikes have affected the civil service and the oil and gas sector.
- The country’s strategic plan for an emerging Gabon (PSGE) aims for an economic relaunch by 2025 by creating ten development centres to use the comparative advantages of the various national spaces.
The economy expanded by 5.1% in 2014, slightly less than the previous year (5.6%) and below projections of 6.7% made at the start of the year. Prospects remain good, with growth projections of 4.6% in 2015 and 4.7% in 2016. However, unpredictable oil prices and output make these uncertain, especially with unrest expected in the run-up to presidential elections in 2016.
The effect of lower oil prices and output on public finances once again underlined the country’s vulnerability to external shocks. The drop in oil revenue meant the budget had to be cut by 11.4%. These cuts have hit small and medium-sized enterprises through delayed payments from their main customer, the government. Inflation was higher in 2014 (about 6%), twice the limit set by the Central African Economic and Monetary Community (CEMAC).
Repeated strikes by civil servants and by the main oil and gas sector trade union caused disruption in 2014. The government presented a new human investment strategy at the beginning of the year in an effort to ease social pressures. Despite being an upper-middle-income country, Gabon still has quite low social indicators and will not achieve most of the 2015 Millennium Development Goals.
The government’s ambitious spatial development scheme, “Strategic Plan Emerging Gabon” (Plan stratégique Gabon émergent, PSGE), is based on setting up ten “clusters” of economic activity around the country to make best use of national potential as a way of diversifying the economy, and will require major investment in infrastructure and social services.
Table 1: Macroeconomic indicators
|Real GDP growth||5.6||5.1||4.6||4.7|
|Real GDP per capita growth||3.2||2.8||2.3||2.4|
|Budget balance % GDP||-3.2||-6.6||-13.2||-11.8|
|Current account balance % GDP||12.1||6.7||-8.1||-4.6|
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.