- Real GDP growth declined to 2.9% in 2016 from 4% the previous year, mainly due to the lower price of oil.
- Economic diversification should take account of high unemployment levels, notably among youth (46% of those under 25 are jobless), and a 34.3% poverty rate.
- In order to encourage entrepreneurship and industrialization, the government is focusing on developing vocational skills among youth.
Gabon had a difficult year in 2016 due to a negative economic environment linked to the low price of oil. A barrel of Brent averaged USD 42.6 over the year. This low price had a negative impact on tax revenue from oil and from other sectors of the economy. The public investment program, which depends on oil revenues, is a driver of economic diversification. Fewer public commissions therefore adversely affect implementation of the Strategic Plan for Emerging Gabon (PSGE). At the same time, the presidential election of 27 August 2016 led some economic operators to adopt a wait-and-see attitude. Nonetheless, certain drivers of growth are strengthening, as shown by the relative growth of agriculture as a share of GDP. Recent projections indicate that the non-oil sector is experiencing stronger growth than oil and gas. Since the price of a barrel is not expected to surpass USD 60 over the next few years, economic diversification will be all the more crucial as a foundation for growth.
Despite this difficult context, the authorities continued implementing major reforms to improve public finances, stimulate the economy and ensure provision of the social benefits envisaged under the country’s human investment strategy. The main efforts involved controlling payroll expenditure, rationalizing operating expenses and making major budgetary trade-offs to protect social spending and public investment. In addition, almost all public subsidies for petrol prices at the pump were eliminated in early 2016. A large share of public investment went towards organizing the Africa Cup of Nations football tournament held in January-February 2017, and this should stimulate economic growth. Still, the short- and medium-term priority will be to clear arrears to the domestic private sector, which are estimated at XAF 600 billion (CFA Franc BEAC) and which handicap growth and economic diversification. Gabon has thus expressed interest in reinforcing its co-operation with the International Monetary Fund (IMF), beginning in 2017.
Development of entrepreneurship is struggling, particularly among youth and women, notably due to: i) the low level of entrepreneurial culture (young would-be entrepreneurs face a socio-economic environment that does not support entrepreneurial spirit); ii) difficult access to adequate, long-term finance; and iii) a shortage of skilled manpower for business management. Aware of these challenges, the Gabonese authorities drew up the PSGE, a road map for economic emergence and diversification. One of its objectives is progressively to reduce dependence on oil resources, notably through economic diversification. Another very short-term objective is to increase the share of agriculture in the national wealth. Although Gabon has undertaken an ambitious reform program to cope with the drop in oil prices, further significant action is needed to promote inclusive growth, structural transformation and economic diversification.