Gabon is a central African country rich in natural resources. Located on the Atlantic Ocean, it borders Cameroon, Equatorial Guinea, and the Republic of Congo. With a population of 2 million (2017), Gabon is a sparsely populated country with forests covering 85% of its territory.
Gabon has one of the highest urbanization rates in Africa; more than four in five Gabonese citizens live in urban areas. The capital, Libreville, and Port Gentil—the economic capital of the country—are home to 59% of the population. One in two Gabonese citizens is under the age of 20, with the fertility rate in urban areas at almost four children per woman against six in rural areas, according to the 2012 Second Demographic and Health Survey.
The Gabonese Democratic Party (Parti démocratique
The opposition boycotted legislative elections in
Legislative and municipal elections were held in October 2018. The ruling party—despite losing 15 seats—maintained its two-thirds majority in the National Assembly, winning 98 of 143 seats. The elections followed an April 2018 constitutional court ruling that dissolved parliament (because elections had been postponed for too long) and forced the government’s resignation in May. A caretaker government has taken measures (contained in an amended 2008 Finance Law) to address slippage in Gabon’s macroeconomic performance and contain its bloated wage bill.
Taking advantage of a prolonged absence by the President of the Republic, who was convalescing in Morocco, several soldiers attempted to seize power on January 7, 2019. This attempted coup culminated in the arrest of the mutineers.
A new government was sworn in on January 12, then reorganized by presidential decree on January 30.
Gabon is an upper-middle-income country. The fifth largest oil producer in Africa, it has had strong economic growth over the past decade, driven by its production of oil and manganese. The oil sector has accounted for 80% of exports, 45% of GDP, and 60% of fiscal revenue on average over the past five years. However, as the country is facing a decline in its oil reserves, the Gabonese government has based a new economic strategy on diversification.
Gabon’s fiscal position worsened in 2015, with the country recording a fiscal deficit for the first time since 1998. Despite the government’s attempts to rein in expenditure and offset the decline in oil revenue, Gabon’s economy stalled in 2017 and was projected to grow by 0.6% compared to 2.1% in 2016.
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A more favorable trade balance has facilitated ongoing balance of payments improvements. Debt is projected to remain steady and sustainable in 2018 (59.1% of GDP excluding payment arrears) before declining in 2019.
The government has launched an audit of the public service payroll: its initial steps included the decision to pay civil servants with vouchers and to carry out physical-presence checks to identify ghost workers. The cabinets of the President and the Prime Minister have reduced their staff by 40%. The government also extended the hiring freeze for another three years—except for social sectors.
The poor quality of Gabon’s business climate is a major barrier to the diversification of its economy. Gabon ranked 167 out of 190 countries in the 2018 Doing Business report. The government’s strategy for the promotion of non-oil sectors has so far been based on the granting of specific incentives to foreign investors. A recent World Bank policy note highlighted the importance of improving human capital, building a fair and transparent business environment, and improving the quality and cost of core infrastructure—three critical building blocks for economic and export diversification. Recent measures to improve the business climate include a one-stop shop for investors; a public-private partnership (PPP) framework; a domestic arbitration court; and codes for hydrocarbons and mining.
Gabon must also boost its social expenditure. A 2013 McKinsey report suggests that about 30% of the population remains vulnerable, living with monthly incomes below the guaranteed minimum wage of CFAF 80,000 (approximately $150). The study states the social situation has deteriorated in terms of access to basic social services (health care, drinking water, and electricity) in 60% of the regions. In 2016, Gabon ranked 109 out of 188 countries on the Human Development Index developed by the United Nations Development Programme.
On the basis of this report, Gabon undertook to improve its social policy by focusing on the following:
- assist the most vulnerable (the elderly, orphans, the disabled), through integrated social programs;
- help low-income people develop income-generating activities
- reduce inequalities in access to basic public services. Although the net primary enrollment rate of 96.4% is one of the highest in Africa, the Gabonese education system continues to have a high repetition rate and a low completion rate (37.2%).
The weakness of the national statistical system is another challenge Gabon needs to address, especially in the context of lower oil prices, where an understanding of the social impact of adjustments in the public sector is critical. Reliable data on poverty and income distribution are not available; the most recent date back to 2010. The consumer price index is still based on household consumption from a 2003 survey.
Last Updated: Mar 08, 2019