Gabon is a central African country rich in natural resources. With a population of 1.9 million over a surface area of 268,000 square kilometers, Gabon is a sparsely populated country with forests covering 85% of the territory. It possesses one of the highest urbanization rates in Africa with more than four in five Gabonese citizens living in urban areas. The capital, Libreville, along with Port Gentil, the economic capital of the country, is home to 59% of the population.
The Gabonese Democratic Party (Parti Démocratique Gabonais or PDG) dominates the political landscape. Omar Bongo held the presidency from 1968 to 2009, and his son, Ali Bongo Ondimba, won the presidential elections in August 2009, against a backdrop of social crisis. The opposition boycotted the legislative elections in 2011. It competed in both the municipal and departmental elections held in December 2013, and the Senate election held in December 2014, all of which were won by the party in power. The next presidential elections will take place in 2016.
Following his election, Ali Bongo established a political agenda to transform Gabon into an emerging country by 2025. To achieve this, the government implemented the Strategic Plan for an Emerging Gabon (Plan Stratégique Gabon Emergent - PSGE), a three-pronged strategy that seeks to leverage industry, sustainable natural resource management, and services. The first pillar entitled “Industrial Gabon” will work to make the country a thriving industrial hub while the second pillar, “Green Gabon”, will ensure sustainable forest management and transform Gabon into a global leader of certified tropical timber production. The third pillar, “Service-Oriented Gabon”, intends to create jobs in sectors such as information and communication technology (ICT) and ecotourism.
In January 2014, Professor Daniel Ona Ondo, the former vice president of the National Assembly, was appointed prime minister and was tasked with implementing the strategic plan "Emerging Gabon".
In spite of political stability since independence, Gabon faces challenges related to transparency and efficient governance. The political and social situation has deteriorated since the contested election in August 2009 of Ali Bongo Ondimba. All key sectors have regularly recorded strikes over the last five years, and President Ali Bongo is still contested by a large part of the political opposition. Social unrest worsened considerably in early 2015 when all major unions of the public sector (which represents over 60% of formal employment) announced an indefinite general strike.
Gabon is an upper-middle-income country. The fifth largest oil producer in Africa, it has experienced strong economic growth over the past decade, driven in particular by oil and manganese production. In 2015, the oil sector accounted for 70% of exports, 20% of GDP, and 40% of budget revenue. However, the country is facing a decline in its oil reserves. The Gabonese government has therefore based its new strategy on economic diversification.
Economic growth decelerated from 5.6% in 2013 to 4% in 2015. The decline was the result of the sharp drop in oil prices and the associated cut of public investment by 50%. Large public works projects in the context of the Strategic Plan for an Emerging Gabon (PSGE) have been the main driver of growth over the past five years. Furthermore, the government cut spending, which lowered domestic demand and caused slower growth in services and non-extractive industries. In 2015, several industrial sectors declined, such as food industries (-1%) and construction (-3%). The largest drops in the service sectors included transport and retail trade. Timber production slowed abruptly, from 28.5% in 2014 to 5.5% in 2015 as a result of lower demand from Gabon’s trading partners.
Given the depressed oil sector, moderate growth driven by non-oil sectors is expected in the medium term. The non-oil economy (mainly manganese, timber, agribusiness and services) will continue to be the major driver of growth in the forthcoming years. In mining, the Moanda-Franceville metallurgic cluster which started in 2015 will boost manganese production. In agriculture and fisheries, the public-private partnership with Singapore-based OLAM is expected to increase palm oil, rubber and fishing outputs. The public-private partnership with Mauritius-based IBL will also allow boost the fishery value chain.
The poor quality of Gabon’s business climate presents a major challenge to the diversification of its economy. Gabon ranked 162 out of 189 in the 2016 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 has highlighted the importance of improving human capital, building a fair and transparent business environment, and improving the quality and cost of core infrastructure, as critical building blocks for economic and export diversification. Recent measures adopted by the government to improve the business climate include the creation of a one-stop shop for investors, the adoption of a PPP framework, the setup of a domestic arbitration court, and the adoption of codes for hydrocarbons and mining.
While the economy has experienced positive growth over the last four decades, it has generated insufficient jobs, with unemployment reaching 21% of the labor force in 2010. Unemployment affects mainly youth, women, and the uneducated. This weak employment creation is partly explained by the dominance of a highly capital-intensive oil sector, and a mismatch between the skills provided by the education system and the needs of the economy. Rigid labor and social legislation is also another major constraint.
Despite having a relatively high per capita income ($7,728 in 2015), Gabon’s poverty rate remains high. A 2013 McKinsey report suggests that about 30% of the population remains vulnerable, living with monthly incomes below the guaranteed minimum wage of FCFA 80,000. The study further states that the social situation has deteriorated in terms of access to basic social services (e.g. health, safe drinking water, and electricity) in 60% of the regions. On the basis of this report, the Government of Gabon organized a large-scale national consultation, ‘Assises Sociales’ in 2014 to define Gabon’s human investment strategy (SIHG). This social policy has three objectives: (i) assist the most vulnerable populations (elderly, orphans, disabled), through integrated social programs; (ii) create income-generating activities for Gabon’s poorest and (iii) reduce inequalities in access to basic public services.
Last Updated: Apr 08, 2016