GABON

Heavily dependent on oil exports, Gabon plunged into a recession in 2020, with GDP shrinking by -2.7%. We project the GDP to rebound by +2.8% in 2021 and +3.2% in 2022, driven by the increase of oil prices as well as the resumption of internal demand.

In the context of the Covid-19 pandemic and the hydrocarbon prices slump, the Gabonese government set two major priorities:  decreasing the dependency on oil and speeding up the Strategic Plan for Food Sovereignty. In fact, despite the recent rise of some manufacturing sectors such as timber and mining, hydrocarbons still account for 68% of Gabon’s exports, 45% of its GDP and 40% of its budgetary revenue. In the second place, the revenues of the forestry sector represent 30% of GDP, wood processing being the chief product. The expansion of agriculture constitutes the key component of the government’s bet on diversification, with the aim of capitalizing on palm oil, rubber, cocoa and coffee production. The sector currently employs 37% of the workforce, a smaller share than the services sector that contributes to 40% of GDP and employs more than 53% of the active labor.

Gabon has recently implemented some key projects to support economic diversification, including the 2019 mining and petroleum codes, which laid the groundwork to deal with the long-term decline in oil production and push diversification towards the mining sector, especially manganese, gold, iron ore and poly-metallic ore. In October 2020, the Kinguélé Aval hydroelectric power plant project was launched  (to be completed 2023) to address the increasing power supply needs of the industrial sector.

The weak business environment of Gabon constitutes a serious impediment to sustainable economic growth. According to the World Bank’s Doing Business ranking for 2020, Gabon ranks 169th (over 190 countries)  due to complicated processes of registering property, weak contract enforcement and time-consuming and costly trade across borders. Moreover, the protection of minority investors and access to power are key bottlenecks.  

President Ali Bongo Ondimba is expected to remain in power until 2025 following recent constitutional amendments that also granted him lifetime immunity.  The country's political stability remains fragile in view of growing public protests and opposition claims of a drift towards authoritarianism under the new constitution.

Gabon ranks 129th in the transparency index (out of 179 countries) as the business environment suffers from patronage, clientelism and systemic corruption. Despite recent efforts by the government to enforce the legal framework and improve transparency, corruption is still rampant, especially in the area of public procurement and in extractive industries.  

Gabon’s Human Development Index has significantly deteriorated over the past decades, from the 77th place in 1990 to 119th in 2019. Major improvements are needed in the areas of poverty and inequality reductions, creation of employment opportunities and socio-economic sustainability. - April 2021