Interview: Régis Immongault
What has been the economic impact of the drop in oil prices in Gabon?
REGIS IMMONGAULT: Similarly to other oil-producing countries, the drop in oil prices has affected both government finances and the activities of the oil and oil-related sectors. Growth is estimated at 3.9% in 2015, down 0.9 percentage points compared to our initial estimates. In this context, we have seen growth spurts from sectors such as agriculture with growth of 9.2%, logging with 5.3%, crude oil with 8.6%, mining with 6.5%, communications with 18.2% and wood processing at 6.4%. On the other hand, some industries have suffered such as construction, which has seen a 3.7% drop, and petrol services and exploration with a 4.3% drop, which have additionally experienced losses in employment. These numbers indicate a strengthening of the country’s resilience, driven by diversification efforts. It also underlines the importance of accelerating structural reforms given the ongoing importance that the hydrocarbons sector has for overall state finances and the Gabonese economy as a whole.
Since January 2015 the government has taken measures to spur diversification, including the mobilisation of budgetary resources, controlling government spending and improving the business environment to support private investment. Adjustment measures mainly concern operational costs, whereas the government has liberalised the price of oil and petrol, and only subsidises kerosene. However, the largest constraint is the weight of the public sector payroll, which has reached levels that are unsustainable.
Since 2015 the government has also put in place a stabilisation account for extractive industries, which will store surplus funds in case of an economic downturn. It is worth noting that Gabon’s success will only be determined by its ability to diversify. Therefore, we will pursue the further implementation of the Investment Promotion and Competitiveness Project.
Regarding the Emerging Gabon Plan (Plan Stratégique Gabon Emergent, PSGE), what have been the outcomes so far?
IMMONGAULT: The average growth of 5.6% in the last five years, as opposed to no growth in the five years leading up to 2009, point to a positive outcome for the PSGE, although certain aspects still need addressing. Between 2010 and 2015, growth in the primary sector reached 2.2% on average, propelled by the recent manganese discovery by Compagnie Minière de l’Ogooué and the development of the agriculture investment programme in partnership with Olam, as well as recent technical support initiatives for agriculture cooperatives. Activities in the secondary sector have posted an average increase of 7.4%, driven by industrialisation policies and the development of public works. Several initiatives such as the ban on log exports, the development of the special economic zone of Nkok and the construction of the Complexe Metallurgique de Moanda are testaments to the advances of the Gabon Industrial plan.
The tertiary sector has also experienced growth in the past five years, driven primarily by the transport and telecoms sectors, which grew by 7.4%. This sector was reinforced by the results achieved by the telecoms and from the advent of 4G and the launch of value-added products.
Growth has been present in recent years, but there remains room for improvement. The government has kept the investment budget at reasonable levels this year, with the intention of accelerating the National Infrastructure Plan, reinforcing human capital improvements and modernising the country’s legal framework.
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