Making it easier: Measures to improve the business climate are accelerating

In a country where public investment programmes have been pivotal for economic growth over the past several years, authorities are nonetheless well aware of the value of stoking private sector growth. However, there are challenges ahead, as, according to the World Bank, Gabon was ranked 144th out of 189 countries in its 2015 “Doing Business” report, down six slots from the 2014 ranking. The country performed well against other major Francophone markets in sub-Saharan Africa, including heavyweights such as Côte d’Ivoire, Senegal and Cameroon, but there is a need for improvement.

The reasons for the low ranking are understandable. It takes an average of 50 days to start a business in Gabon, compared to 27.9 days in sub-Saharan economies and 9.2 days in OECD countries, although the establishment of industrial special economic zones (SEZ) is changing this. “On top of the current unfavourable economic climate, there are the additional challenges related to private sector activity – the problems and time-consuming processes of opening a company, absence of a one stop-shop for administrative issues, and the weight of the administration and Customs procedures. Bureaucratic obstacles are very present in Gabon,” Yves Picard, director at the French Development Agency (Agence Française de Développement, AFD), told OBG.

A Single Voice

To reduce delays and paperwork, authorities have decided to merge several administrative agencies and create the Gabon National Agency for the Promotion of Investment (Agence Nationale de Promotion des Investissements du Gabon, ANPI-Gabon). The new governmental body will incorporate the foreign investment promotion agency, Promo Gabon, created to sustain the development of local small and medium-sized enterprises (SMEs), and the Business Development Centre, where new firms are required to register. The plan is to establish a one-stop shop for companies, something the private sector had long requested to not only serve as a single interlocutor between businesses and the state, but also to make procedures easier and cheaper for enterprises to carry out.

Other measures, such as debt resolution, might help to improve private sector trust. In November 2014 the government announced it had paid over $700m in arrears to private sector companies since the beginning of the year. Smaller steps with the same potential for positive impact have also been taken. Authorities have recently reduced the time it takes to start a business in the Nkok SEZ to two weeks, half the time it used to take, according to the IMF’s Article IV Consultation, which was released in February 2015.

International Role

A handful of programmes and assistance initiatives involving international institutions present in Gabon are also contributing to a healthier business climate. The World Bank and the International Bank for Reconstruction and Development (IBRD) are assisting Gabon in improving its private sector performance. Through the Investment Promotion and Competitiveness Project an $18m loan from the IBRD will be channelled to encourage the creation of SMEs. This will be done through training programmes targeting over 25,000 people and aimed at promoting entrepreneurship.

Assistance is also expected to come from the African Development Bank. In early 2015 the bank agreed to grant CFA580m (€87,000) to support the country’s Chamber of Commerce, which was transformed from a public sector agency into a private non-governmental organisation in 2011. Similarly, since 2009 the AFD has also run a programme that offers bank guarantees of up to 50% to a maximum of CFA200m (€300,000) per beneficiary for investment loans allocated by the Gabonese banking system for SMEs and entrepreneurs. For Gabon to be able to sustain growth over the coming years, increased participation from a robust private sector will be necessary.