Moving forward: Agro-industry to accelerate value-added growth in the sector

The launch of a new grain processing facility and oil palm plantation mark the latest steps forward for the agro-industrial sector in Gabon. With low oil prices constraining the country’s largest source of export revenues and slowing headline growth, the Gabonese government has sought to accelerate economic diversification through the Emerging Gabon Strategic Plan, placing a particular emphasis on industrial agriculture. The two projects – which will require a combined CFA307bn (€460.5m) worth of investment – should also help to greatly improve food security and boost value-added exports.

Flour Processing

Operated by the Foberd Group, a subsidiary of Cameroon’s Fokou Group, the new CFA7bn (€10.5m) grain mill – which specialises in wheat flour, semolina and cattle feed – has a production capacity of 300 tonnes per day.

According to local press reports, Foberd will first target the domestic market for sales, but is also eyeing exports to regional markets in the CEMAC and ECOWAS economic blocs. The mill, located in the industrial area of Owendo, is the second in the country to produce wheat flour. Prior to Foberd’s arrival in 2015, the Société Meunière et Avicole du Gabon (SMAG) was the country’s sole producer.

SMAG imports 90,000 tonnes of wheat annually to be ground into nearly 72,000 tonnes of flour – about 400 tonnes per day – in the company’s Libreville factory, which meets much of the country’s demand of around 75,000 tonnes per year.

Palm Oil Production

In addition to the Foberd facility, a new oil palm plantation – the largest on the continent – started production in June 2016. Developed under the Gabon Initiative for Achieving Agricultural Outcomes with Engaged Citizenry (Gabon des Réalisations Agricoles et des Initiatives des Nationaux Engagés, GRAINE) programme in a public-private partnership between the government and Singapore-based Olam International, the CFA300bn (€450m) plantation spans 70,000 ha and is managed by 10,000 smallholders organised in 330 cooperatives. The project is eventually expected to produce 350,000 tonnes of palm oil. An additional 8,000 ha has also been allocated for domestic crops.

Later in 2016 Olam acquired the palm oil business of Gabon’s other major player – the local subsidiary of Belgium’s Société d’Investissement pour l’ Agriculture Tropicale (SIAT). With this acquisition, Olam Palm Gabon’s operations span 58,000 ha and the company is expected to produce 290,000 tonnes of oil, overall.

The authorities are also negotiating with India’s 3F Oil Palm Agrotech to open another plantation in the country. “This accord would lead to the delivery of 40,000 ha of land for the production and refining of palm oil, creation of 4000 direct and indirect jobs – but most importantly – the investment of $200m,” Mathieu Mboumba Nziengui, then-minister of agriculture, told international media in March 2016.

Key For Diversification 

On the policy front, the government is looking to significantly improve small-scale farming through the Gabon Initiative for Achieving Agricultural Outcomes with Engaged Citizenry (Gabon des Réalisations Agricoles et des Initiatives des Nationaux Engagés, GRAINE), a five-year programme launched in late 2014 to bolster agricultural entrepreneurship in the country.

GRAINE focuses on providing technical assistance and training to improve smallholder productivity, while also increasing access to modern equipment and affordable credit. By encouraging small-scale crop production and boosting agriculture’s contribution to GDP from its current level of 5% to 20% by 2020, GRAINE aims to curb food imports to 50% of domestic consumption.

According to the IMF, large-scale investments in the agricultural sector in Gabon may help reverse a slowdown in broader economic growth, which is expected ease from 4% in 2015 to 3.2% in 2016.