With a tropical climate and arable land to spare, Gabon has significant potential to expand agriculture, yet the sector remains largely underdeveloped. At present production is dominated by cassava and plantain, the output of which reached 300,000 tonnes and 285,000 tonnes, respectively, in 2012. The World Bank estimates that value-added agriculture contributed 4% of GDP in 2012, down from 5% in 2009. One-fifth of the country’s total arable land has not been developed for agriculture, and Gabon remains largely dependent on food imports to meet its consumption requirements. The sector has shown recent growth, roughly 5% year-on-year (y-o-y) from 2010 to 2013, according to the World Bank. The African Development Bank reports a growth rate of 4.8% in 2013. If further developed, the agriculture sector could contribute significantly to overall economic diversification and especially to a more inclusive pattern of economic growth. “The development of the agricultural sector would significantly boost employment, help stem the rural exodus and reduce the cost of living, as locally produced foodstuffs could become much cheaper than imported ones,” Erik Watremez, country managing partner at Ernst & Young Gabon, said.
Cereals
Wheat imports are crucial to meeting the country’s food requirements. However, the rising cost of wheat on the global market has complicated efforts to control the annual food bill while importing sufficient quantities to meet domestic consumption needs. In May 2013 the government added wheat flour to its list of commodity price controls, causing the price of imported wheat to fall by 39% from April to November of 2013. This reprieve was short-lived, however, as prices rebounded in November 2013, rising by 52% and approaching pre-price control levels by March 2014. Prices for Gabon’s second-biggest cereal import, rice, also rose in early 2014, increasing by 30% from February to March and up some 12% y-o-y.
Flour and egg producer Société Meunière et Avicole du Gabon (SMAG), a subsidiary of French Castel Group’s Société d’Organisation de Management et de Développement des Industries Alimentaires et Agricoles, is the sole producer of wheat flour in Gabon. SMAG’s flour production increased from 70,585 tonnes in 2012 to 73,088 tonnes in 2013, and had reached 36,751 tonnes by mid-year 2014. The company records around 3% overall growth each year, which Eric Chardin, the commercial director of SMAG, attributes largely to increased demand driven by population growth. SMAG is also the primary producer of grain for animal feed, the majority of which goes to feed egg-laying hens. SMAG recently boosted its grain production capacity to a total of 75,000 tonnes in response to 12.5% y-o-y growth in grain demand in 2013. Double-digit growth looks set to continue in 2014.
Livestock
Apart from a 100,000-ha, 6000-head cattle ranch run by Belgium’s Société d’Investissement pour l’Agriculture Tropicale (SIAT) in Nyanga Province, domestic commercial livestock activities are minimal, with imports and subsistence farming supplying the majority of meat consumed. In 2011 chicken meat was the top agricultural import by value, and at 54,901 tonnes, the second-largest agricultural import by volume. The government’s Emerging Gabon development plan sets a production target of 25,000 tonnes of broiler chicken by 2016. According to Chardin, “There is strong potential for local production of broiler chickens in Gabon. The primary barrier to growth in this sector is the imported frozen chicken products coming largely from countries such as Brazil and the EU, where production is subsidised. Imported frozen chicken comes in at CFA1200 (€1.80) per kg, whereas the cost to produce chicken locally is estimated at CFA1500-1600 (€2.25-2.40).” But, said Chardin, “The transition to local production of broiler chickens would be achieved relatively quickly if the authorities introduced measures to limit imports or to promote local production.”
Eggs
Egg production has shown notable growth in recent years largely due to the absence of imported eggs on the domestic market. “Eggs expire too quickly to be viable as an import to Gabon; as a result, the local industry for eggs has been very successful,” said Chardin. SMAG has generally registered significant growth, between 10% and 20% y-o-y, in its sales of feed grain to egg producers. SMAG is also an egg producer itself, with an output of around 40m eggs per year. According to Chardin, “We used to have about 70% of the market for eggs, but now our market share is closer to 30%, despite maintaining a consistent production level over approximately the last 10 years. Other producers have steadily developed, demand for eggs is increasing and the industry is growing well, professionalising and turning out a quality product.”
Fishing
Although Gabon has a coastline that stretches for some 800 km as well as numerous inland rivers and lakes that are home to a diverse fish population, commercial fishing, like the agriculture sector generally, remains largely underdeveloped. Gabon imports around 50% of the fish it consumes, with artisanal, rather than industrial, fishing accounting for the majority of domestic production. While industrial fishing activities contribute only about 1.5% of GDP, the Ministerial Conference on Fisheries Cooperation Among African States Bordering the Atlantic Ocean estimates that an industrial fishing sector could potentially generate around €17.68m per year.
A strong domestic fishing industry would have a significant positive impact on food security as well. With this in mind, the government entered into a public-private partnership in February 2013 with Ireland Blyth Limited (IBL) of Mauritius. The deal, in which IBL holds a majority 60% share, entails an investment of €100m and aims to revitalise Gabon’s domestic fish processing sector. The partnership transferred management of a fish processing factory formerly run by Société Industrielle Frigorifique du Gabon to IBL, which has also agreed to establish processing plants to produce fish meal and fish oil, and to build a shipyard.
In April 2013 the Gabonese government signed a three-year protocol with the EU Fisheries Council granting EU fishing vessels access to Gabonese waters in exchange for an annual payment of €1.35m. The deal will contribute financing to the government’s Blue Gabon initiative, which aims to support the further development of a value-added domestic fish processing industry. Of the €1.35m in revenue generated by the EU protocol, €900,000 is for access rights and €450,000 will go to support Gabon’s fisheries policy, which is aimed at improving management of the country’s fishing waters and enhancing conservation.
Reliance on Imports
Gabon remains largely dependent on imported food to meet its domestic consumption requirements. The WTO estimates that some 60% of food consumed is imported, while the government puts the figure at more than 80%. The dependence on imports is more pronounced for basic goods, such as wheat and rice. In 2013 domestic cereals production totalled 33,000 tonnes, whereas consumption of cereals reached 181,000 tonnes, according to the Food and Agriculture Organisation (FAO) of the UN. Gabon expects to see some improvement in 2014 due to a projected uptick in domestic production. Cereals imports are forecast to drop to 177,000 tonnes, or 80% of consumption, in 2014. Gabon spends an estimated CFA150bn-300bn (€225m-450m) on food imports annually, leaving the country highly vulnerable to global price fluctuations and shortages of basic foodstuffs.
Government Strategy
Reducing the food bill and improving food security are priorities of the Emerging Gabon initiative. Domestic agricultural development has proven challenging, however, due to the lack of technical knowledge and relevant training of the workforce, the poor image many Gabonese have of farming work and the limited access to credit for would-be local producers, as well as several infrastructural and logistical hurdles. In 2010 the government launched a five-year National Food Security Plan (Plan National de Sécurité Alimentaire, PNSA) to be implemented at an estimated cost of CFA61.2bn (€91.8m). Financing for the PNSA was to come 58% from the government, 36% from foreign investment, and 6% from the direct beneficiaries of the PNSA’s programmes. The budget deficit has slowed progress on implementation of the PNSA, though the government reinforced its commitment to food security in May 2013 with its ratification of the Comprehensive Africa Agriculture Development Programme (Programme Détaillé pour le Développement Agricole en Afrique, PDDAA), an initiative of the African Union’s New Partnership for Africa’s Development. The programme aims to achieve development through agriculture, setting targets of 6% annual growth in the sector and committing signatories to contribute 10% of their national budgets to other agricultural programmes.
In conjunction with ratification of the PDDAA, the government introduced the National Programme for Agricultural Investment and Food and Nutritional Security to guide implementation of agricultural development policies. Local news sources report that in 2013 public spending on agriculture was just 1% of the total budget, indicating that little progress has so far been made toward these goals. Inflation in basic foodstuffs has exacerbated efforts to cut the food bill and to reduce the broader fiscal impact of agricultural imports.
According to the IMF, rising food prices are a major factor driving inflation, which is set to reach 5.6% in 2014, up from 0.5% in 2013 and 2.7% in 2012. Development of the domestic agricultural sector could, however, bring benefits in terms of wealth creation, diversification of revenue streams and greater fiscal independence. Domestic food production also has the potential to reduce poverty by lowering food prices and creating jobs, particularly in the interior of the country. As Pascal Pommarel, executive director of the Gabonese Institute for Development Assistance (Institut Gabonais d’Appui au Développement, IGAD), noted, “The current administration really wants to develop the interior, and agriculture is a good way to achieve this.”
Market Gardening
In the 1990s the government launched an initiative to establish small-scale community farming activities around the periphery of urban areas with the idea that local farmers could supply food markets in their areas. The broader goals of the periurban farming programme are to improve food self-sufficiency, support entrepreneurs and boost economic development at the local community level. Managed by IGAD and deriving 80% of its funding from a debt-refinancing deal with the French Development Agency, the project was initially implemented in Libreville and later expanded to cover all nine provinces. In its current five-year iteration, the initiative is entitled the Agricultural Development and Investment Project in Gabon (Projet de Développement et d’Investissement Agricole au Gabon, PRODIAG) and covers more than 400 ha of land with a total budget of €20m.
Each year, through a competitive application process, IGAD selects a cadre of participants with no previous background in agriculture and trains them in farming techniques, provides them with a plot of land and the necessary equipment, and helps them establish a self-sustaining small farming business. Farm output is centred on vegetables, poultry, pork, plantain and manioc, with a small processing component as well. From 2012 to mid-2014, total production levels reached 5200 tonnes and CFA 2.6bn (€3.9m) in revenues, and the project expects to train an additional 1000 farmer-entrepreneurs by 2016. “When IGAD was formed in the 1990s, there wasn’t much vegetable production in the country. Now, the change is noticeable; you see lots of locally produced vegetables being sold in street-side markets,” Pommarel said of the project’s impact.
Cash Crops
Large-scale palm oil and rubber production has expanded in recent years, and the government hopes to attract further foreign investment for the development of cash crops such as coffee, cocoa, maize and soya with the eventual goal of exporting to regional and international markets. Created in 2012, Olam Rubber Gabon is a joint venture with 80% participation from Singapore-based Olam International and 20% from the government, while Olam Palm Gabon is split 70:30. However, Olam recently announced the government’s plans to invest an additional €42.4m, thereby boosting its share to 40% in both ventures. As of June 2014 Olam Rubber Gabon had planted 3340 ha of rubber in Bitam, and it intends to eventually plant 28,000 ha in total. Upon completion, this will be the largest single-location plantation in Africa. Olam Palm Gabon had planted 16,600 ha of oil palms as of June 2014 with the goal of reaching 50,000 ha by 2017. In 2013 21,000 ha of new plantations were planted in all of Africa, of which the Olam joint venture with Gabon accounted for 10,000 ha. In addition to its palm and rubber operations, Olam also has plans for a fertiliser production facility that is designed to help boost growth.
SIAT is the other major foreign actor in the sector, having purchased AgroGabon, Hévégab and the Nyanga cattle ranch from the Gabonese government in 2004. The three formerly public companies now comprise SIAT Gabon. In July 2014 the firm signed a new 10-year, CFA315bn (€472.5m) contract with the Gabonese government to enable the expansion of its activities in rubber, palm oil and cattle ranching. The deal includes the planting of an additional 20,000 ha of rubber trees in the Bitam-Kango region and a second rubber processing plant in Lambaréné to support the company’s existing plant in Mitzic, which has reached capacity. Expansion of the company’s palm oil activities will include replanting nearly 10,000 ha of oil palms and reinforcing its processing facilities in Makouké and Lambaréné. SIAT will also add 25,000 heads of cattle to its ranch in Nyanga and construct a new slaughterhouse in Owendo, on the outskirts of Libreville.
The Gabonese government has also entered into a $2.3bn joint venture with the Moroccan government to construct four fertiliser factories, two of which will be built in Gabon. The deal aims to take advantage of Gabon’s gas reserves and Morocco’s phosphates to supply the growing demand for agricultural fertiliser in sub-Saharan Africa, while boosting domestic production in the two countries.
Workforce
According to the FAO, the agricultural sector absorbed approximately a quarter of Gabon’s labour force in 2013, claiming nearly 200,000 individuals out of a total labour force of 810,000. But the sector’s share of the working population has decreased by about 2.78% y-o-y, in part due to the increasing urbanisation of the population and the poor image of farming as an occupation. Apart from those trained by PRODIAG, there is very little agricultural expertise among the Gabonese labour force, obliging foreign investors to conduct substantial in-house training.
Land Ownership
The lack of transparency in Gabon’s land ownership regime presents a barrier to the creation of a formal land market. While the state technically owns most of the land, customary ownership is the de facto norm in rural areas, and more mapping is needed to facilitate development and the creation of sustainable use policies. With this in mind, the National Parks Agency has partnered with Olam International to conduct land use surveys and planning, while the Gabonese Agency for Spatial Studies and Observation carries out satellite-assisted environmental surveillance with the French Institute for Development Research and the Brazilian Institute for Spatial Research. The Gabonese Food Security Agency, set up in 2013 in conjunction with Gabon’s ratification of the PDDAA targets, is working with IGN France International to develop land mapping as a tool for policy planning.
Research & Development
Spending on agricultural research and development (R&D) in Gabon has traditionally been low relative to the rest of sub-Saharan Africa, according to the Agricultural Science and Technology Indicators initiative, led by the International Food Policy Research Institute (IFPRI), though the government has increased the number of researchers on its payroll in recent decades, from 23 in 1991 to 61 in 2008, according to a 2011 report by the IFPRI.
There has been comparatively little donor interest in agricultural R&D in Gabon, as international donors tend to focus such support on lower-income countries. As a result, the government is the sector’s primary backer, although budget outlays for R&D are frequently diverted to other priorities over the course of the year. Most agricultural R&D in Gabon currently focuses on banana, plantain, cassava and, more recently, fishing activities.
Outlook
Development in Gabon’s agricultural sector has been hampered by budgetary constraints, and the mid-year downward revision in the 2014 budget is likely to limit progress on agricultural development targets in the near term. Yet the political will to expand the sector exists, and the potential benefits of agricultural growth are extensive, particularly for improving human development indicators and reducing poverty. The small size of Gabon’s domestic market and the plentiful supply of arable land make achieving domestic food security a possibility in the mid-term, if gaps in the workforce can be remedied and regulatory policies enacted to support domestic production. The country also benefits from a strong sustainability advantage.
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