The Report: Gabon 2016

Economy

The economy of Gabon has been driven in large part by its abundant wealth of natural resources, which have allowed it to support one of the highest per capita GDPs on the continent. However, the country’s economy reached a critical juncture in 2016, with the decrease in the international price of oil since mid-2014 having both highlighted the need for and increased the urgency of plans to diversify the hydrocarbons-dependent economy, while simultaneously reducing the availability of government financing to achieve this transformation. Economic diversification efforts are set to bear increasingly fruitful yields in the coming years – though persistent low oil prices would limit the availability of investment in such efforts and attendant infrastructure improvements, potentially slowing the pace – with several major agribusiness projects coming on-stream.

This chapter includes interviews with Régis Immongault, Minister of Economy, Forecasting and Development Programming; Madeleine Berre, Minister of the Promotion of Private Investment, Trade, Tourism and Industry; Nina Abouna, Director-General, National Investment Promotion Agency; Jean-Bernard Boumah, President, Gabonese Employers’ Confederation; and Abdellah Abbad, President, Chamber of Commerce, Industry and Services – Rabat-Salé-Kénitra Region, Morocco.

Energy

In a global environment of low oil prices, the Emerging Gabon Strategic Plan has sought to diversify the economy away from hydrocarbons since 2010. As such, over recent years the government has increased development of the hydropower sector, as well as expanding the country’s large natural gas supplies. Despite the oil crisis, Gabon remains very much dependent on oil revenues. The government is counting on the 11th licensing round to generate renewed interest in the industry and boost declining national production. Perhaps the biggest upcoming change expected to alter the energy sector is the growth of gas production, with new offshore deposits paving the way for output to increase. While the complexity of the deposits may limit export competitiveness, the steadily rising domestic need for power and the launch of new petrochemicals and fertiliser plants should ensure ample demand for deepwater gas.

This chapter contains interviews with Etienne Dieudonné Ngoubou, Minister of Petrol and Hydrocarbons; Guy Maurice, Senior Vice-President for Africa, Total E&P; Jean Paul Camus, Director-General, Société d’Energie et d’Eau du Gabon.

Banking & Financial Services

Gabon’s banking sector is heavily concentrated – a trait of many of the continent’s financial service industries – with the only privately owned local player in an outsized role. However, African banking groups have been rapidly growing their market share. Pushed down by macroeconomic headwinds, lending fell and distressed debt levels rose in 2015, but the sector showed signs of recovery in early 2016. In the short term the fortunes of the banking sector will remain dependent on the wider economic situation, which is in turn heavily linked to the international price of oil. However, government reform efforts at public banks should help put the industry on a more stable long-term footing, and plans for a new payment incidents registry and credit bureau should also boost the sophistication of payment methods and credit provision in coming years.

This chapter includes a dialogue with Claude Ayo-Iguendha, Director-General, BICIG; and Abdelaziz Yaaqoubi, Director-General, UGB; and an interview with Séverin Anguilé, President, Federation of Gabonese Insurance Companies.

Agriculture & Forestry

Much attention is being focused on Gabon’s rural areas and on developing the 5m ha of fertile land it contains. While the country has one of the lowest population densities in sub-Saharan Africa, around 86% of its 1.8m inhabitants have opted to live in the major urban centres. As a result, the rural workforce is lacking and work is being undertaken to tackle this issue through advertising campaigns that convey the image of farmers as entrepreneurs. However, another challenge in terms of developing a rural workforce is a need for training facilities. From a forestry operator’s perspective, the cost of labour is also a key consideration.

This chapter includes a dialogue with Frederic Ober, Director-General, Precious Woods CEB; and Didier Balzaretti, Former Director-General, Rougier Gabon.

Construction & Real Estate

Following the construction surge leading up to the 2012 Africa Cup of Nations, the sector’s focus shifted towards improving infrastructure, roads and housing. However, the economic malaise facing Gabon in light of the domestic debt crisis, coupled with the subsequent reduction in oil prices, has translated into a serious slowdown in the construction sector, which shrunk by 3% in 2015. While the 2017 Africa Cup of Nations will create some construction demand, the main industry drivers are expected to be infrastructure and housing. A network of roads and bridges connecting Libreville to Port-Gentil is slated to open in 2017, which will also drive a reduction in transport costs that should yield both cheaper inputs and construction materials.

This chapter contains an interview with Salim Kaddouri, Director-General, CIMAF Gabon; and Deputy Director-General, Cimgabon.

Transport

As part of Gabon’s economic growth strategy, the authorities have been looking to accelerate the development of transport infrastructure in recent years as a means to improve national logistics competitiveness and boost development in remote areas of the country. All of the state’s planned infrastructure development projects – road, railway, shipping and aviation – have been outlined in the National Programme of Infrastructure Development, which was set out by the government in 2012. In recent years, authorities have heavily invested in transportation development as a means to improve Gabon’s logistic competitiveness and bolster economic diversification in remote areas. Although transport infrastructure is set to continue expanding, the lack of financial resources is expected to slow the pace of project developments. Since the drop in oil prices in 2014, the government’s budget has shrunk and debt has risen. As such, the development of new economic segments should serve as the primary drivers of growth for the sector in coming years.

This chapter contains an interview with Tsuyoshi Kamihira, CEO, Portek Group.

Industry & Mining

The mining sector has traditionally been a major currency earner for Gabon. The country is the world’s fourth-largest producer of manganese, and is thought to have more than 2bn tonnes of iron ore, over 40 tonnes of proven gold reserves, and a range of other base and rare-earth minerals, including lead, zinc, copper, diamonds, niobium and titanium. The mining sector’s contribution to GDP is estimated to have remained flat at 4% in 2015. However, the potential of the sector is illustrated by government plans to boost GDP contribution to 25% over the next 15 years.

This chapter contains interviews with Martial-Rufin Moussavou, Former Minister of Mining and Industry; and Pietro Amico, General Representative, Eramet Gabon.

Telecoms & IT

Already the most developed market in Central Africa, according to the International Telecommunications Union, the expansion of Gabon’s ICT sector is high on the government’s priority list for the coming years, as it continues to push for economic diversification and private sector development. In 2015 the sector accounted for 5% of the economy, according to the National Agency for Digital Infrastructure and Frequencies. However, the government has laid out ambitious strategies to broaden access and inclusion, which will require significant capital investments, particularly in rural areas, which may become more difficult in light of the government’s slowing revenues.

This chapter contains a roundtable with Abderrahim Koumaa, Director-General, Gabon Telecom; Alain Kahasha, Managing Director, Airtel Gabon; and George Akoury, CEO, Azur Gabon.

Tourism

In a bid to diversify Gabon’s economy away from hydrocarbons, the government has been looking to boost the tourism sector as a means to generate foreign currency, create jobs and promote social and economic development across the country. The sector is expected to develop in the next few years on the back of expanded hotel capacity, upgraded transport infrastructure and better air links, following the 2017 Africa Cup of Nations (ACN). As a major regional event, the 2017 ACN should give the sector a major boost, especially with regard to hotel capacity. However, further work to address obstacles, including a lack of qualified staff, insufficient transport links to parks and ongoing poaching activities, remains crucial to developing the industry.

Tax

In conjunction with Deloitte Gabon, OBG explores the taxation system, examining Gabon’s investor-friendly environment. OBG talks to Angela Adibet, Head of Legal and Tax Department, Deloitte Gabon, about the Finance Act of 2016 and the fiscal framework.

Legal Framework

OBG introduces the reader to the different aspects of the legal system in Gabon, in partnership with Deloitte Gabon.

OBG talks to Nicolas Balesme, Managing Partner, Deloitte Gabon, about the governance and benefits of public-private partnerships (PPPs).

The Guide

This section includes information on hotels, government and other listings, alongside useful tips for visitors on topics like currency, visas, language, communications, dress, business hours and electricity.