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Country Brief

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Gabon: Country Brief

Political Overview

Gabon has an estimated population of 1.5 million inhabitants, of which more than 75% live in urban areas. The population is young, with 50% under the age of 19 years of age.

Gabon was a French colony from 1885 to 1960. The first President of independent Gabon was Mr. Leon M’ba, who, upon his death in 1967, was replaced by then-vice president Mr. Omar Bongo Ondimba. President Omar Bongo remained in power until his death in June, 2009. He was, at that point, the longest-serving head of state in the world, having ruled Gabon uninterruptedly for 42 years. Following President Omar Bongo’s death, presidential elections were held on August 30, 2009. Ali Bongo Ondimba, Omar Bongo’s son, was declared the winner of these elections.

From 1968 to 1990, Gabon was a one-party state. In early 1990, economic discontent and a desire for political liberalization provoked violent demonstrations and strikes by students and workers. This movement led to a number of political reforms, including the creation of a national Senate, decentralization of the budgetary process, freedom of assembly and press, and the cancellation of the exit visa requirement. In 1990, the first multiparty National Assembly elections in almost 30 years also took place.

While Gabon has been politically stable since independence, the new political era marked by the election of Ali Bongo is characterized by a certain level of political and social uncertainty and unrest. Defeated presidential candidates rejected the results announced by the electoral commission after the August 2009 election, and significant social unrest ensued after the announcement of the election results. A poll recount, demanded by the Constitutional Court, upheld the victory of the ruling party’s candidate, and Ali Bongo was sworn in as President of the Republic on October 16, 2009 the third elected president of Gabon.  The ruling party, the Gabonese Democratic Party (PDG), has dominated the political sphere in Gabon since the 1960s. While the opposition suffers from fragmentation, a new opposition party, Union Nationale (UN), was created in February 2010 and dissolved in January 2011 following its leader Mba Obame self-proclamation as the country’s rightful president.

More than two years after his election in August 2009, President Ali Bongo is still contested by a large part of the political opposition.

With a seven-year mandate, the next presidential election is not due until 2016, and Senate elections are due in January 2015. National Assembly elections were held on December 2011. The PDG won 114 seats out of 120 after opposition leader’s called for boycott.

Gabon has played a strategic role in promoting peace and stability in the region. The country’s diplomatic position internationally depended largely on former President Omar Bongo’s personal relations with other African leaders, however—built over his long reign.  UN Secretary-General Ban Ki Moon visited Gabon in June 2010 and also expressed his support for the reforms engaged by the new authorities since October 2009, in particular to promote peace and stability.

Economic Overview

Gabon is a resource-rich country and the fifth largest oil producer in Sub-Saharan Africa. It is well endowed with arable land, forest, and mineral resources. It has extraordinary biodiversity, as well as rich deposits of magnesium and iron ore.  It’s is the fifth largest oil producer in Sub-Saharan Africa and the second exporter of Manganese.

Despite declining oil production and attempts at economic diversification, Gabon remains largely dependent on oil 40 years after the start of oil exploitation. On average over the last five years, the oil sector has accounted for 81% of exports, 45% of gross domestic product (GDP), and 60% of the budget revenue.

Following a history of poor economic performance and fiscal management, Gabon’s economic performance improved over the last five years. Higher oil prices coupled with the government’s commitment to fiscal adjustment and structural reforms have considerably improved economic and financial management. Structural reforms, including privatization, implementation of the Extractive Industries Transparency Initiative (EITI), budgetary capacity improvements, and the promotion of an attractive business climate, are on track. However, there is renewed pressure on expenditures expected from 2012-2016.

The economy has recovered in 2010, after suffering from the effects of the global crisis in 2009. Real GDP growth reached 6.6% in 2010 and 4.8% in 2011 after declining by 1.4% in 2009, while inflation remained low. The current account and the overall fiscal balance remain positive, but due to the increased capital spending the non-oil primary deficit deteriorated and the gap with the sustainable non-oil primary balance widened. GDP growth is estimated to have reached 5.6% in 2012, driven by the expansionary fiscal policy of the government which has announced a CFAF 12,000 billion infrastructure development plan for 2012-2016.

In the short term, any negative impact is expected to be limited, given the modest integration of the country’s financial system and only marginal remittances. However, should the crisis be protracted and spread to other parts of the world (especially Asia), Gabon could be affected by a decline in world demand for its mineral resources, mainly oil and manganese. In this case, having a lower debt burden, Gabon could rely on external financing, mainly foreign direct investment (FDI) and concessional loans from countries such as China and Singapore that have been active in the country over the last years.

Human Development

Gabon’s human development outcomes compare favorably with Sub-Saharan Africa but fall short of countries with similar levels of per capita income particularly challenging with a dramatic increase registered from 1990 to 2010, from 0.7% to 5.4%.

Gabon is ranked 106 out of 187 countries in the 2011 United Nations Development Program (UNDP) Human Development Index and is unlikely to meet a number of Millennium Development Goals (MDGs) by 2015, in particular those indicators relating to poverty, the percentage of malnourished children, completion of primary school education, infant and maternal mortality, prevalence of HIV and access to sanitation facilities.

Youth unemployment in Gabon is alarming. The National Office of Employment (ONE) estimates that the unemployment rate of young people (less than 30 years) is 30%, the total rate accounting for 16%. This situation is mainly explained by the mismatch between the supply of the education system and the needs of the productive sector: 54% of the job offers recorded by the ONE relate to profiles of technicians and high-level technicians whereas 64% of the registered applicants do not have any vocational training.

The improvement of governance is one of the great challenges faced by Gabon. The country is 100 out of 182 in the Transparency International 2011 Global Corruption Report and 27th out of the 53 African countries in the Mo Ibrahim Governance Index, in 2011.

The recent World Bank Public Expenditure Review (PER) highlights weak public finance management, misalignment between public spending and development goals, and low spending on priority sectors, (e.g., 5.6%  annual average in the health sector during 2005-09 compared to 8.3% Sub-Saharan Africa average).

 

Government Strategy

Recognizing the challenges of economic diversification and the growing inequity and poverty facing the country, the Gabonese President has recently announced the completion of the Strategic Plan for Emerging Gabon (Plan Stratégique Gabon Emergent - PSGE). The PSGE has three pillars: making the country an industrial pole of reference (Gabon Industriel), instituting sustainable forest management and transforming Gabon into a global leader in certified tropical timber production, developing agriculture and livestock farming to improve food security, and creating sustainable and responsible fisheries (Gabon Vert) and making Gabon a center of excellence in business, ecotourism, and value-added services, such as higher education and research, health, media, and information technologies (Gabon des Services).

To implement this new development vision, the government has scaled up investment spending to promote non-oil growth and improve basic infrastructure services. As the capacity for the management of investment is limited, the government is working with the American company Bechtel to provide technical expertise. It is, however, important to strengthen the capacity of the authorities in all areas of the project cycle to improve the efficiency of investment spending. The increased capital budget should also be in line with a medium-term fiscal strategy and overall PFM reforms. In order to implement this broad agenda, the government has decided to increase the share of resources allocated to public investment from 14% to 40% of the state budget over the 2010-2016 period.

World Bank Group Support

Gabon joined the World Bank in 1963. Since then, the Bank has provided support through the financing of more than 20 projects – in a variety of sectors. As a middle-income country, Gabon is eligible for financing from the International Bank for Reconstruction and Development (IBRD).

In August 2010, the Gabon government and the Bank signed a three year Reimbursable Technical Assistance Agreement. The first annual service agreement (up to US$3million) will consist of the provision of support to public financial management, for the assessment of potential sources of non-oil growth and to update of the country’s poverty profile.

Gabon became a member of the Multilateral Investment Guarantee Agency (MIGA) in March 2003. MIGA is currently underwriting its first investment in Gabon, a vocational education project sponsored by Austrian and French investors. The project involves the construction/operation of seven vocational education schools in six cities across Gabon. As of August 2011, there were two active projects - with a commitment value of approximately US$35 million – in Gabon. These include: 

In February 2010, the World Bank and the Gabon government organized a Country Program and Portfolio Review (CPPR) in Libreville. The review identified critical bottlenecks to implementation and to the achievement of development outcomes relating to the portfolio. The CPPR concluded that, despite some difficulties, World Bank projects and programs in Gabon are achieving concrete results and that many of the projects are well placed to have lasting impact.

Recent International Finance Corporation (IFC) investment activities in Gabon include US$30 million committed in 2005 to support upstream oil and gas expansion programs of VAALCO, an existing IFC client with whom it had a committed a portfolio of US$3 million. In 2006, IFC committed an equity investment of EUR25 million and a standby facility of EUR35 million to Veolia Water AMI, a multi-utility holding company with operations in many regions. One of its three largest operations is SEEG, the water and electricity company in Gabon which was privatized following an IFC advisory mandate. SEEG was the first true private utility concession to be awarded in Africa (in 1997). IFC also provides technical assistance and support to the government in improving the general business climate in Gabon. A series of priority actions in this area were identified during a July 2011 “Doing Business” mission. IFC will continue supporting the government in the implementation of identified measures.

2012-2016 Country Partnership Strategy (CPS)

The Gabon Country Partnership Strategy (CPS) is the most important World Bank country document. It is tailored to the needs and circumstances of each country and lays down the Bank Group's development priorities, as well as the level and type of assistance the Bank will provide for a period of three years.

The CPS preparation is a participatory process. Before its adoption, key elements of the strategy are discussed with government representatives, and, to ensure the widest possible involvement, public dialogues are also held, with Internet-based discussions taking place in many countries. However, the CPS is not a negotiated document. Any differences between the country's own agenda and the Bank's strategy are highlighted in the document. A progress report is issued in the intervening year.

The new CPS 20012-2016 comes at times when the Bank and Gabon are reenergizing their relationship, and the government is committed to instituting major strategic reforms. This CPS reflects a demand driven partnership, a transformative program that is intended to flexible and responsive to changing client need.  

Significant results and progress have been recorded under the implementation of an on-going IBRD-funded local infrastructure development project in Gabon. The project aims to increase access to basic services for populations living in low-income settlements and improve access of SMEs to public civil works and construction contracts. To date, the project has provided 75,000 people in urban areas with access to all-season roads and 70,000 additional people are benefiting from improved sanitary conditions. Procurement and contracting methods have also been strengthened, in order to improve SME access to public contracts for civil works and construction. A number of additional positive practices have been reinforced as part of the project, including a reduction in delays relating to payment of contracts, implementation of processes that allow for systematic consideration of social and environmental safeguards in project preparation and implementation, and strengthening of control mechanisms (regular technical and financial audits).

The IBRD-funded Gabon Natural Resource Management Development Policy Loan (NRM-DPL) also contributed  to important results across a number of sectors. The operation has supported the Government of Gabon in its efforts to improve transparency, governance and law enforcement for natural resource management, covering four policy areas: (i) forestry; (ii) biodiversity-environment; (iii) fisheries; and (iv) mining-oil. The second tranche for $10M was released in June 2011.

Progress made under the NRM-DPL is particularly striking in the forestry sector where short-term rent-seeking behaviors were widespread. The NRM-DPL contributed to the modernization of Gabon’s forest sector, through (i) the creation and use of instruments for improved sector governance and sustainable management of forest ecosystems; (ii) the elimination of pricing and market distortions stemming from SNBG monopoly on international timber sales; (iii) the reinforcement of institutional capacities to improve monitoring and control of forest activities and (iv) a more open and attractive investment environment for investors engaging in responsible forest management activities in Gabon.  Amongst other the following two quantifiable outcomes can be attributed to the NRM-DPL operation: (i) a sharp rise in the percentage of areas in compliance with sustainable management prescriptions which have moved from 30 percent to 77 percent over the period of the NRM-DPL; (ii) a sharp increase in the recovery rate of the forest revenues which should move from 40 percent in 2005 to 87 percent for the area fees at the end of NRM-DPL.

Fisheries sector has also benefitted from the NRM-DPL, which has been a vehicle to engage the Bank within the sector in Gabon. The results achieved under this DPL go beyond the expectations initially stated: the regular disclosure of the fishing licenses and associated tax collection status, in the national press (on a semi-annual basis) and posted on the website of the Ministry of Finance, places Gabon amongst the top countries in terms of public access to information in the fisheries sector. In addition conservation measures have been taken to protect and/or restore populations of fish in over-exploited or fragile marine areas through the use of GIS-based technologies and enhance control activities.

The NRM-DPL has also provided support to the Environment sector through measures to improve capacity to monitor the social and environmental impacts of development programs including a new code of environment As a result, the DGE has managed to significantly increase the number of control missions (quantity) but also to better target the control missions, based on potential major pollution risks (quality). In addition, the DGE has substantially improved the quality of review process for the Environmental Impact Assessments / Environmental Management Plans (EIA/EMPs) that are submitted to the DGE (see para.45). Moreover, EIA/EMPs are also available at the DGE offices for public disclosure. In the specific sector of Mining, a strategic socio-environmental review of the industrial mining sector has been conducted in September 2008 : the review has provided strong analytical background that are currently being used by the Government as it is in the process reforming of the mining sector, particularly through the revision of its Mining Code

The Bank has also been able –through the Trust for Statistical Capacity Building -to financially and technically support Gabon to develop its first National Strategy for the Development and help to improve the monitoring of the MDGs through the extension of its socioeconomic database.

The World Bank works closely with the Government of Gabon through its office in Libreville. The country’s other main partners include: the European Union, the African Development Bank, UNDP, the World Health Organization, and France.

A 2010-2014 strategic partnership was signed between Gabon and France during President Sarkozy’s visit in Gabon in February 2010. This partnership, which plans high level political consultations on climate change and other main issues of the UN agenda, is expected to give a new momentum to the Franco-Gabonese relationship through win-win cooperation. It includes four cooperation agreements, including a five year defense partnership between Libreville and Paris, exchanges of young professionals and a series of credit agreements between the French Development Agency (AFD) and Gabon.

This strategic partnership was signed after Paris decided to keep in Libreville, the only permanent military base on the Atlantic coast of Africa. These agreements will be submitted to the parliaments of both countries to ensure transparency.

Last updated October 2012




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