Poverty Profile With a GDP per capita of about US$5,000 in 1996, Gabon is one of the richest countries in Africa. In 1996, the oil sector accounted for about 63 percent of government revenues. The relatively high income per capita masks large inequalities and some social indicators are comparable to those of lower-income African countries.
Poverty data are scarce for Gabon. This poverty profile is based on: (i) national account data to estimate poverty trends during 1960-1993; (ii) the 1993-94 Household Survey in Libreville and Port-Gentil (almost half of the population); (iii) the 1993 National Population Census; and (iv) a Participatory Poverty Assessment (PPA) completed in 1995.
The report uses three relative poverty lines to analyze poverty trends during 1960-1994: the first is set at the minimum wage level, the second at two-thirds of the average consumption, and the third, representing an extreme poverty line, at one US dollar a day. Estimates based on the first two lines show that the number of poor is high and has diminished little over the period (from 87/67 percent in 1960 to 83/62 percent in 1994). Extreme poverty, on the other hand, has declined significantly (from 66 percent in 1960 to 23 percent in 1994).
According to the 1993-94 Household Survey, 9 percent of the population in Libreville and Port Gentil are food-poor in the sense that they cannot meet their daily caloric requirement even if they were to devote all their expenditures to the basic food basket, estimated at CFAF 18,000 per person per month. Nearly 20 percent of the population in these two cities live below the absolute poverty line, estimated at CFAF 29,000 per person per month. The minimum wage, at CFAF 64,000 per month, constitutes a fair approximation for the relative poverty line. Twenty five percent of the population in Libreville and Port Gentil live below this line. The urban Gini coefficient reaches 0.5 before private transfers between households, which indicates relatively large inequalities. Joblessness, either because of unemployment or retirement, is closely related to poverty in both cities. Poverty is also associated with low education and households headed by women. Due to high levels of family solidarity, middle class households have a higher number of poor than households headed by a person below the poverty line.
The 1993 Population Census shows wide disparities between provinces in terms of illiteracy, housing and access to potable water. For example, while 80 percent in the Estuaire province (including Libreville) have access to potable water, the rate is below 20 percent in Nyanga and Ngounié. Nyanga, Ngounié, Ogooué Ivindo, and Ogooué Lolo are the poorest of the nine provinces.
The PPA suggests that access to health and education services are the two prime preoccupations of rural people; those living in secondary towns are mainly concerned with the lack or inadequacy of urban infrastructure, (especially the lack of safe water). In Libreville, complaints center around the unhealthy environment, the lack of access roads, and the threat to personal safety due to a perceived rise in crime.
Incentive and Regulatory Framework Following the 1973 oil boom, real GDP rose rapidly (by 70 percent during 1973-76). In face of this sudden influx of revenues, the government decided to follow an expansionist budgetary policy. The public and parapublic sectors became swollen with new staff benefiting from a generous wage policy. At that time, Gabon was at full employment and became a pole for immigration. With its proclivity to invest in projects with poor rates of return and easy access to international financial markets, the country's foreign debt soared by 62 percent between 1975 and 1976. This policy raised the cost of living, hindered the development of small enterprises and agriculture, and devastated the country's competitiveness.
A high percentage of the active rural population abandoned subsistence farming to seek work in urban centers. It is estimated that the negative impact on rural living standards was, however, partially offset by the government's social policy and by the transfers sent by migrants to rural family members.
Gabon's oil economy collapsed suddenly in 1986, when the price of crude oil dropped by 50 percent. In 1995, unemployment reached 30 percent for those under age 26, reflecting a sharp contraction of the public and private sectors combined with a rapid increase of the active population.
Since the 1994 devaluation of the CFA Franc, the government has made efforts to foster a favorable environment for private sector development. It improved its trade and fiscal policies and successfully implemented regional fiscal and tariff reforms. The government has reduced the average customs duties, simplified the tariff structure, and lifted quantitative restrictions. In 1995, it introduced an 18 percent value-added tax.
The government has now adopted a modern Investments Charter and is revising Sectoral Codes (petroleum, mines, timber). Other reforms to simplify the tax structure and to liberalize the labor market are underway. The government has also begun implementing an ambitious and front-loaded privatization program.
Public Expenditure There is a striking imbalance between the mediocre outcomes in health and education and the relatively high level of public spending for these sectors.
The health sector presents a demographic and epidemiological profile typical of a poor country. Public health indicators are only average for Sub-Saharan Africa. Morbidity is still mainly caused by parasitic and infectious diseases and since 1986, nutrition has become a public health problem. Yet, in 1994, public and private spending on health was estimated at US$ 172 per capita, compared with an average of US$ 14 for Sub-Saharan Africa. The sector is characterized by the lack of a sectoral strategy, weak budgetary planning, and an inefficient drug policy: Gabon imports a total of US$20 worth of drugs per person per year, essentially expensive pharmaceutical specialties which are available only in the main cities. The budget favors curative health and the purchase of expensive equipment. As a result, access to health services remains expensive and inequitable. Until recently, there has been a lack of political will to address this issue.
In the education sector, gross primary school enrollment (142 percent in 1995-96) is among the highest in Sub-Saharan Africa and the participation rate for girls is as high as for boys. Although there are wide geographic disparities, the overall illiteracy rate is low (34 percent). However, the system is highly inefficient: the net enrollment rate in primary school is about 86 percent and the repeater rate is higher than 30 percent at all levels. In secondary education, the gross enrollment rate is 53 percent for the first cycle, but the net rate is only 15 percent. As a result, the education level of the population does not meet the labor market demand. The PPA indicates that the poor suffer the most from the social system's shortcomings. These results do not reflect the level of public spending in the sector.
Gabon spends more per pupil than most African countries, although the education budget has been repeatedly cut. In 1994, public spending still reached US$337 per student at the primary and secondary levels. In the absence of a sectoral strategy and efficient budget procedures, budget allocations are simply renewed each year without rigor and control. The government has not yet taken the steps to significantly improve the performance of the system.
Safety Net In the 1980s, the country implemented a generous social protection system for poor Gabonese. The various transfers (including free medicine, food, family allowance, and cash) seems, until 1986, to have had a positive impact on the poor. However, since then, the system has not been able to function effectively due to insufficient budget allocations and inefficient use of available resources.
The government should reform the social protection system by setting up realistic objectives and providing appropriate budget allocations to meet them. The costly and now inefficient ID system for the poor (Carte d'indigent) should be replaced by measures which would: (i) increase the poor's ability to respond to economic opportunities; (ii) reduce the cost of health and education services; and (iii) improve the quality of those services.
Family assistance remains the primary safety net used in urban areas. With growing urban poverty since 1986, solidarity towards village relatives has diminished. Moreover, the PPA revealed that an increasing number of urban households send some family members back to the village where they can at least feed themselves. The NGO sector is just nascent in Gabon.
Poverty Strategy The government has taken an active part in the preparation of the Poverty Assessment and has recognized the elements discussed below as the main axis of its poverty reduction strategy. It has already implemented some of the recommended measures.
The pattern of growth is not conductive to sustainable poverty reduction; the oil sector creates the smallest number of jobs of all sectors. The poverty reduction strategy calls for diversification of sources of growth towards more labor-intensive sectors (such as forestry, agriculture, fisheries) through the development of the private sector and increased competitiveness.
Unemployment is a key factor of urban poverty. The majority of the unemployed can only be absorbed over the medium to long term with a diversification of the economy, efficient market mechanisms, and an improved education system. However, short-term relief measures should be adopted, such as labor-intensive public works, micro-credits facilities, and training programs for the unemployed.
To reduce poverty in small towns and rural areas, strategies will have to be adapted to the degree of isolation of each area. In areas with adequate transportation facilities, the income of the poor could be raised by enhancing productivity through the diffusion of appropriate techniques, inputs and equipment, and access to credit. In relatively remote areas, the major constraint to raising the poor's incomes is the marketing of their products, implying a need for better transport facilities. With the Bank's assistance, the government is mapping the country's current production potential, population density and state of infrastructure, before defining a transportation strategy and undertaking priority investment and maintenance programs. In isolated areas, investment costs are high in relation to expected benefits. Poverty reduction activities should therefore focus on making minor investments to improve access to safe drinking water, primary health care, and basic education.
Better education will be necessary to reduce unemployment and poverty. The government should define an education sector strategy which would include, inter alia, measures to reduce the cost of schooling and to limit overcrowding in primary urban schools.
Improving basic health will require that the government vigorously pursue efforts on preventive health, especially access to safe water and urban sanitation, and a sound drug policy including the introduction and country-wide diffusion of generic medicines. The 1995 Ordinance providing the appropriate legal framework for sector reforms should be implemented without further delay.
Better functioning of both sectors will require more efficient use of public spending and civil service reform. The Bank is currently helping with a social sector PER, but the civil service reform is lagging.
Statistical System To date, the government has not allocated sufficient resources to increase its capacity to collect and analyze poverty-related data. The Statistics Department of the Planning Ministry should define a plan to improve the national statistical capacity, including a household survey program. The data collected could enhance the contents of the existing Social Indicator Table (Tableau de Bord Social). Given the lack of data on health and nutrition, a Demographic and Health Survey is also recommended.
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