Population 1.541 million
GDP 16.804 US$ billion
@rating
country
Business climate
assessment
| 2010 | 2011 | 2012(e) | 2013(f) | |
|---|---|---|---|---|
|
GDP growth (%)
|
6.6 |
6.8 |
7.2 |
5 |
|
Inflation (yearly average) (%)
|
1.5 |
1.3 |
2.5 |
2.1 |
|
Budget balance (% GDP)
|
0 |
5.7 |
10.5 |
8.5 |
|
Current account balance (% GDP)
|
8 |
7 |
14 |
8 |
|
Public debt (% GDP)
|
25 |
20.7 |
18.6 |
17 |
| (e) Estimate (f) Forecast | ||||
STRENGTHS
- Sub-Saharan Africa’s 4th largest oil producer, 2nd largest African timber producer, aiming to be world’s leading manganese producer
- Efforts to diversify the economy, particularly by developing the mining sector
- Clear reduction in the debt burden due to the early repayment in 2008 of the debt owed to the Paris Club
WEAKNESSES
- Economy very dependent on the oil sector
- High cost of production factors linked to inadequate transport and electricity infrastructures
- Business environment still difficult and institutional capacity unsatisfactory
Risk assessment
Growth probably set to slow in 2013 as a result of the stabilisation of oil production
Growth remained robust in 2012 thanks to the dynamism of the extractive industries and forestry exploitation. However, the country is facing a decline in oil production and this could have reached a peak in 2012, unless there are new discoveries. In this context and even though prices remain relatively healthy, growth could slow in 2013. The government is banking on advances in technology, which are opening new prospects offshore. Meanwhile, financial incentives and the high price per barrel have encouraged big foreign oil companies to invest in modernising existing wells, which should make it possible to stabilise production for a time. The operators are ready take stakes in the Gulf of Guinea exploration blocks, once the calls for tender are launched, these having been postponed pending revision of the petroleum code.
As for the mining industry, whose legal code is also being revised, expectations are concentrated on the Belinga iron ore deposit, one of the planet’s last big unexploited sites. Its development should make it possible to end the dependence on oil (49% of GDP, 57% of public revenues and 85% of exports in 2011). Exploitation of the site, however, is delayed due to disputes between the government and the Chinese operator. The latter’s contract was cancelled in early 2012 and the exploitation entrusted to an Australian mining group. Meanwhile, manganese production is expected to double in the medium term. Production started at two new fields in 2011 and exploitation of a gold mine began in July of the same year. After stabilising in 2010-2011, due to a log-export ban, forestry production has recovered due to the development of wood transformation activities. As part of the strategy of diversifying the productive fabric, which aims to lift the country to the rank of the emerging countries by 2025, the government has also created two special economic zones, which should attract many foreign investors. Finally, the tertiary sector is not being left behind, telecoms, in particular, seeing strong development.
Healthier financial position but dependence on oil still strong
The non-oil budget deficit remains too high and growth of the non-oil private sector is still inadequately stimulated and diversified. The business climate and access to finance for SMEs remain difficult. The country still lacks basic infrastructures. Despite this, public finances benefited from a buoyant economic situation in 2012 due to healthy oil production and slightly firmer crude prices. The increase in the selling price of manganese also had a positive effect. Similarly, increased timber and oil production and firm prices for exported raw materials led to an increase in the current account surplus. The risk of default fell distinctly in 2008 due to the reduction of the public debt and its servicing cost, in conjunction with early repayment to the Paris Club creditors. The debt ratio continues to fall but remains sensitive to oil price volatility.
A politically relatively stable but unequal country
Despite objections raised by the opposition, the political situation has stabilised since the validation by the Constitutional Court, in October 2009, of the election of Ali Bongo as President for a seven-year term. The December 2011 legislative elections, marked, however, by a low turnout, gave the president’s party (Gabonese Democratic Party) a handsome victory. The Head of State strengthened his control of the party through the ministerial reshuffle of February 2012. The government may have to deal with demonstrations or strikes, which, however, are not likely to threaten political stability. On the social front, there are big income inequalities and a high poverty rate. There is still a big difference between the human development index and per capita income, while the youth unemployment rate is twice as high as that of the overall labour force (30%).
