#Gabon: Since 2010, the Gabonese economic growth borders on insolence

 


Despite the global economic crisis, Gabon has a strong economy, growing steadily. The diversification of the Gabonese economy is indeed one of the priorities of President Ali Bongo Ondimba.

It relies on many sectors: agriculture, food processing, renewable energy, wood processing, sustainable management of forests and water, training, health, construction, etc ...

The confidence of international investors
Since 2010, Gabon has the confidence of investors whose risk perception of Gabon has improved significantly. Several contracts relating to development projects, totaling more than $ 4 billion have been signed since 2010 in the areas of wood, the ?? agriculture and infrastructure. The rating agencies recognize the commitment to reform the country's economic strategy and implementation.

In April 2012, Fitch has revised the outlook of Gabon to "positive" and affirmed its BB rating. "The government is accelerating the diversification of the economy to turn to the manufacturing sector, with massive investments in infrastructure and the creation of special economic zones. The introduction of new leaders in the administration and measures to improve public governance and attract foreign investments demonstrate the will to reform the country, "says Reuters publication of new ratings of Fitch.


This confidence abroad is justified GCI ranking, through many indicators: low impact of red tape (19th in the world), organized crime (31st), business ethics (49th), mobile telephony (48th) gross national savings / GDP (12th), Public / GDP (25th) debt.

Renewed growth

Since 2010 and after two years of sharp slowdown, the Gabonese economy returned to strong growth, to 7.4% in 2012 (2.7 in 2009). Proof of the success of the policy of Gabon Emergent, non-oil GDP now fully contributing to this good performance.

In fact he knows a 2-digit growth that exceeds 2 years, that of oil GDP in 2012: 10.4% of non-oil growth vs 1.5% growth in oil production. This growth was driven by:

- The mining sector

- The revival of the wood sector

- The construction industry, in particular the construction of hydroelectric dams

- Services that support the sectors mentioned above

The structuring of the territory
Between 2012 and 2016, some 175 "heavy" projects arrow, for a total of 20 billion USD, of which 6 billion on the development of roads (1700km) and 5.5 on the rail network (800 km).

The Gabon will have on the horizon 2016 3663 km of paved road quality (30% of its road network) which will support 80% of domestic traffic of goods and people.

The national infrastructure master plan includes 21 major projects, at an estimated USD 12.236 billion over 6 years total investment.

A good business climate.
UNDAF business and supporting the private sector is at the center of government policy, with the aim to put this sector at the center of the operation of the Chamber of Commerce. A general audit of the civil service has allowed the removal of thousands of phantom jobs, developing the operational efficiency of the public-private relationship. In the GCI ranking, Gabon showing good signs, ranging from the world's top 60 in business ethics, safety, transparency of government actions, the process of governing boards.

Major projects Creation of Special Economic Zone Nkok public-private partnership with the Singapore company Olam consists of industrial zones and 75% (sawmill scrap, cement, etc.) and 25% of residential and commercial areas (675m d investment expected in the next three years on year).

Poubara dam (160MW) near Franceville to drive future ferromanganese plant Moanda (300m investment ?? 75% financed by China and 25% by Gabon) and a thermal power plant (105MW) to Port Gentil by an Israeli company (115m).

To use the revenue and support economic growth, the government restructured the fund for future generations. The sovereign investment fund when its part, will now be managed exclusively by the Strategic Investment Fund (FGIS) newly created.

Furthermore, the growing interest in investments in border and the stability and wealth of Gabon are good arguments to attract partnerships with the private sector markets.

The point of economic conditions and macroeconomic forecasts for the first half of 2014 of the Economic Community of Central Africa (CEMAC) show an excellent location for Gabon.

Regarding economic conditions, the activity was sustained in 2013 in most sectors except export and building materials products.

Specifically, in the primary sector, domestic production of crude oil amounted to 11.014 million tons, down 5.3%, due to the technical difficulties encountered by the operators and the natural decline of mature fields.

In contrast, mining activity was characterized by significant results due to the favorable economic climate and the rise of the deposit Ndjolé with a manganese production of 4 million tonnes (27.7%) .

At the secondary and tertiary sectors, overall activity is on the rise, thanks to strong domestic market demand, with the exception of branches of tobacco manufacturing, lubricants and construction materials.

Regarding consumer prices, inflation, as measured by the HICP, averaged 0.5% in December 2013 Year over year, prices rose 3.3%, due to increases in price of the items "housing, water, electricity, gas and other fuels" (10.6%), "transport" (3.4%) and "clothing and footwear" (3.3%).

In 2013, Gabon's foreign trade was characterized by a contraction in export values ​​(-4.6%) and an increase in imports (+3.4%). As a result, the trade balance, although qu'excédentaire 2 794.3 billion CFA francs, dropped 9.4%.

Concerning the outlook and economic forecasts, CEMAC believes that Gabonese economy will grow 7.1% to 2014 driven mainly by the non-oil sector (8.5%) (construction, mining, etc.) . The primary sector to grow by 3.9% with oil at 0.9%, while the secondary sector would show 9.0% growth and 8.8% tertiary.

In 2015, the growth rate would be 8.5%, supported not only by the non-oil activities, but also by the oil would grow by 5.9%.

Aggregate demand should be supported in 2014 under the leadership of private investment (12.9%) who takes over on the public. Similarly, exports would increase by 3.7% and imports by 5.4%, supported by imports of capital goods.

Thus, 2015 should see the same trends with global demand growth and still supported by private investment (13.4%). Exports were up 5.7%, while imports would increase by 6.4%.

The consumer prices are projected at 1.3% in 2014 contained by government measures for removing taxes on certain commodities. In 2015, prices would gain a point to stand at 2.3%.

In terms of public finances, the primary balance will be in surplus in 2014 is expected an increase in total revenue in 2015, thanks to measures related to the control of tax expenditures, improving capacity and recovery services modernization work tools of tax authorities.

Credit to the economy would experience a significant increase (32.8%), reflecting the expected developments in the banking system and increase its support for the financing of the economy


                                                 LEGABONEMERGENT, September 24, 2014