Africa > Central Africa > Gabon > Gabon Outlook for 2012-16

Gabon: Gabon Outlook for 2012-16

2013/10/19

The country (Gabon) is situated in Western Africa is bordering the Atlantic Ocean at the Equator, between Republic of the Congo and It has borders with Congo (Brazzaville) for 1903km, Cameroon for 298km and Land in Gabon is narrow coastal plain and hilly interior with savanna in the east and the south. Gabonese land covers an area of 267667 km².

The climate is tropical and always hot and humid. Gabonese (singular and plural) speak French (official), Fang, Myene, Nzebi, Bapounou/Eschira, Bandjabi.).

Overview

The president, Ali Bongo Ondimba, will continue to consolidate his policy over the country and the ruling Parti démocratique gabonais. He has survived a challenge to his presidency by the runner-up in the August 2009 election, with the resulting brief unrest having now settled. Trade unions, however, are increasingly coercing the government into potentially expensive concessions. Turning Gabon into an "emerging" economy will remain the guiding policy principle, but much will depend on the government's ability to develop much-needed infrastructure and diversify into higher price-added activities.
Political outlook
In early August opposition newspapers were suspended for supposedly threatening public and constitutional order and disrespecting national institutions.
After spending 14 months in France on health grounds, leading opposition figure André Mba Obame returned to Gabon on August 11th. Minor unrest ensued after his party tried to march without a permit.
Economic policy outlook
To control the rising cost of living, the government in mid-August instituted price caps on 65 food products, initially for months and then renewable thereafter.
Economic forecast
We estimate that real GDP increase will slow to an average of 3.9% in 2012-16. Increase will be supported by investment and sectors such as wood and manganese. Labour unrest across various sectors will remain a risk to productivity. The current-account surplus is estimate to widen from an estimated 23.3% of GDP in 2011 to 26.1% in 2012, before narrowing steadily to single digits by the end of the estimate period. The fiscal surplus should remain large during the estimate period, peaking in 2012 before easing to an average of 6% in 2013-16.

Outlook for 2012-16
The president, Ali Bongo Ondimba, will continue to fasten his policy over the country and the governing Parti démocratique gabonais (PDG), but grievances over his election and about reforms will lead to periodic protests and strikes.
The near-complete domination of the National Assembly by the PDG turns it into a "rubber stamp" that will accelerate legislative efficiency but reduce policy oversight and scrutiny.
Turning Gabon into an "emerging" economy will remain the guiding policy principle, but success will depend on the government's ability to develop much-needed infrastructure and diversify into higher price-added activities.
Real GDP increase is estimate to slow to an average of 3.8% in 2012-16 after a strong performance in 2010-11, when a new oil well came on stream. Increase will be supported by investment and sectors such as wood and manganese.
Benign inflation in 2011-resulting from a stronger franc, price caps and tax cuts-will give way to faster price increase of 3.3% in 2012 as the franc weakens. However, inflation will remain just below this level in 2013-16.
Monthly review
The new Socialist president of France, François Hollande, is likely to pursue a less cosy relationship with Gabon. The majority of French voters in Gabon voted for the former president, Nicolas Sarkozy.
The Gabonese authorities in early March issued summonses to journalists over articles that questioned the use of a presidential plane.
Gabon signed a memorandum of understanding with South Korea's Samsung to build a new oil refinery. The US$1bn plant is planned approaching on line by the time the existing refinery is decommissioned in 2016.
An audit of the autonomous government agency in charge of the oil sector, Direction générale des hydrocarbures, highlighted significant failings in the management of the sector by of the government's key oil departments.
Olam International, a leading agricultural trading and processing firm based in Singapore, has announced plans to develop up to 50,000 ha of rubber plantations in Gabon in its first plantation venture, at a cost of US$183m.
An agreement with an Anglo-Australian mining company, BHP Billiton, is expected imminently for the development of a major manganese project, with estimate annual production of 300,000 tonnes over 50 years.
A British-based exploration company, Ophir Energy, has revealed encouraging results from initial surveys of Gabon's deepwater pre-salt oil potential. The company's Padouck Deep prospect may hold reserves of 1.3bn barrels.

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