major macro economic indicators
|2020||2021||2022 (e)||2023 (p)|
|GDP growth (%)||-1.9||1.5||2.8||3.7|
|Inflation (yearly average, %)||1.3||1.1||3.5||3.2|
|Budget balance (% GDP)||-2.2||-1.9||1.2||3.0|
|Current account balance (% GDP)||-6.9||-5.7||-1.4||-2.9|
|Public debt (% GDP)||78.3||65.8||52.6||50.8|
(e): Estimate (f): Forecast
- Abundant natural resources: fourth-largest oil producer in sub-Saharan Africa (2020), second-largest manganese producer in the world (2022) and one of the continent's largest producers of tropical wood
- Under-exploited mining potential: deposits of iron, gold, uranium, diamond, copper, zinc, rare-earth metals, etc.
- Drive to diversify the economy as part of the Emerging Gabon Strategic Plan 2010-2025
- Hydroelectric potential
- Member of the CEMAC and the Commonwealth
- Economy heavily dependent on the oil sector
- High cost of production factors linked to inadequate infrastructure (transport and electricity)
- Dependent on imports of food and capital goods
- High unemployment, endemic poverty, poor wealth distribution, informal economy (estimated at between 40% and 50% of GDP)
- Widespread corruption
- Stock of domestic and external arrears not yet cleared
The recovery continues, driven by the extractive industries
In 2023, Gabon will continue its recovery, still supported by oil exports (accounting for around 50% of total exports) since the alleviation of the health crisis. Although the economy is still not very diversified, it will benefit from the dynamics of its secondary activities, in particular the mining sector (mainly manganese), construction (resulting from investments, especially from Europe, in hydrocarbons), agriculture (with the development of wood and palm oil exploitation), as well as the recovery in services. Thanks to the preservation of its tropical forests (covering over 90% of its territory), Gabon also intends to take advantage of its status as a net carbon absorber by commercialising its carbon credits (representing around USD 291 million). Although growth will be tempered by ageing oil fields, oil production will increase as new wells are exploited and OPEC+ quotas are gradually relaxed. However, while higher oil prices resulting from the Russia-Ukraine war are favourable for exports and government revenues, the concomitant rise in food import prices, on which the country is heavily dependent, will maintain inflationary pressures. The pegging of the CFA franc to the euro helps to contain them. In this respect, the Bank of Central African States should follow the ECB's monetary tightening and gradually raise its key rate to 5.75% in 2023. However, household consumption could be hampered by the fallout from the war in Ukraine and by a still high unemployment rate (expected to reach 23% in 2022). Foreign direct investment (around 5% of GDP in 2022), particularly in projects accompanying diversification, will compensate for the drop in public investment constrained by a policy of fiscal consolidation. Finally, the start of construction of two hydroelectric power stations, one on the Ngounié River and the other on the Okano River, will contribute to the country's development and job creation.
Accounts closely linked to oil
The comfortable royalties generated by high oil prices, better mobilisation of non-oil revenues and control of current expenditure will allow the budget surplus, which emerged in 2022, to be maintained in 2023. This improvement follows a situation of high public debt that led Gabon to conclude a three-year fiscal consolidation programme with the IMF in 2021, accompanied by an extended credit facility of about USD 553 million. However, currently benefiting from high royalties from the extractive industries, and with presidential elections in 2023, the government is likely to postpone any significant reforms. Nevertheless, after exploding in 2020, public debt, which is mostly external (60% of the total) and held by multilateral (mainly the IMF and the World Bank) and bilateral (France, China, etc.) creditors, should continue its downward trajectory in a benign deficit context. The trade surplus and the current account balance evolve mainly according to oil prices. The rise in oil revenues increased the trade surplus and led to a current account surplus in 2022, outweighing the rise in food imports and increased profit repatriation by foreign companies, while the services deficit persisted. Lower oil revenues are expected to have the opposite effect in 2023, despite lower imports and profit repatriation, as well as higher timber and manganese revenues. The deficit will be easily financed by FDI.
Politicalstability and social frustration
President Ali Bongo Ondimba, who has been in office since 2009 after succeeding his father, was re-elected in turmoil in 2016. Faced with a weak and divided opposition, he remains favourite to succeed himself in the 2023 presidential elections. After several health-related absences since October 2018, a constitutional amendment was adopted in December 2020 to regulate the transfer of interim powers to the presidents of the houses of parliament and the defence minister during the president's temporary absence. While waiting for the next elections, the authorities could face social unrest linked to the lack of public confidence in the president's ability to govern in the event of repeated absences, unemployment, poverty (34% of the population in 2021), fiscal austerity and inflation. The government will also be judged on its credibility in the fight against corruption, as the president's name has come up in the Pandora Papers affair. Regarding international relations, Gabon will play a role in promoting environmental preservation and regional conflict resolution after gaining a non-permanent seat on the UN Security Council from January 2022 for a two-year term. Already close to China and France, Gabon joined the Commonwealth in June 2022, thus improving its diplomatic and economic ties with the UK and its other members.
Last updated: November 2022