major macro economic indicators
|2019||2020||2021 (e)||2022 (f)|
|GDP growth (%)||3.9||-1.8||1.5||3.7|
|Inflation (yearly average, %)||2.0||1.3||1.7||1.7|
|Budget balance (% GDP)||2.1||-2.2||-1.7||-1.0|
|Current account balance (% GDP)||-0.3||-6.0||-3.2||-1.5|
|Public debt (% GDP)||62.4||77.0||72.0||69.0|
(e): Estimate (f): Forecast
- Abundant natural resources: fourth-largest oil producer in sub-Saharan Africa (2020), fourth-largest manganese producer in the world (2020) and one of the continent's largest producers of tropical wood
- Willingness to strengthen its presence on the international scene
- Drive to diversify the economy undertaken as part of the Emerging Gabon Strategic Plan 2010-2025
- Hydroelectric potential
- Member of CEMAC
- 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 gradual recovery continues, driven by the extractive sectors
After being severely affected in 2020 by the drop in oil prices linked to the COVID-19 crisis (oil revenues represent 40% of GDP), Gabon will build on the 2021 recovery in 2022. The rebound will be driven mainly by the increase in production capacity and by strong global demand for the country's export products, including oil products, mining products (manganese, of which production increased by 9.8% year-on-year in 2021, and uranium), agricultural products (palm oil) and forestry products (the objective is to increase timber production in the Nkok special economic zone). In 2022, although growth will be tempered by ageing oil fields, oil production will increase modestly, thanks to the gradual phase-out of OPEC+ quotas. Oil prices, which are expected to remain favourable in 2022, will continue to support activity. The tourism sector (around 3.5% of GDP in 2019) is also expected to pick up and will contribute to export recovery. While the external sector should benefit from persistently sustained demand (24% increase for exports in 2021), household consumption will be hampered by the unemployment rate, which remains high (over 25% in 2021), and COVID-19, which Gabon is struggling to contain due to its low vaccination rate (at the end of 2021, only 4.9% of the population was fully vaccinated). Foreign investment (9% of GDP), particularly in projects aimed at encouraging diversification, could also support activity, as in the case of an Indian group's project to build a wood veneer factory in the Ikolo area, with plans to employ 400 people in 2022. The contribution from investment will, however, be constrained by the public portion, as the authorities carry out fiscal consolidation.
The slow recovery of domestic demand and the CFA franc’s peg to the euro should help to control inflationary pressures.
Twin deficits narrow but persist
The 20% drop in government revenues during the pandemic (due to the decline in oil revenues) and the increase in government expenditure led to a budget deficit in 2020. The recovery in oil revenues, improved mobilisation of non-oil revenues and control of current expenditure reduced the deficit in 2021 and will do the same in 2022. This improvement in the budget balance will take place against the backdrop of a continued heavy public debt burden, which, in June 2021, led Gabon to conclude a three-year agreement under its Extended Fund Facility (EFF) for an amount of USD 553 million in order to accompany the structural measures. After surging in 2020, the country's substantial public debt, which is mainly external (60% of the total in 2021) and held by multilateral (African Development Bank) and bilateral (France, China, and others) creditors, should resume its downward trajectory.
The current account deficit, which widened due to a fall in exports during the COVID-19 crisis, will continue to improve in 2022 on increased exports of oil, wood and mining products. In 2021, a bill was passed that obliges the country's food companies to source up to 50% of their agricultural products locally in order to limit the import bill (60% of food needs are imported). Nevertheless, their purchases will continue to curtail the trade surplus, as the country is dependent on imports of food, manufactured goods and capital goods. The current account deficit will be fuelled by deficits in the services account (9% of GDP), reflecting imports of technical and transport services to support oil production, and in the primary income account (11% of GDP), linked to the repatriation of profits from investments. IMF support and foreign investment should help finance the deficit.
After years of crisis, social unrest continues to run high
President Ali Bongo Ondimba, who has been in office since 2009 after succeeding his father, won a tumultuous re-election in 2016. He will be the favourite to win again in the 2023 presidential elections as he takes on a divided opposition. After the president was absent for several months due to health concerns in October 2018, a constitutional amendment was adopted in December 2020 to address a situation where the president is incapacitated. In this case, power would be temporarily transferred to the speakers of both houses of parliament and the defence minister. Pending the next elections, the authorities may have to contend with social movements linked to unemployment, poverty (30% of the population below the national poverty line), fiscal austerity and difficulties in containing COVID-19. The government will also be judged on its credibility in the fight against corruption. Public frustration could be further fuelled by the appearance of the president's name in the Pandora Papers. Regarding international relations, having won a non-permanent seat on the UN Security Council in 2021, Gabon will play a geopolitical role in promoting environmental preservation and regional conflict resolution. Already close to China and France, the country has ambitions to become a member of the Commonwealth, which would deepen diplomatic and economic ties with the UK. Gabon's integration could take place as early as 2022.
Last updated: February 2022