The Report: Gabon 2013
Long viewed as a bastion of stability in the Central African region, Gabon has been able to leverage its diplomatic clout throughout sub-Saharan Africa. After gaining independence in 1960 the country surpassed an initial decade of occasional political tension to secure a generally peaceful state. The second-biggest economy of the Economic and Monetary Community of Central Africa, which the country is chairing in 2013, Gabon has a population of 1.6m, according to the most recent data available from the World Bank. With abundant resources to fund its aims, Gabon’s relatively new administration is putting forth an ambitious investment proposition that is convincing a growing number of investors.
Country Profile
Located on the equator, Gabon is at the heart of the world’s second-largest rainforest. The country has an abundance of natural resources and is the fourth-largest oil producer in sub-Saharan Africa, at around 250,000 barrels per day. Gabon is also Africa’s second-largest manganese producer and contains significant iron ore deposits along with uranium, gold, rare earth minerals and diamonds. Relative stability has allowed Gabon to underwrite significant socioeconomic development. The continued and steady improvements in the nation’s political participation mechanisms, coupled with the increased enlargement of economic opportunities, will help to secure the gains made in previous years. This chapter contains interviews with President Ali Bongo Ondimba; Prime Minister Raymond Ndong Sima; Pierre Moussa, President, CEMAC Commission; and Mo Ibrahim, Founder and Chair, Mo Ibrahim Foundation.
Explore chapterEconomy
The past 40 years of oil production have turned this small but strategically positioned Central African state into an upper middle-income economy. The country’s extractive industries are sizeable by global standards, with oil, timber and manganese being key exports. Following the 2008-09 financial crisis, GDP growth provided evidence of a recovery, reaching 7% in 2011 and 5% in 2012, according to the African Development Bank. With a current account and fiscal position persistently in surplus, Gabon has the resources to realise its ambitious public investment plans. The issue will be in balancing its books, namely the non-oil fiscal deficit, and in streamlining its regulatory framework to attract the private investment necessary to finance the target figure of 72% of investments planned by 2025. This chapter contains interviews with Magloire Ngambia, Minister of Investment Promotion, Public Works, Transport, Housing and Tourism; Henri-Claude Oyima, Director and Chairman, BGFI Bank; Nina Abouna, Director-General, Agency for the Promotion of Investment and Exports (APIEX); Yves Fernand Manfoumbi, Director-General of the Budget; and Richard Attias, Executive Chairman, Richard Attias & Associates.
Explore chapterEnergy
Over the last 50 years Gabon’s economy has been largely dependent on oil extraction and this continues to be true today. After reaching peak oil production in 1997, with an average of 370,000 barrels per day (bpd), maturing oil fields and slowing discovery rates have resulted in a decline in output to 245,000 bpd in 2012. Oil companies are embarking on major investment programmes to help boost production from a number of existing oil fields. Access to electricity and water continues to be a challenge, and the government is undertaking a number of reforms to help consolidate the sector. In addition to more conventional renewable resources such as hydro, solar and wind, the government is also exploring the potential of biomass by, for example, using wood waste to generate electricity. This chapter contains interviews with Etienne Ngoubou, Minister of Petroleum, Energy and Hydroelectric Resources; and Izak Elyashiv, CEO, Telemenia; as well as a viewpoint from Charles Tchen, CEO, Independent Petroleum Consultants.
Explore chapterBanking
While Gabon’s banking sector is one of the more developed in the Economic Community of Central African States, penetration lags behind its sub-Saharan African peers. Banking assets accounted for 21% of GDP in 2012, according to the IMF, while the private sector’s ratio of credit to GDP stood at 11% (19% of non-oil GDP). As of April 2013 there were just over 266,000 accounts for 1.5m people. Yet as banks’ over-liquidity continues to grow, the sector will be looking to expand its intermediation to the real economy. The €25.5bn Emerging Gabon development strategy is expected to create greater demand for long-term funding, and Gabonese banks should have a bigger role to play in this as new regulations aim to encourage local content. This chapter contains a viewpoint from Lucas Abaga Nchama, Governor, Bank of Central African States (BEAC); and an interview with Thierry Tanoh, Group Chief Executive Officer, Ecobank Transnational.
Explore chapterCapital Markets
The Central African Stock Exchange (Bourse Régionale des Valeurs Mobilières d’Afrique Centrale, BVMAC), headquartered in Libreville, is one of two regional bourses – both of which are located in CFA zones – on the African continent. The past few years have seen only occasional activity on the bourse, in spite of the region’s improving headline growth and the sizeable expansion plans of some of its largest firms. In 2011 sovereign debt accounted for 65% of listed instruments on the BVMAC. Regional and international organisations, such as the BDEAC and the International Finance Corporation, made up 11%, while private firms comprised 24%. Efforts to increase the number of companies active on the bourse include offering incentives, such as a 25% reduction in corporate taxes for firms that list 10-15% of their capital. This chapter contains an interview with Pierre Vandebeeck, Chairman and Managing Director, Société d’Investissement pour l’Agriculture Tropicale (Siat).
Explore chapterInsurance
As with many of Africa’s emerging markets, a number of challenges face Gabon’s insurance sector, including low insurance awareness, a small domestic client base and declining oil production. And yet the Gabonese market remains one of the largest in the sub-region, and it is set to expand in the coming years as the demand for personal insurance lines increases. Despite its modest size, the local insurance sector is highly competitive, with eight companies vying for market share. Rising industrial and construction activity, coupled with the expansion of the market through newer lines such as life and health coverage, have supported growth in recent years. Government efforts to expand industrial activity across a number of different sectors, including timber processing and mining, stand to increase demand for related lines of insurance in the medium term.
Explore chapterAgriculture & Forestry
Gabon aims to significantly increase its domestic food security by 2020, while also working to expand its cash crop exports. An integral part of efforts to diversify the economy away from dependence on oil, successful implementation of its agricultural strategy will have a major impact on its balance of payments and generate significant employment growth. The government has initiated a wide-ranging agricultural development policy aimed at boosting the sector’s weight to around 15% of GDP, and attaining self-sufficiency in subsistence crops, fisheries and meat. Major investments in oil palm, rubber, sugar, coffee, cocoa, maize and soya will boost exports and meet domestic demand in the next seven years. This chapter contains an interview with Sunny Verghese, Group Managing Director and CEO, Olam International.
Explore chapterMining & Industry
While Gabon has a well-established niche in the global mining market as a key manganese exporter, its ambition to significantly expand exploration is generating strong interest from junior miners. With mining accounting for 6.3% of GDP and 6% of exports in 2012, according to the African Development Bank, there is potential for growth. The implementation of a new mining code in late 2013 is set to revise several rules. As Gabon seeks to catalyse investment in exploration and increase its downstream processing capacity, striking the balance between its development prerogatives and incentives for investment will be crucial. The domestic industrial base is small, but with a concerted government strategy intended to leverage the country's sizeable natural endowments towards higher-value-added processing, there is growth potential. Existing capacity is focused in the areas of building materials, food, beverages and limited timber and manganese processing. Industrial activity accounted for 7.7% of GDP and 4% of the labour force in 2012. Close coordination and timely completion of state-run infrastructure projects will be critical to the policy’s success. This chapter contains an interview with Regis Immongault Tatagani, Minister of Industry and Mining.
Explore chapterTransport
Under the Emerging Gabon initiative, the government is planning infrastructure investments in road, maritime and air transport. Among the priorities are improving connectivity between Libreville and the oil centre of Port-Gentil, as well as providing additional capacity on rail networks for mineral and passenger loads from the lesser developed interior of the country – both of which are needed, given the current state of linkages. The sector received a boost in terms of infrastructure in the lead-up to the Africa Cup of Nations in 2012, which sparked a flurry of road and aviation improvements prior to the competition. Despite some delays, transport projects are progressing, in many cases with the support of international lenders and donors, as well as the expertise of foreign contractors. This chapter contains an interview with Amadou Diallo, CEO of DHL Freight, Deutsche Post DHL.
Explore chapterConstruction & Real Estate
Construction has been at the heart of government plans for economic development, with the expansion of energy and transport infrastructure intended to help realise the goal of diversifying the economy. The government seeks to generate over $13bn in infrastructure investments by 2016. The high cost of construction materials, limited transport infrastructure and delays on payments from the public sector will likely translate into a higher construction costs in the short to medium term. In the long term, however, the price of projects could come down. Real estate activity in Gabon has decreased slightly since 2012, but remains on an upward path nonetheless, with demand across all market segments driving growth. Recent government initiatives to cut back on red tape should help to speed up project delivery. Demand for housing is likely to continue providing opportunities for investment for local and international companies, although the implementation of projects could still face obstacles as plans for urban regeneration and expansion confront sporadic and informal urban development on the ground. This chapter contains an interview with Jim Dutton, Director-General, National Agency for Public Works.
Explore chapterTelecoms & IT
As mobile subscriber numbers are nearing saturation, future growth will be driven by the expansion into new products and services. In anticipation, mobile operators are working to introduce value-added services and improve overall network quality. In the meantime, operators are working to expand their infrastructure networks ahead of the switch to 3G. The current absence of 3G services means that the Gabonese market has considerable room for growth, despite the small size of the population. With the arrival of the Africa Coast to Europe (ACE) fibre-optic cable and rising demand for digital services, Gabon’s IT sector is on the cusp of considerable growth. The increased bandwidth offered by the cable should drive down domestic costs for data access. Public investment in ICT has jumped in the last two years, in line with government aims to make the country a digital economy by 2016. State support is crucial to the success of these goals, but it is up to the private sector to develop the service offering in this relatively untapped market. This chapter contains interviews with Alex Bernard Bongo Ondimba, President, National Agency for Digital Infrastructure and Frequencies (ANINF); and Manoj Kohli, Managing Director and CEO International, Bharti Airtel.
Explore chapterTourism
Increasingly aware of the need for economic diversification, Gabon is paying unprecedented attention to the development of its tourism sector. Within the Emerging Gabon strategy, the Green Gabon plan demonstrates recognition of the fact that sustainable development will be key to growth. The upgrading of hospitality options and promotion of Gabon in the ecotourism market should soon boost the sector’s contribution to GDP. Enhanced air connections, better training of human resources, the arrival of international development projects, along with the government’s focus on sustainability, is set to accelerate development efforts.
Explore chapterHealth & Education
Under the National Health Strategy adopted in 2010, Gabon has made a push to upgrade service quality and expand hospital capacity. In recent years, the country’s health strategy has centred on heavy investment in infrastructure. The Ministry of Health aims to enforce a set of quality standards by 2020, but with 86% of the population living in urban areas, rural structures face challenges including understaffing and interruption of supplies. Much remains to be done to meet Gabon’s Millennium Development Goals, yet efforts to make health governance more effective at the local level should help the authorities to identify weak points in the system and allocate resources more effectively. A drive to diversify Gabon’s economy away from commodity dependency has made education a key element of the broader plans for growth. The state is primarily working to increase the number of schools, train and recruit more teachers, and produce reliable statistics on student performance by 2020. Efforts to introduce more advanced and technical degree programmes will better equip young people to meet the demands of the shifting domestic job market. More and more specialised schools are opening with private support, but the country will need to expand these programmes quickly to meet the demands of Gabon’s growing economy. This chapter contains an interview with Léon Nzouba, Minister of Health.
Explore chapterMedia & Advertising
Rising incomes and improvements in providing access to internet platforms are having a positive impact on Gabon’s overall media environment. Print remains the dominant media force and more targeted titles might help bring more dynamism to the newspaper segment. Radio remains Gabon’s most universal medium and is especially relevant for the rural areas, which have widely dispersed populations. Online ventures are gaining more ground, but their rapid expansion remains restricted by limited access to internet connections and advertisers’ reluctance to embrace the internet as an efficient communications platform. As the range of media outlets continues to diversify both in terms of form and content, Gabon’s advertising sector is seeing steady growth. Online news platforms are attracting a steady flow of regular visitors and are increasingly able to monetise this, however, overall investment in internet advertising remains weak. Traditional media, such as press, television, radio and outdoors advertising spaces, will continue to drive the sector.
Explore chapterTax
In conjunction with Deloitte, OBG explores the taxation system, examining Gabon’s investor-friendly environment. This chapter contains a viewpoint from Nicolas Balesme, Partner and General Manager, Deloitte Touche Tohmatsu, OBG’s tax partner.
Explore chapterLegal Framework
OBG introduces the reader to the different aspects of the legal system in Gabon, in partnership with Deloitte.
Explore chapterThe Guide
This section includes an article on viniculture as well as information on hotels, contact details for government agencies and other listings, alongside useful tips for visitors on topics such as currency, visas, language, communications, dress, business hours and electricity.
Explore chapterTable of Contents
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