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Select Economic and Financial Indicators 2014 2015 2016 2017e 2018f
Real GDP (% change) 4.4 3.9 2.1 0.8 2.7
GDP (USD bn) 18.2 14.4 14.0 14.5 15.5
Inflation (average) 4.5 -0.1 2.1 2.8 2.8
Fiscal Balance (% GDP) 6.0 -1.1 -4.7 -2.3 -1.2
Broad Money (% change, end period) 1.6 -0.5 -7.0 8.7 5.8
Population (mn) 1.9 1.9 2.0 2.0 2.1
Exports (USD bn) 9.9 6.3 5.1 5.7 6.1
Imports (USD bn) 7.6 5.6 4.8 4.8 5.2
Current Account Balance (% GDP) 7.3 -5.7 -10.2 -5.4 -5.7
FX Reserves (USD bn, end period) 3.7 2.6 0.7 1.0 1.4
Exchange Rate (average) 496.16 594.11 597.41 588.92 565.09
Oil production (mn bpd) 0.237 0.205 0.185 0.160 0.150
Sources: IMF, World Bank, UN, Bloomberg, EIA, BP, Ecobank Research

Economic outlook

Economic outlook

Real GDP: Real growth is forecast to rebound in 2018, following a slowdown in 2017 that was induced by the adverse impact of declining oil production. Oil production has been on a downward trajectory in recent years reflecting low yields from maturing oil fields and falling investment levels. While the moderate rebound in oil prices and a recent revival of investments in the sector will help oil GDP to recover somewhat, the projected growth rebound is expected to be driven by the non-oil sector. This will be boosted by new developments in transport (following the opening of the Owendo International Port in October 2017), alongside expansion in manganese mining and wood processing. Furthermore, financial support from an IMF loan package, approved in June 2017, should help to strengthen economic activity. Nonetheless, in the medium term, growth will likely be constrained around 3.0% due to the country’s heavy reliance on the oil sector – oil accounts for about 30% of GDP, 40% of government revenue and 71% of export revenues. Furthermore, institutions and governance remain weak, underlining public financial management challenges in utilising hydrocarbons revenues effectively.

Inflation: Consumer price growth is likely to remain around CEMAC’s 3% convergence criteria in 2018, as a pick-up in economic activity and higher crude oil prices sustain some inflationary pressure. However, IMF-supported fiscal consolidation efforts (including planned, moderate cuts to the wage bill), and the exchange rate peg to the EUR (which is forecast undergo a strengthening bias in 2018) should help keep inflation from surpassing that level.

Fiscal balance: Increased oil prices will help to further relieve pressure on Gabon’s fiscal position, with the deficit expected to narrow to just above 1% of GDP over 2018 from more than 2% of GDP in 2017. Furthermore, the new financial arrangement with the IMF should bolster budget support and help to rationalise spending. Nonetheless, public investment, under the ongoing implementation of the “Plan Stratégique Gabon Emergent”, will remain a source of budgetary pressure, alongside a still-high public wage bill over the 2018 period.

Current account: After narrowing notably in 2017, amid subdued export growth, and improved oil and manganese export earnings (these commodities account for about 83% of total export earnings combined), the current account is expected to weaken moderately in 2018. This slight widening will come from increased-investment related imports, and a higher import demand for consumer goods as the economy rebounds. Moreover, despite progress in 2017 (the deficit was reduced to below 6% of GDP from above 10% of GDP the year before), as exports are forecast to remain well below trends preceding the price 2014 crash, the deficit is unlikely to shrink below this level.

Risks

Oil price volatility is a risk to the economy, which in the past has caused boom and bust cycles. In turn, these economic up/downturns have often been worsened by rapidly rising wages in the context of a fixed exchange rate regime. Maturing oil fields also present major risk to the country’s financial situation as does weak progress in reforms aimed to promote economic diversification away from oil, and fiscal reforms aimed to mobilise non-oil revenue.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange Rate Structure

Regime Fixed
Target XAF655.957 to EUR1
Type of intervention Via Central Bank
Convertible currency? Partial
Market participants n/a
Source: Bloomberg, IMF, and Ecobank Research

FX

FX Products Spot Forwards Non-deliverable Forwards Options Swaps
On offer Yes No No No No
Daily trading volume (USD mn) n/a n/a
Average trade size (USD mn) n/a
Average spread n/a
Trading hours 8:00-16:00
Settlement cycle T+2
FX Market Structure BEAC’s exchange regime is free of restrictions on payments and transfers for current international transactions, apart from restrictions maintaned for security.
Non-resident FX Regulations Spot Forwards Non-deliverable Forwards Options Swaps
Trade and FDI flow No restrictions n/a
Financial flow
Resident FX Regulations Spot Forwards Non-deliverable Forwards Options Swaps
Trade and FDI flow No restrictions n/a
Financial flow
Source: Bloomberg, IMF, and Ecobank Research

FI

Primary Market Treasury bills Treasury notes Treasury bonds Central Bank bills OMOs
Issuer Government n/a Government n/a
End use Government financing Government & infrastructure financing
Maturity structure 91- to 364-days 2- to 3-yrs
Coupon Zero Fixed
Coupon payments n/a Annual
Secondary Market  
Daily trading volume Limited trading n/a
Average trade size Limited trading
Settlement cycle n/a
Ecobank local affiliate contact details:
Ecobank Gabon, 214, Avenue Bouët, 9 Etages, Montagne Sainte, Libreville
Tel: +241 01 76 20 71 / 73
Source: Bloomberg, IMF, and Ecobank Research

FI Primary Market information

FI Primary Market information

Gabon Debt 2014 2015 2016 2017e 2018f
Government debt (% GDP) 34.1 44.7 64.2 66.5 66.1
    Sub-Sahara average 44.5 52.6 56.1 55.6 55.8
External debt (official creditors, % GDP) 25.3 33.3 35.6 45.1 48.4
    Sub-Sahara average 25.5 30.2 31.9 32.9 33.2
External public debt stock (USD bn) 4.6 4.8 5.0 6.5 7.5
    Share of total sub-Sahara debt (%) 1.8 1.8 1.7 2.0 2.1
Source: IMF; Ecobank Research

Commodity and Trade Information

Commodity and Trade Information

Hydrocarbon & mineral production

Gabon is Middle Africa’s fifth largest hydrocarbon producer, with estimated output of 195,000 bpd and 31mn cubic feet of gas per day in 2016. The country’s oil production has slumped from a 1997 peak of 370,000 bpd owing to declining output from matured fields such as the Rabi, Tchatamba and Gamba complex. Following major divestment activities by International Oil Companies (including Shell and Total), production is expected to continue declining while the new owners assess their strategies for developing the fields they have acquired. The country’s only refinery, Société Gabonaise de Raffinage (SOGARA), has capacity to process 10% of the country’s crude production but functions well below its capacity and has a high fuel oil yield. SOGARA is reliant on subsidies from the government as it sells its output at below market prices. Gabon consumed over 675,000 tonnes of petroleum products in 2016, most of which were imported.

Gabon has rich mineral reserves, including manganese, uranium, coltan and rare earth metals. However, to date only manganese has been fully exploited, with estimated output of 2.8mn tonnes of ore in 2016, making Gabon the world’s fourth largest producer (after South Africa, China and Australia). France’s Eramet is continuing to expand production at its flagship Moanda manganese mine. Gabon also has small reserves of gold and exported 1 tonne of gold in 2016. The only significant industrial raw material produced in Gabon is cement, with estimated annual output of 170,000 tonnes in 2017.

Soft commodity production

Like its oil-producing neighbours, Gabon’s agricultural sector is poorly developed as it has been largely neglected by the government since the discovery of hydrocarbons. Gabon’s key soft commodity output is timber, estimated at 400,000 tonnes in 2017. The country is also Africa’s fourth-largest producer of natural rubber, but its output of 23,200 tonnes in 2014 is only a fraction of the regional giants, Côte d’Ivoire & Nigeria. The government is prioritising investment in the agriculture sector as part of plans to diversify the economy. Singapore’s Olam is developing a 50,000-ha palm oil plantation which could turn Gabon into an exporter of palm oil to CEMAC and international markets.

Trade Flows

Imports

Gabon’s imports totalled US$1.9bn in 2016. Gabon is heavily dependent on imports of capital and consumer goods and industrial raw materials, reflecting the country’s underdeveloped manufacturing sector. In 2016 the country imported US$636mn worth of machinery, vehicles, ships & electronics, US$65mn of iron & steel, US$64mn of plastics and US$29mn of aluminium. Key consumer goods imports included pharmaceuticals (US$58mn) and furniture (US$43mn). Given the country’s limited agricultural output, Gabon imports large volumes of food, including US$173mn of meat & fish and US$101mn of cereals & flour in 2016.

Exports

Gabon’s exports totalled US$3.9bn in 2016, one third lower than the previous year and two thirds lower than in 2013, reflecting the slump in international oil prices since 2014. Crude oil remains Gabon’s most valuable export, worth US$2.8bn in 2016, most of which went to the USA. Gabon’s key mineral export is manganese, with exports worth US$462mn in 2016, most of which went to China, Norway and the USA. Gabon also exported US$440mn of timber, mostly to China, France and India, and US$52mn worth of gold.

  • Population
    2,067,561
  • Area
    267,667
  • Capital
    Libreville
  • Largest city
    Libreville
  • Official language
    French
  • Major languages
    Fang, Myene, Punu, Nzebi
  • Currency
    Central African CFA Franc (XAF)

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