Gabon develops its first special economic zone

The development of the industrial sector through the establishment of three special economic zones (SEZs) to diversify the economy and create jobs is one of the pillars of the Emerging Gabon strategy. The project is still in its early stages, with the development of the first such zone at Nkok ongoing, but the early signs are promising, with tax benefits, access to inputs, and requisite utility, transport and logistics infrastructure attracting investors.

Eight firms are operating in Nkok as of May 2015, and a further 10 are expected to be operational by year-end. As of February 2015, 80 investors had committed funds, representing total foreign direct investment of $1.7bn, according to Singapore-based Olam International. Olam, which is in a public-private partnership with the state through the joint venture Gabon Special Economic Zone (GSEZ), is responsible for the development and management of the infrastructure at Nkok, as well as a second SEZ on Mandji Island in Port-Gentil. The third SEZ, focusing on agro-industrial processing, is planned for development in Boumango, near Franceville.

Incentives

As with SEZs elsewhere, a primary features of the zones is the special conditions provided to investors. Operators are exempt from income tax for the first 10 years (after which it rises to just 10% for the next five years), as well as from taxes on all imported materials, all exported products, Custom duties on imported machinery, value-added tax and up to 25% of sales to the domestic market. In addition, operators pay less than the standard electricity tariff and are allowed full repatriation of all profits and flexibility in terms of the labour legislation.

Although the SEZs are not sectorally exclusive, each was created to focus on a specific priority industry. The Nkok SEZ has been designed to have a special focus on timber, metallurgy, construction, plastics and glass industries, as well as agro-industry and chemicals. Timber processing and related industries are well developed in the SEZ, with some 40% of the industrial space reserved for wood processing. To support this initiative, the government has made available to investors 2.1m ha of forest, representing 12% of all managed forests in the country.

Infrastructure

Infrastructure has been a crucial prerequisite for attracting investors for the first 450-ha tranche of the eventual 1126-ha Nkok zone – perhaps unsurprisingly, given the challenges associated with water provision and load-shedding in the region (see Energy chapter). Since construction work on the Nkok SEZ began in August 2010, $576m has been invested to date in infrastructure by the state and joint venture. “In the space of four years, the entire infrastructure has been put in place and the SEZ of Nkok is now self-sufficient in both water and electricity supply,” said Sèdji Armel Mensah, the general administrator of Nkok SEZ Administrative Authority (Autorité Administrative de Nkok, AAN). The zone’s power supply needs, which are expected to increase from 8 MW to 20 MW by year-end, are met by the 70-MW Alenakiri gas-fired plant near Libreville via a 20-km-long, 90-KV transmission line.

Linking Up

The Nkok SEZ has direct road and rail links to Libreville, which is just 27 km away, while a 230-metre-long wharf, with a water depth of 3.5 metres and able to receive 1000-tonne-capacity barges, is nearing completion. Construction of a new road from Nkok to the port of Owendo and three spurs to the rail line between Franceville and Owendo will start soon, with the aim of being prepared for the site’s full operation. AAN offices have been established on site, serving as a one-stop shop for firms looking to register. “Gabon’s main challenge is to shorten the length of time it takes to set up companies. There is a need for a one-stop shop, to have all the authorities involved in the process in the same room,” Marie-Josee Ongo Mendou, associate manager of Business Consulting Gabon, told OBG.