New and old partners aid Gabon's growth

Although it remains deeply influenced by its historical ties to Europe, Gabon has strived in recent years to broaden its economic and diplomatic partners. France remains one of the country’s closest trading partners and also one of its largest investors. With several emerging economic powers from elsewhere in Asia and Africa playing a bigger role in investment flows, Libreville has sought to adopt a more multifaceted approach to its economic diplomacy.

Traditional Partners

As the former colonial power, and a continuing important source of investment, France remains Gabon’s most high profile traditional partner. Officials from both countries regularly meet to discuss various issues, ranging from trade and business to security concerns throughout the African continent.

The latest high-profile meeting between France and Gabon took place in April 2014, when Gabonese President Ali Bongo Ondimba met his French counterpart, François Hollande, at the Élysee Palace in Paris. Aside from these formal presidential visits between Libreville and Paris, more informal connections between the two capitals have played an even bigger role in the relationship.

The commercial ties between the two countries have grown since independence. Up to 120 French companies presently operate in Gabon, and the stock of French investment in the country reached €1.3bn in 2013, according to figures published by the French Embassy in Libreville.

Trade volumes have been subject to cyclical changes, although they remain the largest of any European partner. The value of French exports to Gabon fell by 6.7% in 2014 to some €679m, while the value of Gabonese exports – predominantly oil, timber and minerals – also dropped, largely due to the decline in oil prices during the second half of the year, reaching a total of €123m in 2014.

The deep, historical ties have managed to survive, despite the occasional rough patch between the two trading partners.

EU

Strong diplomatic links with France have also opened the door to other EU states, both as a source of new business opportunities as well as support programmes. Currently under negotiation is an EU Economic Partnership Agreement, which may become critical for Gabon as it seeks to access new export markets in line with the country’s efforts to diversify the economy.

The EU as a whole has also become a strong source of development support for the country. Between 2008 and 2014, it granted Gabon a total of €49m to be devoted to education and professional training, as well as improving governance in several sectors of the economy.

An additional €39.2m was put aside by the European Development Fund for the 2007-13 period, to be directed towards infrastructure development, education and professional training programmes.

US

The US too has become an increasingly important commercial partner, importing $1.1bn in goods from Gabon – predominantly raw materials – and exporting $237m worth of goods. The US has also become a major investor in the Gabonese economy, with an investment stock of $157m in 2012, up 149% on 2011, according to figures from the US Department of Commerce.

New Cooperation

Although the importance of several traditional economic partners remains evident, Gabon has been successfully adapting to a changing international business environment, looking to secure new trading partners. The signs of this change abound. Although France remains the most important supplier of goods to Gabon, its importance has been decreasing, going from 32.5% of all imported goods in Gabon in 2011 to 21% by 2014, according to figures from the French Embassy in Libreville. Much of this reduction has to do with the increase in trade bound for countries such as China, Morocco and Turkey.

China

China and Gabon have longstanding political ties, which have been giving rise to a burgeoning economic relationship as well. Chinese companies have become an important presence in Gabon, dealing with large-scale projects in strategic sectors such as construction and transport.

In October 2014 the National Agency for Digital Infrastructure and Frequencies awarded a contract for the installation of the cross-country fibre-optic connection to China Communications Service International (see Telecoms & IT chapter). The total cost of the 1075-km connection, which will cross five provinces, is estimated at $109m.

Meanwhile, the state-owned Chinese conglomerate construction group Sinohydro has recently built a $500m hydropower station on the Ogooué River, and is charged with building several new roads across the country.

Although the presence of Chinese companies in Gabon has been critical in helping to carry out the expansion of infrastructure, there have been the occasional stumbling blocks. In early 2014, for example, Addax Petroleum, a subsidiary of China’s Sinopec, settled a $1bn legal dispute with the Gabonese government over oil exploration rights.

Disputes such as these are nonetheless unlikely to slow down a cooperative relationship that has proven itself to be beneficial for both parties. Deepening ties even further, Chinese officials announced a CFA4bn (€6m) loan to Gabon that will help finance several projects during the 2015-19 period that were included in recent cooperation agreements between the two countries.

Other New Partners

Morocco has also become a key regional player, putting Gabon at the forefront of its African strategy. A $2.3bn deal between Libreville and Rabat signed in early 2014 will lead to the building of four fertiliser plants to serve the African agricultural market, and two of these plants will be located in Gabon.

Another country to recently establish closer ties with the Central African country is Turkey. After repeated reciprocal state visits over recent years, which have translated into several cooperation agreements, Gabon announced plans to open an embassy in Turkey in 2015, after the Turkish Embassy in Libreville was inaugurated in 2012.

Gabon’s growth prospects will certainly get a boost as the country works to solidify new partnerships with emerging economies. Although traditional ties will continue to play a major role, more cooperation with international heavyweights like China and regional players such as Morocco will help Gabon diversify away from its longstanding dependence on the exploitation of resources.