OBG talks to Magloire Ngambia, Minister of Investment Promotion, Public Works, Transport, Housing and Tourism

Interview: Magloire Ngambia

What can be done to encourage foreign direct investment (FDI) and foster long-term growth?

MAGLORIE NGAMBIA: Reducing poverty and increasing prosperity remain priority objectives, and thankfully sub-Saharan Africa has good economic potential. Today, many countries are diversifying their economic partners. South-south trade patterns are increasing, and we can observe growing trade between Gabon and emerging economies like Brazil, India and China.

Gabon needs to attract potential investors in order to increase FDI inflows, and eventually facilitate productivity gains. To do this, further structural and institutional reforms must be adopted so as to improve the business environment. Fostering intra-regional integration would also help facilitate economies of scale and improve access to factors of production, resulting in horizontal FDI growth. Overall, further liberalisation of intra-regional trade and regional infrastructure development could have a significant impact. Finally, we need to make the most of our special economic zones (SEZs) by limiting possible budgetary costs and ensuring that FDIs have maximum effects on growth. SEZs can help facilitate the transfer of know-how and technology, and strengthen local and regional linkages.

To what extent can corporate investments improve transportation networks in the long term?

NGAMBIA: First, public-private partnerships (PPPs) play an important part in the development of our transportation network. For instance, our national railway is operated through a PPP. Additionally, corporate social responsibility programmes have a major role in the development of the intermodal system. For example, in order to connect the Gamba region, one oil company has invested in major transportation infrastructure including an airport, roads and marine transport.

For larger investments, contractual agreements can be signed between the government and companies. While investors develop their businesses, the state takes care of implementing transport infrastructure.

How can the Nkok SEZ promote wood processing?

NGAMBIA: The Nkok SEZ is a pillar of Gabon’s industrialisation strategy. In that sense, this SEZ gives great fiscal incentives as well as other support for product export. For instance, all investors enjoy total corporate tax exemptions for 10 years, and then 10% tax is applicable for the following five years. Companies are also exempt from Custom duties on imports of equipment, machinery and spare parts. Additionally, the SEZ also offers the possibility of repatriating 100% of funds related to local activity income, and a 50% reduction in electricity rates and ownership costs.

Furthermore, Nkok is at the heart of an open forest of 2m ha of usable wood. Common infrastructure like a lumberyard, a drying plant, a wastewater treatment plant and forest concessions are all technical elements provided within the SEZ that should help increase wood processing activities. A power station has also been built in the SEZ to meet its electricity needs, and the newly built power station at Alénakiri will also contribute to Nkok’s energy supply. Within easy reach of all means of transportation, it will be easy to deliver logs to processing plants and export finished products.

To what extent can the costs of construction materials be lowered to integrate local firms?

NGAMBIA: Lowering the costs of construction materials like sand, gravel, cement and wood could have a positive impact on local construction companies. To that end, public authorities have the ability to take some measures. First, by establishing further production capacity, we hope to see increasing competition within the sector. Second, lowering Custom duties and reducing taxes on building materials, would stabilise prices according to the market. We could also implement price caps that would guarantee sellers can make minimum margins, while also managing the risk of material shortages. This will allow us to avoid any artificial inflation. Overall, these measures would improve access to materials for both foreign and local players.