Purchase OBG Publications

Gabon has concentrated funding on infrastructure in recent years, not only in advance of the Africa Cup of Nations, but also as part of the government’s broader push to diversify the economy through its primary development strategy, Emerging Gabon. The construction sector – supported by the Infrastructure Master Plan, which includes 114 projects in education, housing and transport – is thus expected to see annual growth of 4.7% from 2013 to 2016, providing for a better long-term outlook. The state continues to play a central role, predominantly through the National Public Works Agency, and publicly funded developments account for a large percentage of ongoing construction activity. Looking ahead, Gabon’s construction sector has plenty of work to carry out. Following the initial slowdown after the Africa Cup of Nations, the sector’s focus has shifted towards infrastructure projects in transport, industry and housing. Despite the fact that Gabon is a middle-income country, inadequate housing in slums is not uncommon, particularly in the capital city, Libreville, where more than half of the population is concentrated. Extensive government reforms have sought to improve clarity on urban planning, access to land, zoning and procurement issues, as well as construction permits. This chapter contains interviews with Mauricio Toledano, CEO, Eurofinsa; and Luis Castilla, CEO, ACCIONA Infrastructure, Water and Services.

Transport and logistics in Gabon are in the midst of a major transformation. The government is engaged in a multi-year programme to upgrade the country’s infrastructure, with the aim of making it into a logistics centre for the Economic and Monetary Community of Central Africa. Gabon’s transport infrastructure is set for a radical overhaul in coming years. A major state investment programme for roads will see the total length of paved roads in the country increase six-fold between 2009 and 2025, including a link between Libreville and Port-Gentil. This should help open up the interior of the country and boost socioeconomic development in previously isolated areas. Expansion projects at Owendo port should also help reduce congestion and hence costs for shippers, and airport capacity in the country’s main cities is set to increase dramatically, allowing international flights to operate out of Port-Gentil. This chapter contains interviews with Takao Omori, CEO, Portek International; and Frank Legré, Managing Director for Africa, Air France.

As a bastion of liquidity within the financially turbulent Economic and Monetary Community of Central Africa (Communauté Économique des États de l’Afrique Cen-trale, CEMAC), Gabon competes head-on with the more populous Cameroon for the title of regional banking centre. The regional stock exchange based in Gabon is also beginning to see an uptick in activity and insurance penetration is consistently higher than elsewhere in CEMAC. In recent months, banks have sustained the double-digit growth of the past three years, albeit at a slightly slower pace, driven by both deposits and lending. The bulk of growth has been due to lending to the public sector for projects laid out under the Emerging Gabon national development plan. Gabon also has a surfeit of liquidity in the banking sector, reducing the need for companies to turn to the capital markets. Since the first listing in 2008, the markets have been dominated by bonds. However, 2013 saw the region’s first initial public offering and subsequent equity listing on the exchange, and, according to local press reports, other companies are likely to follow suit in the medium term. Home to 1.63m people, Gabon has one of the most dynamic insurance markets in Central and West Africa. The local insurance industry is strong compared to other countries in the region due to its high level of industrial contracts. Efforts to increase insurers’ exposure to clients through investment in multiple sales channels, the introduction of new obligatory insurance lines and the implementation of microinsurance products could all help to expand the Gabonese market in 2014. This chapter contains an interview with Patricia Danielle Manon, Director-General, BGFI Bank Gabon.

With a tropical climate and arable land to spare, Gabon has significant potential to expand agriculture, yet the sector remains somewhat overlooked. One-fifth of the country’s total arable land has not been developed for agriculture, and the country remains largely dependent on food imports to meet its consumption requirements. The sector has shown recent growth, roughly 5% year-on-year from 2010 to 2013, according to the World Bank. If further developed, the agriculture sector could contribute significantly to overall economic diversification and to a more inclusive pattern of economic growth. The mid-year downward revision in the 2014 budget, however, is likely to limit progress on agricultural development targets in the near term. The political will to expand the sector exists, and the potential benefits of agricultural growth are extensive, particularly for improving human development indicators and reducing poverty. This chapter contains an interview with Jean-Luc Wilain, Chief Operating Officer – Business Development, IBL Group.

Gabon is the fifth-largest oil producer in sub-Saharan Africa and oil dominates the economy, accounting for roughly half of state revenues and more than 80% of export revenues. Over the last decade, however, output has declined as the country’s larger oil fields mature. Oil production peaked in 1997 at 370,000 bpd but stabilised in recent years around 240,000 bpd. The decline in production has prompted Gabon to encourage activity in smaller blocks, expand offshore exploration in new blocks, and continue redeveloping existing oil fields. The government has set targets of doubling output to 500,000 bpd and re-joining Organisation of the Petroleum Exporting Countries, which it left in 1997. The government is also taking a more active role in the sector through its still relatively young state-owned oil company, while also tightening oversight. To improve transparency and boost the state’s share of oil revenues, the government has overhauled the legal framework governing the hydrocarbons sector. The new bill was adopted by parliament on July 23, 2014. Under the new hydrocarbons code, the national oil company will have the right to a 15% share in all new petroleum operations, which may strengthen the sector by encouraging shared-equity partnerships between local and foreign players. This chapter contains interviews with Désiré Guedon, Minister of Energy and Water Resources; Etienne Dieudonné Ngoubou, Minister of Petroleum and Hydrocarbons; Jacqueline Bignoumba, President, Gabon Petroleum Union; and Nicholas Cooper, Executive Director & CEO, OPHIR Energy.

Classified by the World Bank as an upper-middle income country, Gabon enjoys an average per capita income – estimated at €8950 in 2013 – that is far higher than the sub-Saharan Africa developing country average of €1212. Oil revenues have sustained the economy, accounting for 56% of total government revenues and 80% of total exports by value, according to US Energy Information Administration (EIA) statistics for 2011. In addition to the hydrocarbons sector, mining and timber activities are major contributors to the economy, primarily through the export of raw materials. With Gabon’s existing oil fields reaching maturity, authorities are looking to minimise the impact of declining oil revenues on the economy, therefore they are embarking on a programme of economic diversification and industrialisation that should also lead to a more inclusive, job-creating pattern of growth. Expansion of the forestry sector, with an emphasis on domestic processing, has the potential to catalyse a more inclusive growth pattern. It is estimated that the economy could grow as much as 6.5% in 2014, following 5.5% growth in 2013 and a 5.7% expansion in 2012. This chapter contains interviews with Magloire Ngambia, Minister of Investment Promotion, Infrastructures, Housing and Territory Planning; Nina Abouna, Director-General, Agency for the Promotion of Investment and Exports; and Serge Thierry Mickoto, Managing Director, Gabonese Strategic Investment Fund.