Contents 1 Background 2

Gabon –
Country Profile
Contents
1
Background 2
4.10 Efficient capital markets and portfolio investment
8
1.1Map
2
4.11 Competition from state-owned enterprises (SOEs)
9
1.2
2
4.12 Corporate social responsibility
9
4.13 Political violence
9
4.14Corruption
9
Geographical information
1.3Background
2
2Population
2
2.1
Population figures 2
2.2
Population growth rate 2
2.3
Age structure (2011 estimates)
2
2.4
Gender ratios (2011 estimates)
2
2.5
Life expectancy (2011 estimates)
2
4.15 Bilateral investment agreements
10
4.16 OPIC and other investment insurance programmes 10
4.17Labour
10
4.18 Foreign trade zones / free ports
10
4.19 Foreign Direct Investment statistics
10
10
2.6Race
2
4.20 Starting a business in Gabon
2.7Languages
2
2.8Health
3
5
Country Risk Ratings
11
5.1
Sovereign risk
11
3Economy
3
3.1Overview
3
3.2
Latest Economic indicators
4
3.3
Five-year forecast
3.4
Annual trends
Political risk
11
4
Economic structure risk
11
5
6
Country Outlook: 2012 – 2016
12
6.1
Political stability
12
6.2
Election watch
12
3.6
Political structure
5
3.7
International organization participation
6
Doing business in Gabon
11
11
5.4
5
4.1Overview
Currency risk
Banking sector risk
5.5
3.5Government
4
5.2
5.3
6
6
4.2
Openness to and restrictions upon foreign investment6
4.3
Conversion and transfer policies
7
4.4
Expropriation and compensation
6.3
International relations
12
6.4
Policy trends
12
6.5
Economic growth
12
6.6Inflation
13
6.7
Exchange rates
13
7
6.8
External sector
13
A
Appendix – Sources of Information
13
4.5
Dispute settlement
7
4.6
Performance requirements and incentives
8
4.7
Right to private ownership and establishment
8
4.8
Protection of property rights
8
4.9
Transparency of the regulatory system
8
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
1
1Background
2Population
1.1Map
2.1 Population figures
1,608,321 (July 2012 est.)
Estimates for this country explicitly take into account the effects of
excess mortality due to AIDS. This can result in lower life expectancy,
higher infant mortality and death rates, lower population and growth
rates, and changes in the distribution of population by age and sex
than would otherwise be expected.
2.2 Population growth rate
1.977% (2011 est.)
2.3 Age structure (2011 estimates)
Total percentage
Male
Female
42.2%
333,746
330,959
15-64 years
54%
424,392
426,478
65 years and
over
3.9%
25,678
53,403
0-14 years
1.2 Geographical information
Gabon is located in West Africa, bordering the Atlantic Ocean at the
Equator, between Republic of the Congo and Equatorial Guinea. It
has a total land area of 267,667 sq km. Gabon has a tropical climate
and is always hot and humid. The country’s natural resources include
petroleum, natural gas, diamond, niobium, manganese, uranium,
gold, timber, iron ore and hydropower.
1.3Background
El Hadj Omar Bongo Ondimba – one of the longest-serving heads of
state in the world – dominated the country’s political scene for four
decades (1967-2009) following independence from France in 1960.
President Bongo introduced a nominal multiparty system and a
new constitution in the early 1990s. However, allegations of
electoral fraud during local elections in 2002-03 and the presidential
elections in 2005 exposed the weaknesses of formal political
structures in Gabon.
Following President Bongo’s death in 2009, new elections in brought
Ali Ben Bongo, son of the former President, to power. Despite
constrained political conditions, Gabon’s small population, abundant
natural resources, and considerable foreign support have helped
make it one of the more prosperous and stable African countries.
Source: CIA World Factbook
2.4 Gender ratios (2011 estimates)
Total population
0.99 male / female
Under 15 years
1.01 male / female
15-64 years
65 years and over
1 male / female
0.73 male / female
Source: CIA World Factbook
2.5 Life expectancy (2011 estimates)
Total population
52.29 years
Male
51.65 years
Female
52.93 years
Source: CIA World Factbook
2.6Race
Ethnic groups
• Bantu tribes including four major tribal groupings (Fang,
Bapounou, Nzebi, Obamba)
• Other Africans and Europeans 154,000, including 10,700 French
and 11,000 persons of dual nationality
Religions
• Christian 55%-75%
• Animist, Muslim less than 1%
2.7Languages
• French (official)
• Fang
• Myene
• Nzebi
• Bapounou/Eschira
• Bandjabi
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
2
2.8Health
Gabon’s medical infrastructure is considered one of the best in West
Africa. By 1985 there were 28 hospitals, 87 medical centers, and 312
infirmaries and dispensaries. As of 1999, there were an estimated
0.2 physicians and 3.2 hospital beds per 1,000 people. From 1985 to
1995, 90% of the population had access to health care services. In
2000, 70% of the population had access to safe drinking water and
21% had adequate sanitation.
3Economy
Most Gabonese, an estimated 90% in number have access to
health care services provided by the government. Moreover,
70% of Gabonese has access to safe drinking water and when it
comes to adequate sanitation, there is an estimated 21%. With
the government’s comprehensive health care programmes and
activities, people suffering from diseases like leprosy, malaria,
sleeping disorders, intestinal worms, tuberculosis, and others are
provided with medical care.
Gabon depended on timber and manganese until oil was discovered
offshore in the early 1970s. The economy was reliant on oil for about
50% of its GDP, about 70% of revenues, and 87% of goods exports
for 2010, although some fields have passed their peak production. A
rebound of oil prices from 1999 to 2008 helped growth, but declining
production has hampered Gabon from fully realising potential gains.
3.1Overview
Gabon enjoys a per capita income four times that of most subSaharan African nations, but because of high income inequality, a
large proportion of the population remains poor.
Gabon signed a 14-month Stand-By Arrangement with the IMF in
May 2007, and later that year issued a US$1 billion sovereign bond
to buy back a sizable portion of its Paris Club debt. Gabon continues
to face fluctuating prices for its oil, timber, and manganese exports.
Despite the abundance of natural wealth, poor fiscal management
has stifled the economy. However, President Bongo has made efforts
to increase transparency and is taking steps to make Gabon a more
attractive investment destination to diversify the economy. Bongo
intends to boost growth by increasing government investment in
human resources and infrastructure.
.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
3
3.2 Latest Economic indicators
2010
1 Qtr
Prices
Consumer prices (2000=100)
Consumer prices (% change, year on year)
Financial indicators
Exchange rate CFAfr:US$ (av)
Exchange rate CFAfr:US$ (end-period)
Deposit rate (av; %)
Discount rate (end-period; %)
Lending rate (av; %)
M1 (end-period; CFAfr bn)
M1 (% change, year on year)
M2 (end-period; CFAfr bn)
M2 (% change, year on year)
Foreign trade (US$ m)
Exports fob
Imports cif
Trade balance
Foreign reserves (US$ m)
Reserves excl gold (end-period)
2 Qtr
2011
3 Qtr
4 Qtr
1 Qtr
2 Qtr
3 Qtr
4 Qtr
112.8
2.5
111.9
1.2
112.3
0.9
113.7
1.2
112.5
-0.3
113.5
1.4
115.3
2.7
115.2
1.3
473.9
486.7
3.3
4.3
n/a
779.9
-1.2
1,190.8
0.7
516.3
534.6
3.3
4.3
n/a
836.4
16.4
1,267.3
13.7
508
480.6
3.3
4
n/a
806.4
8
1,221.9
8.4
482.9
490.9
3.3
4
n/a
918.1
19.8
1,389.2
19.2
480.1
461.7
3.3
4
n/a
889.5
14.1
1,396.1
17.2
455.8
453.9
3.3
4
n/a
1,054.0
26
1,485.9
17.3
464.9
485.8
3.3
4
n/a
947.6
17.5
1,381.5
13.1
486.7
507
3.3
4
n/a
1,252.3
36.4
1,791.6
29
1,585.7
-706.8
878.9
1,474.0
-612.3
861.7
1,827.0
-661.5
1,165.6
2,103.0
-718.9
1,384.1
2,594.2
-734.4
1,859.7
2,650.8
-789.8
1,861.0
2,684.8
-915.3
1,769.5
2,438.4
-1,098.9
1,339.5
2,012
1,976
1,952
1,736
1,925
2,503
2,282
2,157
Source: Economist Intelligence Unit
3.3 Five-year forecast
(% unless otherwise indicated)
Real GDP growth
Consumer price inflation (av)
Lending interest rate (%)
Government balance (% of GDP)
Exports of goods fob (US$ m)
Imports of goods fob (US$ m)
Current-account balance (US$ m)
Current-account balance (% of GDP)
External debt (year-end; US$ m)
Exchange rate Birr:US$ (av)
Exchange rate Birr:¥100 (av)
Exchange rate Birr:€ (av)
Exchange rate Birr:SDR (av)
2011 (a)
7.5
33
16
-2
2,957
-9,670
-1,671
-5.4
8,289
16.9
21.18
23.52
26.89
2012 (b)
8
15.7
14.5
-3.1
3,169
-10,283
-1,807
-4.9
8,591
17.8
23.04
22.7
27.5
2013 (b)
7.5
10.2
12
-3.5
3,558
-10,992
-1,996
-5.4
9,335
20.1
24.98
24.92
30.6
2014 (b)
7.2
14
11
-2.9
3,936
-11,786
-2,843
-6.6
10,306
21.13
26.09
25.93
31.99
2015 (b)
8.1
13.4
11.5
-2.2
4,505
-13,583
-4,266
-8.6
11,710
22.38
27.3
27.69
33.95
2016 (b)
7
12.3
13
-1.6
4,929
-14,845
-3,760
-6.9
12,746
24.15
29.11
30.43
36.84
a) Economist Intelligence Unit estimates; b) Economist Intelligence Unit forecasts; c) Fiscal years ending 7 July
Source: Economist Intelligence Unit
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
4
3.4 Annual trends
3.4.1 Real GDP growth (% change)
3.4.2 Consumer price inflation (av %)
3.4.3 Budget balance (% GDP)
3.4.5 Main destination of exports 2011 (% of total)
3.4.6 Main origin of imports 2011 (% of total)
Source: Economist Intelligence Unit
3.5Government
3.6 Political structure
Official name
République gabonaise
Form of state
Unitary republic
Legal system
The legal system in Gabon is based on the constitution of March
1991, amended by the National Assembly in 2003 to remove the
restriction on the number of terms that a President may serve.
3.4.4 Trade balance (% GDP)
National legislature
The National Assembly (the lower chamber) has 120 members, who
are elected for five years by universal adult suffrage; the Senate (the
upper chamber) has 91 members, who are elected for six years by
municipal and regional councilors.
National elections
The last legislative elections were held in December 2011 and the last
presidential elections were held in August 2009. The next legislative
and presidential elections are due in 2016.
Head of state
Ali Bongo Ondimba was elected president in late August 2009 and
was sworn in to office in mid-October following a recount of votes.
National government
The government is led by the Prime Minister and an appointed
Council of Ministers.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
5
Main political parties
• Parti démocratique gabonais (PDG, the ruling party)
3.7 International organization participation
• ACP
• AfDB
• AU
• Union nationale (UN, dissolved in February 2011)
• BDEAC
• CEMAC
• FAO
• Union du peuple gabonais (UPG)
• FZ
• G-24
• G-77
• Parti gabonais du progrès (PGP)
• IAEA
• IBRD
• ICAO
• Rassemblement pour le Gabon (RPG formerly Rassemblement
national des bûcherons)
• ICCt
• ICRM
• IDA
• IDB
• IFAD
• IFC
• Parti social démocrate (PSD)
• IFRCS
• ILO
• IMF
• Union gabonaise pour la démocratie et le développement (UGDD)
• IMO
• IMSO
• Interpol
• Union pour la nouvelle République (UPNR)
• IOC
• IOM
• IPU
• Alliance démocratique et républicaine (Adere)
• ISO (correspondent)
• ITSO
• ITU
• Cercle des libéraux réformateurs (CLR)
• ITUC
• MIGA
• NAM
Key ministers
• Prime Minister: Raymond Ndong Sima
• OIC
• OIF
• OPCW
• UN
• UNCTAD
• UN Security Council (temporary)
• UNESCO
• UNIDO
• UNWTO
• UPU
• WCO
• WHO
• WIPO
• WMO
• Agriculture, Livestock and Rural Development: Julien Nkoghé
Bekalé
• Budget, Public Accounts and Civil Service: Christiane Rose
Ossoucah Raponda
• Digital Economy, Communications and Post: Blaise Louembé
• WTO
• Defence: Pacôme Ruffin Ondzounga
• Economy, Employment and Sustainable Development: Luc
Oyoubi
• Education, Training, Youth and Sport: Séraphin Moundounga
• Investment Promotion, Public Works, Transport, Housing and
Tourism: Magloire Ngambia
• Family and Social Affairs: Honorine Nzet Biteghe
• Foreign Affairs: Emmanuel Issozet Ngondet
• Health: Léon Nzouba
• Industry and Mines: Régis Immongault Tatagani
• Interior, Public Security, Immigration and Decentralisation: JeanFrançois Ndongou
• Justice: Ida Réteno Assonouet
• Oil, Energy and Hydro Resources: Etienne Ngoubou
• Small and Medium-sized Businesses, Crafts and Trade: Fidèle
Mengue M’Engouang
• Water and Forestry: Gabriel Ntchango
• Central Bank Governor: Lucas Abaga Nchama
4Doing business in Gabon
4.1Overview
4.2 Openness to and restrictions upon foreign investment
Gabon is open and actively encouraging foreign investment across a
range of sectors. Foreign firms are active in the country’s three main
sources of income and exports: petroleum, manganese, and timber.
The Gabonese Government is taking a more pro-active role to ensure
transparency within these extractive industries through the creation
of public-private partnerships and revised mining and oil codes.
Gabon is actively working to improve its investment and business
climate but several factors continue to constrain foreign investment
in the non-extractive industries. These include a small domestic
market, high production costs, a rigid labor market, limited and poor
infrastructure (transportation, telecommunications, etc.),
a cumbersome judicial system, and sometimes inconsistent
customs regulations.
Gabon’s regulatory and judicial bodies can be subject to influence,
creating uncertainty concerning fair treatment and the sanctity of
contracts. Gabon’s commercial ties with France remain strong but
the Government is looking to diversify its sources by courting Asian
and Anglophone investors.
Gabon is affiliated to the Organisation for Business Law
Harmonisation in Africa (OHADA). Legislation allows foreign
investors to choose freely from a wide selection of legal business
structures, such as a private limited liability company or public limited
liability company. The distinctions arise primarily from the minimum
capital requirements and the conditions under which shares may be
re-sold. There are no restrictions on foreign investment in Gabon, but
the state reserves the right to invest in the equity capital of ventures
established in certain sectors (e.g., petroleum and mining). There are
no other blanket requirements for local participation in the capital of
local corporate entities, nor any systemic practices by private firms to
restrict foreign investment, participation, or control.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
6
The 1998 investment code conforms to Central African Economic
and Monetary Community (CEMAC) investment regulations,
providing the same rights to foreign companies operating in Gabon
as to domestic firms. Businesses are protected from expropriation or
nationalisation without appropriate compensation, as determined by
an independent third party. Certain sectors have specific investments
codes, such as mining, forestry, petroleum and tourism, which
encourage investment through customs and tax incentives. The
Government is in the process of updating several of these codes to
attract foreign investment.
In September 2011, the Private Investment Promotion Agency
(APIP), formerly charged with the opening of new businesses,
was completely dissolved. Two new entities were created in order
to increase efficiency: The Export and Investment Promotion
Agency (APEX), which assists Gabonese companies to invest and
promote their businesses overseas, and the Centre of Enterprises
Development (CDE), which is in charge of helping new companies
succeed on the domestic market.
The President’s Cabinet reviews foreign investment contracts
after ministerial-level negotiations are completed. The Presidency
takes a very active role in meeting with investors and ensuring that
investments are made in a strategic and coherent manner, in line
with the Government’s “Emerging Gabon” initiative which focuses
on sustainable development, services, and manufacturing. Priority
sectors for the Government are transportation, housing, public
facilities, tourism, ports, and other large infrastructure projects.
Regarding infrastructure investments, Gabon’s National Infrastructure
Agency (ANGT) has sought technical expertise of U.S. engineering
firm, Bechtel. ANGT’s mission is to build projects that add value,
complete and inspect identified existing projects, and develop new
projects within agreed schedules and budgets.
It is important to note that Gabon has improved on several major
international indices in 2011. Notably, Gabon’s ranking improved by
ten spots in Transparency International’s 2011 Index and by six spots
in the Heritage Foundation’s Economic Freedom report.
Measure
Year
Index/Ranking
TI Corruption Index
2011
100
Heritage Economic Freedom
2011
110
World Bank Doing Business
2011
160
MCC Gov’t Effectiveness
2009
153
MCC Rule of Law
2009
142
MCC Control of Corruption
2011
100
MCC Fiscal Policy
2011
137
MCC Trade Policy
2011
132
MCC Business Start Up
2011
154
MCC Land Rights Access
2011
131
4.3 Conversion and transfer policies
Gabon is a member of CEMAC and the Bank of Central African States
(BEAC). The other members in these organizations are Cameroon,
the Central African Republic, Congo-Brazzaville, Equatorial Guinea,
and Chad.
Gabon’s currency is the franc of the Communauté Financière
Africaine (CFA). The CFA is convertible and tied to the euro; 1 euro
equals 657 CFA and 1 dollar is roughly equivalent to 500 CFA.
Foreign investors have the option of opening local bank accounts
in CFA, dollars, or Euros. There is no difficulty obtaining foreign
exchange, with the three main commercial banks providing currency
exchange services at non-prohibitive rates. Under Gabonese law,
documentation is required to substantiate the need for any foreign
exchange over one million CFA (approximately US$2,300).
There are no legal restrictions on converting or transferring funds
associated with an investment, including the inflow or outflow of
funds for remittances of investment capital, earnings, profits, etc.
CEMAC regulations require banks to record and report the identity
of customers engaging in transactions over US$10,000. Additionally,
financial institutions must maintain records of large transactions for
five years. CEMAC regulations do not stipulate a threshold amount
for transactions to be reported. Under Gabonese law, however,
documentation is required to substantiate the need for any foreign
exchange over one million CFA (approximately US$2,300). Transfers
within the CEMAC zone are not restricted.
In August 2008, the BVMAC (Bourse des Valeurs Mobilieres de
L’Afrique Centrale), a Central African regional stock exchange created
in 2003, was officially launched in Libreville. Overall authority for
Gabon’s exchange control system rests with the Department of
Economic Control and External Finance within the Ministry of
Economy. It currently operates using public financing from the
government, with a value of 100 billion CFA (about US$200 million).
In November 2009, the International Finance Corporation (IFC), the
World Bank’s private sector lender, launched a US$43 million
Central African bond which was listed on the Central African
regional stock exchange in Libreville as well as the Douala Stock
Exchange in Cameroon.
On average, the delay for remitting investments returns is between
three and six months, depending on the type of contract that is
signed. There is no limitation on inflow or outflows. An investor is
authorized to remit on a legal parallel market so long as they justify
the reasons for the transaction and respect the signed contract.
4.4 Expropriation and compensation
Foreign firms established in Gabon operate on an equal basis with
national companies. Under Gabonese law, business investments that
are expropriated must first be compensated as determined by an
independent third party.
There are no recent examples of property being expropriated.
However, there is an example of a Chinese company being asked
to renegotiate a mining permit. In June 2006, the government
awarded the China National Machinery and Equipment Import and
Export Corporation (CMEC) the permit for the Belinga iron ore mine.
However, this year the Gabonese Government asked CMEC to come
up with a new proposal for the Belinga project due to environmental
and transparency concerns. A Chinese delegation is expected in
Libreville in January 2012 to discuss the permit.
There is no general requirement for local participation in investments.
Many businesses find it useful to have a local partner who can help
navigate the subjective factors in the business environment.
4.5 Dispute settlement
There have been instances of disputes with foreign firms, but
most disputes are resolved before going to outside arbitration.
Both settlements and monetary judgments are usually made in the
currency on which the business contract was based, whether CFA or
the foreign investor’s currency.
Gabon’s legal system is based on the French model, with a written
code of commercial law. The law is not consistently applied; Gabon’s
judicial bodies are subject to political influence, creating uncertainty
concerning fair treatment and the sanctity of contracts. Foreign court
and international arbitration decisions are accepted, but enforcement
may be difficult.
Gabon is a member of the International Centre for the Settlement of
Investment Disputes (ICSID) and the New York Convention of 1958
on the Recognition and Enforcement of Foreign Arbitral Awards.
However, Gabon has not adopted specific legislation to enforce
awards resulting from ICSID or New York Convention decisions.
Gabon is also a party to the World Trade Organisation (WTO),
the Multilateral Investment Guarantee Agency (MIGA), and the
Organisation for Business Law Harmonisation in Africa (OHADA),
which provides an International Court of Justice and Arbitration
(CCJA) common to its 16 member countries for the settlement of
conflicts related to business law implementation.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
7
4.6 Performance requirements and incentives
There are no specific performance requirements imposed as a
condition for establishing, maintaining, or expanding investment.
There are no requirements for investors to buy local products, to
export a certain percentage of output, or to invest in a specific
geographical area. There is no blanket requirement that nationals
own shares in foreign investments in Gabon that the share of foreign
equity be reduced over time, or that technology be transferred on
certain terms. Nonetheless, many investors find it useful to have
a local partner who can help navigate the subjective factors in the
business environment.
Foreign investors must recruit and train Gabonese citizens to
gradually take on their own responsibilities, particularly at the
executive level. Accordingly, hiring foreigners is subject to prior
authorisation from the Ministry of Labour. The hiring company
must provide evidence prior to employing a foreigner that there
are no qualified Gabonese to fill the position. Foreign firms have
stated that there is a lack of qualified Gabonese workers, requiring
companies to often request authorisation to hire foreigners. NonGabonese Africans find it increasingly difficult to obtain employment
authorisation; non-African expatriates have less difficulty. Chinese
industry in Gabon historically imports their labour force.
There is a law pending that would limit foreign workers to 10%
of all sectors; the law has not yet been ratified. In the petroleum
sector, the Gabonese labour union (ONEP) is particularly focused
on ensuring that foreign workers only occupy 10% of the labour
force and continually pressure the government to implement and
enforce the law. At present, about 5,000 Gabonese are employed in
the oil sector. In October 2011, immigration authorities performed
document checks in Port Gentil as part of an operation to enforce
labour laws and protect Gabonese employment in the oil sector. Such
checks, although targeted on foreign workers, are rare.
Gabon’s main industries, petroleum, mining and timber, encourage
investment through customs and tax incentives. For example, oil
and mining companies are exempt from customs duty on imported
working equipment. The Government has attempted to promote
tourism with the Tourism Investment Code of 2000, which provides
tax exemptions to foreign tourism investors during the first eight
years of operation, tax-free imports, and other administrative
incentives. Since 2005, the Gabonese authorities have been working
on developing the country’s ecotourism landscape. The Government
is working to strengthen the management of the 13 Gabonese
national parks in partnership with international non-governmental
organsations (NGOs). In 2011, the Ministry of Tourism implemented
a classification of hotels and restaurants across the country in
preparation for the 2012 African Cup of Nations (CAN), allocating
stars to hotels and restaurants based on quality of service and
conditions of the establishment. This classification will serve
to professionalise the hotel sector and to attract tourists and
investors alike.
President Ali Bongo Ondimba made a strategic decision in 2009 to
outlaw the export of unprocessed wood in order to boost Gabon’s
capacity to enjoy more domestic benefits from one of its top exports.
The Government and Singaporean-based firm Olam have set up a
Special Economic Zone (SEZ) to process timber products. The SEZ
provides several single-window business services to participants and
provides new investors with lucrative and beneficial fiscal incentives,
including tax-free operation for ten years, no custom duties on
imported machinery and parts, and 100% repatriation of funds.
As a member of CEMAC, Gabon’s trade with other member
countries (Cameroon, Central African Republic, Chad, CongoBrazzaville, and Equatorial Guinea) is subject to low or no
customs duties.
4.7 Right to private ownership and establishment
Any legal entity or person wishing to do business in Gabon must
request prior permission from the Ministry of Economy. Foreign
investors are largely treated in the same manner as their Gabonese
counterparts with regard to the purchase of real estate, negotiation
of licenses, and entering into commercial agreements.
4.8 Protection of property rights
Secured interest in property is recognised, and the recording system
is fairly reliable. Under the 1998 investment code, no investment
can be expropriated without prior just compensation as determined
by an independent third party. As a member of CEMAC and the
Economic Community of Central African States (ECCAS), Gabon
adheres to the laws of the African Intellectual Property Office (OAPI).
Based in Yaounde, Cameroon, OAPI aims to ensure the publication
and protection of patent rights, encourage creativity and transfer
of technology, and create favourable conditions for research. As
a member of OAPI, Gabon acceded to a number of international
agreements on patents and intellectual property, including the Paris
Convention, the Berne Convention and the Convention Establishing
the World Intellectual Property Organisation. As a member of the
World Trade Organisation (WTO), Gabon is also a signatory of
the Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS).
4.9 Transparency of the regulatory system
Regulatory procedures are streamlined and no laws or policies
are used to impede foreign investment. Nevertheless, at times
government policies and laws do not establish “clear rules of the
game” and firms can have difficulty navigating the bureaucracy. While
great strides are being made to modernise and make the Gabonese
Government more efficient, hurdles and red tape remain, especially
at the lower and mid levels of the ministries.
Gabon’s regulatory bodies are subject to influence, creating
uncertainty concerning fair treatment and the sanctity of contracts.
Additionally, as a former French colony, Gabon maintains strong
economic ties with France. Despite recent efforts to diversify foreign
investment, these strong ties can make investment by firms with
other national affiliations difficult. Lack of French language skills can
put American or non-Francophone firms at a disadvantage as well
but this is changing as Gabon puts more emphasis on English
language skills.
Tax, environment, health, and safety laws and policies are
transparent and consistent with international norms, and do not
impede investment. Labour laws, on the other hand, are considered
by many investors to be unusually weighted toward workers’
interests, which tend to impede investment.
There are no informal or nongovernmental regulatory procedures in
place. Proposed laws and regulations are not published in draft form
for public comment.
4.10Efficient capital markets and portfolio investment
The Bank of the Central African States (BEAC), headquartered in
Cameroon, regulates the banking system. Overall authority for
Gabon’s exchange control system rests with the Ministry of Budget.
Gabon’s banking system includes one development bank, the
Gabonese Development Bank (BGD), and five commercial banks.
The BGD normally lends to small and medium-sized companies. The
International Gabonese and French Bank (BGFI) is the principal bank
in Gabon and the first investment group in the CEMAC zone. Their
total assets totaled over US$2 billion in 2010. There is one American
bank (Citigroup) present in Gabon.
Commercial banks offer most corporate banking services, or can
procure them from overseas. Local credit to the private sector is
limited and expensive but available to both foreign and local investors
on equal terms. The country’s main economic actors, the
oil companies, finance themselves outside Gabon. Commercial
banks have transferred excess liquidity to correspondent banks
outside the region.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
8
The Central Africa Regional Stock Exchange (BVMAC) began
operation in August 2008, but is still in its embryonic stage.
4.11Competition from state-owned enterprises (SOEs)
Gabonese SOEs are managed by civil servants appointed by
Gabonese authorities and work primarily in the energy and social
sectors, such as pensions, hospitals, and housing agencies. They
often have a monopoly on the sectors in which they operate; sectors
may not be open and this may unfairly burden foreign investors.
Private enterprises are allowed to compete with public enterprises
under open market access conditions. However, they may face
disadvantages with bureaucratic hurdles. Public enterprises may
be granted priority over private enterprises, and typically private
enterprises will pay more and wait longer for the same services and
licenses. There are no specific laws or rules that offer preferential
treatment to SOEs.
The budget of each SOE is prepared and submitted each year by
the corresponding Ministry in each sector. Gabon has two types
of SOEs - the Para-SOEs and the SOEs. The management of these
two types of SOEs depends on the division of shares. There are no
limits of participation of private enterprise. There is no statutory list or
prohibited sectors to private investment.
Corporate governance of SOEs usually consists of a board of
directors who are under the authority of the related Ministry. The
members of the board are chosen by each Ministry. The board seats
are allocated not specifically to government officials, and can be
chosen from the general public. The SOEs often consult with their
Ministry before undertaking any important business decisions.
Since 1998, Gabon maintained a reserve account at the BEAC to be
used as a fund for future generations. In 2010, Gabon converted it
to a Sovereign Wealth Fund (SWF) called the Sovereign Fund of the
Gabonese Republic. The fund amounts to about US$10 million and is
managed by a presidential decree. In 2011, Gabon set up a stimulus
fund to carry funds for capital projects over into the next budget
year to improve the oversight and quality of spending and release
resources for growth-enhancing and social projects. The Government
reserves these funds for strategic projects in line with the “Emerging
Gabon” economic agenda.
4.12Corporate social responsibility
There is a general awareness of Corporate Social Responsibility
(CSR) among both producers and consumers. Many international
companies in Gabon are involved in CSR projects and continue
to look for ways to contribute to Gabon’s social sector. The British
oil company Shell funds a foundation in southern Gabon which is
undertaking conservation and biodiversity programmes. Total, a
French oil company, developed several CSR projects in Gabon in
2011, including renovating the Port Gentil airport and investing in
the underground cable which will allow Gabon to increase internet
speed and reduce costs. Foreign competition in extractive and
non-extractive industries is increasing CSR activities in Gabon. The
Government is actively encouraging these programmes.
4.13Political violence
In June 2009, President Omar Bongo Ondimba, who had been head
of state since 1967, died. On August 30, 2009, Ali Bongo Ondimba,
the son of the late President, won the election with 41% of the vote.
The announcement of the election results on September 3, 2009
sparked protests in Libreville and violence in Port Gentil, where
rioters set the French Consulate on fire. Police and military forces
quickly dispersed protesters. The Government maintained a heavy
security presence in Port Gentil for the following months. There were
no further demonstrations.
In January 2011, André Mba Obame, former Interior Minister and
Secretary General of the opposition party National Union (UN),
self-proclaimed himself as President of Gabon in violation of the
Constitution. Mba Obame occupied the headquarters of the United
Nations Development Programme (UNDP) for over one month.
During that time, his supporters were responsible for several
outbreaks of violence that resulted in the death of a police officer
and property destruction. The UN was dissolved in July 2011 for
violating the Constitution and laws regulating political parties. Mba
Obame was allowed to leave the country for medical treatment in
South Africa, where he still remains. Legislative elections were held
without incident on December 17, 2011.
4.14Corruption
The Government continues to take steps to identify and root out
corruption in its own bureaucracies, contracting and procurement
system, and in the security forces. The government has actively
sought the technical expertise of international organisations and
corporations, including the International Monetary Fund, the World
Bank, the IFC, Olam, Bechtel, and Alex Stewart to audit procurement
processes, make recommendations to enhance transparency, and
advise on procedures to entice foreign investment.
Gabon is aware of its existing capacity constraints and wants to
ensure a sound, well-sequenced, and cost-efficient implementation
of its plan. The Government is seeking to implement anti-corruption
measures and to change the way of doing business after former
President Omar Bongo’s 40 year rule of patronage and nontransparent management of natural resources.
Since his election in 2009, President Bongo Ondimba has launched
a number of reforms aimed at reducing corruption, including cutting
the size of the cabinet in half, demoting or stripping ministers of
responsibilities when corruption allegations surfaced, arresting
several high profile officials for corruption, conducting an audit of
all government ministries to identify ghost workers, consolidating
miscellaneous “slush” funds from ministries into the central
treasury, and increasing oversight of government infrastructure
projects. Some of his initial actions included a new ethics code for
government officials and orders for ex-government officials to turn
in their government vehicles and properties and to publicly declare
their assets. In October 2010, Bongo Ondimba ordered the arrests
of Gabonese officials involved in a multi-million dollar scandal at the
BEAC’s Paris Bureau and announced Gabon’s full cooperation with
French investigators.
The Commission to Combat Illicit Enrichment, established in 2004
and charged with publishing quarterly and annual reports on its
activities, has ramped up its activities in the past year. As previously
noted, Transparency International’s 2011 Index ranked Gabon at 100,
a significant improvement over the previous year by 10 rungs.
In 2010 and 2011, the Gabonese Government respected its
commitment to the IMF by working to increase economic reforms.
The government undertook a series of audits to prepare for such
reforms: a water and electricity systems audit in February 2011, an oil
sector audit in March 2011, and a scholarship and training procedures
audit in March 2011. Also in March, the government issued the
complete dismissal of the Ministry of Housing’s civil servants in the
fight against systemic corruption.
The Gabonese Government also set up two new companies, Gabon
Oil Company and Gabon Equatorial Mining Company, with the
objective to improve the judicial, financial, and fiscal transparency of
Gabon and to fight against corruption in the oil and mining sectors.
President Bongo Ondimba recruited top-notch Gabonese managers,
with proven international experience in the oil and mining sectors,
to lead the new companies. Along with this development, Gabon
is reforming its oil and mining codes to develop a more attractive
regulatory framework to draw investors to Gabon’s extractive
industries. The aim of the companies is to ensure transparency in the
government’s investment and revenues from natural resources.
Gabon is a participant in the Extractive Industries Transparency
Initiative (EITI), which aims to provide more transparency in
accounting for revenues from petroleum and mining industries.
Gabon has been a candidate for the EITI since 2007. In October
2010, the EITI Board designated Gabon as an EITI Candidate country
that is “Close to Compliant”. As set out in EITI Policy Note #3, the
designation of “Close to Compliant” applies in cases where the
EITI Board considers that a Candidate country has not only made
meaningful progress, but can reasonably be expected to achieve
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
9
compliance within a short period. At its meeting in Amsterdam in
June 2011, the EITI International Board decided to renew Gabon’s
EITI Candidate status for 18 months (until December 2012), by which
time Gabon will be required to have completed an EITI Validation that
demonstrates compliance with the 2011 edition of the EITI Rules.
As a BEAC country, the Government of Gabon has a National
Financial Investigations Agency (ANIF). ANIF serves to investigate
domestic corruption and money laundering issues while maintaining
contact and collaboration with its regional counterparts. Gabon
signed the United Nations Convention against Corruption in
December 2003 and ratified it in October 2007.
No international or regional watchdog organisations operate in
Gabon and local civil society lacks capacity to play a significant role in
highlighting cases of corruption. However, during the past year, there
has been a slight uptick in anti-corruption activities by civil society.
Several local non-governmental organizations have targeted alleged
corruption on the part of high-level government officials, including
several Ministers.
4.15Bilateral investment agreements
Gabon is a beneficiary of the African Growth and Opportunity Act
(AGOA), a framework for U.S. trade, investment and development
policy for sub-Saharan Africa. Gabon has bilateral investment
agreements with the following countries: Belgium, Luxembourg,
China, Egypt, France, Germany, Italy, Lebanon, Mali, Morocco,
Portugal, Sao Tome and Principe, South Africa, and Spain. There is a
bilateral investment agreement among CEMAC member countries
as well.
4.16OPIC and other investment insurance programmes
The Overseas Private Investment Corporation (OPIC) is open to
providing services to U.S. investors in Gabon and has done so in
the past. Gabon is also a member of the Multilateral Investment
Guarantee Agency (MIGA), which guarantees foreign investment
protection in cases of war, strife, disasters, or expropriation. MIGA is
a branch of the World Bank Group.
4.17Labour
Gabon’s population is approximately 1.4 million, of which as many as
25% are foreigners (mostly Africans from neighboring countries).
Foreign firms report a shortage of highly skilled Gabonese labour.
Chinese industry in particular imports the majority of its workers
from China. Authorization from the Ministry of Labour is required in
order to hire foreigners. Non-Gabonese Africans find it increasingly
difficult to obtain employment authorisation; non-African expatriates
have less difficulty. Non-Gabonese Africans take up most positions
requiring unskilled labour. Skilled labour costs are high and are kept
so by a labor code inspired by a French model that strongly defends
the rights of Gabonese workers. Labour unions and confederations
are active. There is a law pending that would limit foreign workers
to 10% of a company’s workforce, but the law has yet to be ratified.
In particular, the Gabonese oil workers’ labour union (ONEP) is
pressuring the Government to implement the law quickly.
4.18Foreign trade zones / free ports
A new Special Economic Zone (SEZ) opened in September 2011
near the port of Owendo in Libreville. The construction is a joint
partnership between the Government of Gabon and Olam, a
Singapore-based corporation with interests in Gabonese timber. In
August 2011, the Government announced it would partner with Olam
to build a fertilizer factory at the Mandji Free Trade Zone in Port-Gentil.
The factory, not yet open, will be operational in 2014 and will create
300 direct employment opportunities. Both economic zones will offer
tax and customs incentives to attract foreign investors.
4.19Foreign Direct Investment statistics
According to the UN Conference on Trade and Development
(UNCTAD) Country Fact Sheet on Gabon, the total value of inward
foreign direct investment (FDI) in place in Gabon in 2010 was
US$1438 million (compared to US$1267 million in 2009). Annual
direct investment into Gabon in 2008 was US$20 million (compared
to US$269 million in 2007).
The UNCTAD Gabon Fact Sheet also indicates that the total value
of Gabonese direct investment abroad in 2010 was US$663 million
(compared to US$582 million in 2009.) Annual direct investment
capital flow out of Gabon in 2008 was US$96 million (compared
US$59 million in 2007).
Most foreign investment comes from France and is concentrated
in petroleum (Total) and manganese (COMILOG/ERAMET).
According to the French Ministry of Economy/Commerce, France
is the main supplier of goods to Gabon, and Gabon is the second
largest recipient of French FDI in Africa. Most foreign investment is
concentrated in the oil sector. Major foreign companies in Gabon
include Total, Shell, Perenco, Vaalco, Bechtel, and COMILOG.
The Gabonese Government is focused on attracting FDI for
assistance with critical infrastructure projects and has taken several
measures to strengthen public investment management and
transparency. A National Infrastructure Agency (ANGT) was set
up to manage the identification, planning, management,
and implementation of large public infrastructure projects. The
American engineering corporation, Bechtel, is providing ANGT with
technical expertise.
4.20Starting a business in Gabon
No Procedure
Time
1.
Deposit the legally required
capital in a bank and obtain
the deposit evidence
Either the founder or the
notary public deposits the
initial capital in a bank and
obtains the deposit evidence.
2 days
2.
Verify and reserve the
company name
To avoid future lawsuits, the
founders must pick a name
not already in use.
1 day
3.
Obtain extracts of criminal
record of the company
manager
1 – 10 days
4.
Deposit and register the
company’s articles of
association with the public
notary
The notary public issues a
certificate of payment of the
initial capital. APIP just issued
guideline requiring people to
use lawyer to draft statutes.
14 days
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
Associated
costs
No charge
XAF 25,000
XAF ,3000
XAF
375,000
10
5.
Deposit documents
with the Investment
Promotion Agency
(Agence de Promotion
d’Investissement)
Agence de Promotion des
Investissements Privés
(APIP) registers the company
statutes with the Ministry of
Finance (Administration de
Domaines), completes the
company registration with
the court clerk (greffier du
tribunal) at the Ministry of
Justice (registration number
and k-bis), and obtains the tax
identification number.
30 days
XAF 50,000
(APIP fee) +
XAF 60,000
(registration
fees) + XAF
80,000
(stamps)
5Country Risk Ratings
Sovereign Currency Banking Political Economic Country
risk
risk
sector
risk
structure risk
risk
risk
March
2012
BB
BBB
BB
B
BB
BBB
(AAA=least risky, D=most risky)
5.1 Sovereign risk
Stable. On the back of new debt data that show a slightly larger
than estimated rise in public debt in 2010, the sovereign risk score
worsens by two points this month. The outlook changes back from
positive to stable.
5.2 Currency risk
Negative. The currency risk has remained unchanged over the
quarter, as slightly higher real interest rates compensate for slightly
worse debt ratios. Hovering near the bottom of the BBB band,
currency risk still merits a negative outlook, given the weak external
context and euro zone crisis.
To complete these
registrations, APIP must
forward the documents
to the relevant agencies.
In principle, the Direction
des Impots, the Greffe de
la Court and should have
a representation at the
Guichet Unique of the APIP,
but since its inception the
relevant administrations
have not been able to place
a representative at the
Guichet Unique. Instead
the representatives of the
APIP request the relevant
documents from the relevant
authorities on behalf of the
applicant. Alternatively,
notaire/lawyer take care of
relevant authorisations.
5.3 Banking sector risk
Stable. The banking sector will benefit from slightly higher positive
real interest rates, which should help moderate the pick-up in
domestic credit. Banks’ net foreign assets are also improving.
5.4 Political risk
Unrest in the wake of the controversial December 2011 legislative
election has been muted. The extraction of concessions by
powerful unions compromises government policy and the business
environment.
5.5 Economic structure risk
Gabon is over-dependent on oil, but sector expansion and economic
diversification should consolidate the improving economic structure
risk rating.
Included in
procedure
5
6.
Pay fees and obtain receipt
After depositing the
documents, the founder pays
the fees at the cashier and
obtains a receipt.
1 day
(simultaneous
with previous
procedure)
7.
Publish the notice of
company formation in
a legal journal (Hebdoinformations)
2 days
8.
Notify the Ministry of Labor
the commence of operation
This procedure is often not
completed in practice.
1 day
No charge
9.
Register the employees
with the Social Security
Authorities
This procedure is often not
completed in practice.
1 day
No charge
XAF 60,000
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
11
6Country Outlook: 2012 –
2016
6.1 Political stability
Gabon is likely to remain one of the region’s most stable countries.
Nearly three years after his controversial election in August 2009, the
president, Ali Bongo Ondimba, has seen off multiple challenges to
his rule. He has withstood criticism of his victory; a self-proclamation
as President by André Mba Obame, the third-placed runner-up
and former leader of the Union nationale (UN), a now-defunct
opposition party; and condemnation over the December 2011
legislative election, which saw a landslide victory for the ruling Parti
démocratique gabonais (PDG), following a widespread opposition
boycott and a poor performance by those other parties that did
participate.
Mr. Bongo will continue to assert his position within the party and
over policy, having in his February 2012 cabinet reshuffle removed
further vestiges of his father’s rule, under which Mr. Bongo has
promised to draw a line. Even though many opposition politicians
still contest Mr. Bongo’s presidential legitimacy (and that of his party
in parliament), foreign governments support him, and there is a
negligible risk of the results of the elections being overturned.
Although Mr. Mba Obame could face prosecution, the government
can be expected to tread carefully to avoid accusations of
persecution, and Mr Bongo’s new prime minister, Raymond Ndong
Sima, hails from the same region as Mr. Mba Obame. Nevertheless,
although there were few reports of unrest surrounding the legislative
poll, charges that the government is ruling with only a weak mandate
and with barely any opposition in parliament to scrutinise policy
may lead to dissent finding expression on the streets. A greater
challenge facing Mr. Bongo will be to keep his sprawling
parliamentary party disciplined.
6.2 Election watch
Following a widespread opposition boycott of the legislative
election in protest at the lack of a biometric electoral roll, and a poor
performance by those who did participate, the PDG now dominates
the National Assembly, controlling, with its minority coalition
partners, 118 out of 120 seats. Challenges have been lodged with
the Constitutional Court but, even if upheld, they will not affect the
PDG’s domination. With a seven-year term, the next presidential
election is due in 2016; on current form, Mr. Bongo is the favourite to
win. Senate elections are due in January 2015, with the PDG again
expected to continue to dominate, although the opposition may
regroup over this time.
6.3 International relations
Relations with France will remain strong (Gabon hosts France’s
regional military base and Mr. Bongo visits Paris frequently) despite
a French judicial probe into the Bongo family’s French assets and
claims by former French officials that Mr. Bongo’s election victory
was fraudulent. However, pressure is growing to reduce such
long-standing political and commercial ties. Commercial links with
China remain strong, and the government appears able to contain
the political and commercial fallout from its desire to transfer the
giant Bélinga iron ore project from a Chinese state-owned company,
because of a lack of progress. Gabon is assiduously courting
investment from Asia. Links with the US, Gabon’s primary oil export
market, will remain favourable, given Gabonese support for US
policy, bolstering the country’s regional standing, which previously
depended to a large extent on the former president’s relations with
other African leaders. A long-standing border dispute with Equatorial
Guinea over the potentially oil-rich zone around Mbañe, Conga and
Cocotiers is edging towards resolution, despite the support of the
EquatoGuinean president, Teodoro Obiang Nguema Mbasogo, for
Mr. Mba Obame.
6.4 Policy trends
Economic policy during the forecast period will be driven by the goal
of transforming Gabon into an “emerging” economy. The government
will seek to accelerate investment and steer the economy towards
higher value-added activities in order to reduce its oil dependency,
building on policies such as the ban on unprocessed timber exports.
This will also involve the state taking stakes in companies operating
in strategic sectors, as well as outsourcing elements of policy
development and execution to private international companies.
The new special economic zone (SEZ) should encourage even more
investment. Gabon aims to overtake Nigeria and South Africa as the
continent’s largest producer of palm oil and manganese within a
decade. Dwindling oil will remain the economy’s cornerstone, which
the government hopes to manage better with the creation of a new
state oil firm, Gabon Oil Company, to increase its share of sector
revenue and control of logistics and infrastructure. A similar entity is
planned for mining projects. Militant labour unions remain a business
and policy challenge, with the main oil workers’ group staging and
threatening strikes to extract government concessions. Fighting
corruption and waste is another priority, both through increased
scrutiny of state spending and through Mr. Bongo’s ongoing
replacement of the PDG old guard. Gabon has been declared “close
to compliance” with the Extractive Industries Transparency Initiative.
In order to start iron ore production at Bélinga, the government is in
the process of transferring the concession from a Chinese stateowned company to BHP Billiton, an Australian company. In order to
improve power and water supply, the state has taken over a utility
company, Société d’électricité de téléphone et d’eau du Gabon.
6.5 Economic growth
Growth was supported in 2011 by new oil that came on stream in
December 2010, boosting waning output by around 10% to nearly
250,000 barrels/day. Other fields continue to mature, however, and
questionable labour policy, despite pacifying labour unions, may
reduce sector efficiency. However, after a strong performance in
2010-11, real GDP growth is expected to slow markedly in 2012-14
to an average of 3.8%, given the subdued global outlook. As the
oil sector suffers, growth will be underpinned by strong capital
investment in other sectors that are increasing value-added
operations and volume output, such as forestry, manganese and
gold.
Fixed investment, such as the construction of Gabon’s first SEZ, will
also be important, driven by generous oil-funded government and
sovereign wealth fund spending. Banking and infrastructure should
also drive non-oil growth. Industrial unrest presents a constant risk to
output over the forecast period. Strong investment, particularly from
Asia, will help real GDP growth to accelerate gradually in 2015-16
to around 3.9% a year. Strong downside risks to the forecast stem
from the possibility of a euro zone break-up and a global double-dip
recession, although these risks will develop more from reduced
investment, declining revenue (as a result of lower oil prices) and
tighter French credit than from collapsing export markets, as Europe
accounts for less than one-third of Gabon’s export market.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
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6.6Inflation
Average annual consumer price growth is now estimated to have
eased in 2011 to 1.3%, as a stronger currency, subsidies and cuts
in the value-added tax (VAT) rate in January 2011 mitigated the
impact of elevated commodity and import prices, wages and
government spending. The Economist Intelligence Unit expects
average consumer price inflation to accelerate in 2012, to 3.3%, as
the currency weakens and the government raises spending to ease
tensions in the wake of the December 2011 election, and as the
January 2011 VAT cut falls out of the calculation. Notwithstanding
the possibility of the euro zone collapsing, the euro-pegged franc
will continue to weaken until 2014 before recovering. Inflation is
expected to ease to 3% in 2013 as global commodity prices fall
further and domestic growth moderates. It should remain in this
region over the rest of the forecast period, partly because the
government can be expected to increase subsidies should global and
domestic prices rise too quickly again.
AAppendix – Sources of
Information
World Bank
CIA World Factbook
Economist Intelligence Unit
Doingbusiness.org
United Nations
US Department of State
6.7 Exchange rates
The CFA franc – which is pegged to the euro at CFAfr655.96:€1 – will
fluctuate against the US dollar in line with the euro:dollar exchange
rate. Heightened concerns over a double-dip recession in the euro
zone have seen the euro slide since mid-2011. It has recovered
somewhat in 2012, but weakness will persist and the euro-pegged
franc is forecast to depreciate from an average of CFAfr472:US$1
in 2012 to CFAfr530:US$1 in 2015, before strengthening to
CFAfr521:US$1 in 2016. A euro zone break-up would lead to
significant volatility
6.8 External sector
After reaching an estimated US$10.9bn in 2011, exports will grow
only slightly in 2012 to US$11bn, as oil prices firm and non-oil exports
such as manganese and timber make up for sliding oil output.
Exports will ease in 2013 as oil prices weaken, but rise thereafter,
especially as the non-oil sector grows. Imports should continue to
rise over the forecast period, from an estimated US$3.2bn in 2011 to
US$6.1bn in 2016, because of robust demand for capital goods.
However, a weaker franc might restrain some consumer imports
and undermine the impact of lower commodity prices. The services
deficit will improve in 2012, remaining relatively stable thereafter as
a result of expected higher tourism, but will remain fundamentally
determined by import-associated transport costs and technical
services. The income deficit typically reflects export receipt
dynamics, being mainly driven by profit repatriation by foreign oil and
mining companies. We forecast that the current-account surplus will
widen from an estimated 23.3% of GDP in 2011 to 25.2% of GDP
in 2012. It will narrow steadily over the remainder of the forecast
period, declining to single digits in 2016 but remaining comfortably in
surplus.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
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