Economy of Gabon

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Gabon enjoys a per capita income four times that of most nations of sub-Saharan Africa. This has supported a sharp decline in extreme poverty; yet because of high income inequality a large proportion of the population remains poor. Gabon depended on timber and manganese until oil was discovered offshore in the early 1970s. The oil sector now accounts for 50% of GDP and 80% of exports. Oil production is now declining from its apogee of 370,000 barrels per day in 1997. The 1998 fall-off in oil prices had a negative impact on government revenues and the economy. Little thought or plans have been made for an after-oil scenario. Gabon public expenditures from the years of significant oil revenues have not been spent efficiently. Overspending on the Transgabonais railroad, the oil price shock of 1986, and the franc CFA devaluation of 1994 have caused debt problems. Gabon has earned a poor reputation with the Paris Club and the IMF for poor management of its debt and revenues. IMF missions (related to the now lapsed EFF program) have criticized the government for over-spending on off-budget items (in good years and bad), over-borrowing from the Central Bank, and slipping on the schedule for privatization and administrative reform.

Gabon's oil revenues have given it a strong per capita GDP of more than $4,000, extremely high for the region. On the other hand, a skewed income distribution and poor social indicators are evident. The economy is highly dependent on extraction of abundant primary materials. After oil, timber and manganese mining are the other major sectors. Gabon continues to face fluctuating prices for its oil, timber, manganese, and uranium exports. Foreign and Gabonese observers have consistently lamented the lack of transformation of primary materials in the Gabonese economy. Various factors have so far stymied more diversification (a small market of 1 million people, dependence on French imports, inability to capitalize on regional markets, lack of entrepreneurial zeal among the Gabonese, and the fairly regular stream of oil "rent"). The small processing and service sectors are largely dominated by just a few prominent local investors.

In 1992, the fiscal deficit widened to 2.4% of GDP, and Gabon failed to settle arrears on its bilateral debt, leading to a cancellation of rescheduling agreements with official and private creditors. Devaluation of its CFA franc by 50% on 12 January 1994 sparked a one-time inflationary surge, to 35%; the rate dropped to 6% in 1996. The IMF provided a one-year standby arrangement in 1994-95 and a three-year Enhanced Financing Facility (EFF) at near commercial rates beginning in late 1995. Those agreements mandate progress in privatization and fiscal discipline. France provided additional financial support in January 1997 after Gabon had met IMF targets for mid-1996. In 1997, an IMF mission to Gabon criticized the government for overspending on off-budget items, over-borrowing from the central bank, and slipping on its schedule for privatization and administrative reform. The rebound of oil prices in 1999 helped growth, but drops in production hampered Gabon from fully realizing potential gains.

GDP: purchasing power parity - $7.9 billion (7.9 G$) (1999 est.)

GDP - real growth rate: 1.7% (1999 est.)

GDP - per capita: purchasing power parity - $6,500 (1999 est.)

GDP - composition by sector:
agriculture: 10%
industry: 60%
services: 30% (1999 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 2.9% (1999 est.)

Labour force: 600,000

Labour force - by occupation: agriculture 60%, services and government 25%, industry and commerce 15%

Unemployment rate: 21% (1997 est.)

Budget:
revenues: $1.5 billion
expenditures: $1.3 billion, including capital expenditures of $302 million (1996 est.)

Industries: food and beverage; textile; lumbering and plywood; cement; petroleum extraction and refining; manganese, uranium, and gold mining; chemical production; ship repair

Industrial production growth rate: 2.3% (1995)

Electricity - production: 1.025 TWh (1998)

Electricity - production by source:
fossil fuel: 27.8%
hydro: 72.2%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 953 GWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: cocoa, coffee, sugar, palm oil, rubber; cattle; okoume (a tropical softwood); fish

Exports: $2.4 billion (f.o.b., 1999 est.)

Exports - commodities: crude oil 75%, timber, manganese, uranium (1998)

Exports - partners: United States 68%, the People's Republic of China 9%, France 8%, Japan 3% (1998)

Imports: $1.2 billion (f.o.b., 1999 est.)

Imports - commodities: machinery and equipment, foodstuffs, chemicals, petroleum products, construction materials

Imports - partners: France 39%, United States 6%, Cameroon 5%, Netherlands 5%, Côte d'Ivoire, Japan (1998)

Debt - external: $4.6 billion (1999 est.)

Economic aid - recipient: $331 million (1995)

Currency: 1 Communauté financière africaine franc (CFAF) = 100 centimes

Exchange rates: Communauté financière africaine francs (CFAF) per US$1 - 647.25 (January 2000), 615.70 (1999), 589.95 (1998), 583.67 (1997), 511.55 (1996), 499.15 (1995)
note: since 1 January 1999, the CFAF is pegged to the euro at a rate of 655.957 CFA francs per euro

Fiscal year: calendar year