Gabon flag Gabon: Economic and Political Overview

The economic context of Gabon

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Gabonese economy was hit hard by the joint effects of declining demand for oil, decreasing oil prices and the containment measures implemented to tackle the coronavirus crisis. After a contracting by an estimated -1.8% in 2020, GDP growth recovered in 2021, reaching 1.5% (IMF estimates). Higher oil prices, increasing vaccination rates and good agriculture and forestry performances supported economic recovery. According to IMF forecast, GDP growth is expected to accelerate to 3.9% in 2022 before stabilizing at 3.2% in 2023. The economic recovery will remain fragile and subject to risks from the pandemic and oil prices (IMF). The Economist forecasts economic growth to slow in 2024-26 as oil prices dip sharply.

The Gabonese economy has faced challenging circumstances brought on by the fall of the prices and of the global demand for oil, its main export commodity, as well as the Covid-19 pandemic. The authorities responded to the crisis with a recovery plan estimated at EUR 381 million (approximately 3% of the GDP), and benefited from IMF assistance through an extended arrangement under the Extended Fund Facility (EFF). The authorities focused on fiscal and governance reforms to support economic recovery and enhance debt sustainability. After widening to an estimated -2.1% GDP (-7.4% of the non-oil GDP) in 2020, global fiscal deficit was forecast by the IMF at -3.5% GDP (-7.1% of the non-oil GDP) in 2021 and -0.3% GDP (-4.9% of the non-oil GDP) in 2022. Fiscal consolidation should enable global fiscal budget to return into surplus in 2023. Public debt, which soared to an estimated 77.4% GDP in 2020, decreased to 72.1% GDP in 2021 and is forecast to further reduce to 63.7% GDP in 2022 and 62.7% GDP in 2023 (IMF). Inflation remained contained thanks to Gabon’s membership in the CFA franc currency. Estimated at 1.3% in 2020, it increased to 2% in 2021 due to supply disruptions, and is forecast to stabilize at that level in 2022 and 2023 (IMF). The Gabonese government is focused on decreasing the dependency on oil and speeding up the Strategic Plan for Food Sovereignty (Euler Hermes). To revert dependence on raw materials and lack of economic diversification, Gabon seeks to revive its agricultural sector (cocoa, coffee, and palm oil). The country is also planning to develop tourism, and particularly eco-tourism, to take advantage of its forest heritage. Gabon has also launched a broad public investment program (PSGE) to become one of the fastest-growing economies by 2025. The 2022 budget aims at reducing public debt and transforming the economy, but includes additional Covid-19 related spending. Among the challenges identified by the IMF, strengthening domestic revenue and public financial management, securing higher oil and mining revenue, enhancing debt sustainability, reforming the tax system and protecting the most vulnerable are key priorities.

Gabon is classified as an upper-middle-income country with a GDP per capita above its neighbors. However, social indicators lag behind the country's wealth. A third of the population lives below the poverty line (nearly 5% live on less than a dollar and a half every day) and unemployment is very high. In 2020, the unemployment rate in the country was at 20.5% (ILO Estimate). There is also a large gap between economic development in urban and rural populations. Moreover, city rents exploded as a result of the exodus from rural areas to cities (four major cities house more than 85% of Gabon's population).

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 15.3420.2422.2221.5522.19
GDP (Constant Prices, Annual % Change) -1.91.52.73.73.7
GDP per Capita (USD) 7e910910
General Government Gross Debt (in % of GDP) 78.365.854.052.449.3
Inflation Rate (%) 1.31.13.53.22.5
Current Account (billions USD) -1.06e-1.15-0.31-0.63-0.70
Current Account (in % of GDP) -6.9-5.7-1.4-2.9-3.2

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Gabon is rich in natural resources. It is Africa’s second largest wood producer and the fifth oil producer in sub-Saharan Africa. The agricultural sector accounted for an estimated 6.7% of Gabon's GDP in 2020 (World Bank), employing 30% of the workforce. Gabon has 22 million hectares of forest, one million hectares of arable agricultural land and over 800 kilometers of coastline. The sector includes food crops, rubber (especially in the north), and palm oil, with the country relying heavily on food imports.

Industry contributes to 40.7% of the country's GDP and around 11% of total employment (World Bank). The sector is dominated by petroleum, manganese mining, and timber processing. Hydrocarbons account for 68% of Gabon’s exports, 45% of its GDP and 40% of its budgetary revenue (Euler Hermes). However, the country is facing a decline in its oil reserves. Other activities include textile plants, cement factories, chemical plants, breweries, shipyards, and cigarette factories. Most industrial establishments are located near Libreville and Port-Gentil.

The services sector accounts for 45.7% of GDP, employing 59% of the active workforce (World Bank). The government is the biggest employer in the sector. Tourism is still embryonic due to poor infrastructures and the country’s landscape mostly covered in forests.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 30.0 10.7 59.3
Value Added (in % of GDP) 6.4 41.5 46.2
Value Added (Annual % Change) 5.2 -3.0 -0.8

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
58,1/100
World Rank:
110
Regional Rank:
15

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

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Latest Update: November 2022

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