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Gabon |
ECONOMY
In spite of the International Monetary Fund (IMF)’s recommendation that Gabon must tighten up the management of its public finances, the country’s financial backers are «exasperated» by what’s happening to the oil industry
Some thirty years ago, Gabon failed to diversify its economy and create economic means capable of supporting the country’s commercial fabric. What happened? Gabon had built its wealth entirely on oil, timber and other raw materials. The fact that both the population and the national income is unequally distributed across the country, means Gabon has genuine development problems. This alarming situation which causes increased unemployment, is the result of poor economic politics implemented by Gabon’s various governments since the 1970s when the country became very prosperous, thanks to oil.
Today, neither the International Monetary Fund (IMF) nor the World Bank consider Gabon to be a «good pupil». Foreign investors no longer rush to Libreville, and support from France no longer suffices to change things for the better, especially among the country’s leaders. Other factors contributing to poor governance are: The non-existence of a reliable judiciary; corruption is rife in the civil service; public finances are being embezzled.
A lot has changed over recent years. Oil is no longer Gabon’s main resource as its reserves are running low. The country’s external debt has reached 2,000 billion CFA francs and the national debt is reckoned to be as high as 300 billion CFA francs.
Poorly allocated subsidies
Despite moderate demographic growth (an average of 2.5%), the people’s living conditions have worsened. During the period 1980-1993, the Gross National Product per capita decreased by 1.8% per year; from 1964-1980 it had increased by 5.6% per year. Yet, in spite of this, in the year 2000, the World Bank ranked Gabon as the only sub-Saharan country in Africa with intermediate income. As the country is unable to make a rational use of its resources, however, the level of basic social services is relatively poor.
Following recent consultations with the IMF, the government remains «reasonably optimistic», while acknowledging that: Not enough agricultural workers are available; basic services in urban areas are gummed-up and indeed, throughout the country, leave much to be desired; urban poverty is increasing. The Minister for Economy and Finances, Mr Emile Doumba, says: «We forecast a 3% growth for this year as against 6% for 1999. If fuel prices remain at present levels and if reorganisational efforts in administration progress continue as expected, we will be able to improve our income noticeably and have an acceptable leeway in self-financing, which will enable us to reach the growth-rate we have forecast».
The fuel trap
Fuel holds a predominant place in Gabon’s Gross National Product (GNP). In 1997 it contributed to 40.9% of the nation’s wealth. In 1999, this contribution amounted to approximately 60%. Following the «black gold», come services and trade, representing respectively 9.7% and 8.8% of the GNP. The economy’s dependency of the oil sector is a factor of instability.
Industry holds a very restricted place in national production. Except for timber processing, it mainly serves Gabon’s internal market. Over the last years, the informal sector of industry, availing itself of the economic crisis, became more and more importance in Gabon’s economy, even if statistics about its contribution to the GNP are not available. Not only has Gabon got to readjust its economic outlook today, but it has also progressively to diversify its economy if the country wants to escape the oil trap.
A large percentage of the country’s population (1.4 million) live in the capital, Libreville (450,000 inhabitants). The question remains: How will the State be able to solve its basic problems in a crisis period now, when it proved unable to do so during the years of plenty? Gabon, like all other oil producing countries, is suffering from the enormous place fuel had in its economic picture. The present government is endeavouring to progressively reverse this situation.
Minister Doumba puts it this way: «Today, we are suffering from the state our country is in. Our roads are full of pot-holes; the education system is inadequate; primary health-care services are still lacking in some places, in spite of major efforts made to develop these services and to build hospitals. I hope the situation we are experiencing today will help us change our behaviour and more importantly, our way of thinking. We must learn to spend less, and care more about saving and, most of all, we must be more enterprising.»
Deep-rooted poverty
Gabon has been poverty-stricken for many years, but this was kept hidden. Even if complete statistics are unavailable, according to the World Bank, trends show that the proportion of people living above the minimum wage level, dropped from 87% in 1960, to 83% in 1994. Over the same period, people living above the poverty–line, set at two-thirds of the average individual expenditure rate -– dropped from 68% to 62%. The situation worsened to such an extent that in this year 2000, almost 30% of the population living in the large centres of Libreville and Port-Gentil, are now living below the absolute poverty line, set at approximately 30,000 CFA francs per month.
The government is now aware that poverty is increasing and has promised to promote the development of basic social services. But in spite of all efforts made during recent years, social, education and sanitation indicators are still very weak compared to Gabon’s potential. Indeed, Gabon is a rich and sparely populated country. It has to restructure its economy and this implies new priorities in the country’s economic orientations, and in improved cost efficiency.
During the relative opulence of the years of growth in oil production, people from the Opposition were included in the government, and this kept ethnic problems to a manageable level. But truth to say, a major effort has been made to delude international institutions and foreign governments as to what is really happening. Ministers continue to be appointed according to ethnic origin, and only serve to fill a government which is already over-subscribed.
President Omar Bongo gives the impression of being very active, but much of what he does can be described as a series of scattered initiatives — personal whims rather than a well-planned effort likely to benefit the whole region. Such an objective, however, which would be the only valid one for Gabon in an «après-oil perspective», seems unattainable for the time being. The fact is, Gabon’s economy is over-centralised and is increasingly bogged down (perhaps with the exception of oil production). The country is ruled by a group of people who lack a real popular basis. Gabon’s present rulers should accept to give up substantial parts of their sovereignty and rule with the people.
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