CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
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Gabon |
ECONOMICS
Formerly a small-scale oil paradise in Central Africa, Gabon is now considered to be
one of the most expensive countries in the world, where many pockets of poverty are developing
Despite the income from its mining and oil wealth, the reserves of which are dwindling, Gabon needs to explore alternative resources. This has become necessary because the country’s economy, now in financial crisis, is built on its oil revenues.
The cost of living has risen in Libreville, where more than half the Gabonese population lives. A loaf of bread has risen from 100 to 125 CFA francs (Editor’s note: 1 euro = 656 CFA francs). A chicken can cost as much as 7,000 CFA francs or more. A chicken leg, in a restaurant, costs 4,000 CFA francs. Shopkeepers are offering pineapples at 1,000 CFA francs each. At the M’Bolo supermarket, the range of prises is also extremely surprising. Radios sold in Abidjan for between 10,000 and 30,000 CFA francs, cost between 40,000 and 70,000 CFA francs in Libreville. As for TV and freezers, the prices are staggering.
According to the listings published in mid-December 2002 by The Economist Intelligence Unit, Gabon’s capital, Libreville, is by far the most expensive city in Africa. In a country seriously affected by the drop in oil production and the lack of new discoveries, the cost of living is a heavy burden on the buying power of households. This is a major concern for international lenders, following the example of the International Monetary Fund. Where the minimum wage revolves around 47,000 CFA francs, the high cost of living in Gabon is largely due to the lack of competition in the market.
Libreville is one of the five most expensive cities in the world. The high cost of living has increased the level of poverty among the inhabitants of the city. The exceedingly high customs charges, force entrepreneurs to adjust their prices accordingly. «Many companies set high prices and generally distribute goods according to the needs of well-to-do customers», comments Mrs Sylvianne Nimbo, the price-control inspector.
As if to complicate the situation, some business people are creating artificial shortages of goods. The country is chronically dependent on food imports, most of its foodstuffs coming from countries in the sub-region (Cameroon, Sao Tomé e Principe, Congo-Brazzaville, Chad, Equatorial Guinea, etc.), as well as Europe, Asia, South Africa and more recently the United Arab Emirates. In addition, the lack of reliable trunk roads does not help, when people want to travel, forcing them to go by air.
Agriculture as an alternative
«In order to reduce the cost of living considerably, Gabon is struggling to promote agriculture, currently providing less than 20% of the country’s food requirements. Since the devaluation of the CFA franc, in January 1994, the country has not recovered from the successive financial crises of 1998 and 1999», comments Mr Cyriaque Mba, an agricultural engineer, by way of analyzing the situation. With the drop in oil revenues that form almost 80% of exports, and the relocation of, among others, the Shell-Gabon oil company (whose offices were moved from Port-Gentil to Gamba, in the south-west of Gabon), unemployment hit the large towns. Although the equatorial climate, with its high rainfall, favours the development of agriculture, which could replace exploitation of oil resources, Gabon has always neglected this aspect of the economy.
Marginalised for so long, agriculture appears to be experiencing a slight blossoming. Many Gabonese are also turning to subsistence farming in order to overcome the reduction in their purchasing power. «The idea is gaining ground and slowly some families have created kitchen gardens behind their houses. Fields of manioc and bananas are being grown», comments Didier Ogoula, an official at the Ministry of Agriculture. «Prices in the market are high and it is difficult to feed the whole family. Five years ago, you could cook a meal for ten people with 5,000 CFA francs. You’d need three times that now, and we no longer have the resources. I am growing crops so as to feed my family», states farmer Michel Mintsa.
In an environment characterised among other things by the globalisation of the economy, government and private sector employees live on credit cycles, since works are normally short of money only a week after receiving their salary, already reduced by the «fortnight», an intermediate withdrawal granted by the banks, at interest.
The public authorities and international organisations have initiated some steps to promote agriculture. The Gabonese Development Support Institute which encourages and promotes the creation of agricultural and para-agricultural businesses, has enabled the creation of 210 businesses, which each contribute 15 tonnes of vegetables, 15 tonnes of poultry and 2.5 tonnes of pork every day onto the local market. But the essential products are often frequently scarce because of monopolies putting them out of reach of all purses. In February 2003, cooking oil was nowhere to be found in Libreville, but its black-market price was between 1500 and 2500 CFA francs, although its normal top price was 1,000 CFA francs.
New eating habits
Formerly only eaten by low income families, ox-tail, chicken pies and beef chops, whose prices have risen because of high demand, are now to be found on the tables of the well-off white collar worker. It should be remembered that ox-tail was the common family meal at the start of the 90s. Prices of the main food stuffs have rocketed. This is especially true of sugar (which has risen from 700 to 850 CFA francs per kilo) and plantains (4 fruits cost 1,000 CFA francs, while 6 fruits are 500 CFA francs in Malabo, Equatorial Guinea).
Mr Cyprien Moussavou, electrician and father of seven children, believes that «it is difficult to have a varied diet, since the money available for food is limited». Because it is still affordable, rice has become the staple food of households, helping to alter the eating habits of the Gabonese. «But all the initiatives to develop agriculture are still inadequate, since it is not yet part of our way of life as the State has not made this sector a priority since the 70s, the period of the big oil boom», observes the economist Clément Mbourou. To succeed in its agricultural challenge, the State must set up a wide range of structures, while training technical staff qualified in food production.
Poor distribution of income
«The country’s income is unequally distributed among the population, to the point that a minority has 75% of the wealth of the country, while most families live miserably on the remaining 25%», explains Xavier Ndong, an official at the Planning Ministry. With a land surface of 267,667 km2, 80% of which is covered by forest, Gabon has very fertile soil, good for agriculture. Farming accounts for only 8% of the gross internal product, and the small amount of local agricultural produce meets only about 20% of food requirements. «With the drop in oil reserves and the uncertainty of employment that plagues many sectors of the Gabonese economy, unemployment and poverty are appearing in large towns, breaking up the family solidarity so dear to African society», states Ndong.
For a decent standard of living in Gabon, an income of between 500,000 and 625,000 CFA francs a month is needed, according to a study carried out between 2000 and 2001 by a team of union members from National Education. The essential part of household income goes straight to children’s education and family health, while small households often spend less than 90,000 CFA francs a month on food.
A study from the Economist Intelligence Unit shows that among about twenty countries worldwide, experiencing the fastest economic growth, eight of these are in Africa. For the second year running, Equatorial Guinea the new oil paradise in Central Africa is in the lead with a jump of 34%. Its neighbour, Gabon, is way behind, with –0.6%.