CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
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Gabon |
ECONOMY
Gabon has often been described as «the African Emirates».
True, its got many things going for it but now the country
must diversify its economy which is still too dependent on oil.
The fact is, the nation’s oil resources are continually diminishingThe fall in oil production started in 1998 and continued into 2002, with a decline of 4.7% compared to 2001. In 2002, national production was 12.281 million tons. Those in charge of the economy say that it’s hoped to control the rate of decrease in oil production to below 5%, thanks to on-going development work in this sector. However, oil production in 2003 is envisaged at approximately 11.294 million tons, that is to say, a decrease of 8.04% compared to 2002. The rate of exchange with the US dollar has done nothing to help matters. In 2002, it was on average throughout the year at 694.9 CFA francs for 1 US dollar; in 2001 it was 733.11 CFA francs for 1 US dollar. i.e. in 2002, a depreciation of 1.8%. Income from oil has decreased by 32.3%. (510 billion CFA francs in 2002 and an estimated 448.1 billion CFA francs in 2003). This situation is linked to the fall in production of crude oil and uncertainties connected with its price per barrel. Also, income from taxes levied on oil production, royalties and dividends are unlikely to make up the shortfall.
Disappointment with the Rabi Oilfield
The Rabi Oilfield was thought to be Gabon’s saving factor. Indeed, in 1997, it was producing approximately 250,000 barrels per day. But in 2003, this rate of production was down to 55,000 barrels per day. (These days, Gabon’s total production is 250,000 barrels per day). However, the Rabi Oilfield which is associated with Elf-Gabon, remains nevertheless an important part of Gabon’s oil industry. As an oilfield, Rabi has attained its zenith and is now entering Phase Three of production. The aims is to establish a new development strategy while improving, inter alia, surface equipment, in order to make it possible for the wells to achieve their full potential.
Mr Frank Denelle is Shell-Gabon’s chairman/-chief executive. he says: «Rabi’s Phase 3 is progressing well. We’ve reached an agreement with the Gabonese authorities concerning the renewal of Rabi’s licence to operate. This agreement was signed on 18 April. We’ve drilled 8 wells out of the 15 planned for this new phase. The results are good. I’m happy to say that the wells which we drilled are giving satisfaction. i.e. we’re stabilizing Rabi’s production rate. We are expecting an average production for this year at between 53,000-55,000 barrels per day. We are very hopeful that we shall achieve stabilisation in production». Mr Denelle was then asked about the profitability of the more than 150 million dollars invested in Rabi’s Phase 3. He replied: «We are hoping to produce as a starter, some 50 million barrels of oil. From that moment, from the economic point of view, the project will be worth its while». Rabi was «discovered» in September 1985. Oil production started in January 1989 over a surface area of 129 km2. In 1994, its production had attained 9.2 million tons and this made it possible thereafter to quickly exceed 305,000 barrels per day.
But Gabon has other assets, still to be fully investigated. The country will need these in order to diversify its economy. It should have developed them during the 1970s, at the time of the great oil prosperity. These assets cover such areas as agriculture, fisheries, tourism and the mining sector.
Agriculture and food self-sufficiency
Mr Paul Mba Abessole is Gabon’s Deputy Prime Minister with responsibility for Agriculture. He says: «Agriculture is one of Gabon’s great national riches. It must be one of the fundamental elements of our economic power. Gabon wants to attain food self-sufficiency and to diversify its income by making agriculture one of the nation’s economic priorities, although that is proving to be a long-term process». He continues: «The duty of any government is to protect its people, to look after them and to feed them». He insists that the authorities should organize better the agricultural sector to help it emerge from its present uncertain situation.
Truth to say, agriculture hasn’t made much impact on Gabon’s economy. Its growth has been blocked by such factors as: People leaving the rural areas and flooding into the towns and cities; the state of the roads; low agriculture production; antiquated farming techniques. The agricultural sectors’ contribution to the nation’s Gross Domestic Product (GDP) accounts for only 5%, whereas it was 16% in the 1960s and approximately 7% in the 1990s. There are three types of farming production in Gabon: crops grown for food, market-gardening and crops grown for national income generating purposes. The first two are for consumption within the country; the third includes coffee, cocoa and rubber, and are all intended for export.
The Gabon Institute For Support and Development (IGAD) continues its development projects vis à vis agricultural infrastructure, in more than 400 out-of-town projects, thanks to a grant of 3.9 billion dollars by France’s Development Agency (AFD). Simon Efoun is Head of Projects at the Ministry of Agriculture, Stock Breeding and Rural Development. He says: «The IGAD will continue to guarantee support and advice to those farmers in the 6 provinces involved in this program, and especially to those who want to improve and intensify the way in which they operate their farms».
The Libreville out-of-town agriculture sector (market-gardening and animal rearing) generates an average sales turnover of some 6.2 billion CFA per annum. The IGAD contributes by helping to improve those farms specializing in market gardening, fruit and vegetable production, small-scale animal raising and the food processing industry. The project is supported financially by the State and Elf-Gabon, as well as by the country’s backers — the AFD and French Co-operation. To date, agriculture, animal raising and the fisheries industry constitute in the modern private sector of industry, Gabon’s sixth most important provider of employment.
Importance of the tourist industry
In the past, Gabon didn’t have much of a tourist industry tradition. Now, the authorities have established an advantageous policy for investors in this sector, in order to develop and promote places of interest for tourists. The government wants to reorganize the tourist industry and has thus promulgated a decree doing away with visa’s for businessmen and cancelling the various taxes which used to be paid to the State Treasury from this sector. Another advantage which the law provides for those who invest in the tourist industry, is that foreign investors will be able to freely export any dividends resulting from their investments.
Gabon already has a sizeable hotel infrastructure, but any tourist industry which does exist in the country has been developed in Gabon by a handle of French operatives who own a number of tourist sites. In general, there’s not much by way of a tradition of tourism in Gabon. These days, thanks to the interest the authorities have in this aspect of the country’s economy and because of the many press campaigns undertaken by the government to «sell» Gabon as a tourist destination, the flow of tourists tends to increase and should reach a reasonable rate in the coming years.
Mines, timber and fishing
Globally, Gabon is currently the third largest producer of manganese, coming after South Africa, but before Australia. 95% of manganese extracted in Gabon is intended for the iron and steel industries throughout the world. The Ogooué Mining Company (COMILOG) which has been extracting manganese since 1962, has made major investments available for the construction of the Moanda industrial complex, in the south of the country. In 2002, the world production of manganese recorded a historical record of 903 million tons, that is to say, a growth of 6.2%. Gabon exported 469,000 tons of alloys to France that year. In 2001, the Moanda manganese deposits improved their output performance.
The Director-General of Customs and Excise says that together with manganese, timber is a major product exported in 2002. Gabon’s annual Economic Report states that; «Timber exports are a powerful factor in the economy. There’s a keen demand for finished and partly finished timber products, and there’s an increased number of business deals completed, which could mean an increase in production». The total amount earned from unhewn exports was 138.1 billion CFA francs, whereas sawn timber earned 52.3 billion CFA francs.
As for the industrial fisheries sector, just over 8,000 tons of fish are caught each year. But according to the Fisheries Minister, some 24,000 tons are in fact needed each year for export and for local consumption. Traditional fishing methods provides 70% of local needs. Since 1997,
Japan has participated actively in implementing the government’s policy to ensure the people have enough to eat and are able to provide for their own needs as far as possible. A fisheries centre was built at Port-Gentil, thanks to Japan providing a non-refundable loan of 4.8 billion CFA francs (7.32 million euros).
Gabon has about 800 km of coastline with abundant fishery resources mostly fished by Togolese, Beninese and Nigerian fishermen. Since December 1998, Gabon has signed an agreement with European fishing fleets, allowing them to fish for Tuna off the Gabonese coast.
Fishing rights (up to 9,000 tons of Tuna per annum) were granted to 75 factory ships from the European Community. This has resulted in 1,329 billion CFA francs (2,025 million euros) being paid into the government exchequer, to which must be added fishing rights payable by the European ship-owners, to the tune of 440 million CFA francs based on an eventual catch of 9,000 tons of Tuna.
- Antoine Lawson, Gabon, July 2003 — © Reproduction authorised, with usual acknowledgment