Gabon is a historically stable country located in a volatile region of the world and has significant economic advantages: a small population (roughly 2 million), an abundance of natural resources, and a strategic location along the Gulf of Guinea. After taking office in 2009, President Ali Bongo Ondimba introduced reforms to diversify Gabon’s economy away from oil and from traditional investment partners and to position Gabon as an emerging economy. Gabon promotes foreign investment across a range of sectors, particularly in the oil and gas, infrastructure, timber, ecotourism, and mining sectors. Despite these efforts, Gabon’s economy remains dependent on revenue generated by the exportation of hydrocarbons. Gabon’s commercial ties with France remain very strong, but the government continues to seek to diversify its sources by courting investors from the rest of the world. In 2018, the Gabonese government lifted exit visa requirements for U.S. citizens.
Although Gabon is taking steps towards making the country a more attractive destination for foreign investment, it remains a difficult place to do business, especially without in-country or francophone experience. Foreign firms are active in the country, particularly in the extractive industries, but the difficulty involved in establishing a new business and the time it takes to finalize deals are impediments to increased U.S. private sector investment. Although the Gabonese government is taking a more active role to ensure transparency in extractive industries, investors are still waiting for key reforms to be established in law and in practice. Gabon enacted a new mining code in 2015. Gabon proposed revisions to its 2014 hydrocarbons code to draw more investors with greater flexibility and attractive financial terms. The Gabonese government expects to implement the new hydrocarbons code in 2019.
Increased investment is constrained due to limited bureaucratic capacity, unclear lines of decision-making authority, a lack of a clearly-established and consistent process for companies to enter the market, lengthy bureaucratic delays, high production costs, a small domestic market, rigid labor laws, and limited and poor infrastructure. The judicial system at times fails to enforce the rule of law and limits access to justice. Corruption and lack of transparency remain an impediment to investment. The Gabonese government inconsistantly applies customs regulations.
Economic conditions in Gabon weakened throughout 2017 and 2018. In addition to budget constraints due to low oil prices, the government lacks fiscal transparency. Many international companies, including U.S. firms, continue to have difficulties collecting timely payments from the Gabonese government, and some companies in the oil sector have closed down operations. To address fiscal imbalances, Gabon signed in June of 2017 a three-year Extended Fund Facility arrangement of USD 642 million with the IMF. While opportunities exist, the investment climate in Gabon will remain difficult as the government must have the politcal will to make prudent decisions. In 2018, higher oil prices, new investment in the oil sector and export processing zones, and the increasing manganese production helped support a modest recovery of economic growth of about 2 percent (according to the IMF September 2018 report).
|Measure||Year||Index/ Rank||Website Address|
|TI Corruption Perceptions Index||2018||124 of 180||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report “Ease of Doing Business”||2019||169 of 190||www.doingbusiness.org/rankings|
|Global Innovation Index||2018||N/A||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country (M USD, stock positions)||2017||– $251||http://www.bea.gov/international/factsheet/|
|World Bank GNI per capita||2017||$6,650||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|