Economy

Gabon: 2024 Economic Overview

What are the prospects for the Gabonese economy in the aftermath of the 2023 coup d'état?

(Image: Forest Elephants in Loango National Park in Gabon. Credit: Shutterstock / Dominyk Lever)

Gabon made the headlines in 2023 because of the August 30 coup d’état, which ended the decades-long rule of the Bongo family.

They had been in power since the nation’s independence in 1960.

The coup was carried on by the Gabonese armed forces motivated in part by a generalised dissatisfaction about the country’s economic woes.

Since the partial handover of power by the military leadership to the interim government, discussions about the economy have started once again.

As any general election for the presidency and the legislature will not take place before summer 2025, according to the military leadership, the transitional government should be taking care of economic decision-making to avoid a prolonged period of uncertainty.

But what are the economic realities of Gabon, and what sectors make its economy tick?

Oil, metals, and wood

Gabon is in theory among the wealthier countries in Central Africa with a GDP per capita of USD14,000 (PPP). The nation’s population of roughly 2.35 million are largely urbanized (over 75%).

The country is covered by vast expanses of tropical forests, which enjoy a certain level of protection. Indeed Gabon is one of the few nations in western central Africa to launch environmental sustainability programs such as forest and marine conservation initiatives.

“Its diverse ecosystem offers fertile soils, abundant coastal resources, and fisheries,” observed the World Bank about Gabon, while adding that, “despite its economic potential, the country is struggling to translate its wealth of resources into sustainable, inclusive growth.”

One natural resource that can easily translate into economic gains—albeit not necessarily in a sustainable manner—is crude petroleum.

And Gabon is home to an estimated 2 billion barrels of it.

Over the last couple of years, crude oil exports have been fetching Gabon USD3-4 billion in foreign exchange, making oil the small nation’s number-one source of revenue. China, Indian, and South Korea are the largest target markets for Gabonese crude exports as of 2023.

The country’s next major export is minerals, and particularly manganese ore.

At 150 million tonnes, it is estimated that Gabon holds the world’s second largest deposits of manganese—a critically rare mineral with wide applications in metallurgical industries.

The global demand for manganese has surged with the rise of electric vehicles in the 2020s. “Manganese sulfate bottleneck looms over US, European EV manufacturers,” observed S&P Global’s market intelligence in 2023, which means the value of manganese ore is likely to rise.

There is also a good chance that large deposits of other metals including iron and copper are also present in the country. Ramping up exploration activities can lead to the discovery of copper and iron and subsequently diversification of the minerals sector.

Manganese ore is currently the country’s second largest export after oil, making up over 10% of Gabon’s export portfolio, but its contribution may increase with investment in the mining infrastructure and logistics.

Timber accounts for another 10% of the nation’s exports. Gabon is an exporter of timber, thanks to its vast tropical rainforests, of which some 11 million hectares have been set aside as concessions for industrial timber production.

Breaking the resource curse

One cannot help but notice that a pattern persists across the Gabonese economy: the export of raw natural resources accounts for the majority of the export portfolio, foreign exchange revenue, and—not surprisingly—GDP.

This has not escaped the notice of local observers. Many have suggested that Gabon needs to create value-addition by exporting processed or at least semi-processed products instead of the bulk shipping of raw natural resources.

The nation has sufficient energy resources to support the sustainable and economical operation of various processing plants, as Gabon has the world’s highest hydropower potential in terms of landmass and population.

The shift to value addition has been—at least partly—realized in the timber industry. With the government introducing a partial ban on the export of unprocessed wood in 2010, more timber processing facilities have opened up around the capital Libreville in recent years.

Adopting a similar approach in the petroleum and minerals sector, however, will require significant foreign investment, which is largely not forthcoming under the current political climate of uncertainty.

Sooner or later, however, the country’s downstream oil industry must expanded through the construction of refineries, in addition to the existing Sogara Refinery, as well as petrochemical plants which can turn crude petroleum into more valuable products, while creating a large number of jobs into the bargain.

This is especially important as Gabon has a predominantly young population, with 50% of the nation under the age of eighteen.

At the same time, Gabon can tap into the expanding market for African tourism and safaris.

This will be helped by the country’s natural beauty, tropical Atlantic coastlines, large protected parklands and rainforests, and its diverse flora and fauna.

This will also mark the beginning of a shift to a service economy which could generate foreign exchange revenue without the export of raw natural resources.

Follow our output for developments in the Gabonese economy in 2024.

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