20 Economic Gabon 25 Update SPECIAL TOPIC: Building and Preserving Gabon’s Wealth for Better Livelihoods June 2025 © 2025 International Bank for Reconstruction and Development / The World Bank Some rights reserved. This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. 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Washington, DC: World Bank.” All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrights@worldbank.org. i Contents Acknowledgments...................................................................................................................................... iv Abbreviations and Acronyms.................................................................................................................... v Overview.........................................................................................................................................................1 1. Recent Economic Trends and Outlook for Gabon............................................................................8 I. Global and regional growth remains below pre-pandemic levels and vulnerable to a highly uncertain context ..........................................................................................................................8 II. Growth accelerated in 2024 but remained constrained by structural challenges.......................10 III. Creating jobs remains a key pathway for poverty reduction ......................................................12 IV. Inflationary pressures gradually abated, allowing the regional central bank to start easing monetary policy in 2025..............................................................................................................15 V. Gabon’s trade position benefited from strong commodity exports, while facing trade barriers and infrastructure challenges.........................................................................................16 VI. Combined with lower oil revenues, an expansionary spending policy caused a deterioration of the fiscal position in 2024........................................................................................................19 VII. Gabon has taken actions to more actively manage public debt, but still faces high public debt and debt servicing costs.....................................................................................................23 VIII. Firms face challenges to access financing whereas financing costs increased for the state.....28 IX. Gabon’s growth outlook is exposed to a challenging and highly uncertain global environment.......29 X. Key actions to help Gabon achieve stronger growth, create more jobs, and raise living conditions ...................................................................................................................................33 2. Assessing the Value of Forest Ecosystem Services for Gabon’s Economy...............................37 SECTION I. Introduction. Measuring national wealth – why does it matter?....................................37 SECTION II. State and trends of Gabon’s national wealth.................................................................40 SECTION III. Gabon’s forest ecosystem service accounts: Measuring the conditions and economic contributions of Gabonese forests................................................................48 SECTION IV. Building a prosperous future: How can Gabon protect and expand its national wealth and make the most of forest ecosystem services?............................................58 Annex........................................................................................................................................................... 68 References.................................................................................................................................................. 71 ii List of Figures, Tables and Boxes FIGURES Figure 1. Oil and non-oil GDP growth and share of oil and non-oil GDP............................................................. 10 Figure 2. Gabon: Supply-side contribution to real GDP growth (in percent), 2019-2024.................................... 12 Figure 3. Gabon: Demand-side contribution to real GDP growth (in percent), 2019-2024.................................. 12 Figure 4. Evolution of GDP per capita and poverty rate (USD6.85/day in 2017 PPP) ....................................... 13 Figure 5. Evolution of social spending, as percent of total budget...................................................................... 13 Figure 6. Number of enterprises identified in Gabon by number of employees.................................................. 14 Figure 7. Distribution of private sector job opportunities by sector ................................................................... 14 Figure 8. Distribution of skilled staff in public vocational training centers by sector........................................... 14 Figure 9. Inflation (monthly, y-o-y, in percent), January 2020-December 2024................................................... 15 Figure 10. Recent evolution of Gabon’s trade position, percent of GDP............................................................... 17 Figure 11. Recent evolution of Gabon’s exports and composition of the 2024 export basket.............................. 17 Figure 12. Top destinations for Gabonese exports, 2024...................................................................................... 18 Figure 13. Recent evolution of Gabon’s imports and composition of 2024 imports.............................................. 18 Figure 14. Composition of fiscal revenue, CFAF millions ...................................................................................... 20 Figure 15. Shares of oil and non-oil sectors’ contributions to the corporate income tax ..................................... 20 Figure 16. Tax collection performance (tax revenues as a % of total government revenues)................................ 20 Figure 17. Evolution of tax expenditure, CFAF billions ......................................................................................... 20 Figure 18. Composition of public expenditure, CFAF millions .............................................................................. 21 Figure 19. Evolution of the fiscal balance, percent of GDP.................................................................................... 21 Figure 20. Evolution of public debt, percent of GDP............................................................................................. 22 Figure 21. Stock of external debt arrears, percent of GDP.................................................................................... 22 Figure 22. Evolution of the debt-to-GDP ratio, percent ........................................................................................ 23 Figure 23. Composition of public debt, CFAF millions ......................................................................................... 24 Figure 24. Distribution of public debt, percent of total debt.................................................................................. 24 Figure B1. Redemption profile of the public debt portfolio at end-2024, CFAF billions........................................ 26 Figure 25. Burden of debt service on public finances, percent of total fiscal revenues ....................................... 27 Figure 26. Evolution of the Gabonese government securities yield curve, percent............................................... 27 Figure 27. Credit to the economy, CFAF millions .................................................................................................. 28 Figure 28. CEMAC countries’ yield curve in 2020 and 2024 ................................................................................. 29 Figure 29. Evolution of the spread on Gabon’s and Africa’s Eurobonds................................................................ 29 Figure 30. Commodity price prospects, USD ...................................................................................................... 30 Figure 31. Global and regional growth prospects, percent.................................................................................... 30 Figure 32. Commodity production in Gabon (2020-2027)..................................................................................... 31 Figure 33. Structure of wealth accounts................................................................................................................ 38 Figure 34. Evolution and composition of wealth in Sub-Saharan Africa................................................................ 39 iii Figure 35. National and per capita wealth evolution in Gabon.............................................................................. 41 Figure 36. Cumulative GDP per capita growth vs. cumulative wealth per capita growth, 1995-2020.................. 42 Figure 37. Produced capital per capita and GFCF, Gabon, peers and regions..................................................... 43 Figure 38. Human capital wealth in Gabon and peer countries............................................................................. 44 Figure 39. Nonrenewable natural capital in Gabon and peer countries................................................................. 46 Figure 40. Renewable natural capital in Gabon and peer countries...................................................................... 47 Figure 41. Deforestation rate in Gabon and selected countries in the Congo Basin, percentage of forested area ........................................................................................................................................ 49 Figure 42. Change in ecosystems’ extent, in thousand hectares, between 2000, 2010 and 2020....................... 50 Figure 43. Forest concessions and protected areas in Gabon, 2020.................................................................... 50 Figure 44. Export values and volumes, 2000 vs. 2020........................................................................................... 52 Figure 45. Adjusted Net Savings, percent of gross national savings..................................................................... 58 TABLES Table 1. Selected macroeconomic and fiscal indicators ................................................................................... 11 Table 2. Criteria and calculation of risk weights applied to banks’ exposure to CEMAC Member States......... 23 Table 3. Cost and risk profile of public debt at end-2024.................................................................................. 25 Table 4. Average maturity of Gabon’s public debt portfolio............................................................................... 25 Table 5. Gabon’s medium-term outlook: selected economic indicators............................................................ 33 Table 6. Structural development indicators in Gabon........................................................................................ 35 Table 7. Health and education outcomes in Gabon and peer countries............................................................ 45 Table 8. Major drivers of forest use and degradation in Gabon......................................................................... 52 Table 9. Physical and monetary values of forest ecosystem services in Gabon................................................ 55 Table 10. Adjusted Net Savings (ANS) and Adjusted Net Income (ANNI) calculations........................................ 57 Table 11. Policy options to build and preserve Gabon’s national wealth............................................................. 66 BOXES Box 1. Active public debt management operations launched by the Gabonese Authorities during the political transition........................................................................................................................................ 26 Box 2. SOE portfolio expansion and continued governance challenges............................................................... 32 Box 3. Estimating the values of carbon retention services and forest assets........................................................ 54 Box 4. How can countries avoid being left with stranded assets in an evolving global environment?................. 61 Box 5. The third way - a strategic approach to agriculture in highly forested nations .......................................... 63 Box 6. Developing forest-based tourism: the case of Rwanda.............................................................................. 64 iv Acknowledgments The 2025 edition of the Gabon Economic Update was prepared by a World Bank team co-led by Sonia Barbara Ondo Ndong (Senior Economist, EAWM2) and Erick Tjong (Economist, EAWM2), consisting of Chris Belmert Katindi Milindi (Extended Term Consultant, EAWM2) and Ryan Milan (Governance Specialist, EGVPI), with contributions from Dr. Sugandha Srivastav (Lecturer in Environmental Economics and Senior Research Associate at the University of Oxford), under the supervision of Robert Utz (Lead Economist, EAWM2). The report benefited from guidance and comments from Cheick Fantamady Kante (Country Director, AWCC1); Sandeep Mahajan (Practice Manager, EAWM2); Geneviève Boyreau (Program Leader, EAWDR); and Aissatou Diallo (Resident Representative). Pinar Baydar (Operations Analyst, EAWM2); Ifeoma Clementina (Team Assistant, EAWM2); Celeste Martiale Migan Boukandou Epse Tesse (Program Assistant, AWMGA); and Irene Sitienei (Program Assistant, EAWM2) supported the team during the preparation of the report. The team is thankful to the peer reviewers Kanta Kumari Rigaud (Lead Climate Change Specialist, SAWE1), James Cust (Senior Economist, AFECE), and Kevin Carey (Program Manager, EFICT) for their constructive contributions. The team gratefully acknowledges the collaboration of the Government of Gabon throughout the preparation of this report. v Abbreviations and Acronyms AfDB African Development Bank ANNI Adjusted net national income ANS Adjusted net savings BEAC Bank of Central African States (Banque des États de l’Afrique Centrale) bbl oil barrel CAR Central African Republic CAFI Central African Forest Initiative CEMAC Central African Economic and Monetary Community (Communauté économique et monétaire de l’Afrique centrale) CFAF African Financial Community Franc (Franc CFA) CIT Corporate income tax CO2 Carbon dioxide COBAC Central African Banking Commission (Commission bancaire de l’Afrique centrale) CWON Changing Wealth of Nations DRC Democratic Republic of Congo EITI Extractive Industries Transparency Initiative FDI Foreign Direct Investment GDP Gross Domestic Product GFCF Gross fixed capital formation GNI Gross National Income HCI Human Capital Index HIC High income countries ICT Information and communication technologies ILO International Labor Organization IMF International Monetary Fund ITTO International Tropical Timber Organization LMIC Lower middle income countries NDC Nationally Determined Contributions ND-GAIN Notre Dame Global Adaptation Initiative OECD Organisation for Economic Co-operation and Development OPEC Organization of Petroleum Exporting Countries PIMA Public investment management assessment PNDT National Transition Development Plan (Plan National de Développement de la Transition) PPP Purchasing power parity PSGE Emerging Gabon Strategic Plan (Plan Stratégique Gabon Émergent) vi REDD+ Reducing Emissions from Deforestation and Forest Degradation in Developing Countries SME Small and medium enterprises SOE State-owned enterprises SSA Sub-Saharan Africa UN United Nations USD United States dollar UMIC Upper middle income countries VAT Value-added tax WB World Bank WDI World Development Indicators WGI World Governance Indicators y-o-y Year-on-year O 1 Overview The Gabon Economic Update is an annual World Bank publication that presents an overview of the evolving macroeconomic position in Gabon, followed by a detailed exploration of a specific topic. The first chapter analyzes recent economic developments, key development challenges, and outlook and risks for Gabon’s future growth. It presents policies to help the country create more jobs, build resilient growth, and strengthen public finances. The second chapter discusses measurements of national wealth and links with indicators such as Gross Domestic Product. It analyzes the role of human, physical, and natural capital in shaping long- term development in Gabon, with a focus on forest ecosystem services accounts, providing insights on how to make the best sustainable use and benefit the most from the country’s vast forest resources. This report is based on data available as of May 2025. Gabon’s GDP growth accelerated in demand, and relatively few operational issues. 2024, but the country continues to The services and construction sectors also con- face challenges to create more jobs tributed to growth, benefiting from significant in- and reduce poverty vestments in large public works and government projects, from public buildings to roads, power Economic growth in Gabon accelerated to and water, and other infrastructure being built an estimated 2.9 percent in 2024, up from 2.4 and renovated throughout the country. However, percent in the previous year, thanks to the oil the wood and manganese sectors, Gabon’s sector and accelerating public works. Oil out- main exports besides oil, continued to suffer put grew by an estimated 4.6 percent in 2024, from subdued demand and structural infrastruc- due to the exploitation of new oilfields, lower ture problems, such as railway disruptions, inad- OPEC+ quantity restrictions, sustained global equate roads, and frequent power outages. 2 Limited employment opportunities and insufficient underlying causes of the high cost of living, which are growth have caused an increase in poverty in re- high trade and production costs due to logistical gaps, cent years, with more than a third of Gabonese high tariffs, and costly energy and transportation. living in poverty. Gabon’s growth was modest since the COVID-19 pandemic, averaging 2.0 percent be- Gabon’s strong commodity exports allowed it to tween 2019 and 2024, and was centered in capital-in- maintain a high trade surplus in 2024, but it re- tensive oil and mining industries. This growth did not mains highly dependent on a few products, with create enough jobs, as many youth enter the labor 97 percent of exports consisting in oil, manga- market every year. Unemployment affects about 20 nese, and wood. The trade surplus remained high at percent of the workforce. In view of lack of jobs, mod- an estimated 36.2 percent of GDP in 2024. Gabon’s est growth, and limited social spending, 34.6 percent exports benefited from higher oil production and sus- of Gabonese were estimated to live in poverty, with tained prices for most commodities, increasing by an less than USD6.85 per day in PPP in 2024. Initiatives estimated 6.6 percent. Meanwhile, nominal imports are being taken to confront this problem, with invest- increased by an estimated 14.1 percent in 2024, as ments in training centers, SME credit, and entrepre- higher public spending and social measures that in- neurship, but stronger reforms are needed to create creased demand for imports. better conditions for private firms to thrive and hire more workers. Lower oil revenues, high borrowing costs and an expansionary spending policy are Inflation continued to decline over 2024, amid a aggravating fiscal and debt sustainability tightened monetary policy adopted by the region- risks al central bank, stronger price controls, and de- clining global inflation. Inflation stood at 0.9 percent Lower oil revenues and an expansionary spending in December 2024 (year-on-year), continuing on a policy caused a deterioration of the fiscal position in downward path since its peak at nearly 6.0 percent 2024, increasing fiscal risks and liquidity pressures. in late 2022. With signs of decreasing inflation across Boosted by tax digitalization efforts, public revenues CEMAC, the BEAC gradually started to loosen mon- remained stable in 2024 despite a decline in global etary policy in early 2025. While providing relief for oil prices. The launch of Digitax, a new online tax fil- households, tax exemptions are costly for the coun- ing platform, and the connection of customs offices at try, inefficiently targeted, and unable to address the the Northern border with Sydonia World allowed reve- Photo credit: alamy.com 3 nue collection to exceed budget projections. However, surances that high fiscal and financing pressures and public spending increased by about 24 percent, with debt risks are addressed. a sharp rise in investments in infrastructure and so- cial measures like fuel subsidies and scholarships. As The highly uncertain global environment dims a result, the fiscal balance deteriorated sharply to an Gabon’s outlook, with its growth, trade, and fis- estimated -3.7 percent of GDP in 2024, down from a cal outlook vulnerable to shocks coming from 1.8-percent surplus in 2023, bringing the non-oil prima- the evolving global context. Countries face rising ry balance to -15.9 percent in 2024. trade restrictions, trade wars, and multiple geopolit- ical tensions and regional conflicts that can escalate Spending needs were financed with state borrow- quickly. The currently challenging fiscal position could ing on the regional financial market, with the pub- be affected by further decreases in oil prices. Also, lic debt increasing to an estimated 72.5 percent of global inflationary surges could drive up living costs GDP in 2024, up from 70.6 percent in 2023. However, and reduce consumption, whereas liquidity pressures, Gabon’s credit rating downgrading by Fitch and which are already high, could be aggravated by tighter Moody’s in June 2024 and the imposition of a high- financing conditions. Greater challenges in mobilizing er risk weight by COBAC in October, limiting banks’ financing could result in further accumulation of ar- capacity to participate in bond issuances, impacted rears or cuts in public investments, affecting growth. financing goals, leading to a build-up in external ar- As it navigates through a changing global situation, rears. Gabon’s public debt has been increasing since to minimize risks Gabon should accelerate reforms 2021, following an expansionary spending policy but to build a solid foundation for higher growth and job also due to the additional debt components identi- creation. In a context requiring cuts in public invest- fied thanks to higher transparency since 2023, such ments and public consumption, it would be essential as unpaid budgetary commitments, VAT refund and to prioritize the most urgent, efficient, and productive salary arrears. Along with higher spending pressures public spending, from an economic and social point of and borrowing costs, this brought public debt above view. To address development needs while securing the CEMAC’s 70-percent convergence target. Faced a viable fiscal path, Gabon should protect the econ- with higher interest rates and a costly debt service, omy and especially the most vulnerable while ensur- Gabon has taken actions to more actively manage ing sustainable public finances through strong fiscal public debt, carrying out early buy-back operations of consolidation. its June 2025 Eurobond in late 2024 and early 2025, and reprofiling a large part of domestic debt in April. Special topic: Measuring Gabon’s wealth and ensuring a sustainable and prosperous Gabon’s growth outlook remains exposed future to a highly uncertain global environment Measures of a nation’s wealth are an important Gabon is projected to grow by about 2.4 percent complement to GDP, providing insights into the over 2025 to 2027, driven by mining, wood, and capital foundation for future growth and its sus- agricultural sectors, but in the absence of strong tainability. Assessing the evolution of the level and economic reforms growth would be insufficient for composition of national wealth allows policymakers to meaningful poverty reduction. The oil sector faces better understand an economy’s capacity to gener- challenges such as maturing oilfields, lower prices, ate future incomes and sustain development. National and lower demand as key trading partners are affect- wealth assessments, including key components such ed by recent global disruptions. Yet, vast manganese, as forest ecosystem services, can help inform devel- iron ore, timber, and agricultural resources offer a opment strategies, budget discussions, and dialogue great economic potential. With a newly elected gov- with civil society, the private sector, and development ernment in power, political uncertainty should decline partners. Ideally, a sustainable situation would be of as the country completes its move from a transition a resilient growth and wealth accumulation balancing to constitutional order, improving investor confidence. natural, human, and produced capital, where both However, strong fiscal consolidation policies are GDP per capita and wealth per capita would increase, needed to attract more investments and provide reas- indicating growth without a depletion of wealth. 4 Photo credit: shutterstock.com Gabon’s national wealth increased by 35 percent job creation, contributing to a decrease in per capita between 1995 and 2020, or by 1.4 percent per year, wealth. Logistical gaps remain a major obstacle due reaching USD105 billion in 2020 (in real chained to inadequate and costly access to transportation and 2019 USD). It is dominated by natural capital (42 per- energy. Public investment remained volatile, closely cent of total wealth), followed by human (31 percent) linked to oil cycles, and hampered by management and and physical capital (27 percent). Over this period, the planning deficiencies, causing produced capital per value of Gabon’s renewable natural assets grew by 2 capita to decline by 10 percent from 1995 to 2020. Due percent, nonrenewable natural capital, by 39 percent, to population growth and depletion of finite extractive produced capital by 85 percent, and human capital, resources, nonrenewable natural capital per capita de- by 207 percent. Between 2009 and 2016, supported clined by 33 percent, whereas renewable natural assets by an oil boom, investments were made in infrastruc- per capita declined by 51 percent. Human capital per ture and social areas. Meanwhile, Gabon had a strong capita increased by 49 percent, but key education and increase in nonrenewable natural wealth, thanks to health indicators remained lower than in countries with vast hydrocarbon reserves, peaking at around 380 similar incomes, hindered by low social spending and million tons in the 1990s, while strong conservation efficiency and allocation issues. efforts allowed it to increase forests’ value and create a sustainable local timber industry. Gabon is among the few countries that experi- enced both negative GDP growth and a decline in At the same time, Gabon had a significant decline per capita wealth from 1995 to 2020, reflecting an in per capita wealth, by 34.7 percent from 1995 to erosion of its asset base and economic output. As 2020, or -1.39 percent every year, indicating chal- Gabon was not able to fully seize the opportunity of its lenges in converting its rich natural resources into vast natural resources to diversify its productive base, productive assets and human capital. While Gabon growth has been modest and volatile, mainly reflect- experienced rapid population growth, inadequate in- ing oil cycles. Policy challenges include redistribut- frastructure, governance challenges, and a dominant ing and efficiently using oil revenues, expanding and public sector hindered private sector development and maintaining infrastructure and leveraging the tourism 5 potential of forests. Governance and public finance Gabon’s forests are well-preserved, thanks to sustain- management challenges resulted in limited invest- able forestry policies, high urbanization, and low pop- ment efficiency and inadequate logistic infrastructure, ulation density. They are crucial for climate mitigation, undermining growth, investment, and job creation. absorbing vast quantities of carbon and storing it in biomass and soils. Its forests are estimated to have The evolution of national wealth can be analyzed retained 8,000 million tons of carbon in 2020, equiva- using Adjusted Net Savings (ANS), providing a lent to 29.8 billion tons of CO2. Yet , neglecting forests’ broader picture of a nation’s economic sustain- economic contributions in economic and fiscal plan- ability and ability to invest in its future. ANS is mea- ning could raise risks of overuse, underinvestment in sured as gross national savings (or gross investment, conservation, and distortions in development planning. given the savings-investment identity) minus depreci- ation of produced capital, depletion of subsoil assets Gabon has maintained strong forest coverage, with (fossil fuels and minerals) and timber resources, and well-preserved forest conditions and biodiversity. air pollution damages to human health, plus a credit Overall deforestation rates, at around 0.6 percent per for expenditures on education. Gabon’s Adjusted Net year in 2000-2020, remained low compared to region- Savings was negative at -3 percent in 2020, indicating al peers. The average regional deforestation rate was that it was depleting wealth faster than it was accu- three times higher during this period. Yet, degradation mulating new assets, due to lower savings and invest- was stronger in certain specific locations. Pressures ment following the 2014 oil price shock. Institutional from logging, agriculture, and infrastructure develop- policies are thus needed to shield the budget from oil ment are intensifying, especially along transport and cycles, enabling the country to build fiscal buffers and economic corridors. Human-modified areas like crops stabilize investments, and also to promote a higher and build-up areas are still considerably small, having rate of savings and investment over the long term. expanded from 0.7 percent of the territory in 2000 to 1.3 percent in 2020. At the same time, Gabon lost 0.6 Thanks to extensive and well-preserved forests, percent of its forests, from 90.8 percent of the territory Gabon is one of the world’s few net carbon sinks. in 2000 to 90.2 percent in 2020. Photo credit: shutterstock.com 6 The total value of forest ecosystem services ta wealth and set Gabon on a higher development in Gabon nearly doubled from CFAF22.6 tril- path. If current trends continue, Gabon would keep lion (USD39.4 billion) in 2000 to CFAF43.2 trillion losing national wealth per person, disposing of few- (USD75.1 billion) in 2020. A new World Bank study er assets and resources to generate incomes for its recently assessed the value of Gabon’s forest ecosys- people. The decline in per capita wealth highlights tem accounts, indicating that over 99 percent of the the need to ensure a more efficient management of monetary value of such services consisted in carbon oil revenues and other natural resources. Governance retention, estimated at USD74.7 billion, equal to over reforms are key also for a stronger build-up of infra- a quarter of total national wealth and over three times structure and human capital. Setting clear timelines, Gabon’s GDP. The value of this key service, however, performance indicators, and accountability can help is largely not captured by the country, representing a improve spending efficiency. Investment needs to be massive economic loss. First, this value is estimated aligned with fiscal space to enable essential public based on the social cost of carbon (the cost of climate services. Also, Gabon needs to increase, improve, change damages avoided thanks to carbon retention), and better target public spending on education, skills which is different from the typically lower market values and healthcare. Health, education and jobs are pri- obtained in carbon markets. In addition, underdevel- orities for the new government, but social spending oped global carbon markets and institutional challeng- remains low compared to peer countries. It is key to es hinder countries’ capacity to monetize these values. focus on primary education and teacher quality, better align training with job opportunities, and better target Forest ecosystems also provide important eco- spending on health. nomic value in the form of wood resources, bush- meat, wild plants, soil retention, and ecotourism. To manage and utilize extractive revenues more Thanks to diversification policies, Gabon’s timber sec- effectively, a strategic approach is necessary to tor generates significant revenues and employment, ensure that natural resources contribute more with timber extraction valued at USD157 million in to sustainable growth and diversification. Even if 2020, even if its environmental impact is minimized. oil resources may be finite, they remain central for Between 2000 and 2020, wood export volumes de- Gabon. Mineral resources, including manganese and creased by 56 percent, but their values were stable, iron ore, are another enormous source of wealth. As thanks to the near elimination of log exports and Gabon was recently readmitted into the Extractive substantial increase in processed wood exports. Yet, Industries Transparency Initiative (EITI) in early 2025, most exports consist in primary processing goods, in- it will be key to implement EITI recommendations and dicating challenges to advance into higher processing ensure transparent management of this crucial natu- levels such as furniture. Wood is also used by local ral wealth. Also, strategies need to adjust to evolving populations for construction poles and as fuel, and global conditions, to avoid leaving stranded assets forests are an important provider of wild non-wood like natural resources and infrastructure serving these resources such as bushmeat, wild food plants, which sectors. are significant to sustain local livelihoods. Forests are also crucial for soil and sediment retention, which, To make the most of its resources, structural re- valued at USD183 million in 2020, contributes to forms improving the business climate are needed erosion control and water quality. Trees anchor soil to promote wood, mineral and food processing, and absorb rainfall, reducing costs associated with as well as ecotourism and sustainable agriculture. erosion, such as dredging and shortening reservoir The expansion of infrastructure, agriculture, and for- lifespans, impacting hydropower and drinking water estry are necessary for higher growth but would im- quality. Ecotourism also benefits from forests, but the ply some reduction in natural capital. To minimize the value generated by tourism, at nearly USD22 million environmental impact of growth and preserve natural in 2020, has been declining, amid infrastructure gaps wealth, policies could focus on promoting more local and other challenges. value added, to make the most of current resources. To increase local transformation, firms need condu- Strong structural reforms are urgently needed to cive business conditions, notably with quality energy reverse the worrying trend of declining per capi- and transportation. Sustainable agriculture also offers 7 great potential, as forest preservation and agriculture promotion is not a zero-sum situation. Many crops’ yields are stagnant and lower in Gabon than in the re- gion, suggesting options to improve productivity with sustainable agriculture and agroforestry, which enjoys forests’ benefits like improved soil, erosion prevention, local climate regulation, and higher prices from certifi- cation labels. Ecotourism and other forest-based sec- tors like knowledge activities around medicinal plants can also reveal enormous opportunities to generate more incomes and jobs for the Gabonese. Finally, Gabon and other-densely forested coun- tries need a sizable and well-functioning global financing system to be able to transform carbon retention services into tangible benefits. Estimating the value of carbon retention services is a first step, that allows policymakers, civil society, and the general public to quantify and target a necessary compensa- tion. But despite the growth of climate funds and oth- er green financing initiatives in recent years, including the UN-led Central African Forest Initiative (CAFI)’s support to Gabon, a compensation mechanism capa- ble of achieving climate goals is still an aspiration. It is thus crucial for the international community to put in place fair, concrete, and adequate means to re- ward, compensate, and support countries like Gabon for their efforts to preserve forests. Options to help Gabon achieve a fairer share of benefits from carbon retention services include engaging in stronger glob- al negotiations to develop fairer REDD+ mechanisms, stronger cooperation and financial support to tackle climate change, and considering nature-based sov- ereign financing tools such as sustainability-linked bonds.1 Domestically, it is important to maintain and update data on forest ecosystem services, strengthen legal frameworks, engage more strongly with civil so- ciety and firms in sustainable forest management, and design fiscal policies to maximize revenue generation and job creation based on sustainable economies. Photo credit: alamy.com 1 Climate financing options are discussed in the upcoming Gabon Country Climate and Development Report (CCDR). 1 8 Recent Economic Trends and Outlook for Gabon I. Global and regional growth yields in advanced economies, compared to remains below pre-pandemic the 2010s. Global trade recovered in 2024, with levels and vulnerable to a highly an estimated growth of 3.4 percent. The global uncertain context economy seems to be settling into a relatively slow and uneven growth, not enough to sup- Global growth stabilized in 2024 as inflation- port sustained inclusive development. Global ary pressures further eased, and incipient growth, trade, and investment are all below loosening of monetary policy helped sup- the pre-pandemic averages observed in 2010- port economic activity. The global economy 2019 and remain insufficient to counter the is estimated to have grown by about 2.8 per- damage from the multiple shocks affecting the cent in 2024, same as in 2023. Inflation has world since the COVID-19 pandemic.2 been on a downward trend, reflecting falling food and energy prices and lagged impacts of Economic activities in Sub-Saharan Africa monetary tightening, being brought at or be- (SSA) expanded in 2024, with higher growth low targets in over 60 percent of economies compared to the previous year, but still in- in 2024. Monetary policy easing has become sufficient to drive significant poverty reduc- widespread, leading to a slight easing of glob- tion. SSA’s GDP growth increased from 2.9 al financial conditions since mid-2024. Yet, percent in 2023 to an estimated 3.5 percent in investor sentiment toward emerging markets 2024. Growth improved in the region’s largest remained unstable, and non-concessional economies, supported by higher oil produc- borrowing remained costly due to high bond tion in Nigeria and improved electricity supply 2 World Bank. 2025. Global Economic Prospects. June. 9 in South Africa. The drop in energy and metal prices quidity remain constrained within CEMAC, limiting op- from their 2022 peaks has required fiscal adjustments tions to manage further shocks. Tax revenues remain, in several commodity-exporting economies, under- on average, below 15 percent of GDP, which research mining growth, particularly among metal exporters. indicates to be the usually recommended threshold to Overall, growth in SSA remains modest and uneven, support basic public services.4 Meanwhile, the trade and unable to generate sufficient jobs and poverty re- balance registered a slight decrease from 8.9 percent duction. Due to low growth, fast population growth, of GDP in 2023 to 8.6 percent in 2024. Overall, the lingering effects of inflation and underinvestment, region maintains trade and current account surplus- poverty continues to rise, in a region that faces the es, largely supported by strong commodity exports. highest extreme poverty rate in the world, home to 80 At the same time, a high vulnerability to volatile com- percent of the world’s 612 million extreme poor.3 modity prices is evidenced by the impacts of declin- ing oil prices. Between 2022 and 2024, as oil prices Growth in the Economic and Monetary Community declined from about USD100 to 80, CEMAC’s current of Central Africa (CEMAC) reached an estimated account balance decreased from 7.5 percent of GDP 3.0 percent in 2024, up from 2.0 percent in 2023. to 4.0 percent of GDP, translating into a drop in foreign Cameroon and Chad exhibited the strongest growth reserves, from 5.2 months of import coverage in 2022 performances, registering 3.5 and 3.7 percent growth, to 4.6 months in 2024.5 primarily driven by increased cocoa and cotton ex- ports in Cameroon, and non-oil sectors in Chad. The Encouraged by declining inflation, the Bank of Republic of Congo registered modest growth of 2.6 Central African States (Banque des États de l’Af- percent, with a 3.9 percent increase in non-oil sectors rique Centrale, BEAC) began easing its monetary partially offset by a decline in oil production due to policy in March 2025. Inflation in the CEMAC zone technical issues. Meanwhile, growth in CAR improved continued its downward trend, reaching 4.0 percent from 0.7 percent in 2023 to 1.5 percent in 2024, ben- in December 2024, compared to 4.5 percent a year efiting from enhanced fuel and electricity supplies and earlier, due to the recovery of global supply chains, signs of recovery in the agro-processing, telecom, and easing energy and food prices, and a tight monetary retail sectors. The Equatoguinean economy, following policy. Preliminary data from early 2025 indicate that a significant contraction of 5.1 percent in 2023, is es- this downward trend may persist throughout the year, timated to have modestly recovered in 2024 with a although regional inflation still exceeds the conver- 0.9-percent growth, driven by a rebound in hydrocar- gence criterion of 3 percent and faces risks in view bons. In per capita terms, income growth in CEMAC of the changing global trade and financial conditions. is estimated to have increased to 0.2 percent in 2024 In this context, for the first time since late 2021, the (up from -0.8 percent in 2023). BEAC lowered its key policy rate from 5.00 percent to 4.50 percent in March 2025. Also, the marginal lending CEMAC’s trade and fiscal positions deteriorated facility rate, which is the interest charged on overnight in 2024, as CEMAC continues to be heavily influ- loans granted by the BEAC to commercial banks, was enced by fluctuations in oil prices. Due to lower reduced from 6.75 percent to 6.00 percent, as part of oil prices, reduced commodity revenues, and high an effort to lower refinancing costs, improve access to spending pressures, CEMAC’s average fiscal balance credit, and encourage investment. is estimated to have shifted to a deficit of -1.5 percent of GDP in 2024, compared to a 0.6 percent surplus in 2023. The public debt remains elevated in countries such as Congo (93.5 percent) and Gabon (72.5 per- cent), surpassing the regional convergence criterion of 70 percent of GDP. Tax collection, fiscal space and li- 3 World Bank. 2025. Africa Pulse. Extreme poverty is based on estimates of the share of households living under $2.15 per day, in 2017 PPP. 4 Choudhary, Rishabh; Ruch, Franz U; Skrok, Emilia. 2024. Taxing for Growth: Revisiting the 15 Percent Threshold. Policy Research Work- ing Paper 10943. Washington, DC: World Bank. 5 World Bank. 2025. CEMAC Economic Barometer. June edition. 10 II. Growth accelerated in 2024 but estimated 5.8 percent in 2024 (Figure 2). Subdued remained constrained by structural demand from China led the largest mining firm, the challenges Compagnie Minière de l’Ogooué (Comilog), to halt production for three weeks. Railway disruptions also Economic growth in Gabon accelerated to an es- impacted transport and production capacity. Timber timated 2.9 percent in 2024, up from 2.4 percent production decreased in 2024, by an estimated 5.2 in the previous year, thanks to the oil sector and percent, also impacted by lower Chinese demand and accelerating public works. Oil remains central to transportation challenges.7 Log transportation by road the Gabonese economy. Oil output grew by an esti- was affected by the rainy season in late 2024, and mated 4.6 percent in 2024, to around 11 million tons by the lack of train cars. Insufficient railway capacity (Figure 1 and Table 1), due to the exploitation of new has been a long-term challenge, especially for logs. oilfields, lower OPEC+ quantity restrictions, sustained Gabon’s single railway, a key transport line for wood, global demand, and relatively few operational issues. manganese, and passengers, is managed by the The services and construction sectors also contribut- Société d’Exploitation du Transgabonais (SETRAG), a ed to growth, benefiting from significant investments subsidiary of Comilog. In 2023 both wood and man- in large public works and government projects, from ganese had seen a weak performance due to railway public buildings to roads, power and water, and oth- disruptions caused by inclement weather. To help ad- er infrastructure being built and renovated throughout dress this challenge, SETRAG is investing in railway the country. Construction grew by about 15 percent transport capacity, with support from IFC, the World in 2024. Demand from public works also benefited Bank’s entity dedicated to the private sector. painting (+33 percent) and cement (+18 percent) pro- duction, and the services sectors (+5 percent).6 The wood and agro-industries endured frequent power cuts, which impacted overall economic ac- The wood and manganese sectors, Gabon’s main tivity over 2024 and early 2025. Long-term under- exports besides oil, continued to suffer from investment in the power sector has been affecting structural problems such as gaps in transport in- power reliability, impacting industries such as wood frastructure. Manganese output decreased by an and food processing, which grew by, respectively, an Figure 1. Oil and non-oil GDP growth and share of oil and non-oil GDP 15 100 Annual change (percent) 10 80 Share of GDP (percent) 5 60 0 40 -5 20 -10 0 2019 2020 2021 2022 2023 2024e 2025f 2019 2020 2021 2022 2023 2024e 2025f Oil GDP Non-Oil GDP Real GDP Oil GDP Non-Oil GDP Sources: Gabonese authorities and World Bank staff calculations. Preliminary data for 2024; World Bank projections for 2025. 6 World Bank. 2025. Macro Poverty Outlook. April; Government of Gabon. 2025. Note de Conjoncture Sectorielle. March. 7 Government of Gabon. 2025. Note de Conjoncture Sectorielle. March. 11 Table 1. Selected macroeconomic and fiscal indicators Key macroeconomic indicators 2020 2021 2022 2023 2024e 2025f Annual % change, unless indicated otherwise Real GDP growth -1.8 1.5 3.0 2.4 2.9 2.1 Per capita GDP (USD, nominal) 6,671 8,102 8,517 8,022 8,367 7,675 Inflation 1.6 1.1 4.3 3.7 2.4 2.3 Oil sector -1.2 -6.7 3.3 7.6 4.6 -2.1 Agriculture and forestry 4.8 19.2 9.7 -2.0 -1.3 7.3 Mining and non-oil industries -3.0 8.9 3.4 1.9 -1.9 3.4 Services -2.5 1.3 2.4 2.6 5.0 1.5 Private consumption -2.0 -1.4 -0.3 2.1 2.6 -0.8 Public consumption 5.5 3.2 3.8 1.5 4.5 4.8 Gross fixed capital formation -16.7 12.7 8.4 6.2 6.9 -4.3 Exports, goods and services 10.0 12.8 12.9 -2.5 4.0 0.0 Imports, goods and services -6.0 17.4 12.5 1.3 6.8 -5.1 Percent of GDP, unless indicated otherwise  Government revenues 17.6 15.3 21.1 24.6 23.7 24.3 Public expenditures 19.7 17.2 21.9 22.8 27.4 29.7 Fiscal balance -2.1 -1.9 -0.8 1.8 -3.7 -5.4 Primary balance 1.2 0.9 1.8 4.8 -0.6 -1.8 Public debt 78.2 68.5 57.0 70.6 72.5 80.2 Current account balance 20.7 27.3 34.4 28.5 30.7 17.9 Trade balance 24.9 33.5 43.1 37.3 36.2 26.3 Net FDI inflows 0.7 2.2 1.6 1.8 1.6 1.6 Memo     Total population (millions) 2.3 2.4 2.4 2.5 2.5 2.6 Nominal GDP (CFAF billions) 8,831 10,783 12,750 12,165 12,593 11,928 Nominal GDP (USD millions) 15,342 19,445 20,441 20,056 20,917 19,954 Sources: WDI, BEAC, Gabonese authorities and World Bank staff calculations. Note: e = estimate; f = forecast. estimated zero and -5.5 percent in 2024. Increasing are another long-term issue for the country. In con- outages have broader social and economic impacts, trast, rubber production increased by about 23 per- hindering productivity and affecting living conditions. cent, thanks to expanding plantations by the multi- In early 2025, the authorities were able to partially ad- national group Olam and the state’s investment in the dress the issue with the purchase of electricity from Agro Business Group, allowing it to settle previous Equatorial Guinea and from a ship-based generator labor disputes and expand production.8 provided by the Turkish company Karpowership, al- though at high costs. Meanwhile, agriculture also per- On the demand side, growth was largely driven by formed poorly in 2024, with an estimated 9.5-percent oil exports and by public investments, thanks to decrease in oil palm production, affected by insuffi- the launch of several major projects by the tran- cient rain in the Ngounié province and the devastation sition government. Large public works continued as of plantations by elephants – human-wildlife conflicts part of the authorities’ goal of delivering tangible infra- 8 Government of Gabon. 2025. Note de Conjoncture Sectorielle. March. 12 structure improvements, increasing public investment the labor market every year. Gabon struggles with by over 10 percent in 2024 (Figure 3). National and long-term unemployment, at about 20 percent of the urban roads are being expanded and renovated, pow- workforce.9 Concentrated in capital-intensive oil and er and water networks extended, and schools, health mining industries, growth is not job-rich, preventing clinics, and social housing being built. Coupled with more people from escaping poverty. As a result, the an increase in civil service hiring, this increased de- poverty rate (measured as the share of households mand and household incomes. As a result, 2024 saw living on less than $6.85 per day, in 2017 purchas- an increase in both public and private consumption, ing power parity, or PPP) has increased since 2022, while a stronger production and sustained global de- reaching 34.6 percent of Gabonese in 2024 (Figure 4). mand for oil allowed the volume of oil exports to in- crease by about 2 percent in 2024. Poverty is aggravated by limited social spending, reducing the state’s capacity to build human capi- III. Creating jobs remains a key tal effectively and protect the most vulnerable from pathway for poverty reduction shocks. The budget allocated to social spending has steadily decreased since 2020, representing only 18.2 Limited employment opportunities and insuffi- percent of the revised budget for 2024 (Figure 5). cient growth have caused a sustained increase in Weaknesses in public procurement, investment, and poverty in recent years, with more than a third of budget processes and management limit an effec- Gabonese living in poverty. The modest growth in tive and timely execution, hindering the achievement Gabon since the Covid pandemic, averaging 2.0 per- of social goals. Public spending on non-contributory cent between 2019 and 2024, did not create enough social assistance such as cash transfer programs is jobs for the young population, as many youth enter even more inadequate: Gabon spends about 0.2 per- Figure 2. Gabon: Supply-side contribution to real Figure 3. Gabon: Demand-side contribution to GDP growth (in percent), 2019-2024 real GDP growth (in percent), 2019-2024 6.0 20.0 15.0 4.0 Contribution to growth Contribution to growth 10.0 2.0 5.0 0.0 0.0 -5.0 -2.0 -10.0 -4.0 -15.0 2019 2020 2021 2022 2023 2024e 2025f 2019 2020 2021 2022 2023 2024e 2025f Oil Services Change in inventory Industry and mining Agriculture and forestry Statistical discrepancy Net exports Gross xed capital formation Government consumption Private consumption GDP growth Sources: Gabonese authorities and World Bank staff calculations. Preliminary data for 2024; World Bank projections for 2025. 9 World Bank. 2025. Macro Poverty Outlook. April. 13 Figure 4. Evolution of GDP per capita and Figure 5. Evolution of social spending, as percent poverty rate (USD6.85/day in 2017 PPP) of total budget 2,560 39.0 35.0 2,540 38.0 30.0 2,520 37.0 2,500 36.0 25.0 2,480 35.0 2,460 34.0 20.0 2,440 33.0 15.0 2,420 32.0 2,400 31.0 10.0 2,380 30.0 5.0 2,360 29.0 2,340 28.0 0.0 2019 2020 2021 2022 2023 2024e 2025f aw aw aw aw aw aw g. L 019 g. L 020 g. L 021 g. L 022 g. L 023 g. L 024 GDP per capita (’000 CFAF) d 2 ud 2 Bud 2 Bud 2 Bud 2 Bud 2 Bu vB e v. v. Poverty indicator ($6.85/day PPP) R Re Re Sources: World Bank staff calculations and Government of Gabon. Preliminary data for 2024; World Bank projections for 2025. cent of GDP on non-contributory social assistance, sector remains a primary provider of jobs, compris- four times lower than the average upper-middle in- ing 97,986 permanent employees in 2024, a minor in- come country.10 In view of the difficulties to set up crease compared to 2023. social protection programs, such as the lack of an updated and comprehensive social registry, different Initiatives are being taken to foster entrepreneur- alternatives are used to attenuate living costs, such as ship and job creation, particularly among the fuel and wheat subsidies, tax exemptions, and schol- youth, yet many obstacles persist, such as strong arships. While providing relief to households, these labor skills mismatches. Recent measures taken to broad measures come at high fiscal costs and have a encourage entrepreneurship include the reduction limited ability to target vulnerable citizens. of business registration fees and the creation of the Banque pour le Commerce et l’Entrepreneuriat du To expand the sources of growth and job creation, Gabon (BCEG), a public guarantee bank, to facili- the authorities have embarked on economic di- tate access to credit for SMEs. Efforts are also on- versification policies focusing notably on wood, going to promote access to vehicles for taxi drivers mining, and agriculture, yet with limited results. As and facilitate artisanal mining and agricultural activ- a result of these efforts, the forestry sector has be- ities. However, the results of such measures are yet come the largest private employer. However, private to be seen. Moreover, labor skills mismatches prevent sector development is still limited by several obsta- young people from seizing the relatively few job op- cles, such as limited access to water and electricity, portunities available in the private sector. These are weak property rights and contract enforcement, and notably provided by services, followed by the wood mismatches between available and required labor and transport sectors (Figure 7). Yet, access to an ad- skills. Out of all companies identified in the 2019 gen- equately trained workforce is a challenge. Although eral enterprise census, about 49 percent had fewer about one third of the youth is unemployed, certain job than 30 employees, underscoring the limited capacity posts still go unfilled due to the lack of corresponding of the Gabonese private sector to create jobs for a skills. As of mid-2023, over 10 percent of the 669 jobs fast-growing population (Figure 6). Thus, the public offered at employment agencies went unfilled, despite 10 World Bank. 2022. Gabon: Country Economic Memorandum. 14 Figure 6. Number of enterprises identified in Gabon by number of employees 70,000 66,662 60,000 50,000 40,000 32,228 30,000 23,347 20,000 8,742 10,000 946 724 197 55 43 5 375 0 ne o4 o9 9 9 99 99 ov e d le al No 1t 5t o2 o9 o1 o9 b lose ab To t 10t 30t 0t 0t da isc pli c 10 20 n d p 0a Un ta 1,0 0 No Source: Gabon’s Statistics General Directorate. General Enterprise Census. September 2023. the number of applicants being nearly ten times high- be key. Recently opened centers are dedicated to er than the offers.11 sectors like oil, wood and ICT. As of end-June 2023, among the 3,415 people who completed training at To tackle this issue, the authorities have been set- public training centers, 20.6 percent were trained in ting up several vocational training centers, but a electricity and electronics, 20.0 percent in adminis- stronger alignment of skills and market needs will trative and management techniques, 18.2 percent Figure 7. Distribution of private sector job Figure 8. Distribution of skilled staff in public opportunities by sector vocational training centers by sector Agriculture, livestock Administration hunting and shing Arts and graphics 4% 3% Administration 4% Public works Other service Forestry and and management activities 18% wood industry techniques Wood and 8% 23% 20% furniture 1% Steel Oil extraction construction 2% 5% Other extractions Leather 1% Mechanical engineering and skins Industry 7% 1% 9% Services Electricity- 40% Public works IT electronics 3% 12% 21% Trade Transportation 3% and ICT Hotels and tourism Textile clothing 6% 9% 2% Source: Government of Gabon. National Employment Bulletin, June 2023. 11 Government of Gabon. 2023. Bulletin Trimestriel de Suivi de l’Emploi. No. 10. June 2023. 15 in construction, 12.2 percent in IT and 8.8 percent decreasing, food inflation was slightly higher at 1.2 in hospitality and tourism (Figure 8). While can help percent in December 2024 (y-o-y). In view of Gabon’s improve human capital, it might be reinforcing mis- strong reliance on food imports, which cover about matches in certain areas. For example, 18 percent of 60 percent of nutritional needs,12 imports contribut- youth received training in construction, but this sec- ed to inflation, with imported inflation at 1.2 percent tor represented 3 percent of job opportunities. On the in December 2024. At the same time, the decrease other hand, the wood industry offered 23 percent of in global inflation since 2022 was one of the reasons all jobs but training amounted to only 12 percent of all for the declining inflation in Gabon – as indicated by training (Figures 7 and 8). Reducing skills mismatches the higher imported inflation at end-2022 (6.2 percent) requires a stronger sectoral alignment of training with and end-2023 (3.6 percent). Similarly, the decline in current job opportunities. global energy prices since 2022, combined with the maintenance of subsidies on fuel and gas consump- IV. Inflationary pressures gradually tion, allowed energy inflation to be negative, at -2.0 abated, allowing the regional central percent. As mentioned previously, with the recent bank to start easing monetary policy in signs of decreasing inflation in Gabon and across 2025 CEMAC, the BEAC has gradually started to loosen its monetary policy in early 2025.13 Inflation continued to decline over 2024, amid a tightened monetary policy adopted by the regional In recent years, the authorities have been stepping central bank, stronger price controls, and declin- up efforts to contain the cost of living. Launched ing global inflation. The consumer price index has in 2017, the Fight Against an Expensive Life program been declining since mid-2022, standing at 0.9 per- (Programme de lutte contre la vie chère), establishes cent in December 2024 (y-o-y), since its peak at nearly price ceilings and tax reductions for staple goods, six percent in late 2022 (Figure 9). Since August 2023, which are negotiated with food distributors and con- inflation in Gabon has remained under the CEMAC’s sumers’ associations. The number of goods with fixed 3.0 percent regional convergence criterion. While also prices went from 67 basic items in mid-2023 to 102 in Figure 9. Inflation (monthly, y-o-y, in percent), January 2020 - December 2024 10.0 8.0 6.0 4.0 2.0 0 -2.0 -4.0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-20 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Consumer Price Index (growth) Food Price Index (growth) CEMAC convergence criteria Source: Gabonese authorities. Note: Data for February 2024 and April 2024 was estimated based on an average of the previous and following months, as statistical data was not available for those months. 12 African Development Bank. 2017. Technical Support for the Agricultural Transformation Strategy and Promotion of Youth Entrepreneur- ship in the Agricultural Sector and Agribusiness. Appraisal Report. 13 Banque des États de l’Afrique Centrale. 2025. Rapport de Politique Monétaire. March. 16 October 2024, expanding to local food products and V. Gabon’s trade position benefited construction materials, in efforts to support access to from strong commodity exports, while housing. Other measures taken by the Government facing trade barriers and infrastructure to support purchasing power in 2024 include the challenges maintenance of wheat flour subsidies and free pub- lic transportation in Libreville, reduction of butane gas Gabon’s strong commodity exports allowed it to prices, reintroduction of fuel subsidies for industrial maintain a high trade surplus in 2024. Global de- consumption, reduction of plane and train tickets, ex- mand for Gabon’s main commodities was relatively pansion of scholarships, and increase of the age limit sustained over the year, translating into higher pric- for imported cars to ten years. es for most exports: sawn wood (+1.6 percent price increase), manganese (+2.5 percent), rubber (+33.5 While providing relief for households, these mea- percent), and oil palm (+0.4 percent). The drop in oil sures are costly, inefficiently targeted, and unable prices was an exception (-3.1 percent, from USD82.6 to address the underlying causes of the high cost of to USD80). Nonetheless, oil output still grew in 2024, living, which are high trade and production costs. partially offsetting the decline in oil prices. As a result, Measures to reduce living costs add a considerable while the nominal value of oil exports declined slight- burden to the budget, which already faces strong fi- ly, thanks to stronger oil production and higher prices nancial and fiscal pressures. They consume scarce for other commodities, Gabon’s exports increased by resources that could be used to fund critical social in- an estimated 6.6 percent in 2024, benefiting the trade vestments. In 2024, VAT tax benefits, including those position. related to the Vie chère program, were estimated at CFAF 40 billion (0.3 percent of GDP), while the cost of Nominal imports increased by an estimated 14.1 fuel subsidies amounted to CFAF 110 billion (0.9 per- percent in 2024, a result of higher public spend- cent of GDP).14 Most gasoline and diesel subsidies are ing and of measures to ease import restrictions captured by the wealthiest, who consume the most for older vehicles. The Government’s expansionary fuel.15 More efficient and less costly options, such as fiscal policy has been causing an increase in demand targeted social protection programs, could be consid- for different types of imports. The strong expansion in ered to support the most vulnerable while reducing public works generated demand for imported inputs fiscal risks. Moreover, structural reforms are needed used in construction, for instance. Also, a broader to reduce the overall costs of producing, importing, increase in imports of food and other consumption and transporting goods in Gabon. Gabon greatly re- goods reflects policies such as stronger social sup- lies on imports to cover its needs for food and many port measures. other consumer goods and equipment. However, CEMAC’s tariffs are among the world’s highest, and Despite the increase in exports, the stronger in- non-tariff barriers further increase trade costs. Other crease in imports caused a slight decrease in the barriers such as inadequate transport and power sup- trade balance as a percentage of GDP in 2024. The ply, and petty harassment practices, make it expen- trade surplus declined from 37.3 percent of GDP in sive to produce and move goods, impacting house- 2023 to an estimated 36.2 percent in 2024 (Figure holds’ purchasing power. 10). In absolute terms, however, the trade surplus in- creased from CFAF 7,488 billion to CFAF 7,581 billion. Meanwhile, the current account surplus, which in- cludes the trade balance plus primary and secondary incomes, increased from 28.5 percent to an estimated 30.7 percent of GDP over the same period, due to a decrease in the level of income outflows. 14 Data on fuel subsidies is based on government estimates from November 2024; data on VAT tax expenditures is based on a modeling tool for VAT tax expenditures, developed by the tax authorities with World Bank technical support in early 2025. 15 World Bank. 2023. Gabon Economic Update. Special Topic: Reforming Fossil Fuel Subsidies. Washington, D.C.: World Bank Group. 17 Figure 10. Recent evolution of Gabon’s trade highlighting a strong exposure to volatile markets de- position, percent of GDP spite the pursuit of diversification strategies (Figure 11). In recent years, the value of oil exports has been declining, in line with decreasing oil prices since 2022. 70 Manganese and wood exports, on the other hand, 60 have shown signs of a recovery from railway transport 50 disruptions that strongly impacted exports in the pre- % of GDP 40 vious year. They amounted to nearly a third of exports 30 in 2024. Rubber, palm oil, gold, fish and other goods 20 made up the remaining 3 percent of exports. 10 Gabon’s exports are also strongly concentrated 0 2019 2020 2021 2022 2023 2024e in terms of markets, with China absorbing near- ly a third of all exports in 2024. Next come Italy Exports Imports and Indonesia, with about ten percent of exports Trade balance Current account balance each (Figure 12). Looking at exports by continent, Oil exports nearly two-thirds of Gabon’s products were export- ed to Asia, one quarter to Europe, ten percent to the Sources: Gabonese authorities, World Bank staff calcula- Americas, and 2.7 percent to Africa, out of which, only tions. Note: 2024 data is preliminary. 0.7 percent went to its CEMAC neighbors. While in- formal cross-border trade flows are estimated to be Gabon is highly dependent on exports of a few high within CEMAC,16 there is still a strong potential products, with 97 percent of exports deriving from for Gabon to deepen regional integration. Gabonese three commodities: oil, manganese, and wood. In exporters could greatly benefit from reforms removing 2024, oil alone made up over 65 percent of all exports, barriers to trade, such as logistical and infrastructure Figure 11. Recent evolution of Gabon’s exports and composition of the 2024 export basket 4,500 Palm oil 4,500 Rubber Palm 0.2%oil Gold 4,000 4,000 1.2% 0.2% Gold Rubber 0.2% Other 3,500 (nominal) Wood products1.2% 0.2% Other 1.3% 3,500 (nominal) 3,000 11% Wood products 1.3% 3,000 11% 2,500 2,500 billion 2,000 billion 2,000 1,500 Manganese CFAF 1,500 1,000 20.6% Manganese CFAF 1,000 20.6% 500 500 0 ts ts er l ts er Oil products 0 se oi ld d ucts anese ducts bber lm il Gold ducts Other Oil products 65.5% c c u o c ro u g ne ro u R bb Palm Go produ Ot h 65.5% l p od an a p od Ru Pa h pro Oil pr Mang ood pr i F hs Oi M W od o Fis W 2022 2023 2024 2022 2023 2024 Source: Gabonese customs authorities. Note: 2024 data is preliminary. 16 World Bank. 2018. CEMAC: Deepening Regional Integration to Advance Growth and Prosperity; Nkendah, Robert. 2013. “Estimating the Informal Cross-border Trade of Agricultural and Horticultural Commodities between Cameroon and its CEMAC Neighbours”. Food Policy, Vol. 41, pp. 133–144. 18 Figure 12. Top destinations for Gabonese continued to increase in 2024, making up a con- exports, 2024 siderable share of imports. In 2024, imports were comprised of equipment (35 percent), consumption goods (27 percent), intermediary goods (24 percent), Others and energy (13 percent). Within consumption goods, France 14.1% 2.5% food imports represent nearly 20 percent of all imports Thailand 2.5% China (Figure 13). The Government has been promoting ag- 31.2% riculture and fisheries to increase food security, jobs, Africa 2.7% exports, and farmers’ incomes. Yet, despite a vast USA agricultural potential, food imports continue to grow, 3.2% driving up the cost of living due to high tariffs and Netherlands 3.2% trade barriers persisting in Gabon. Malaysia 5.9% The recent evolution of the import basket may Italy Brazil 10.5% also indicate challenges to expand local industri- 6.2% al activity. The Government has been pursuing plans India Indonesia 8% 9.9% to incentivize local firms to move up in value chains and produce more locally processed goods. Since the Source: Gabonese customs authorities. Note: 2024 data is 2010s, a wood processing industry emerged, thanks preliminary. Color shades indicate countries located in each to policies such as a ban on log exports and the set- continent: main importing countries in Asia (green), Europe (orange), Americas (yellow), Africa (blue), and all other ting up of a special economic zone in Nkok. Also, lo- countries (gray). cal palm oil and gas industries are being launched. However, local transformation of manganese, fish, and challenges, and regulatory barriers such as road in- other products remains below potential. Recent data spections and difficulties in border compliance. on imports do not seem to point to a strong industrial expansion. In 2024, imports of equipment other than Reflecting Gabon’s strong reliance on imported cars, which tend to consist of machinery and other food and oil products, food and energy imports inputs needed to increase production, decreased by Figure 13. Recent evolution of Gabon’s imports and composition of 2024 imports 700 700 Oil Oiland andother otherenergy energy 600 600 14% Food Food 14% 18% (nominal) 18% billion (nominal) 500 500 Intermediary Intermediary 400 24% 24% 400 CFAFbillion 300 300 Other Other consumption consumption 200 200 9%9% CFAF 100 100 Vehicles Vehicles 0 0 8% 8% dd nn es s tt ry y oo FF oo tito pp io icilcle m enen d iaiary e rgrgy e h eeh ip m e ed n uumm VV uu ip m r e en n ss e qq ter e rm the er h on er r e InInt oot r rcco ee th he nd d Other Otherequipment equipment t hh O t a n 27% 27% O il il a OOt OO 2022 2023 2022 2023 2024 2024 Source: Gabonese customs authorities. Note: 2024 data is preliminary. 19 seven percent, compared to 2023. Over the same tion, and 67 for transport. Gabon’s scores were higher period, other types of imports increased, indicating than global and African averages, highlighting stron- that Gabon’s import profile remained heavily focused ger service trade restrictions.21 on consumption goods (Figure 13). Regarding trade in services, Gabon imports more services, estimated VI. Combined with lower oil revenues, at CFAF 1,215 billion (9.6 percent of GDP) in 2024, an expansionary spending policy while exports of services stood at CFAF 235 billion caused a deterioration of the fiscal (1.9 percent of GDP). This reflects challenges to pro- position in 2024 mote service exports, despite a potential for sectors like ICT, as Gabon has one of the most developed and Boosted by efforts to digitize tax and customs ad- accessible digital infrastructures in the region.17 ministrations, total public revenues remained rela- tively stable in 2024 despite a decline in global oil Gabon imposes substantial trade restrictions prices. Government revenues equaled 23.7 percent on its firms, hindering competitiveness and rais- of GDP in 2024, compared to 24.6 percent of GDP in ing production and trade costs. As a member of a 2023 (Figure 14). The decline in revenues was mainly customs union, Gabon generally applies the CEMAC due to lower oil prices. Global oil prices have been common external tariff, at around 18 percent. Gabon’s steadily declining since their peak close to USD100 simple average tariff rate of 18.8 percent between in 2022, with a 9.5-percent drop observed in 2024, 2020 and 2022 was the world’s 8th highest tariff, con- to about USD75. Tax revenue mobilization efforts re- siderably higher than the average of 12.0 percent in sulted in a 4-percent increase in tax revenues in 2024, Sub-Saharan Africa and the global average of 7.4 per- which only partially offset the 4-percent decline in oil cent.18 Access to foreign goods and trade activity are revenues. also hampered by non-tariff barriers, such as complex regulatory and technical requirements and licensing Most government revenues in 2024 came from processes, and logistical gaps. In 2023, Gabon was tax revenues, but non-tax oil revenues remained ranked 115th out of 139 countries on the World Bank’s significant at 25 percent of total revenue. In recent Logistics Performance Index, which measures coun- years, tax revenues have been increasing consider- tries’ performance in customs, infrastructure, ship- ably, from 9.5 percent of GDP in 2021 to 16.1 percent ments, and logistics. Firms face a mean port dwell in 2024. This increase, however, reflects the depen- time of 11.4 days for imports and 6.4 days for exports, dence on oil, given that oil tax revenues account for compromising timeliness, costs, and causing losses 66.3 percent of corporate income tax revenues (Figure of perishable goods.19 Another obstacle, particularly 15). Measures to diversify revenue sources are urgent to regional trade, are the numerous inspections at the in the current context of declining oil prices and un- border and along trade corridors. For example, firms certainty in global markets. trading goods between Libreville and Cameroon can be stopped by public agents over 40 times (once To boost domestic revenues, the Government has every eleven kilometers), costing them about CFAF stepped up digitalization efforts, but revenue col- 1,980,000 (USD3,736) through multiple fees, and a lection remains constrained by large tax exemp- 15-hour delay in travel time.20 Moreover, Gabon im- tions. In April 2024, Digitax, a new online platform poses substantial restrictions on trade in services. In was launched for filing and paying taxes, with man- the 2020 Services Trade Restrictions Index, substan- datory digital filing progressively rolled out. Also, cus- tial restrictions resulted in Gabon’s scores of 66.7 out toms offices at the Northern border, the last ones that of 100 for professional services, 62.4 for communica- were not yet connected to the Sydonia World system, 17 2024 Government estimates for trade in services (General Directorate for the Economy and Fiscal Policy); World Bank. 2022. Gabon: Country Economic Memorandum; World Bank. 2025 (unpublished). Gabon Country Climate and Development Report. 18 World Bank. World Development Indicators database. 19 World Bank. Logistics Performance Index database. 20 World Bank. 2022. Gabon Economic Update. 21 WTO-World Bank. Service Trade Restrictions Index database. 20 Figure 14. Composition of fiscal revenue, CFAF Figure 15. Shares of oil and non-oil sectors’ millions contributions to the corporate income tax 3500000 3000000 100.0 2500000 80.0 2000000 1500000 68.2 66.3 60.0 1000000 500000 40.0 0 2019 2020 2021 2022 2023 2024e 20.0 31.8 33.7 Direct taxes Taxes on goods and services 0.0 Taxes on int. trade and transactions 2023 2024e Other taxes Non-oil CIT Oil CIT Non-tax oil revenues Other revenues Sources: Government of Gabon, World Bank staff calculations. Note: Note: 2024 numbers are estimates. ‘Direct taxes’ includes corporate income tax paid by oil firms. ‘Non-tax oil revenues’ includes state revenues from the oil sector, such as royalties and participations. ‘Other taxes’ includes revenues from fines and land area fees paid by forest concessionaires. ‘Other revenues’ includes grants and revenues from licenses, state participations in mining, forestry, and other sectors, and others. were digitalized in December 2023. As a result, tax consequences. An efficient and relatively fast way to and customs revenue collection have significantly ex- increase revenues would be to further rationalize tax ceeded budget projections (Figure 16). While further exemptions granted to companies. Given the com- increasing tax revenues remains important to sustain plex political and economic context of the transition, public finances, changes in tax rates require careful the authorities continued to use tax exemptions to analysis due to social, distributional, and economic attract investment. Estimated losses associated with Figure 16. Tax collection performance (tax Figure 17. Evolution of tax expenditure, CFAF revenues as a % of total government revenues) billions 70.0 200 195.84 67.8 195 68.0 191.70 66.0 190 65.0 185 64.0 62.5 180 62.0 174.01 60.2 175 60.0 170 58.0 165 56.0 160 Forecast Execution Forecast Execution 2023 2024e 2025f 2023 2024 Sources: Government of Gabon, World Bank staff calculations. Note: 2024 numbers are estimates. 21 tax incentives have increased to an estimated CFAF 2023, driven by large infrastructure projects launched 192 billion of foregone revenues, equal to 1.5 percent by the authorities, such as a new administrative city, of GDP in 2024 (Figure 17). Another challenge is to im- projected to enable rent savings of about CFAF 30 bil- prove control and monitoring of tax expenditures, to lion per year; expansion and rehabilitation of nation- avoid potential misuse or fraud behaviors that hinder al and local roads; improvements in the railway and tax collection goals. power and water networks; construction of schools, health clinics, and social housing; and modernization Public spending increased significantly, by about of military buildings. 24 percent in 2024, mainly driven by a sharp rise in capital expenditures (+155 percent) and govern- Despite the lifting of the freeze on civil service hir- ment transfers (+48 percent). In response to high so- ing and the recruitment of 26,900 persons in the cial expectations resulting from the August 2023 coup civil service, the wage bill remained relatively sta- d’état, the Government adopted several social mea- ble between 2023 and 2024. Spending on public sec- sures and support for firms in 2024 and early 2025. tor salaries amounted to CFAF 782 billion, or 6.2 per- School scholarships were reintroduced for secondary cent of GDP in 2024. The wage bill had a limited rise school and fuel subsidies was reinstated for industrial because many recruitments were administrative regu- consumers and for the Société d’Énergie et d’Eau du larizations of staff already present in the civil service. Gabon (SEEG),22 the electricity company, which faces In addition, the civil service audit launched in October commercial and production challenges. Spending on 2024 allowed to identify and eliminate irregularities, subsidies and transfers increased from 2.8 percent of helping contain the wage bill. Spending on goods and GDP in 2023 to 4.0 percent in 2024 (Figure 18). Capital services, at 3.3 percent of GDP in 2024, increased in expenditures increased significantly to 5.4 percent view of the national political dialogue in April 2024 and of GDP in 2024, compared to 2.2 percent of GDP in the constitutional referendum in November. Figure 18. Composition of public expenditure, Figure 19. Evolution of the fiscal balance, CFAF millions percent of GDP 3000000 2500000 2.0 2000000 1.0 1500000 0.0 1000000 -1.0 500000 -2.0 0 -3.0 2019 2020 2021 2022 2023 2024e -4.0 Wages and compensation 2019 2020 2021 2022 2023 2024 Use of goods and services Interest payments General government balance (accrual basis) Current transfers Capital expenditures Sources: Government of Gabon, World Bank staff calculations. 22 Gabon has made several attempts to reform fossil fuel subsidies, but past efforts were hindered by the absence of compensatory mea- sures such as targeted social protection programs. Fuel prices were liberalized in 2015, a price adjustment mechanism was introduced in 2016-2017, and subsidies were reinstated in 2021. From mid-2022 to mid-2024, fuel subsidies were removed for industrial consumption, after which they were reintroduced to all customers. A detailed analysis of this topic is available at: World Bank. 2023. Gabon Economic Update 2023. 22 In a context of declining oil revenues, the increase increasing regional borrowing by CEMAC countries. in tax and customs revenues thanks to tax and The country was thus not able to mobilize all resources customs digitalization efforts was unable to cover needed; out of the CFAF 727.8 billion sought on the the significant rise in public spending. As a con- regional market according to its debt strategy, Gabon sequence, the fiscal balance deteriorated sharply in was able to mobilize CFAF 664.3 billion, or 91.3 percent 2024. Gabon recorded a fiscal deficit of -3.7 percent of the targeted amount. Similarly, Gabon was not able of GDP in 2024, compared to a fiscal surplus of 1.8 to mobilize new resources on the international finan- percent of GDP in 2023 (Figure 19). Meanwhile, the cial market in 2024, compared to a forecast of CFAF non-oil primary balance declined from -9.4 percent of 469.9 billion in the Revised Budget Law.24 This under- non-oil GDP in 2023 to -15.9 percent in 2024, reflect- performance created a financing gap and a build-up in ing an important intensification of fiscal pressures.23 In external arrears, a long-term challenge aggravated by addition to challenges to contain spending and mobi- cash flow management issues. At end-2024, the stock lize more revenues, other important challenges in fis- of external arrears reached 1.8 percent of GDP, up from cal policy include the lack of timely publication of key 0.5 percent of GDP at end-2022 (Figure 21). fiscal data, including of significant public investments. The Central African Banking Commission’s To finance spending needs, the state had to rely on (COBAC) decision to increase the risk weight borrowing, resulting in an increase in public debt to applied to banks for the acquisition of securities 72.5 percent of GDP in 2024, up from 70.6 percent of issued by the Gabonese Treasury also contribut- GDP in 2023 (Figure 20). Gabon relied significantly on ed to a build-up in arrears. On October 18, 2024, the regional financial market in 2024 to finance its grow- COBAC notified banks in CEMAC member states of ing fiscal deficit. However, this strategy faced challeng- the new risk weighting rates applicable to credit risk es due to the downgrading of Gabon’s sovereign credit coverage on sovereign liabilities over 2024-2025. This rating in June 2024 by the rating agencies Fitch (from weighting rate is calculated based on compliance with B- to CCC+) and Moody’s (from Caa1 to Caa2), and the regional convergence and multilateral surveillance cri- Figure 20. Evolution of public debt, percent of Figure 21. Stock of external debt arrears, percent GDP of GDP 90.0 2.0 80.0 1.8 70.0 1.6 60.0 1.4 50.0 1.2 40.0 1.0 30.0 0.8 20.0 0.6 10.0 0.4 0.2 0.0 2019 2020 2021 2022 2023 2024 0.0 2021 2022 2023 2024 Public debt (% of GDP) Sources: Government of Gabon, World Bank staff calculations. 23 The non-oil primary balance refers to the difference between non-oil revenues and non-interest expenditures. Compared to the overall fiscal balance, it can be a better indication of the sustainability of a country’s fiscal policy, since it does not take into account the effect of oil revenue fluctuations. A detailed discussion can be assessed at: Davis, J. Fedelino, A., Ossowski, R. 2003. Fiscal Policy Formulation and Implementation in Oil-Producing Countries. IMF. August. 24 Government of Gabon. 2024 Revised Budget Law. 23 teria, namely a fiscal balance below -1.5 percent of Figure 22. Evolution of the debt-to-GDP ratio, GDP, a public debt below 70 percent of GDP, non-ac- percent cumulation of external and domestic arrears, and an inflation rate below 3 percent (Table 2). Not having met these criteria in 2023, Gabon saw its risk weighting 90.0 increase from 65 percent to 100 percent. Banks were 80.0 less able to participate in bond issuances, which, to 70.0 some extent, contributed to disrupting budget execu- 60.0 tion and accumulation of arrears. Impacts can con- 50.0 tinue if Gabon’s request for a temporary exemption 40.0 is not accepted by COBAC. At the same time, if im- 30.0 plemented, this decision should reduce local banks’ 20.0 exposure to sovereign risk. 10.0 0 VII. Gabon has taken actions to more 2019 2020 2021 2022 2023 2024e 2025f actively manage public debt, but Debt to GDP ratio still faces high public debt and debt servicing costs Sources: Government of Gabon, IMF, and World Bank staff calculations. Note: 2024 numbers are estimates and 2025 Gabon’s public debt has been increasing since numbers are projections. 2021, following an expansionary spending policy but also due to the additional debt components ponents, such as unpaid budgetary commitments, identified thanks to higher transparency since VAT and salary refund arrears, and stocks of Treasury 2023. To respond to the COVID-19 pandemic and bills. This inclusion was made possible by transpar- boost growth, the authorities pursued an expansion- ency efforts taken by the Transitional Authorities fol- ary fiscal policy, causing the debt ratio to increase lowing the August 2023 coup d’état. The addition of from 59.8 percent of GDP in 2019 to 68.5 percent in these new debt components increased public debt 2021 (Figure 22). Debt continued to increase since between 2021 and 2024, bringing it to 72.5 percent 2022, mainly due to the inclusion of new debt com- of GDP in 2024, above the CEMAC’s 70-percent convergence target. While domestic and external debt have been increasing, due to strong cash flow Table 2. Criteria and calculation of risk weights constraints, the higher accumulation of arrears to applied to banks’ exposure to CEMAC Member suppliers and other unpaid commitments has been States contributing the most to an increase in public debt Relative over recent years (Figure 23). Criteria weight Budget balance as a percentage of nominal In 2024, Gabon’s debt consisted mainly of loans 20% GDP (complied with/met if -1.5% or higher) from the regional and international financial mar- kets, representing respectively 31.3 percent and Outstanding domestic and foreign debt-to- 10% 19.8 percent of total debt. Since 2019, debt owed to GDP (complied with/met if 70% or lower) regional financial market investors has become more Average annual inflation rate in % prominent, in line with the Government’s strategy of 5% (complied with/met if 3% or lower) relying more on the local market and reduce exchange Accumulation of internal and external rate risks (Figure 24). The share of debt owed to the payment arrears in CFAF (complied with/ 65% regional market went from 10.3 percent of total debt met if = 0) in 2019 to 24 percent in 2024. This growing demand Source: COBAC. For purposes of the CEMAC convergence for regional financing has increased local banks’ ex- criteria, the budget balance is defined as the overall fiscal posure to the state and the state’s crowding out of balance minus 20 percent of oil revenues and 80 percent of the difference between oil revenues and their average relative credit to the rest of the economy. Holding 24.3 per- to GDP over the previous three years. cent of total debt, multilateral creditors are Gabon’s 24 Figure 23. Composition of public debt, CFAF second largest creditor. Bilateral, local bank debt, and millions commercial debt accounted for 11.5 percent, 9.4 per- cent, and 2.9 percent of total debt in 2024, respec- tively. Thanks to audits of domestic debt conducted in 12,000 recent years, the moratorium debt, which represents debt resulting from agreements signed with compa- 10,000 nies, mainly due to payment arrears for public works 8,000 and provision of services, decreased from 4.4 percent of total debt in 2019 to 0.8 percent in 2024, as part of 6,000 this debt was found to be irregular. 4,000 With close to 70 percent of total debt denominated 2,000 in foreign currencies, mostly in US dollars, Gabon’s public debt portfolio remains highly exposed to 0 foreign exchange risks. This risk is increasing in the 2019 2020 2021 2022 2023 2024e 2025f context of rising global uncertainty observed in April External debt Domestic debt 2025, reflected by a sharp fluctuation in market pric- Additional components es. Fixed-interest rate debt represented 83 percent of the public debt portfolio, meaning that interest rate risks on Gabon’s debt are relatively low. With respect Sources: Government of Gabon, IMF, and World Bank staff calculations. Note: 2024 numbers are estimates and 2025 to debt maturity, although the average maturity of the numbers are projections. Information on additional debt debt portfolio was 5.7 years in 2024, refinancing risks components was not available prior to 2022. on domestic debt were high at end-2024. The average maturity of domestic debt stood at 2.1 years in 2024, compared to eight years for external debt (Table 3). Figure 24. Distribution of public debt, percent of total debt The sharp rise in interest rates in recent years, as part of global efforts to curb inflation, impact- ed developing countries’ borrowing costs and 100 forced them to adjust public debt management 90 strategies. In view of these financing pressures, 80 Gabon, like other developing countries, adopted various strategies to manage debt more effectively. 70 To reduce foreign exchange risks weighting on debt, 60 Gabon increased regional market borrowing, as its 50 local market, shared within CEMAC, is denominated 40 in local currency. In addition, to reduce the severe 30 liquidity pressures weighing on the budget and ease 20 the burden of debt service on public revenues, the 10 authorities launched active public debt management 0 operations. Gabon carried out an early buy-back of 2019 2020 2021 2022 2023 2024* its Eurobond maturing in June 2025, through two Bilateral debt Multilateral debt transactions, in November 2024 and February 2025. Commercial debt External market On domestic debt, Gabon also undertook active Debt to local banks Moratorium debt debt management operations, mainly to address the Domestic market continuous decline in the average maturity of do- mestic debt observed since 2020 (Table 4). In April Sources: Government of Gabon, World Bank staff calcu- 2025, Gabon reprofiled a large part of domestic debt, lations. Note: 2024 numbers are based on the latest data which involved issuing new securities and exchang- available as of end-November 2024. ing them with existing ones. This enabled it to extend 25 Table 3. Cost and risk profile of public debt at end-2024 External Domestic Total Risks and costs debt debt debt Average interest rate on public debt (%) 3.6 6.0 4.5 Refinancing risks Average maturity (years) 8 2.1 5.7 Percent of debt maturing within a year 10.4 29.4 17.9 Interest rate risks Average time to refixing (years) 6.6 2.1 4.8 Percent of debt to be refixed within a year 34.5 29.4 32.5 Percent of debt at fixed interest rates 70.2 100 83 Exchange rate risks Percent of debt at foreign currency - - 60.9 Percent of debt at floating exchange rate - - 66.9 Source: Government of Gabon. Debt Strategy 2025-2027. Annex to the 2024 Budget Law. Note: the Government’s debt strategy included domestic and external debt but did not include additional components identified in 2023, such as VAT refund and salary arrears, and unpaid budgetary commitments. Data as of early 2024, reflecting risks and costs prior to the early buyback of the June 2025 Eurobond and the domestic debt reprofiling operation in early 2025. Table 4. Average maturity of Gabon’s public debt portfolio 2019 2020 2021 2022 2023 2024 External debt 6.4 7.6 7.8 6.2 5.5 8.0 Domestic debt 3.6 3.6 3.4 2.7 2.2 2.1 Total debt 5.7 6.2 6.3 4.9 4.2 5.7 Source: Government of Gabon. repayment periods from about 2-3 years to about 6 hand, tight financing conditions have been imposed years, reduce liquidity pressures, and access new fi- by central banks to curb inflation in advanced econ- nancing (see Box 1). omies, attracting more capital and thus making it scarcer for Gabon and other developing countries. On Despite the recent debt management efforts un- the other hand, Gabon’s debt service costs also in- dertaken by the country, debt service remains a creased due to the uncertain political context charac- considerable burden, claiming 42.6 percent of total terized by a military-led transition following the coup government revenues in 2024. Debt servicing costs, d’état of August 2023, and by the downgrading of the including payments of interest and principal, have in- country’s sovereign rating, which resulted in higher creased over recent years, up from 36.1 percent of risk perceptions. This credit rating downgrade reflect- total tax and oil revenues in 2019 (Figure 25). While ed the more uncertain political context and intensi- this cost decreased in 2024 compared to 2023, debt fying fiscal and financial pressures. In January 2025, service continues to weigh heavily on public finances, Fitch further downgraded Gabon’s sovereign rating limiting the state’s capacity to invest in urgent social from CCC+ to CCC, and Moody’s sovereign rating re- and development needs, that are essential to achiev- mained at Caa2. Thus, during its Eurobond early buy- ing higher growth. back operation in February 2025, Gabon was charged a particularly high interest rate of 12.7 percent25 (Box The high debt service costs were notably caused 2). In comparison, Gabon had not obtained an inter- by tight global financing conditions and higher est rate higher than 7 percent on various Eurobonds interest rates charged by Gabon’s creditors, re- issuances since 2013, when market confidence was flecting higher political and fiscal risks. On the one more solid. 25 As reported in the media (https://www.africaintelligence.com/central-africa/2025/03/26/brice-clotaire-oligui-nguema-launches-a-vast- reprofiling-of-public-debt,110403168-art). 26 Box 1. Active public debt management operations launched by the Gabonese Authorities during the political transition Reprofiling and securitization of domestic debt (“Mouele” Operation) In March 2025, Gabon launched a vast reprofiling operation for its domestic debt, estimated at more than CFAF 1,400 billion (about USD2.4 billion), to reduce refinancing risks and increase room for maneuver in the medium term. This was in line with the authorities’ goals to manage debt more actively, to better prepare for the servicing costs of upcoming external debt maturities, in particular for bonds issued on the international market. This reprofiling operation was directly negotiated with local banks, involving ten financial institutions in the CEMAC region, led by BGFI Bank, a Gabonese bank. Named as Mouele project, this domestic debt re- profiling was carried out in a context where Gabon’s domestic debt repayment represents a high liquidity risk, particularly given the high cash flow pressures. Indeed, as of March 2025, 78 percent of the domestic debt, or CFAF 1,977 billion, would have to be repaid between 2025 and 2027 (Figure B1). Moreover, regional market borrowing costs are also high in CEMAC. Discounts are applied on securities issued by CEMAC states, with negative impacts for risk analyses, creating an unhealthy competition among states. Thus, interest rates paid by Gabon have been much higher over the past two years, in view of political risks in the context of the transi- tion and elections. In addition, banks’ overexposure to public debt and the increasing state debt solicitation in the regional market, owing to the scarcity of external financing, meant that banks could not fully meet states’ financing needs. This has led to mixed results on the latest issuances in 2024 for Gabon and other countries. The Mouele operation comprised three components. The first was Figure B1. Redemption profile of the public debt portfolio at a reprofiling of CFAF 592 billion end-2024, CFAF billions in the securities market, involving existing securities. In February 1,400 2025, the outstanding domestic public debt amounted to CFAF 1,200 2,196 billion, out of which CFAF 1,000 1,741 billion consisted of securi- 800 ties issued on the CEMAC mar- ket with an average maturity of 600 2.3 years. Maturity periods were 400 heavily concentrated over the 200 next years (Figure B1). Carried out through voluntary bilateral 0 exchanges with banks, this re- 25 026 027 028 029 030 031 032 033 034 035 036 20 2 2 2 2 2 2 2 2 2 2 2 profiling increased the average External Domestic maturity of Gabon’s domestic debt from 2.3 years to 6 years, re- Source: Government of Gabon, Debt Strategy 2025. ducing liquidity risks. The second component of the Mouele operation was a securitization of CFAF 473 billion of off-market bank claims at an interest rate of 6.99 percent. These bank claims were converted into a 9-year Treasury bond with a two-year grace period, improving banks’ liquidity and ability to participate in issuances, as the debt that was securitized was weighing on banks’ balance sheets, due to the low liquidity of the CEMAC secondary market. The BEAC cleared this operation and guaranteed the liquidity to all holders, and new securities are eligible for refinancing by the BEAC. Finally, the third component involved mobilizing CFAF 338 billion in new financial resources from banks, which converted new debt securities into Treasury bills, enabling Gabon to settle arrears with development partners and fund public investments. Early buyback operations of the June 2025 Eurobond On November 7, 2024, Gabon launched a first early buyback of USD290 million of its June 2025 Eurobond, which was originally of USD700 million, to reduce the risk of default due to the perceived heightened country 27 Box 1. Active public debt management operations launched by the Gabonese Authorities during the political transition (continued) risk, which had led to high interest rates. In addition, high debt servicing costs due in 2025 exert strong pres- sure on liquidity, an issue exacerbated by the political context. This operation was financed by bonds issued on the regional market, with borrowing in CFA francs, via two domestic syndications, allowing Gabon to convert part of external debt into domestic debt. The loan was obtained at a 7-percent interest rate, for a buyback of debt initially issued at 6.95 percent. On February 10, 2025, Gabon launched a second early repurchasing operation, for the remaining USD315 mil- lion of its June 2025 Eurobond. It involved a double transaction, with an early Eurobond redemption and a USD570 million bond issuance via a private placement. Foreign resources were mobilized from international investors specializing in emerging markets and frontier debt. This operation produced about USD202 million in foreign exchange resources for Gabon but came at a high cost. The yield required was 12.7 percent, one of the highest for emerging market borrowing, reflecting a perception of very high sovereign risk, in a context of high liquidity pressures and strong fiscal challenges. These operations allowed Gabon more time to improve the sustainability of public finances, including poten- tially securing an IMF program and bringing in policies capable of reducing bond yields. Programs with the IMF often lead to facilities that help augment foreign exchange resources and contribute to countries’ capacity to obtain support from other development partners. The increase in Gabon’s borrowing costs was also (Figure 26). Furthermore, while yields on government visible in the regional market, reflecting a higher securities had fallen between January 2023 and risk perception over a one-year horizon. The inter- February 2024, they rose again in January 2025. This est rate on 3-month Treasury bills issued by Gabon recent rise in early 2025 can be attributed to the rating increased from 3.06 percent in January 2019 to 6.73 downgrading by Fitch in January and the acceleration percent in January 2025, while interest rates on one- of the transition calendar. Initially foreseen in August year maturities rose from 7.32 percent to 7.6 percent 2025, presidential elections were advanced to April, Figure 25. Burden of debt service on public Figure 26. Evolution of the Gabonese finances, percent of total fiscal revenues government securities yield curve, percent 12 80.0 10 70.0 8 60.0 50.0 6 40.0 4 30.0 2 20.0 0 3-month 6-month 1-year 1.5-year 2-year 3-year 3.5-year 4-year 5-year 6-year 7-year 8-year 9-year 10-year 10.0 0.0 2019 2020 2021 2022 2023 2024 Jan-19 Jan-23 Feb-24 Jan-25 Sources: Government of Gabon; BEAC. 28 which provided reassurances on the advancement of Figure 27. Credit to the economy, CFAF millions the transition but caused a momentary rise in uncer- tainty during the election period. 2500000 To reduce the risk of debt distress and ensure public debt sustainability, it is essential to adopt 2000000 an adequate and sustainable fiscal policy and improve the management of public finances. 1500000 Structural reforms are needed to increase domestic revenue mobilization, contain and improve the quality 1000000 of public expenditure. Such measures would be key to strengthening the state’s capacity to service debt. In a 500000 context where external financing is becoming scarcer, it is also important to improve debt management and 0 2023 2024 debt data transparency, to preserve access to finan- Credit to the State Credit to the private sector cial markets over the longer term. VIII. Firms face challenges to access Source: BEAC. financing whereas financing costs increased for the state state represents compared to a private borrower. This is also explained by the significant increase in inter- Credit to private firms increased in 2024, but est rates on government securities issued by CEMAC Gabon’s banking sector remained vulnerable to countries, given the deterioration of their fiscal posi- a relatively high share of non-performing loans. tions and the resulting increase in risk perceptions. The volume of credit distributed to the private sec- tor increased in 2024 (+9.9 percent), reaching CFAF Even though domestic and international finan- 2,028.1 billion, due to the higher public investment cial markets remained accessible to Gabon in to fund large public works, particularly in roads and 2024, financing costs increased significantly. While energy, which boosted domestic activity, especially Cameroon, Gabon and Congo were able to issue for construction companies and related services. At Treasury bills at an average interest rate of 3.82 per- the same time, claims held on the state fell slightly cent for a three-month maturity and at an average in- (-1.6 percent), standing at CFAF 1,108.1 billion in 2024 terest rate at or lower than 5.9 percent for one-year (Figure 27). However, at end-2024, the non-perform- maturities in April 2020, interest rates have increased ing loan rate stood at 9.0 percent, up from 8.0 percent in recent years. For these same maturities, the aver- in the previous year. In comparison, in the CEMAC re- age interest rate requested by investors rose to 6.25 gion, on average 16.2 percent of total loans were in percent and 7.9 percent respectively in February 2024. default at end-2024.26 This reflects the strong regional market financing de- mand by CEMAC member states due to growing finan- Local banks’ exposure to the state remains signifi- cial difficulties, resulting in competition among states in cant and the public sector is still crowding out pri- 2024. For Gabon, the interest rate payable on 3-month vate sector financing. Despite the increase in credit maturities rose from 4.09 percent in April 2020 to 6.03 to the private sector, access to finance is considered percent in February 2024, while, the interest rate on one of the major obstacles to private sector develop- one-year maturities went up from 6.36 percent to 7.82 ment in Gabon.27 Banks’ interest in government se- percent in the same period (Figure 28). Similarly, the curities derives from the perceived lower risk that the spread on Eurobonds issued by Gabon has been in- 26 COBAC. 2025. Analyse et risques du secteur bancaire de la CEMAC au 31 décembre 2024; World Development Indicators database. In comparison, in 2021-2022, on average 11 percent of loans were non-performing in SSA (based an average for 26 countries with avail- able data), and the global average was 6 percent (for 140 countries). 27 World Bank Enterprise Surveys database. In 2009, 30.4 percent of firms identified access to finance as a major constraint and 8.6 percent considered it as their biggest obstacle 29 Figure 28. CEMAC countries’ yield curve in Figure 29. Evolution of the spread on Gabon’s 2020 and 2024 and Africa’s Eurobonds 12 1,000 900 10 800 8 700 600 6 500 400 4 300 2 200 100 0 0 th th ar ar ar ar ar ar ar on on 1-ye .5-ye 2-ye 3-ye .5 ye 4 ye 5-ye Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 3-m 6- m 1 3 Gabon 2020 Congo 2020 Cameroon 2020 Gabon’s spread (EMBI) Africa’s spread (EMBI) Gabon 2024 Congo 2024 Cameroon 2024 Sources: BEAC, Bloomberg. creasing, rising from 667 basis points in January 2024 world is witnessing the highest number of conflicts to 833 basis points on March 28, 2025 (Figure 29). since World War II.28 IX. Gabon’s growth outlook is exposed Despite global trade uncertainty and foreign aid to a challenging and highly uncertain reduction, growth in SSA is expected to increase in global environment 2025, supported by easing financial conditions and further declines in inflation. SSA growth is expected Global economic activity is expected to to increase to 3.7 percent in 2025. A gradual easing of slow while growth in SSA is forecast to policy interest rates should improve private consump- slightly increase in 2025 tion and investment. However, high debt levels and borrowing costs would continue to constrain the fiscal Global growth is projected to slow to 2.2 percent space. In CEMAC, growth should slow down to 2.4 in 2025, down from an estimated 2.8 percent in percent in 2025, reflecting lower projected oil prices 2024, amid rising trade uncertainty. Ongoing mod- and a decline in export demand from key trade part- erating inflation and easing monetary policy should ners, as Europe and China absorb around 60 percent support growth. However, heightened uncertainty in of regional exports. Also, fiscal risks are increasing for trade, fiscal, monetary, and regulatory policies are a CEMAC due to prospects of a sustained decline in oil key risk for the world. Countries imposing or facing prices, already observed in April 2025. Overall, SSA higher tariffs could suffer direct losses, while others faces strong risks like persistently high risks of de- could experience collateral damage due to subdued faults due to weak fiscal positions and worsening se- demand from trading partners and imported inflation curity conditions, such as in Sudan, parts of the Sahel, in a context of trade fragmentation, prompting cen- DRC, and in regions within CAR and Cameroon. tral banks to maintain higher interest rates, affecting global consumption and investment. Moreover, the Gabon’s outlook is also expected to be potential escalation of Russia’s invasion of Ukraine or impacted by an unstable global trade and conflicts in the Middle East adds uncertainty, as the financing environment 28 World Bank. 2025. Global Economic Prospects. January. 30 Gabon is projected to grow by about 2.4 percent addition to well-established timber and manganese over 2025 to 2027, mainly driven by non-oil com- industries, the recent start of iron ore production at modities, as the oil sector is set to face a number the Belinga deposit in 2024 and the expected start of of challenges. With the recent move from transition exploitation at Baniaka in 2026, which are both among to elected government, political uncertainty should Africa’s largest deposits, could boost mining activity decline. The newly elected government took power (Figures 31 and 32). Overcoming obstacles to growth in May 2025, and an elected parliament and consti- in non-oil sectors, with measures to improve business tutional court are expected by late 2025, completing conditions, especially energy supply and transport the return to constitutional order. This could improve capacity, would be key. Addressing local challenges investor confidence, although strong fiscal consolida- becomes ever more urgent, to attenuate the effect of tion policies are needed to attract more investments trade shocks and impacts on global growth that could and provide reassurances that high fiscal and financ- compromise demand also for non-oil commodities. ing pressures and debt risks are addressed. A central issue is the potential decline in oil production, which Growth prospects are thus hindered by uncertain- as per Government projections could start in 2025 due ties in the oil sector, which are likely to cause a to the natural maturing of existing oilfields. Other risks decrease in public spending, affecting overall de- include lower global demand if global trade restric- mand. A stifled global demand should translate into tions hinder growth in major markets such as China. lower oil prices at about USD60 over 2025-2027, a considerable drop from about USD80 in 2024 (Figure Over the coming years, Gabon’s economy would 30). A drop in both prices and production would have be driven mainly by other commodities, thanks to important consequences, as a reduced government expanding manganese, timber, palm oil and rub- demand would affect overall growth. Faced with in- ber industries. While major sectors such as man- tensifying fiscal pressures, the Government plans ganese and wood were recently hindered by energy to cut capital expenditures over the coming years.29 and transport issues, they are still expected to be- Public consumption should also be cut to accommo- come more prominent growth drivers, thanks to the date public spending within a significantly constrained vast potential of Gabon’s abundant resources. In fiscal space. Figure 30. Commodity price prospects, USD Figure 31. Global and regional growth prospects, percent 120 8.0 100 6.0 80 4.0 USD 60 2.0 40 0 20 -2.0 0 -4.0 2024 2025f 2026f 2027f 19 20 21 22 23 e f f f 20 20 20 20 20 24 25 26 27 20 20 20 20 Crude oil (USD/barrel) Metals and minerals (USD) World SSA CEMAC Gabon Source: World Bank staff calculations. Note: e = estimate; f = forecast. World Bank projections based on data as of April 2025. Prices for minerals are based on a basket of key metals and minerals. 29 Government of Gabon. 2024. Programme d’Investissement Public 2024-2026. Annex to the Revised Budget Law. 31 Figure 32. Commodity production in Gabon (2020-2027) 14 80 12 70 Wood (million m3) and minerals (million tons) 60 10 Oil (million barrels) 50 8 40 6 30 4 20 10 2 0 0 20 21 22 23 4 e 5 f 6f 7f 20 20 20 20 202 202 202 202 Oil (million barrels) Manganese (million tons) Sawn wood (million cubic meters) Iron ore (million tons) Sources: Government of Gabon, World Bank staff calculations. Note: e = estimate, f = forecast. Gabon’s trade position should remain strong The fiscal risks of a drop in oil revenues are high, thanks to the ramp-up of other commodity exports requiring efforts to ensure a sustainable fiscal and to lower imports. Even if oil exports decrease and debt path while attenuating social conse- in the coming years, mineral, wood, rubber and oil quences of fiscal adjustments with targeted relief palm exports should help the country maintain trade policies. Ongoing improvements in tax administra- surpluses. Also, lower public investment due to fiscal tion, such as digitalization of tax filing and invoices, constraints would reduce imports, strengthening the should gradually improve tax collection, but Gabon’s external position (Table 5). Nevertheless, with exports fiscal position would become increasingly challeng- concentrated on a few volatile commodities and mar- ing as oil revenues dwindle, especially as an expan- kets, Gabon remains highly exposed to trade shocks, sionary spending policy has been adopted. Liquidity especially in the currently uncertain global context. pressures already intensified in early 2025 and could be aggravated by tighter financing conditions, rais- Consumer price levels should remain contained, ing already high debt service costs. Other rigid re- but the indirect effects of imported inflation could current expenditures are also high, such as the wage be severe in case the world sees a resurging glob- bill. High spending pressures and lower revenues al inflation caused by trade wars or other shocks. would result in high fiscal deficits, at nearly 5 per- Headline inflation should remain at about 2.3 percent cent of GDP by 2025-2027, making it more difficult to over the coming years, thanks to a tight monetary contain public debt. In addition, the state has been policy and subsidies and price controls on essential increasing its participation in several sectors, bring- goods. However, if sustained and dramatic trade re- ing up fiscal risks. Fiscal risks are exacerbated by strictions are implemented in large economies, Gabon potentially high levels of off-budget operations and could be strongly affected by imported inflation. The risks associated with state-owned entities, since social impacts could be severe due to its strong reli- transparency on their financing and debt situation ance on imports of basic food items, which are con- remains limited (Box 2). In a context requiring cuts in sumed by households across income levels. Also, ris- public investments and public consumption, it would ing trade restrictions can increase production costs be essential to prioritize the most urgent, efficient, throughout global value chains, indirectly affecting the and productive public spending, from an economic country, especially firms that rely on foreign inputs. and social point of view. 32 3031 Box 2. SOE portfolio expansion and continued governance challenges Since the launch of the political transition, Gabon’s authorities have expanded the state’s participation in the economy. Recently created SOEs and acquired companies include: • Oil: acquisition, through the state-owned Gabon Oil Company (GOC), of two oil producers, Assala Energy, and Tullow Oil, announced in the media at, respectively, USD1.5 billion and USD300 million, plus the Société de Maintenance Pétrolière (SMP), a firm engaged in oilfield maintenance. • Wood: acquisition of the Société Nationale des Bois du Gabon (SNBG), a wood producer, following a parliamentary inquiry revealing irregularities in its privatization by the previous regime. • Rubber: acquisition of 35 percent of Agro Business Group, previously Société d’investissement pour l’agriculture tropicale (Siat-Gabon), a major rubber producer, announced in the media at CFAF 4 billion. • Air transport: creation of Fly Gabon, a new SOE, which acquired 56 percent of Afrijet, a local airline. • Banking: creation of the Banque pour le Commerce et l’entreprenariat du Gabon (BCEG) to finance SMEs. • Food retail: transfer of 35 percent of participation in the major food retailer group CECA-GADIS to the state, an asset considered to have been previously unduly obtained from the state. • Construction: creation of the Société de Construction et de Restauration des Edifices Publics (SOCOREP), in charge of construction of public buildings. In making these investments, the government has sought to increase control over natural resources, especially oil, and pursue other development goals like improving domestic transportation, supporting SMEs, local food sourcing by re- tailers, and reducing living costs. Certain investments were not done directly by the government, such as oil firms’ acqui- sitions by GOC, which were based on borrowing by the SOE, with the share of production-sharing contracts previously due to the private firms used to finance loan repayments. Similarly, control over Fly Gabon and CECA-GADIS was car- ried out by seizing assets reported to have been unduly acquired by private individuals in the previous regime. Still, the state might face increased fiscal risks coming from debt contracted by SOEs, especially if it is guaranteed by the state. Overall, the stronger state presence in the economy entails significant fiscal risks, stemming from weak corporate gov- ernance and lack of transparency of SOE operations. The lack of transparency around recent SOE acquisition costs and financing mechanisms is a major obstacle to assessing the fiscal and debt situation. Fragmented financial and gover- nance-related data on SOEs make it difficult to ensure effective performance monitoring, fiscal risk assessment, and accountability. Information on state guarantees on SOE debts is not easily available, and very few publish their finan- cial statements and information on their performance. For instance, the country’s sovereign wealth fund, the Fonds Gabonais d’Investissements Stratégiques (FGIS), only publishes general information about its activities and invest- ments. To tackle these challenges, the government has recently undertaken reforms, establishing a Directorate General of Holdings (Direction Générale des Participations, DGPAR) in 2024 and launching a web-based Central Registry of State Holdings (Fichier Unique des Participations) in early 2025. An audit of Delta Synergie, a holding company set up by members of the previous regime with assets potentially unduly acquired, was also launched, but results are not yet known. An SOE governance law is being prepared to improve SOE oversight and transparency. It would be key to ensure a comprehensive monitoring, auditing, and publication of financial information on state participations, and institutionalize transparency requirements. Strengthening fiscal risk assessments presently included as an annex to the budget law with more detailed information on SOEs would also help improve fiscal risk analyses. Additionally, the state’s participation in markets can bring economic risks. The state’s economic footprint is large in Gabon, with the public sector employing about 57 percent of the formal workforce.30 SOEs can benefit from subsidies and preferential access to finance through state guarantees, distorting competitiveness and hindering the private sec- tor, especially if SOEs and private firms compete, such as oil, wood, construction, and food retail. It is thus essential to better assess and improve SOE performance. Specific approaches and strategies can be adopted for natural monop- oly and competitive sectors, such as by strengthening regulators’ capacity and independence. Strong coordination of DGPAR and ministries is needed for an adequate oversight. It is key to ensure market rules and incentives, monitor SOE profits and consider options to reform or reduce participation in underperforming and loss-generating SOEs.31 30 Government of Gabon. 2023. Tableau de Bord de l’Economie : Situation 2022 et Perspectives 2023-2024. No. 53. October. 31 World Bank. 2023. Businesses Of The State (BOS) and Private Sector Development: A Policy Toolkit for Practitioners. 33 Table 5. Gabon’s medium-term outlook: selected economic indicators Selected macroeconomic indicators 2024e 2025f 2026f 2027f Annual percentage change Real GDP 2.9 2.1 2.2 3.0 Oil sector 4.6 -2.1 -5.8 -2.0 Agriculture and forestry -1.3 7.3 6.6 5.0 Mining and non-oil industry -1.9 3.4 8.9 4.6 Services 5.0 1.5 0.4 2.9 Inflation 2.4 2.3 2.2 2.3 Percent of GDP Government revenues 23.7 24.3 23.0 22.4 Public expenditures 27.4 29.7 27.7 27.1 Fiscal balance -3.7 -5.4 -4.7 -4.6 Public debt 72.5 80.2 82.6 86.1 Current account balance 30.7 17.9 22.4 24.0 Source: World Bank staff calculations. Note: e = estimate, f = forecast. Based on forecasts and data available as of April 2025. Poverty levels should remain high over the com- conflicts that can escalate quickly. Reduced growth ing years, due to the moderate growth outlook and in large economies can impact demand for Gabon’s the lack of jobs and social protection programs. As commodities. Together with a higher oil supply the economy continues to expand moderately, pover- caused by an expected surge in US energy produc- ty should gradually decline. The share of Gabonese tion, lower global demand for oil can also reduce pric- living on less than USD6.85 per day is projected to es, impacting Gabon’s oil revenues and straining its decrease from 2025 to 2027, from 37.8 to 35.8 per- fiscal position. Also, global inflationary surges could cent. Yet, this means that about 970,000 people, or drive up living costs and reduce consumption, while over a third of the population, would be affected by tighter global financial conditions could slow down in- poverty in 2027.32 The capital-intensive oil and mining vestment in extractive sectors and add to the current industries are key but are unable to produce enough liquidity challenges. Gabon’s borrowing capacity is al- jobs for Gabon’s population, which grows by over two ready limited due to banks’ high sovereign exposure, percent every year. High unemployment and income which was exacerbated by the COBAC’s risk weight inequality reduce prospects for poverty reduction. increase. Greater challenges in mobilizing financing And while the authorities have been expanding social could result in further accumulation of arrears or cuts measures, spending on social assistance remains low in capital expenditures, affecting growth. in Gabon. Social policies are largely focused on schol- arships and healthcare subsidies. Cash transfer pro- X. Key actions to help Gabon achieve grams, which directly elevate vulnerable households’ stronger growth, create more jobs, and incomes, are nearly absent. raise living conditions Gabon is expected to continue growing, but the As it navigates through a changing global situation, highly uncertain global environment dims its out- to minimize risks Gabon should accelerate reforms look. Gabon’s growth, trade, and fiscal outlook is that can build a solid foundation for higher growth vulnerable to shocks coming from the evolving global and job creation. While Gabon is an upper-middle in- context. Countries face rising trade restrictions, trade come country, several social indicators are lower than wars, and multiple geopolitical tensions and regional in most countries of comparable income levels (Table 32 World Bank. 2025. Spring Meetings 2025 Macro and Poverty Outlook. 34 6). Social pressures and demand for better infrastruc- cess to public services was a priority of the transition, ture and public services are high. Yet, meeting these and major investments were made. Yet, challenges demands can be challenging under a limited fiscal remain in healthcare, education, and skills. Despite in- space. Important reforms are underway, and the au- vestments done in schools and training centers, firms thorities adopted a National Development Plan for the still face difficulties in finding adequately skilled work- Transition (PNDT) setting a vision to create a more in- ers, and gaps remain in healthcare and other public clusive and diversified economy. Going forward, it will services. Gabon had only 0.5 physicians for every be key to accelerate reforms and ensure effective im- 1,000 people in 2022, three times less than the glob- plementation. To address development needs while al average.33 Frequent power cuts disrupt firms and securing a viable fiscal path, Gabon should protect the households, and half of the population did not have economy and especially the most vulnerable while en- access to basic sanitation in 2022.34 suring sustainable public finances through strong fiscal consolidation. This section looks at priority actions that To adequately fund public investments and ser- could help Gabon achieve its development aspirations vices, Gabon needs to optimize and enhance and tackle the main challenges facing the country. the management of its public finances and align spending plans with fiscal capacity. The way a Investing in infrastructure and the business cli- country manages its finances is central to achieving mate is essential to create more solid conditions its goals. This is particularly true when it comes un- for growth. To attract more investment and enable der strong fiscal constraints, as is the case of Gabon. investors and entrepreneurs to set up more firms, hire A selective approach requires prioritizing spending more workers, and expand their businesses, Gabon based on a careful cost-benefit analysis, urgency, and needs to address the issues preventing private sector alignment with national goals. It is equally important growth. Firms need a reliable and accessible power to spend in a more efficient way, by pursuing ongoing supply and transportation, and the Government has and planned reforms to improve the quality of pub- been investing heavily in infrastructure, including new lic spending. Key reforms include the implementation roads, airports, and power lines. But due to long-term of the public investment law and adopting new leg- underinvestment, important gaps remain, as illustrat- islation to reinforce governance and transparency of ed by recent power cuts and weather-related railway state-owned entities and public procurement. Better and road disruptions. Reducing tariff costs would re- managing the state’s human resources would also im- quire strong regional coordination. Other barriers to prove spending quality, by pursuing ongoing actions trade, such as port delays, multiple inspections and to eliminate ghost workers and improve control over complex regulatory requirements, could also be ad- the wage bill. Furthermore, public spending should dressed to improve business conditions. Policies support a sustainable fiscal situation. Strong actions should focus on building better overall conditions for would be needed to set a firm macroeconomic path firms to grow, given the high fiscal cost and potential and avoid high fiscal deficits, which could put debt on inefficiencies of targeted incentives. The fiscal impli- an unsustainable path. On the revenue side, it is key cations of tax incentives and other support measures to advance planned reforms such as digitalizing VAT should be balanced against the intended impacts, to invoices, ensuring compliance with property taxes by avoid revenue losses and misuse by beneficiaries. all properties, and rationalizing tax incentives. On the expenditure side, it would also be essential to reflect Better health, education, and public services are all central government spending in the budget and im- central to improving well-being. Investing ade- prove the targeting of spending policies. quately and efficiently in social areas would help Gabon achieve social and economic goals, as firms Another crucial action is to ensure transpar- need a healthy and skilled workforce. Expanding ac- ent resource revenue management, building on 33 World Bank. World Development Indicators database. The global average number of physicians per 1,000 people was 1.7 in 2020, whereas the Sub-Saharan African and the UMIC averages were, respectively, 0.2 and 2.2. 34 World Bank. World Development Indicators database. The global average share of the population using at least basic sanitation ser- vices was 81 percent in 2022. The average shares in SSA and UMIC were, respectively, 35 and 93 percent. 35 Gabon’s recent Extractive Industries Transparency natural resources, improving control and visibility over Initiative (EITI) membership validation. After being much-needed public funds.36 suspended in 2013, Gabon started a process to rejoin EITI in 2021. This concluded in March 2025, as Gabon To achieve a more solid and sustainable develop- validated its membership, published the validation re- ment path, Gabon should balance its immediate port, and advanced on the disclosure of information priorities with reforms to improve the long-term on state contracts with oil and mining firms and on management of natural wealth. The effects of pol- data quality.35 Enhancements recommended by EITI, icies on natural assets such as forest ecosystems such as publishing full information on such contracts, need to be considered to avoid unsustainable devel- including data on beneficial ownership and amend- opment. Policies need to be well calibrated, so that ments, as well as other relevant information like au- resources can serve the Gabonese in the present and dited SOE financial statements, would be greatly ben- the future. The next chapter of this Economic Update eficial to advancing transparency and accountability discusses the contribution of natural, physical, and of resource revenues. Advancing transparency is a human capital wealth to Gabon, proposing actions national goal stated by the Government, which would to better manage, control, and benefit from this vast enable Gabon to make the most optimal use of its rich wealth. Table 6. Structural development indicators in Gabon Value Position in upper middle- income group (upper, middle, Indicators 2021 2022 2023 Trend(i) lower tercile)(ii) PRIVATE SECTOR Foreign direct investment, net inflows (% of GDP) 7.9 5.4 5.9 Up Upper tercile Industry (incl. construction), value added (% of GDP) 50.91 57.35 52.9 Down Upper tercile Services, value added (% of GDP) 38.7 33.2 36.4 Up Lower tercile Agriculture, forestry, and fishing, value added (% of GDP) 6.0 5.6 5.8 Stable Middle tercile INFRASTRUCTURE Gross fixed capital formation (% of GDP) 17.5 16.0 18.1 Up Lower tercile Access to electricity (% of population)a 91.8 93.5 - Up Lower tercile Score: 2.2 Score: 2.1 Score: 2.4 WB logistics Performance index (LPI)b Rank: 143 Rank: 150 Rank: 115 Up Lower tercile Score: 0 to 5; Rank: Out of about 160 countries In 2016 In 2018 In 2023 HUMAN CAPITAL (EDUCATION) Government expenditure on education (% of GDP) 2.7 2.2 - Down Lower tercile Output per hour worked (constant 2017 international $ at PPP) 27.24 25.78 25.63 Down Upper tercile DIGITALIZATION Individuals using the Internet (% of population) 68.6 70.7 71.9 Up Lower tercile Secure Internet servers (per 1 million people) 40 28 43 Up Lower tercile CLIMATE CHANGE ND-gain index on climate vulnerability and readiness 42.5 43.0 43.0 Stable Lower tercile (higher is better) 35 Information on contracts signed by the state with extractive industries started to be published by the Ministry of Economy and Partici- pations in July 2024 (https://economie.gouv.ga/publications-des-contrats/). 36 EITI International Secretariat. Validation of Gabon (2024). Assessment of Progress in Implementing the 2019 EITI Standard. 36 Table 6. Structural development indicators in Gabon Value Position in upper middle- income group (upper, middle, Indicators 2021 2022 2023 Trend(i) lower tercile)(ii) EMPLOYMENT Employment in agriculture (% of total employment) 30.0 29.4 29.2 Stable Upper tercile Employment in industry (% of total employment) 15.8 15.8 15.7 Stable Lower terciles Employment in services (% of total employment) 54.2 54.8 55.1 Up Middle tercile Share of youth not in education, employment or 29.2 29.1 29.2 Stable Upper tercile training, total (% of youth population)c TRADE AND FOREIGN AID Net ODA received (% of GNI)d 0.37 0.58 0.70 Up Middle tercile Fuels and mining exports (% of GDP) 24.4 31.3 24.9 Down Total export (% of GDP) 45.4 53.8 54.7 Up Export to Asia (% of GDP) 28.9 32.2 34.0 Up Export to Europe (% of GDP) 9.2 13.3 12.3 Down Export to North America (% of GDP) 1.1 2.7 1.6 Down Export to Africa (% of GDP) 8.0 5.5 6.4 Up GOVERNANCE [Percentile rank among all countries (ranges from 0 (lowest) to 100 (highest) rank)] Voice and Accountability 23.2 24.2 24.0 Stable Lower tercile Political Stability and Absence of Violence/Terrorism 45.8 48.6 33.6 Down Middle tercile Government Effectiveness 20.0 26.4 23.1 Down Lower tercile Regulatory Quality 21.9 25.5 25.0 Down Lower tercile Rule of Law 24.8 23.1 20.8 Down Lower tercile Control of Corruption 21.0 16.5 17.9 Up Lower tercile Sources: World Development Indicators, International Labor Organization, World Trade Organization, Organization of Economic Complexity. (a) Access to electricity, spending on education, and the ND-gain index reported for 2021 and 2022 (2022 used to allocate each country into its tercile); (b) LPI reported for 2016, 2018, and 2023 (2023 used for tercile allocation); (c) Share of youth not in education has a different color code rule. When the value goes down it shows improvement (green), and when it goes up, it shows deterioration (red). Being in upper tercile means having higher share of youth in education, employment or training; (d) Net ODA reported for 2020, 2021, and 2022 (2022 used for tercile allocation). Notes: (i) The table shows how the indicator evolved from 2021 to 2023, except for the ND-gain index and Logistics Performance Index. (ii) For each indicator, the country’s position in its income group is based on 2023. The country can be in the upper tercile (countries with higher scores relative to the income group), middle tercile (average scores), or lower tercile (lower scores). Blank cells mean there was not enough data available to assess the trend or identify the tercile position. 2 37 Assessing the Value of Forest Ecosystem Services for Gabon’s Economy SECTION I. Introduction. assets that will support future prosperity. This can help them design strategies that promote Measuring national wealth – sustainable development, ensuring that growth why does it matter? does not come at the expense of environmen- Measures of a nation’s wealth are an import- tal degradation or social inequity. This dual ap- ant complement to GDP, providing insights proach enables a more balanced assessment into the capital foundation for future growth of an economy’s future prospects, guiding and its sustainability. Gross domestic product investments in education, infrastructure, and (GDP) is a widely used indicator of economic environmental conservation to foster a resilient performance that calculates the total value and equitable economic landscape. of goods and services produced in a country over a specific period. Complementing GDP The wealth of a nation can be classified into with figures on national wealth offers a more four categories: human capital, produced comprehensive view of an economy’s health. capital, natural capital, and financial capital National wealth encompasses various assets, (Figure 33). Human capital represents the skills, including natural resources, human capital, and health, and education of the population, a key produced capital. By considering both GDP driver of productivity and long-term growth. and assessing the evolution of the level and Produced capital includes infrastructure, facto- composition of national wealth, policymakers ries, and other durable goods that support eco- can identify whether current economic prac- nomic activities. Natural capital includes nonre- tices are depleting resources or investing in newable assets such as hydrocarbons, metals, 38 Figure 33. Structure of wealth accounts Sustainable prosperity and material well-being Long-term growth Total wealth Produced Nonrenewable Renewable Human Net foreign capital natural capital natural capital capital assets Machinery, Forest Male/female, Fossil fuels, Cropland, Protected Fisheries, Assets minus structures, timber and employed/ urban land minerals pastureland areas mangroves liabilities eco services self-employed Source: World Bank, 2025. and minerals, and renewable assets, which are natu- resources by their nature tend to decline as they are rally replenishing resources like forests, fisheries, oth- exploited, new discoveries and changes in asset val- er flora and fauna, and groundwater. Financial capital ues can result in significant fluctuations over time. consist of net foreign assets, the difference between a Renewable natural can regenerate but also be at risk country’s external financial assets, such as foreign re- of overexploitation. serves, investments, and loans to other countries, and its external liabilities, such as foreign debt and invest- For Sub-Saharan Africa, such trends are reflect- ments made by foreigners.37 Total and per capita real ed in significant growth in per-capita human and wealth increases when more workers join the labor produced capital, while non-renewable capital per force, when existing workers acquire new skills, when capita remained constant and renewable capital forests expand, or when new mineral deposits or hy- declined. The relative contribution of these categories drocarbon reserves are discovered. However, they will to Sub-Saharan to total nominal wealth also changed decline if fish stocks are overfished, machinery and significantly between 1995 and 2020 (Figure 34). While infrastructure degrade, or if mining and fossil fuels re- in 1995, human and renewable capital accounted for serve are depleted. By monitoring per capita trends 44 percent and 27 percent of total wealth, respec- in real GDP and real wealth, it is possible to assess tively, by 2020 their share had further increased to 50 whether a nation’s GDP growth is achieved by grow- and 30 percent of total wealth. On the other hand, the ing or shrinking the economy’s productive base.38 share of non-renewable wealth only increased mod- estly from 4 to 5 percent during that period, while In the course of a country’s development the rel- the contribution of produced capital declined sharply ative composition of its wealth typically changes. from 25 to 15 percent. Increases in produced and human capital are typ- ically strongly associated with growth in production Sustaining long-term prosperity necessitates a and income. In a virtuous cycle, these increases drive comprehensive view of national wealth, one that economic growth which in turn generates resources considers natural capital alongside produced and for investment in human and physical capital. The human assets. Gabon’s forests, embedded within relationship between natural capital and econom- the Congo Basin—the planet’s largest remaining trop- ic growth is more complex, as while non-renewable ical forest carbon sink—provide ecosystem services 37 World Bank. (2024). The Changing Wealth of Nations. Washington DC: World Bank Group. 38 Ibid. 39 Figure 34. Evolution and composition of wealth in Sub-Saharan Africa Trends in global wealth per capita, by asset Nominal wealth shares by asset category, category, Sub-Saharan Africa 1995-2020 Sub-Saharan Africa, 2020 (1995=100) 140 140 Renewable Renewable Nonrenewable Nonrenewable 120 capital naturalcapital natural capital naturalcapital natural 120 30% 5% 30% 5% 100 100 Produced Produced 80 80 capital capital 15% 15% 60 60 40 40 20 20 00 1995 1995 2000 2000 2005 2005 2010 2010 2015 2015 2020 2020 capital Producedcapital Produced capital Humancapital Human Renewable Nonrenewable capital Humancapital Human Renewable Nonrenewable 50% capital naturalcapital natural capital naturalcapital natural 50% Source: CWON database. that are critical to economic activity, food security, with similar income levels. Higher income countries and climate resilience. These services encompass typically have the largest share in human capital, while carbon sequestration, hydrological regulation, soil fer- natural capital may comprise the smallest share, even tility, biodiversity preservation, and cultural heritage, if per capita values may remain high. For instance, in underpinning local livelihoods and global environmen- 2020 the average share of human and physical capital tal stability.39 Yet, conventional macroeconomic indi- combined was 33 percent of total nominal wealth in cators such as GDP undervalue these contributions, lower middle-income countries, 84 percent in upper obscuring ecological depletion and distorting assess- middle-income countries and 97 percent in high in- ments of sustainability.40 While the value of certain come countries.42 A central development challenge forest ecosystem services such as carbon retention for Gabon is therefore how to harness its natural cap- cannot be directly added to GDP, it is important to ital wealth most effectively to drive higher rates of ac- also consider these values and their trends in policy cumulation of human and produced capital, without making and in development planning, as they provide degrading the stock of natural capital. a broader picture of wealth sustainability. Without ro- bust natural capital accounting, countries risk pursu- This chapter is organized into three main sections. ing a growth trajectory that silently erodes their eco- Following this introduction, the second section pro- logical foundation, jeopardizing future prosperity.41 vides an overview of the evolution and composition of Gabon’s wealth, highlighting the critical role of natural While Gabon has achieved upper middle-income capital—alongside produced and human capital—in status, the largest component of its national wealth shaping long-term development in Gabon. The third is natural capital, differently from most countries section examines in detail Gabon’s forest related 39 UNEP TEEB 2010; Dasgupta 2021. 40 Stiglitz, Sen, and Fitoussi 2009; World Bank 2021. 41 Arrow et al. 2012; Lange, Wodon, and Carey 2018. 42 World Bank. 2024. CWON database. 40 wealth and services and offers insights into the eco- est growth and limited economic participation, GDP nomic value and ecological importance of the coun- per capita in constant U.S. dollars fell from USD8,515 try’s forest resources. The fourth section discusses in 1995 to USD6,542 in 2020, a -0.8 percent average policy options to sustainably build and expand na- annual growth. Thus, the decline in national wealth per tional wealth. The goal is to inform strategies that capita in Gabon and other countries in the region re- strengthen produced and human capital, promote flects challenges in converting natural resources into better management of forest ecosystems, and ensure produced and human capital, capable of sustaining an efficient use of natural resources, to foster a more growth and expanding wealth (Figure 35d). inclusive and resilient economic growth path. The decline in per capita wealth observed in Gabon suggests challenges to translate natural SECTION II. State and trends of wealth into physical and human capital. Gabon’s Gabon’s national wealth population nearly doubled from 1995 to 2020, from 1.1 million to 2.3 million people. However, declining Country context: How is national wealth wealth per capita, along with a decrease in GDP per evolving in Gabon? capita in recent decades, can reflect an erosion of both the country’s long-term asset base and immedi- Gabon’s national wealth increased by 35 percent ate economic output, as not enough growth in wealth between 1995 and 2020 and is mainly comprised is being produced to raise living standards. In other of natural capital. This report relies on the World words, wealth per capita is being depleted over time, Bank’s Changing Wealth of Nations (CWON) database instead of being accumulated (Figure 36 – section 3 to describe how Gabon’s wealth has evolved between discusses how Adjusted Net Savings can be used to 1995 and 2020. Gabon’s total wealth increased by analyze the sustainability of savings and wealth ac- 1.40 percent per year on average, reaching nearly cumulation). Gabon is among the few countries that USD105 billion in 2020, up from USD77 billion in 1995 have experienced both negative GDP growth and a (in real chained 2019 USD43 - Figure 35a). Natural decline in per capita wealth from 1995 to 2020. As resources account for 42 percent of the country’s Gabon was not able to fully seize the opportunity of its wealth, followed by human capital (31 percent) and vast natural resources to diversify its assets and pro- produced capital (27 percent - Figure 35b). Between ductive base, growth has been modest and volatile, 1995 and 2020, the value of Gabon’s renewable natu- mainly reflecting oil cycles. Policy challenges include ral assets grew by a modest 2 percent, nonrenewable redistributing and efficiently using oil revenues, ex- natural capital, by 39 percent, while produced capital panding and maintaining infrastructure and leveraging increased by 85 percent and human capital by 207 the tourism potential of forests. Governance and pub- percent (Figures 35b and 35c). lic finance management challenges resulted in limited efficiency of public investments, inadequate logistic On a per capita basis, Gabon’s wealth decreased and trade infrastructure, undermining growth, private by 34.7 percent from 1995 to 2020, indicating investment, and job creation. sustainability concerns over the evolving nation- al wealth. Gabon’s population grew by 4.3 percent Measuring the components of Gabon’s on average in 1995-2020. Despite a growth in total wealth wealth, on a per capita basis Gabon’s wealth has been on a downward trend, decreasing by about 1.39 Produced capital percent every year from 1995 to 2020. Over this peri- Gabon’s produced capital wealth nearly doubled od, Gabon’s nearly 35-percent decline was high com- between 1995 and 2020, in line with public invest- pared to most of the region, which is formed by coun- ments in infrastructure and private investment in tries that also had strong demographic growth: wealth oil, manganese, and wood industries. The value of per capita decreased by 8 percent in Congo, 11 per- produced capital assets grew from about USD14 bil- cent Cameroon, and 29 percent in CAR. Due to mod- lion in 1995 to USD25 billion in 2020 (in real chained 43 For more details on the methodology and on the use of real chained USD to measure wealth, please consult the Annex. b Re C o UM SS Ga o er ng Ca m 20 Co 1995 2000 2005 2010 2015 2020 Produced capital Human capital Natural capital 41 National Comprehensive Wealth Index Produced capital Human capital Renewable Nonrenewable natural capital natural capital Figure 35. National and per capita wealth evolution in Gabon a. National wealth evolution in Gabon, in real b. Nominal wealth shares, 2020 chained 2019 USD, 1995-2020 140 Produced capital 27% 120 Human capital 31% 100 80 60 40 20 0 1995 2000 2005 2010 2015 2020 Produced capital Human capital Natural capital Natural capital 42% c. Nominal wealth shares, by asset category, 2020 d. Trends in real wealth per capita in Gabon, 1995-2020 (1995=100) 100 180 80 160 140 60 120 40 100 20 80 60 0 n . R n IC A 40 bo ep CA oo SS Ga o R er UM ng Ca m 20 Co 1995 2000 2005 2010 2015 2020 Produced capital Human capital Natural capital National Comprehensive Wealth Index Produced capital Human capital Renewable Nonrenewable natural capital natural capital Source: CWON, 2024. 2019 USD), reflecting an expansion of infrastructure, cused on oil and other commodities, also contributed machinery, and urban land. In line with the Emerging to an expansion in produced capital. For instance, the Gabon Strategic Plan (PSGE) and supported by an oil creation of special economic zones, particularly the boom, since the 2010s significant public investments Nkok zone, helped increase foreign direct investment Produced capital 140 were made in road networks, ports, railway rehabilita- in the timber processing and agro-industrial27% sectors. 120 Human capital tion, and a new international airport in Port-Gentil. The 31% since 2023, investments on roads, en- More recently, 100 road network was significantly expanded, with 672 km ergy, airports, and other infrastructure, have increased 80 of 1,800 km of paved roads built between 2009 out substantially. 60 2016. Investments were launched in railway reha- and bilitation 40 and the main ports, Owendo and Port-Gentil, However, Gabon’s per capita produced capital de- were 20 modernized. Private investment, strongly fo- clined, remaining below potential due to volatile 0 1995 2000 2005 2010 2015 2020 Produced capital Human capital Natural capital Natural capital 42 Figure 36. Cumulative GDP per capita growth vs. cumulative wealth per capita growth, 1995-2020 3 Wealth per capita growth, HIC 2 UMIC 1995-2020 (%) SSA LMIC 1 0 COG Cameroon -1 CAR GAB -2 -2 -1 0 1 2 3 4 5 6 7 8 9 10 GDP per capita growth,1995-2020 (%) Sources: WDI and CWON, 2024. investments, which are closely linked to oil sector Gabon continues to suffer from severe long-term fluctuations. On a per capita basis, produced capital structural gaps, affecting the quality and access of (public and private) declined by 10 percent from 1995 infrastructure and logistics and hindering private in- to 2020, or -0.42 percent per year. A first cause for this vestment. Logistical gaps, along with other obstacles decline is that investments, both public and private, in the business environment, like access to finance, have been declining in line with the more difficult con- competition issues and regulatory hurdles, prevent- ditions experienced since the end of the oil boom that ed the private sector from investing more in machin- took place in the early 2000s. Total investment de- ery, industries, and other built-up assets, contributing clined from 22.7 percent of GDP in 1995 to 19.9 per- to the decline in per capita produced capital. Even if cent in 2020, while peaking at 31.4 percent in 2010, public investments were made in infrastructure, access during a strong boom in the oil sector. While private to infrastructure remained unequal and costly. Gabon investment increased by 11.7 percent over the last was ranked 134th out of 141 countries on transporta- two decades, much of it going to the oil sector, public tion in the 2019 Global Competitiveness Index and was investment significantly declined by 73.7 percent. The ranked 115th out of 139 countries on the 2023 World share of capital expenditure decreased steadily since Bank’s Logistics Performance Index (LPI). 2010, from 36.6 percent of total spending in 2010 to 13.8 percent in 2020. Structural deficiencies in the organization and planning of public investment hinder the coun- The collapse of oil prices in 2014 caused a sharp try’s capacity to carry out efficient and produc- reduction in both fiscal space and public invest- tive investments, impacting infrastructure quality. ment and also in private investment, reflecting an Despite higher public investments being made over absence of countercyclical budgetary policies. the early 2010s, the accumulation of the stock of Net FDI inflows declined sharply from 6.9 percent of public capital has not been sufficient, mainly due to GDP in 2014 to 0.3 percent in 2015.44 In addition, governance challenges hindering efficiency. In 2019, public investment fluctuates sharply, with an aver- a public investment management assessment (PIMA) age year-on-year variation of about 1.0 percentage was carried out to evaluate Gabon’s framework and points of GDP since 2010. Thus, in the absence of a practices. It assessed institutions’ strength and effec- countercyclical budgetary policy, investment serves tiveness in managing public investments, throughout as an adjustment variable to shocks, with cuts in three stages: planning, allocation, and implementa- spending compromising a sustained and timely proj- tion. The study highlighted that Gabon’s institution- ect implementation. al framework was close to the highest international 44 World Bank. World Development Indicators database. 43 Figure 37. Produced capital per capita and GFCF, Gabon, peers and regions a. Growth in produced capital per capita b. GFCF in Gabon and peers, 1995-2023 between 1995-2020, in percentage 250 40 200 35 150 30 100 25 50 20 0 15 -50 10 n p. AR on A C C HI eer s SS UMI 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 a bo , Re C ero p G go m al Co n Ca gion R e Gabon Regional peers Sub-Saharan Africa Upper middle income High income Sources: CWON 2024 and WDI. Note: Throughout this report, Gabon’s regional peers are Cameroon, CAR, Congo and Equatorial Guinea. GFCF = Gross Fixed Capital Formation. standards for fiscal objectives and rules, budget com- Wealth of Nations database, the value of human capi- pleteness and unity, and monitoring of public assets, tal wealth is assessed based on the estimated value of thanks to Gabon’s adherence to the CEMAC regulato- future labor incomes, which can be generated by the ry framework and use of objective-based budgeting. current working population, given its longevity, edu- However, shortcomings in public investment planning cation level and work experience.46 It can be used to affect resource allocation and project execution. In complement the Human Capital Index (HCI), which is the absence of sufficiently coordinated planning, based on health and education indicators, and aims fund allocation during the budgetary programming of at estimating the level of productivity that a child born investment expenditure can be incomplete and sub- today can expect to attain when reaching working jective, resulting in insufficient and undermaintained age. Human capital wealth is a major asset for Gabon, infrastructure. Challenges in public investment per- estimated in the CWON database at USD35 billion in formance thus contributed to the decline in produced 2020, up from USD11 billion in 1995 (in real chained capital per capita between 1995 and 2020. Gabon’s 2019 USD). In per capita terms, human capital wealth public investment efficiency score was of 0.5 in the grew by 49 percent from 1995 to 2020, or 1.94 percent 2019 PIMA, below the averages in CEMAC (0.69) and per year (Figure 38a). Gabon’s human capital has ex- SSA (0.80), indicating a 50-percent efficiency gap in perienced some notable improvements. Sectoral gov- public investment relating to infrastructure quality.45 ernment plans were adopted for education and health in the 2010s, with initiatives that increased vaccine Human capital coverage and provided ample coverage of healthcare Between 1995 and 2020, Gabon’s human capital subsidies, which make up the bulk of spending on so- wealth increased by 207 percent, partially due to cial assistance.47 From the mid-1990s to 2020, literacy fast demographic growth, while improvements in rates were raised from 72 percent to 89 percent for education, health, and skills increased per cap- people aged 15 and older, and life expectancy at birth ita human capital by 49 percent. In the Changing increased from 61 to 67 years.48 45 IMF. 2019. Public Investment Management Assessment - Gabon. Fiscal Affairs Department. 46 Please consult the Annex for details on the methodology used to estimate human capital wealth. 47 World Bank. 2022. Gabon Country Economic Memorandum. 48 World Bank. World Development Indicators database. 44 Figure 38. Human capital wealth in Gabon and peer countries a. Human capital per capita wealth growth, b. Human Capital Index, Gabon and peer countries, 1995-2020 (percent) Gabon and peer countries, 2020 60 0.8 50 0.7 0.6 40 0.5 30 0.4 20 0.3 0.2 10 0.1 0 0 . R n R n A . n IC C ep CA oo HI C IC SS A on CA oo SS ep bo HI ,R er UM Ga b er ,R Ga UM go m m go Co n Ca Ca Co n Sources: CWON and World Bank HCI. However, despite the significant accumulation of of education, less than the SSA and UMIC averages, Gabon’s human capital wealth, it remains below and repetition rates are among the world’s highest, at potential, hindered by deficiencies in education, 37 percent.49 Education attainment rates are low for healthcare, and training. Gabon’s Human Capital secondary and tertiary levels.50 Furthermore, teacher Index (HCI) is lower than the averages for countries quality and school infrastructure are major problems, at similar income levels (Figure 38b), suggesting a po- despite ongoing public investments in schools. Only tential for further human capital development. Even if 12 percent of teachers meet required knowledge human capital wealth has increased, the HCI indicates thresholds in language or math, 60 percent of schools that gaps in schooling and health services still pre- had adequate supplies in essential learning materials vent the population from fully contributing to nation- like pens and pencils, and 73 percent of schools have al wealth. For instance, school enrollment, average computers and internet.51 Another challenge is the in- years of school attendance, and completion rates in adequacy of labor skills, contributing to high unem- Gabon are all below UMIC averages. Access to health ployment and underutilization of human capital, which services are also below what would be expected, with coexists with unmet labor demand across different the number of physicians, nurses, and hospital beds skills levels.52 per thousand people below UMIC averages. This translates into a considerable gap in life expectancy Overall, Gabon has better health outcomes than at birth, which is eight years less in Gabon than the most of Sub-Saharan Africa, but health problems UMIC average (Table 7). still prevent people from being sufficiently produc- tive, as in other upper-middle income countries. While Gabon has improved educational outcomes, Gabon outpaces SSA regional averages but falls con- major challenges remain, like inadequate teacher sistently under UMIC averages across different health quality and school infrastructure, low access to indicators (Table 7). Diseases such as malaria, respi- secondary and higher education, and labor skills ratory infections, HIV, and diarrhea are a high burden, mismatches. The average Gabonese has 8.2 years being leading causes of death among children under 49 International Labor Organization. 2019. State of Skills: Gabon. 50 World Bank. World Development Indicators database. 51 World Bank. 2025 (unpublished). Gabon Country Climate and Development Report (CCDR). 52 As discussed in chapter 1 of this Economic Update. International Labor Organization. 2019. State of Skills: Gabon. 45 Table 7. Health and education outcomes in Gabon and peer countries Health and education indicators Gabon Gabon SSA UMIC HIC Education 2010 LY* LY LY LY Learning poverty (10 years old) 30.68 86.00 29.39 7.97 Learning performance scores 456.1 372.8 414.8 484.2 Primary completion rate 82.02 69.89 95.97 98.95 Lower secondary completion rate 51.88 45.59 89.94 93.77 School enrollment, primary (% gross) 130.2 99.95 98.30 101.64 100.03 School enrollment, secondary (% gross) 71.44 44.79 94.99 104.18 School enrollment, tertiary (% gross) 14.74 9.50 59.55 79.93 Expected years of school 8.26 8.31 11.85 13.16 Government expenditure on education, total (% of GDP) 3.08 2.21 3.51 3.74 4.80 Health and longevity Physicians per 1,000 people 0.5 0.2 2.2 3.6 Nurses and midwives per 1,000 people 2.2 1.2 3.6 9.8 Hospital beds per 1,000 people 2.0 1.2 3.7 5.4 Probability of survival to age 5 0.96 0.93 0.98 0.99 Survival rate from age 15-60 0.79 0.73 0.85 0.92 Maternal mortality rate (per 100,000 live births) 233 448 57 10 Life expectancy at birth 64.7 68.3 60.74 75.67 79.51 Current public and private health expenditure (% of GDP) 2.48 2.71 5.11 5.82 13.13 Human capital index (HCI) 0.46 0.40 0.56 0.70 Human capital wealth index (per capita) 125 150 131 131 120 Sources: WDI, UNESCO, UN, CWON. Note: LY stand for Latest Year, which the last year the data is available for Gabon: Learning poverty (2019), primary and secondary completion (2023), All school enrollment rate (2023), government expenditure on education (2022), on health (2021), Human capital outcomes (2020), physicians and nurses per 1,000 people (2022), hospital beds per 1,000 people (2011), maternal mortality rate (2023), life expectancy (2023), Human capital wealth Index (2020). Human capital wealth Index (per capita): Year 1995=100. five, along with premature birth. Non-communicable ficiency. About 80 percent of health resources are de- diseases such as cardiovascular diseases, diabetes, voted to curative care, which contributes less than 10 renal failure, and cancers are also on the rise. Water- percent to improvements in health indicators. Certain borne diseases are widespread, due to lack of basic policies compound these challenges, as spending on sanitation services, which reach only half of the pop- secondary and tertiary education tends to be regres- ulation. For example, water-borne diseases such as sive, benefiting mostly the wealthiest. Underspending dysentery attained 94 percent of people in 2019. at primary and lower-secondary levels, and vocation- al training institutions reduces both the quantity and Despite the strong and rising social challenges, quality of basic education services.53 spending on both health and education seem in- sufficient to address these problems and are hin- Nonrenewable natural capital dered by allocation and efficiency issues. Gabon Gabon’s nonrenewable natural capital, consider- spends less on health and education than its peers. ing mostly oil, gas and gold reserves, was valued To expand access to healthcare, the Government has at USD31 billion in 2020 (in real chained 2019 USD), recently been building health clinics. Yet, access to a 39-percent increase since 1995, largely driven hospitals and clinics is unequal and concentrated in by an increase in oil assets. The value of nonre- major cities. Allocation issues also hinder spending ef- newable capital assets is highly dependent on factors 53 World Bank. 2018. Gabon Public Expenditure Review. 46 like commodity prices, technological advancements, impacts on growth, fiscal and trade positions. The and the discovery of new reserves. Gabon has ex- significant drop in oil prices observed in April 2025, perienced a strong increase in nonrenewable natural following shifts in global trade policy, represent an im- wealth, thanks to its vast hydrocarbon reserves. The portant risk that exacerbates the expected decline in CWON database includes data on oil (98 percent of oil production in Gabon. Gas reserves play a smaller nonrenewable natural wealth), gas (2 percent) and role, but efforts are ongoing to better utilize gas as- gold (0.1 percent). Hydrocarbon reserves peaked at sociated with oil production, reducing gas flaring and around 380 million tons in the late 1990s, due to in- generating gas-based electricity and fuel. vestments in oil exploration since discovery in the 1960s. However, due to the natural depletion of ex- Another key component of Gabon’s natural wealth isting oilfields, oil wealth started to gradually decline are its abundant mineral resources. Gabon’s total since the late 1990s (Figures 39a and 39b). Gabon’s wealth computed in the CWON database would be hydrocarbon wealth per capita declined by 28 percent higher if all of its rich mineral resources, including between 1995 and 2020, or -1.11 percent every year.54 manganese, iron ore, and gold, were added this da- tabase. Currently, when it comes to minerals, the da- Efforts have been implemented to reduce reliance tabase includes mostly gold reserves in Gabon, which on oil, but the oil sector continues to play a critical declined from USD235 million in 1995 to USD43 mil- role in Gabon’s economy. The oil sector’s contribu- lion in 2020. Yet, other mining sectors are being de- tion to GDP decreased from 39 percent in 1995 to 15 veloped, based on massive reserves. Manganese is percent in 2020. Yet, oil remains central for Gabon, already a large sector, as Gabon is the world’s fourth contributing to 24 percent of public revenues and largest producer in 2020, with 13 percent of global 60 percent of exports in 2020. Challenges persist production.55 Its reserves, estimated at 61,000 tons, to diversify the economy and reduce vulnerability to amount to four percent of global reserves.56 Gabon oil, a finite resource with volatile prices. Fluctuations has recently launched iron ore exploitation at Belinga, in global oil prices and demand can have profound one of the world’s largest deposits, to be followed by Figure 39. Nonrenewable natural capital in Gabon and peer countries a. Nonrenewable wealth evolution, b. Gabon’s oil reserves in million tons, in billion real chained USD, 1995-2020 1995-2020 50 1,400 1,200 40 1,000 30 800 20 600 400 10 200 0 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Oil Natural gas Gabon Angola Eq. Guinea Congo, Rep. Sources: CWON 2024 and OPEC. Note: CWON data on manganese wealth is not available. 54 Data on Gabon’s mineral resources are not available in the World Bank’s Changing Wealth of Nations database. 55 United States Department of the Interior. 2024. U.S. Geological Survey. 2020 Minerals Yearbook. Manganese. September. 56 African Minerals Development Center. Green Mineral Profile: Manganese. Accessible at: https://www.africangreenminerals.com/miner- als/manganese. 47 a second major site, at Baniaka. Artisanal gold mining (4 percent), and fisheries (0.3 percent). Forests’ shares is also being promoted. As oil reserves may dwindle, are higher in Gabon than in many other heavily for- minerals could contribute significantly to Gabon’s nat- ested countries, highlighting their crucial importance ural capital, if properly managed. (Figure 40b). The main sources of forest wealth in 2020 were timber (44 percent), non-wood products Renewable natural capital (25 percent), water retention services (20 percent), Gabon’s renewable natural capital remained stable recreation, hunting and fishing (10 percent), and man- from 1995 to 2020, with forests, agricultural land, groves (0.4 percent). and fish stocks accounting for USD29 billion in 2020 (in real chained 2019 USD). The CWON data- Strong conservation efforts allowed Gabon to in- base assesses renewable capital wealth by estimating crease the value of forests and most other renew- the value generated by key natural assets, such as able natural capital, but worrying trends indicate a hydropower systems, agricultural land, fisheries, and depletion of fish reserves. Thanks to conservation forests. Forest-based goods and services include tim- and sustainable management efforts, the value of re- ber, non-wood products, recreation, hunting and fish- newable natural capital increased by 2 percent from ing, and water retention by forests. The value of car- 1995 to 2020 (Figure 40a). The value of timber and bon retention by forests is not included in the CWON other forest-based goods and services decreased only database but is discussed in the next section of this slightly, by 1 percent, in line with the low deforestation chapter. Gabon benefits from vast endowments of rate. At the same time, Gabon experienced increas- renewable capital, with well-preserved forests, man- es in the values of agricultural land (+9 percent) and groves, rivers, and marine ecosystems, which hold hydropower generation (+24 percent), due to invest- extensive biodiversity. Forests formed the bulk of re- ments implemented in line with the PSGE. However, newable natural capital (72 percent) in 2020, followed fish stocks experienced a depletion, decreasing by 25 by agricultural land (23 percent), hydropower energy percent from 1995 to 2020, which can compromise Figure 40. Renewable natural capital in Gabon and peer countries a. Renewable natural capita evolution, b. Renewable natural capital components in Gabon in billion chained 2019 USD, 1995-2020 and peer countries, 1995-2020 30.0 100 30.0 25.0 80 25.0 20.0 20.0 60 15.0 15.0 40 10.0 10.0 5.0 20 5.0 0 0 0 da ia n p. R n lia az il da ia es bo CA oo es 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 na Re tra na 1995 on Ga , er s Br on Ca go Au Ca Ind n Ca m Ind Co Hydropower energy Hydropower energy Agricultural land Agricultural land Fisheries Fisheries Mangroves Mangroves vices Water retention services Forests, water retention services roducts Forests, non-wood forest products Forests, non-wood forest products and shing Recreation, hunting and shing services Forests, recreation, hunting and shing Forests, timber Forests, timber Source: CWON 2024. 48 the authorities’ goals to boost food security and jobs. underpin the subsistence and income of rural popula- Moreover, in per capita terms, renewable natural capi- tions, while also providing critical habitat for globally tal decreased by 51 percent over 1995-2020, equal to endangered species. Yet GDP and other conventional an annual decrease of 2.04 percent. indicators neglect forests’ important economic contri- butions, which could raise risks of overuse, underin- vestment in conservation, and distortions in long-term SECTION III. Gabon’s forest ecosystem development planning.58 service accounts: Measuring the conditions and economic contributions This section synthesizes Gabon’s forest ecosys- of Gabonese forests tem service accounts for the 2000–2020 period. Drawing on the System of Environmental-Economic Gabon’s immense forest wealth forms the eco- Accounting – Ecosystem Accounting (SEEA-EA) logical and economic bedrock of its development framework,59 this section analyzes transformations strategy yet remains chronically undervalued in in forest extent, condition, biodiversity, service flows, fiscal planning and national accounts. With 23.6 and asset values. Gabon’s unique status as a high million hectares of forests, over 90 percent of its ter- forest, low deforestation country presents both an ritory, Gabon anchors the western flank of the Congo opportunity and a paradox: global public goods are Basin, a global stronghold for carbon sequestration, preserved by the country but without adequate com- biodiversity protection, and hydrological regulation.57 pensation from the international community. A robust Thanks to its extensive and well-preserved forests, ecosystem accounting could help bridge this gap by Gabon is one of the world’s few net carbon sinks, ab- informing more equitable and sustainability-aligned sorbing more carbon dioxide than all emissions pro- fiscal frameworks and by ensuring preparedness and duced in the country. Gabon’s forests store billions data availability to benefit from global climate financ- of tons of carbon, help stabilize rainfall regimes, and ing mechanisms, which, while still incipient, have been Photo credit: Francisco Ahued. 57 World Bank. 2025 (unpublished). Forest Ecosystem Accounts for Gabon 2000-2020 – Draft Report: December 2024. 58 Stiglitz, Sen, and Fitoussi 2009; Dasgupta 2021. 59 The data on forest ecosystems conditions, asset values, and economic contributions, that are presented and analyzed in this section, are based on a recent World Bank study assessing forest ecosystem accounts in Gabon, which provides details on the methodology and analytical approaches underlying the findings: World Bank. 2025 (unpublished). Forest Ecosystem Accounts for Gabon 2000-2020 – Draft Report: December 2024. Washington, DC: World Bank. 49 increasing. Detailed data on forest coverage, condi- Figure 41. Deforestation rate in Gabon and tion, trends, and forest services’ values is produced selected countries in the Congo Basin, at the provincial level, providing policy makers with percentage of forested area spatially disaggregated information that could inform subnational policies and solutions to local challenges. 4 3.1 Backed by strong conservation policies, 3 Gabon’s forests remain well-preserved 2 but face signs of growing pressures along 1 transport and economic development 0 corridors -1 -0.6 Gabon has maintained an extraordinary forest -2 -1.9 cover, yet pressures from logging, agriculture, -3 -2.6 -2.8 and infrastructure development are intensifying, -4 Cameroon Equatorial Republic Gabon CAR especially along corridors. As of 2020, Gabon’s Guinea of Congo ecosystems consisted mainly of lowland tropical for- ests, which made up about 84 percent of the territo- Source: World Bank. 2025 (unpublished). Forest Ecosystem ry. Other land types included savannahs (7 percent), Accounts for Congo Basin countries. swamp forests (4 percent), and other natural lands like mangroves, submontane forests, wetlands, and cover, forest connectivity, and landscape natural- water systems (3 percent). Anthropogenic lands, ness, even if lower conditions occur in specific such as forest farm mosaics, plantations, and urban locations. Over 80 percent of lowland forests, and areas, covered one percent of the territory.60 Overall 95 percent of submontane forests, was classified as deforestation rates, at around 0.6 percent per year in pristine. Yet, areas around Libreville and along small- 2000-2020, remained low in Gabon compared to most er towns, villages and roads tend to present lower regional peers (Figure 41). In comparison, the aver- conditions. Swamp forests near Port-Gentil and man- age regional deforestation rate stood at 1.8 percent groves along the Atlantic coast still remain relatively over this period.61 Yet, degradation was more perva- intact but are vulnerable to coastal development and sive in certain specific locations. Between 2000 and climate-induced salinization. Satellite-derived data 2020, forest-farm mosaics and other human-modified show drops in canopy height and biomass density systems such as plantations and built-up areas ex- in logged concessions and peri-urban zones. Natural panded by about 70 percent, with new roads and ur- forest regrowth has not kept pace with degradation in ban expansion fragmenting primary forests. Human- some areas, suggesting potential shifts in ecological modified areas are small, having expanded from 0.7 function and service delivery in those locations. percent of the territory in 2000 to 1.3 percent in 2020, about 335,650 hectares. The strongest increases in Logging concessions dominate Gabon’s forest use anthropogenic land uses were in plantations (+386 landscape, with legal logging concentrated in low- percent), croplands (+168 percent), and built-up areas land forests and illegal encroachments increas- (+57 percent). At the same time, Gabon lost 0.6 per- ingly evident near transportation routes. Provinces cent of its forests, from 90.8 percent of the territory in such as Woleu-Ntem, Moyen-Ogooué, and Ngounié 2000 to 90.2 percent in 2020, or 23.7 million hectares host extensive logging zones, many of which are sus- (Figure 42). tainably managed (Figure 43). Over the years, Gabon has put in place strong policies to incentivize sus- Overall, forest conditions were still near pristine tainable forestry, imposing certification requirements by 2020, with strong levels of tree height, canopy and adjusting taxes to the environmental impact of 60 Please consult the Annex for a definition of forest ecosystems and other types of ecosystems in Gabon. 61 FAOSTAT. 50 Figure 42. Change in ecosystems’ extent, in thousand hectares, between 2000, 2010 and 2020 100 50 0 -50 -100 -150 es t es t t) d ah nd n aic d n up es er or or ea lan nn tla at io os lan at io lt- ov at f f n-p d a e t m p t u i gr w d n e (no oo Sa v W ge Cr o Pla n B an en w lan nta st W ve f ar m M Op o re s e - Lo fo ar st bm mp Sp re Su a Fo Sw 2000-2010 2010-2020 Source: World Bank. 2025. Forest Ecosystem Accounts for Gabon 2000-2020. of forest agents overseeing vast territories. Mangrove Figure 43. Forest concessions and protected deforestation, though minor in area, is locally severe in areas in Gabon, 2020 estuarine areas near Libreville, and linked to informal settlement expansion, which can pose important chal- lenges due to mangroves’ key value for flood defense. Ecological pressure is concentrated along trans- port and economic corridors, such as roads and the Nkok special economic zone. These corridors exhibit heightened fragmentation, biodiversity loss, and carbon release. While localized, their impacts are amplified by challenges in land use coordination and limited cross-sectoral governance and spatial planning enforcement. For instance, despite the im- plementation of sustainable forest management poli- cies, challenges remain in fighting illegal logging and enforcing urban planning. Building up infrastructure, including power systems, roads and public buildings and services, is critical to develop trade and economic activities. Yet, unplanned urbanization can cause not only environmental damages but can also have strong negative consequences for human health and for the Source: World Bank. 2025. Forest Ecosystem Accounts for Gabon 2000-2020. economy, for instance, as urbanization expands into areas exposed to floods and landslides. forestry. For example, land area fees are higher in for- est concessions without certification.62 However, en- Gabon’s forests retain globally significant biodiver- forcement and compliance remain uneven, with chal- sity, but habitat degradation and species decline lenges in monitoring capacity and a limited number are accelerating in some areas. Gabon is endowed 62 World Bank. 2024. Gabon Economic Update. 51 with extremely rich biodiversity. As of 2020, forest eco- Economic services, drivers and trade-offs systems preserved an estimated 83 percent of their in forest use original biodiversity, down from 87 percent in 2000.63 Biodiversity levels are still high, but face a mounting The total value of forest ecosystem services erosion, reflecting the effects of logging, poaching, and in Gabon nearly doubled from CFAF22.6 tril- landscape fragmentation. Iconic species such as the lion (USD39.4 billion) in 2000 to CFAF43.2 trillion western lowland gorilla, forest elephants, and the grey (USD75.1 billion) in 2020. The Forest Ecosystem parrot face mounting threats despite strong legal pro- Accounts for Gabon study assessed the value of tections and recent investments and plans to promote Gabon’s forest ecosystem services, indicating that ecotourism. Human-wildlife conflicts are also a major over 99 percent of the value of such services consist- challenge, involving difficulties in preventing elephants ed in carbon retention, estimated at USD74.7 billion from destroying plantations and menacing rural pop- (Box 3). However, forest ecosystems also provide im- ulations. Tackling this issue is a key priority to ensure portant economic value in the form of wood resources, food security and protect farmers’ incomes and lives. bushmeat, wild plants, soil retention, and ecotourism. In addition, a deeper investigation of other important Mangroves and swamp forests exhibit higher in- services could result in an increase in the value of ser- tactness but face mounting risks from both direct vices provided by Gabon’s forests, such as forests’ and indirect pressures. While being carbon-dense role in water preservation. and biologically rich, in general these types of forest tend to receive less focus of protection efforts and suf- Thanks to diversification policies and sustainable fer from weak baseline data and monitoring systems. forestry incentives, Gabon’s timber sector gener- Investments in biodiversity accounting, including spe- ates significant revenues and employment, with cies-based tracking and improved habitat condition timber extraction valued at USD157 million in 2020, metrics, are essential for an effective management of even as its environmental impact is being lowered. biodiversity, and could also contribute to access to Over time, development plans such as the Emerging international biodiversity financing options. Gabon Strategic Plan (PSGE) adopted in the 2010s, set Photo credit: Francisco Ahued. 63 Forest extent and condition are used as proxy for assessing biodiversity intactness in Gabon’s landscapes over time. Comprehensive assessments of biodiversity metrics (such as species richness) at the Congo Basin scale are scarce, and no data with a suitable resolution and time series was available for use in the forest condition accounts. 52 out incentives for sustainable local wood processing, in official data and data from the International Tropical with a ban on log exports, promotion of environmen- Timber Organization. Between 2000 and 2020, wood tal certifications in forest concessions, and creation of exports decreased by 56 percent in volume, but their special economic zones. Supported by these policies, values were stable, thanks to the near elimination of a local wood processing industry emerged, becom- log exports and substantial increase in exports of pro- ing the largest private sector employer. Wood product cessed wood (Figure 44). Yet, most exports consist in exports, dominated by the Okoumé species, were the primary processing goods, such as sawn wood, ve- third main export in 2024, after oil and manganese. neer, and plywood, indicating challenges to advance Thus, while logging levels decreased over time, local into higher processing levels, such as furniture. value added increased. Formal timber extraction vol- umes decreased by 18 percent from 2000 to 2020, In addition to commercial timber, wood resources reaching 1.78 million tons per year in 2020, or CFAF91 are also used by local populations for construc- billion (USD157 million – Table 8). Informal logging re- tion poles and as a fuel source, valued at around mains a challenge64 but is assessed to be relatively USD16 million in 2020. While 90 percent of wood ex- small in Gabon, as evidenced by the small differences traction was directed to the timber industry in 2020, Figure 44. Export values and volumes, 2000 vs. 2020 Export values (USD millions) Export volumes (million cubic meters) 600 3.0 600 500 2.5 500 400 2.0 400 300 1.5 300 200 1.0 200 100 0.5 100 0 0 0 2020 2000 2020 2000 2020 n wood Logs Sawn wood Veneer Logs Sawn wood ood Plywood Furniture, moldings, etc. Venner Plywood Source: International Tropical Timber Organization. Data on secondary processed products’ export volumes not available. Table 8. Major drivers of forest use and degradation in Gabon Driver Forest Type Affected Economic Return (2020) Beneficiaries Timber extraction Lowland forests CFAF 90.5 billion Formal forestry sector Mainly lowland forests, Fuelwood CFAF 9.4 billion Local households swamp forests, mangroves Mainly lowland forests, Poles CFAF 0.25 billion Local households swamp forests, mangroves Infrastructure expansion Lowland, swamp forests n/a Households and firms Agricultural expansion Degraded lowland forests n/a Farmers Source: World Bank. 2025. Forest Ecosystem Accounts for Gabon 2000-2020. 64 William F. Laurance, et al. 2006. Challenges for forest conservation in Gabon, Central Africa, Futures, Vol. 38, Issue 4. 53 Photo credit: shutterstock.com other uses such as fuel and construction poles, have hunting is concentrated in the northern province of been increasing (Table 8). The use of wood to gen- Woleu-Ntem, and this decline could be associated erate fuel made up nearly 10 percent of total timber with lower availability of wild animals or changes in resources, or nearly 200,000 tons in 2020 (equal to consumption patterns. However, it could also be due CFAF9 billion, or USD16 million). Access to clean to underestimation, as forest extent and conditions are cooking technologies is high in urban areas, but rural used as proxies for non-wood resources. Meanwhile, areas are lagging. In 2022, 96 percent of the urban wild fruit and vegetable harvesting in Gabon experi- homes had access to clean cooking tools, against 49 enced substantial growth, increasing by 59 percent percent of rural homes.65 As a result, wood extraction from 2000 to 2020, reaching 1,400 tons in 2020. Many for fuel has declined in the more urbanized Estuaire forest plants play an important role in local nutrition, province, while increasing in peri-urban locations in such as the nkumu and odika. Wild plant food har- other provinces, with a total 93 percent increase in vesting is concentrated in northern and central areas, overall fuelwood between 2000 and 2020. Moreover, around major settlements like Libreville, Franceville, wood extraction for poles, which are used in house- Mouila, and Oyem, and along major routes. hold construction, also increased, by 96 percent. In 2020, pole harvesting reached 12,000 tons, about Carbon retention generates most of the value 1 percent of wood resources (CFAF0.25 billion, or from Gabon’s forests, at about USD75 billion in USD436,000). 2020, greatly surpassing all other ecosystem ser- vices, even if this value is largely not captured by Gabon’s forests are also an important provider of the country. Gabonese forests are well-preserved, wild non-wood resources such as bushmeat, wild thanks to sustainable forestry policies, a high urban- food plants, which, valued at about USD20 million ization rate, and low population density. They are a in 2020, are significant for local economies. The crucial asset for climate change mitigation, absorb- total value of bushmeat and wild plant harvesting in ing vast quantities of carbon (carbon sequestration) 2020 was estimated at CFAF11 billion (USD20 mil- and storing it in biomass and soils (carbon retention). lion), mostly from bushmeat, estimated at 4,590 tons Forests in Gabon stored an estimated 8 billion tons in 2020, a 56-percent decline since 2000. Bushmeat of carbon in 2020, equivalent to 29.8 billion tons of 65 World Bank. World Development Indicators database. 54 CO2 (Table 9). Lowland forests hold 96 percent of this the value generated by carbon retention in Gabon in- stock, but mangroves and swamp forests had the creased by 91 percent from 2000 to 2020. This vast highest per-hectare carbon densities. On average, amount, over three times higher than Gabon’s GDP, mangroves retained 607 tons of carbon per hectare in represents a massive economic loss. The country pro- 2020, considerably higher than the 342 tons per hect- vides a significant service to the planet but interna- are retained in lowland forests. Despite minor declines tional financing mechanisms remain limited and still in forest extent and conditions, net carbon sequestra- unable to compensate it for these services (Box 3). tion increased by about six percent over 2000-2020, While the global value of Gabon’s forests has been due to tree growth. Carbon retention increased both widely discussed, local values are just as important. in volumes and value (Table 9). In monetary terms, The Congo Basin forests help regulate precipitation carbon retention services were valued at over CFAF and cool the regional climate in Gabon and its neigh- 43 trillion (USD75 billion) in 2020 (Box 3). Due to the bors by 3-4 degrees Celsius.66 This is critical to con- increase in carbon retention volumes by growing trees tain temperatures, benefiting livelihoods, crops, and and the higher value of carbon retention services, rain patterns.67 Box 3. Estimating the values of carbon retention services and forest assets Carbon retention services: The report on Forest Ecosystem Accounts for Gabon estimates the value of carbon retention services using the social cost of carbon (SCC), a theoretical metric that quantifies, in monetary terms, the damages caused by the release of an additional ton of carbon dioxide (CO₂) into the atmosphere. These damages include adverse impacts on human health, agricultural productivity, increased flooding, wildfires, and sea level rise. A key challenge in assessing the values of carbon retention services is selecting an appropriate carbon price to quantify avoided climate damages. The report uses the SCC estimates from Nordhaus (2017), a widely recognized metric that quantifies the economic damages associated with carbon dioxide emissions. The following avoided global social cost of carbon were used (prices in 2024 USD): 2000: USD29 per tCO2e; 2010: USD39 per tCO2e; 2020: USD52.5 per tCO2e. In Gabon, carbon retention services generated an estimated annual value of CFAF43 trillion (USD75 billion) in 2020. While the SSC provides a valuable benchmark for estimating the global value of avoided climates damages, it remains a theoretical indicator, used primarily for policy analysis and cost-benefit assessments. In contrast, valuing carbon retention using market prices reflects the actual transaction recognized in carbon trading, of- fering countries a tangible pathway to generate income through carbon markets and initiatives like REDD+. Distinguishing between the two approaches is essential to setting realistic expectations of support that could be received by forest-rich countries like Gabon, in terms of building the institutional and technical capacity needed to access markets and benefit from emerging carbon market opportunities. Forest assets: Forest ecosystem services yield annual benefits, derived from the asset stock. Gabon’s ecosys- tem accounting distinguishes between service flows (e.g., tons of carbon retained, wood harvested per year) and asset values (the present value of these flows, based on flows to be generated over an asset’s life). Using SEEA principles, a 100-year time horizon and a discount rate of 4.5 percent to calculate assets’ net present val- ue, Gabon’s forest asset value in 2020 was estimated at CFAF 950 trillion (USD 1.6 trillion), mainly from carbon retention. The asset value of carbon retention services is estimated in terms of the climate change damages avoided, or “social cost of carbon (SCC)”. The SCC is the discounted present value of the cumulative impact over time of one additional ton of carbon dioxide emitted into the atmosphere today over its residence time in the atmosphere. In Gabon the total forest ecosystem asset values almost doubled since 2000, reaching CFAF 498 trillion (USD824 billion), mainly thanks to higher prices and demand for carbon retention services. Yet, a minimal share of this value has been realized domestically, through support from CAFI and other agencies. 66 Nogherotto, R., et al. 2013. Impact of Congo Basin deforestation on the African monsoon. Atmos. Sci. Lett, 14. 67 An analysis of climate-related shocks to Gabon’s infrastructure, human and natural capital is presented in the upcoming Gabon Country Climate and Development Report (CCDR). 55 Box 3. Estimating the values of carbon retention services and forest assets (continued) Gabon forest ecosystem asset values, 2020 Asset value Value per ha Net value change, Ecosystem Type Extent (ha) (CFAF billion) (CFAF million/ha) 2000-2020 (%) Lowland Forest 22,200,729 889,083 40,047 38% Submontane Forest 120,787 4,497 37,229 38% Swamp Forest 1,172,073 40,431 34,495 36% Mangroves 191,777 13,584 70,831 36% Forest-Farm Mosaics 100,962 1,967 19,478 98% Total 23,786,328 949,560 40,416 (average) 38% Source: World Bank. 2025. Forest Ecosystem Accounts for Gabon 2000-2020. Table 9. Physical and monetary values of forest ecosystem services in Gabon Monetary values of annual forest ecosystem service flows (in constant 2024 CFAF billion) Service Type 2000 2010 2020 Wood 115 70 100 Wild resources 6 9 11 Sediment retention 53 69 105 Carbon retention 22,466 31,199 43,008 Tourism 20.2 16.4 12.7 Total 22,660 31,363 43,237 Physical estimates of annual forest ecosystem goods and services Resource Type 2000 2010 2020 Wood (thousand tons/year) 2,265 1,546 1,990 Wild resources (thousand tons/year) 11 16 6 Sediment retention (million tons/year) 1,390 1,389 1,384 Carbon retention (million tons/year) 7,656 7,911 8,115 Ecosystem-based tourism (CFAF billion) 20.2 16.4 12.7 Source: World Bank. 2025. Forest Ecosystem Accounts for Gabon 2000-2020. Wood includes wood harvested for timber, fuel, and poles. Wild resources includes bushmeat and wild plant foods. Soil and sediment retention, valued at USD183 dredging costs and the shortening of lifespans of res- million in 2020, are key for erosion control and ervoirs and other infrastructure, impacting hydropow- water quality, but sediment retention capacity is er and drinking water quality. Sedimentation in rivers decreasing. Forest ecosystems play a stabilizing role can also exacerbate flooding and impact sewerage as vegetated areas trap sediments, reducing the ef- systems. In Gabon, sediment retention services were fects of soil erosion on water systems. Trees anchor the second largest value provided by forest ecosys- soil in their roots and their canopies and ground cov- tems, after carbon retention, valued at CFAF105 bil- er intercept and absorbs rainfall, reducing the risk of lion in 2020 (USD183 million). Yet, in physical terms, soil being washed way into rivers, lakes or reservoirs. from 2000 to 2020 sediment retention remained sta- This reduces costs associated with erosion, such as ble (Table 9). Due to forest loss and degradation, the 56 amount of sediments exported to watercourses over provides insights into the sustainability of Gabon’s that period was estimated to have increased by eight long-term growth with respect to its wealth as- percent. Thus, by 2020, an estimated 721,500 tons of sets. Drawing on information from forest ecosystem sediment reached water systems, which remained low services accounts and wealth accounts, this study compared to many countries in the region. analyses the values of (a) forest ecosystem services that are not captured in GDP and (b) adjusted esti- Finally, tourism activities are largely concentrated mates of GNI and savings that consider changes in a in coastal and central areas, particularly in pro- country’s wealth. tected national parks, but the value generated by tourism, at nearly USD22 million in 2020, has been Assessing the value of ecosystem services declining. During the 2000-2020 period, the value of that are not captured in GDP nature-based tourism, focused on forests and wildlife, Timber, wildlife, and tourism services are cap- is estimated to have declined from CFAF20.2 billion tured by both GDP and forest ecosystem services to CFAF12.7 billion in constant 2024 CFAF (USD22 accounting, but values reported may differ for a million).68 This is a worrying trend, considering how variety of reasons. GDP measures typically include tourism can contribute to jobs, incomes, and for- some forest ecosystem services like timber, wildlife, est conservation, and how this decline impacts the and ecotourism, but methodological differences can Government’s plans to rely more strongly on tourism impact results. The forest ecosystem accounts esti- as a diversification strategy. It would be key to identify mate resource rents (percentage of gross output val- solutions to the causes for the underperforming tour- ue) rather than the national accounting approach of ism industry, which may include inadequate transport value added. Also, informal logging can impact esti- and accommodation infrastructure. mates. For example, timber extraction in Gabon was estimated by forest ecosystem services accounts at Links between Gabon’s national USD134 million in real terms in 2020 (0.9 percent of wealth, forest services accounts, and GDP), comparing to USD214 million (1.4 percent of macroeconomic indicators GDP) in the national accounts. An analysis of the relationship between national A share of sedimentation and carbon retention wealth, forest ecosystem services, GDP and GNI services indirectly impacts GDP in the form of in- Photo credit: alamy.com 68 Based on estimates from World Travel and Tourism Council on tourism’s contribution to GDP. Adjustments were made to exclude other types such as business travel and visits to friends and family, and to determine the share of nature-based tourism. For more details on the methodology, please consult: World Bank. 2025. Forest Ecosystem Accounts for Gabon 2000-2020. 57 puts to the production of goods and services that additionality, and leakage.70 In addition, some for- are captured in GDP. For example, sedimentation est-rich countries face challenges in measuring, ver- retention services are important for hydropower gen- ifying, and selling carbon credits. This means that eration while forests’ climate regulation contributes to Gabon and other Congo Basin countries will keep agricultural productivity. However, the value of these providing the world with key carbon retention services services for the domestic economy, at USD89 million, for free, unless substantial global reforms and a much was a minimal share of the value created for the world. stronger cooperation and commitments are in place, Carbon retention services generated a massive value, aiming at achieving concrete results. which mostly accrues to the rest of the world. Adjusting gross national income and In 2020, the social cost of carbon retention ser- net national savings for changes in vices was valued at USD 57 billion in real terms, national wealth but the actual market value of carbon is likely to be Adjusting traditional macroeconomic indicators to significantly lower, due to limited demand, verifi- account for changes in wealth due to depreciation, cation challenges, and the absence of a well-func- natural capital depletion, or human capital accumu- tioning market for carbon retention from standing lation can provide a new perspective on the state forests. In comparison, Gabon’s real GDP stood at of national wealth. In the 1990s, the World Bank in- USD15 billion in 2020, underlying the massive value troduced two indicators, adjusted net savings (ANS) generated by carbon retention. Yet, even if Gabon has and adjusted net national income (ANNI), to integrate made considerable progress, being recognized as a environmental degradation and resource depletion leader in climate policies, it will capture little of this into national accounts. ANS measures the true rate at value unless a proper mechanism for direct payments which a country is saving for the future. It is estimated is set up, such as under REDD+ or a well-function- as gross national savings (or gross investment, given ing Article 6 framework under the Paris Agreement.69 the savings-investment identity) minus depreciation Major challenges at the global level make it difficult to of produced capital, depletion of subsoil assets (fos- foresee meaningful evolutions in the near future. First, sil fuels and minerals) and timber resources, and air there is an important distinction between estimated pollution damages to human health, plus a credit for values and market prices. The value of carbon reten- expenditures on education. ANNI, on the other hand, tion services is estimated based on the social cost of adjusts GNI by subtracting the depreciation of pro- carbon (the cost of climate change damages avoid- duced capital and natural capital depletion, offering a ed thanks to carbon retention), so it is different from clearer picture of sustainable income (Table 10). While the market value obtained in global carbon markets, ANS focuses on savings and investments, ANNI looks which can be much lower. Also, global carbon mar- at income flows and erosion of natural and physical as- kets are underdeveloped, and there are limited buy- sets. A negative ANS and ANNI signals that country is er commitments and concerns about permanence, consuming more than it is investing or saving. Table 10. Adjusted Net Savings (ANS) and Adjusted Net Income (ANNI) calculations Gross National Income (GNI) Gross National Savings (Deduct: Consumption of fixed capital) (Deduct: Consumption of fixed capital) Net National Income Net National Savings (Deduct: Consumption of natural capital) (Add: Expenditure on education) Adjusted Net National Income (ANNI) (Deduct: Natural resource depletion (Deduct: pollution damage) Adjusted Net Savings (ANS) Sources: CWON and Gabon forest ecosystem services accounts report. 69 World Bank. 2023. Article 6 of the Paris Agreement establishes the framework for countries to voluntarily cooperate in achieving their climate targets through carbon markets and non-market approaches, including trading emissions reductions. 70 ERC Finance working group report (2023). 58 Figure 45. Adjusted Net Savings, percent of SECTION IV. Building a prosperous gross national savings future: How can Gabon protect and expand its national wealth and make the most of forest ecosystem services? 60 0.09 Strong structural reforms are urgently needed to 40 reverse the worrying trend of declining per capi- 20 ta wealth, setting Gabon on a higher development 57 0 path. If current trends continue, Gabon would keep losing national wealth per person, disposing of fewer 20 assets and resources to generate incomes for its peo- 40 ple. To build a more sustainable national wealth, capa- 15 60 ble of improving well-being over time without deplet- GDP+ 2000 2010 2020 ing the country’s wealth, Gabon needs more effective Education expenditure Gross savings management of natural resources, and targeted and alue CFC Natural resource depletion strategic investments in infrastructure, human capital r Gabon Carbon and pollution Adjusted net savings and economic diversification. These are crucial to en- damage suring that both its assets base and GDP per capita can increase substantially over time. Source: Gabon forest ecosystem services accounts report. CFC = Consumption of fixed capital. Physical capital In Gabon, adjusted net savings was positive in To address the challenges preventing a stronger 2000 and 2010, but turned negative in 2020. When build-up of infrastructure, governance reforms are Gabon’s GNI per capita is adjusted based on ANNI, it key for more efficient and effective public invest- decreases to 70 percent of total GNI per capita, indi- ments. As the country faces strong fiscal constraints, cating that income generation came largely from con- amid prospects of declining oil revenues, subdued sumption of oil and other natural resources. This dif- global oil prices, and high rigid spending pressures ference is higher in Gabon comparing to the regional and UMIC averages. Furthermore, ANS was positive between 2000 and 2010 (4 percent and 9 percent, re- spectively), suggesting that during this period Gabon was accumulating savings, which can be attributed to the commodity boom experienced in the beginning of the century. However, ANS then shift to -3.0 percent in 2020, due to lower savings and increased cost of capital depreciation caused by lower investment fol- lowing the oil price shocks (Figure 45). Institutional policies are thus needed to reduce budget cyclicality and allow the country to build fiscal buffers and stabi- lize investments, and also to promote a higher rate of savings and investment over the long term. Photo credit: alamy.com 59 from debt service and other sources, investing effi- climate like credit and labor skills, creating the right ciently is crucial. Rising energy needs and inadequate conditions for firms to set up and expand local pro- transportation are among the top challenges to firms cessing activity. A strong private sector engagement and households and constitute a Government priori- can help identify and address key bottlenecks. Other ty. During the political transition in 2023-2025, public policy options include reinforcing the legal framework investments in infrastructure expanded considerably. for public-private partnerships to attract more private A road fund, the Fonds autonome national d’entretien capital and reduce the fiscal burden of investments. et d’investissement routier (FANEIR), is being planned to improve road maintenance. Going forward, reforms Human capital such as decrees implementing the new public invest- To enable its people to fully contribute to growth, ment law are key to achieve more transparency and Gabon needs to increase, improve, and better efficiency, and improving project selection, prioritiza- target public spending on education and skills. tion and monitoring, agency coordination, and spend- Recently, the Authorities have been expanding spend- ing controls. Setting clear timelines, performance ing on education, reinstating scholarships for second- indicators, and accountability mechanisms can help ary schools based on students’ performance, at an ensure that projects are completed on time and with- expected cost of CFAF83 billion, or 3 percent of total in the budget. Integrating all public investments into revenues.71 Also, close to 200 classrooms were report- the budget would also be essential for better internal ed to have been built during the transition, in 2023- controls, planning, and public oversight. Key actions 2025. Yet, spending on health and education is lower include prioritizing spending categories and efforts to in Gabon compared to its peers. To build a stronger mobilize non-oil revenues, as discussed in chapter 1. human capital, the country needs to only to reinforce spending on key social areas, but also to improve tar- Also, to be sustainable and stable, investment should be aligned with national priorities and fiscal capacity and embedded in a countercyclical bud- getary policy. Countercyclical policies are needed to minimize the impacts of economic downturns and oil price shocks, preventing abrupt cuts in infrastructure spending. Setting clear, realistic and credible fiscal rules, such as a target for the non-oil primary balance, can help decouple the budget from oil cycles. Rules need to be enforced in practice, such as fiscal tar- gets and contributions to FGIS, the sovereign wealth fund, which should receive a share of oil revenues. This could protect public finances and help stabilize spending on public investment. Meanwhile, better conditions are needed to stimu- late private investment, which is crucial for growth. Most investment done in Gabon comes from the pri- vate sector, but reforms are needed to diversify invest- ments into non-oil sectors, enabling firms to expand industries and participate more actively in infrastruc- ture development. To foster private investment in pro- duced capital, which would contribute to growth and jobs, reforms should focus on creating more enabling conditions for firms, improving access to energy and Photo credit: alamy.com transportation, among other aspects in the business 71 Government of Gabon. 2025. Budget Law. 60 geting and allocation. It is key to redirect spending technologies can also leave countries with stranded to primary education and teacher quality and make assets (Box 4). But evolving global markets can also it less regressive and more aligned with job opportu- bring great opportunities for Gabon’s mineral resourc- nities.72 Incentives and controls could be developed es, like manganese, gold, and iron ore. However, as to attract and retain qualified teachers, making them minimal amounts of manganese and other miner- available across the territory and providing more eq- als are currently processed before exports, reforms uitable access to quality education. Investments in should focus on improving conditions for local pro- school infrastructure are needed to ensure adequate cessing. There are also opportunities to tap into gas facilities, especially for rural schools, of which 0.4 reserves to expand gas-based energy, reducing gas percent have functional toilets and 14.5 percent have flaring and increasing the availability of affordable electricity.73 Furthermore, training centers are being energy.77 built to improve labor skills, offering training on wood, ICT, construction, and other sectors. Expanding them To manage and utilize extractive revenues more ef- and engaging with the private sector is crucial to align fectively, a strategic approach is necessary to en- training with market needs. sure that resources contribute more to sustainable economic growth and diversification. Policies to Investing more and better in public health could enhance extractive revenues management, promote help Gabon create a healthier and more productive economic diversification, and ensure environmental labor force. Upon President Oligui Nguema’s inaugu- sustainability can help avoid risks of a depletion or ration in May 2025, access to health services was cited unsustainable exploitation. As Gabon was recently re- as a key social expectation for the new Government, admitted into the Extractive Industries Transparency which aims at reforming the health system.74 Health Initiative (EITI) in early 2025, it will be key to imple- clinics are being built, and investments in digitaliza- ment EITI recommendations and ensure transparent tion to support health services are underway,75 but management of natural resources. This includes fully access to health remains unequally distributed. In publishing information on oil and mining contracts, addition to increasing health spending, it would be including data on beneficial ownership and amend- critical to better target, allocate and align spending ments. As done by other countries, Gabon could also with the epidemiological profile and demographic dis- include the forestry sector into its EITI engagement, tribution, for instance by targeting preventive care and currently limited to hydrocarbons and mining. It could primary healthcare facilities, and adopting innovative also enforce data sharing for key state actors in ex- techniques such as performance-based payments.76 tractives sectors, such as by publishing audited SOE Furthermore, investing in emergency preparedness is financial statements. needed to enable the health system to respond to ep- idemics and other shocks. Renewable natural capital Renewable natural resources can be leveraged to Nonrenewable natural capital diversify the Gabonese economy and help reduce Natural resources are a cornerstone of Gabon’s the reliance on finite extractive sectors, yet poli- wealth, but their sustainability is a concern, as cies need to carefully consider trade-offs involved over-reliance on nonrenewable resources can lead in a country’s development path. Gabon’s natural to economic volatility and environmental degrada- resources are a major asset, that can be used to gen- tion. Changes in global demand, energy structure and erate local industries. With prospects of declining oil 72 World Bank. 2018. Gabon Public Expenditure Review. 73 World Bank. 2025 (unpublished). Gabon Country Climate and Development Report (CCDR). 74 L’Union. Discours d’Investiture du Président de la République. May 3, 2025. 75 The World Bank’s eGabon Project aims at improving timeliness and availability of information to support public health services delivery and management, with eHealth applications and services, and ICT services. 76 World Bank. 2018. Gabon Public Expenditure Review; World Bank. 2025 (unpublished). Gabon Country Climate and Development Report (CCDR). 77 Reform options on the gas sector are discussed in detail in the upcoming Gabon Country Climate and Development Report (CCDR). 61 Box 4. How can countries avoid being left with stranded assets in an evolving global environment? Oil and gas are still expected to play a major role in the global economy over the coming decades. Yet, the sec- tor is becoming more competitive, with new drilling technologies reducing extraction costs in the United States and other regions. Emerging efficiency standards, batteries, and infrastructure for electric vehicles create un- certainty in oil demand. Changes in policies, institutions, social norms, and technologies can cause a sustained reduction in global demand for fossil fuels, leaving countries unable to use natural resources or physical capital built to serve those industries. Research highlights the risk of stranded assets in fossil fuel-dependent coun- tries, with changes limiting the economic role of these sectors and resulting in ‘unburnable carbon’. Cust and Manley (2018) assess the carbon wealth of nations and the risks posed by technological advances and climate policies, arguing that fossil fuel-rich countries risk losing the value of their underground wealth and may be adopting policies that increase their exposure to these risks. A global low-carbon transition poses specific risks for oil-rich countries due to their reliance on narrow reve- nues and employment base. They are highly vulnerable to climate shocks but also highly exposed to global mit- igation efforts, with a global decline in fossil fuel industries and related value chains impacting local develop- ment. If due to the aforementioned factors global hydrocarbon demand declines, there is a significant risk that CEMAC countries’ hydrocarbon related assets could see significant declines in their values, leaving them with important assets stranded. This includes natural resources in the ground but also physical capital, like power and transport infrastructure serving resource extraction or fuel-based power generation, and human capital, due to workers’ training and skills acquired in those sectors. At present, much of foreign and private investment in CEMAC currently goes into extractive sectors. An estimated 30 percent of private investment in Gabon was directed to the oil industry in 2024. Depending on an evolving and uncertain global scenario, investment in the hydrocarbon sector could further decline. This adds urgency to diversification needs. To mitigate risks, investments should prioritize sectors that stimulate regional development, such as infrastructure for agricultural trade. Diversification should focus on broadening a country’s asset portfolio, including people and skills, agriculture and forestry, underground assets, and fac- tories and infrastructure. Successful strategies must balance between managing carbon-intensive assets and transitioning to knowledge-intensive growth models based on broader asset types and supported by strong in- stitutions. In countries like Gabon, strategies should adapt to different extractive sectors, leveraging the rising global demand for minerals needed for energy transition. Many of these are abundant, providing great oppor- tunities if resources are well-managed. Sources: Peszko, G, et al. 2020. Diversification and Cooperation in a Decarbonizing World: Climate Strategies for Fossil Fuel–Dependent Countries. Climate Change and Development. Washington, DC: World Bank; Cust, J., and D. Manley. 2018. “The Carbon Wealth of Nations: From Rents to Risks.” The Changing Wealth of Nations 2018: Building a Sustainable Future, edited by G. M. Lange, Q. Wodon, and K. Carey, 97–113. Washington, DC: World Bank. wealth, policies to promote sustainable, productive, natural, human, and physical capital. Policies should and high value-add activities based on renewable re- aim at promoting growth and improving living condi- sources will be key to enable Gabon to make the most tions without massively depleting natural resources, of its natural resources. As countries follow a devel- helping preserve and accumulate Gabon’s wealth for opment path, trade-offs can be necessary between future generations. development needs and potential impact on forests and other natural resources. The expansion of infra- To attenuate pressure on forests while promoting structure, agriculture, and forestry are necessary for a robust and inclusive growth path, policies are higher growth but would imply some level of reduc- needed to enhance local value added in key sec- tion in natural capital. However, uncontrolled and un- tors relying on renewable capital. With the appro- sustainable exploitation of natural capital can deplete priate conditions and an improved institutional envi- assets, compromising future well-being. In order to ronment, the country could make the most of its vast minimize the environmental impact of growth, it would potential in several sectors, such as timber, other for- be important to seek a balanced approach between est-based products, agriculture and fisheries, but also 62 a strong forest-based economy, that could support crops and farmers. Measures to reduce animal-human eco-tourism, knowledge centers, and pharmaceutical conflict could include wildlife corridors, early-warning industries. systems, electric fences, acoustic and light-based deterrents, and insurance schemes to compensate On forestry, ongoing efforts to promote local value farmers.79 added, improve regulations and wood traceability should be accelerated. As mentioned, Gabon cre- Gabon’s unique cultural and natural heritage is an ated a large local wood processing industry, adding opportunity to develop ecotourism, which would value and jobs, but faces challenges to promote wood require investments in infrastructure and market- processing at higher levels. Initiatives underway to ing, and a strong support strategy. Gorillas and for- digitalize wood tracing and logging licensing could est elephants are abundant in Gabon, which has been help advance transparency and sustainability. A broad promoting ecotourism over the years. Having one of ongoing reform plan in this area is a review of the for- the richest biodiversity in Africa, Gabon could model estry code, which provides an opportunity to embed itself on Costa Rica, or Rwanda, where a strong ec- stronger regulations, enforcement and control mech- otourism sector focused on mountain gorillas gener- anisms, and incentives for sustainable development ates important revenues for local communities (Box in forestry. For example, Gabon is the only country in 6).80 However, effectively realizing this opportunity CEMAC which has a bonus-malus system, incentiviz- ing sustainable forestry with lower land area fees for certified forest concessions. As discussed in the pre- vious Gabon Economic Update and upcoming CCDR, this bonus-malus approach and other climate-smart fiscal policies could be expanded to promote sustain- able forestry, but also agriculture.78 Increasing productivity in agriculture and agrofor- estry can help generate more jobs, incomes, and better food security, while minimizing environmen- tal impacts. For Gabon’s rural population, at about 10 percent of total population, agriculture is an important source of income. Its national development plan aims at using food production to boost food security and incomes. While this could generate important bene- fits, ensuring sustainable land use is key to avoid risks of tensions with forest preservation. Agricultural de- velopment should focus on boosting yields (through enhanced fertilizer-use and other techniques) and leveraging the forest through agroforestry (Box 5). Similarly, increased support to sustainable fisheries is needed to enable Gabon to achieve its goal of sus- tainably recreating its tuna processing industry. Also, a sustainable, socially fair, and human-centered ap- proach to environmental conservation requires envi- Photo credit: alamy.com ronmental policies to be aligned with the protection of 78 World Bank. 2024. Gabon Economic Update; World Bank. 2025 (unpublished). Gabon Country Climate and Development Report (CCDR). 79 Shaffer, L.J., Khadka, K.K., Van Den Hoek, J. and Naithani, K.J., 2019. Human-elephant conflict: A review of current management strategies and future directions. Frontiers in Ecology and Evolution, 6. 80 Maekawa, M., et al. 2013. Mountain gorilla tourism generating wealth and peace in post-conflict Rwanda. Natural Resources Forum, Vol. 37, No. 2. 63 Box 5. The third way - a strategic approach to agriculture in highly forested nations Despite a common notion that densely forested countries face a choice of expanding agriculture or protecting forests, there is a third way, which aim at maximizing agricultural and forest ecosystem values. Step 1: Close yield gaps. With fast growing populations and the need to diversify exports, countries need to ramp up food production. In Gabon, one in five people are undernourished, an issue exacerbated by high living costs, dependence on imported foods, and high trade costs. Across the Congo Basin, agricultural yields tend to be low, often far below what is achievable for a plot of land. Yields such as cassava, maize, yams, and bananas are stagnant or declining since the 1960s, and are lower than the SSA averages. For example, in 2023 Gabon produced 7.8 kilograms of bananas per hectare, about half of the average yield in SSA. Factors causing low yields include challenges in soil management practices, lack of fertilizer use, and selection of less suitable crops. Rather than increase output by expanding into virgin forests, improving agricultural productivity can help countries get more food with current agricultural land available and better preserve forests, benefiting from critical forest services for agriculture, such as nutrient cycling, rainfall regulation, climate regulation, and protection against extreme weather. Step 2: Pursue agroforestry. In conjunction with productivity-enhancing policies, countries could explore options to foster agroforestry, where some forest cover is kept alongside crops or animal husbandry. Trees are a useful technology – they boost soil health, prevent wind and water erosion, shield against extreme tempera- tures that can stress crops and offer protection against natural hazards.81 Many of these services enhance yields and increase prices through certification labels. Step 3: Monitoring and enforcement. Forests are a critical ecosystem that can drive new development mod- els, leveraging high value-add opportunities in sustainable wood and agricultural production, as well as tourism and related services (e.g. a forest-based knowledge economy with educational centers, research hubs, etc.). To avoid an unsustainable use of forests, monitoring infrastructure that combines satellite-based measurement with on-ground enforcement, is necessary. Source: FAO. FAOSTAT database. requires81investment in basic infrastructure such as a comprehensive tourism destination if the right in- tourist lodges, transportation, and public services; frastructure is developed and policies are adopted to properly trained staff including English-speaking tour facilitate tourism and address misperceptions. operators and security personnel; and navigation tools such as field guides, maps and trail networks.82 It also Gabon can also capitalize on its forests, biodiver- requires fixing important misconceptions,83 as even sity, local traditions and knowledge by establish- if Gabon is stable, Central Africa can be perceived ing educational and research centers, enhancing to be unstable as some countries experience armed local human capital and fostering a forest-based conflicts. Finally, eco-tourism operators reported fac- knowledge economy. These centers could focus on ing roadblocks related to public transport, immigra- areas like ethno-botany, conservation, and genetics, tion policies, and other challenges.84 With its forests, ensuring that this knowledge benefits Gabon. The biodiversity, mountains and beaches, Gabon can be commercialization of forest plants into new drugs is 81 Mbow C, et al. 2014. Agroforestry solutions to address food security and climate change challenges in Africa. Current Opinion in Environmental Sustainability; Awazi NP, Tchamba NM. 2019. Enhancing agricultural sustainability and productivity under changing climate conditions through improved agroforestry practices in smallholder farming systems in sub-Saharan Africa. African Journal of Agricultural Research, 14(7); Jose S. 2009. Agroforestry for ecosystem services and environmental benefits: An overview. Agroforestry Systems, 76; Nair PKR, Garrity D. 2012. Agroforestry - The Future of Global Land Use. Advances in Agroforestry, 9(1). 82 E.D. Coates, A.J. Coates, A Preliminary Feasibility Study for Ecotourism Development in Gabon, Report to Wildlife Conservation Soci- ety, Bronx, NY, 2004. 83 William F. Laurance, et al. 2004. Challenges for forest conservation in Gabon, Central Africa, Futures, Volume 38, Issue 4. 84 BBC (7 February 2012). Gabon: Surfing hippos, lacking tourists. https://www.bbc.com/news/world-africa-16686544. 64 Box 6. Developing forest-based tourism: the case of Rwanda Mountain gorilla tourism in post-conflict Rwanda has produced significant gains for local communities. Creative revenue sharing models ensured that different groups benefited from spillover effects creating local jobs in veterinary science, forest stewardship, security services, and conservation studies. Over time, the value of mountain gorilla tourism has increased, reflecting a gradual progression into high-end tourism, and serving as a testament to the unique comparative advantage that Rwanda has secured by being one of the few habi- tats in the world to offer this premium experience. Knowledge-sectors are also emerging with the creation of educational and research institutions based on mountain gorillas. Nature-based tourism is a major source of jobs, foreign exchange earnings, and incomes for Rwanda. The country had been attracting more than a million visitors per year from 2009-2019, and tourism earnings represent 20 percent of total exports. In 2019, tourism exports amounted to USD458 million, or 4.4 percent of GDP. The bulk of it, about 80 percent of leisure and business visitors in Rwanda, is centered on nature-based tourism, creating many jobs. For every USD1 million coming from nature-based tourism, an estimated 1,328 new jobs could be created. With an estimated popula- tion of 35,000 gorillas, comparing to about 350 gorillas in Rwanda, Gabon holds a strong potential for tourism, bringing incomes and jobs. Sources: World Bank. 2023. Rwanda Economic Update: Making the Most of Nature Based Tourism in Rwanda; Maekawa, M. et al. 2013. Mountain gorilla tourism generating wealth and peace in post-conflict Rwanda. Natural Resources Forum, Vol. 37, No. 2. an option value which is wholly unquantified due to system is not created, countries will not be able to the unknown market potential in undiscovered uses capture these values, increasing incentives for unsus- of forest products. Gabon’s forests have shown tainable uses and environmental degradation. promise in developing new drugs, as seen during the COVID-19 pandemic, when local plants helped Achieving reliable revenues from ecological assets Gabonese patients, spurring new research into their also requires robust legal frameworks, to enhance potential for medical use.85 readiness to participate in carbon markets, enable credible carbon accounting and ensure that ben- Gabon and other-densely forested countries need efits reach forest communities. Important reforms a sizable and well-functioning global financing are underway in Gabon, including the creation of a system to be able to transform carbon retention Green Economy Development Agency (AGADEV), a services into tangible benefits. Estimating the value Sovereign Carbon Initiative, and a Sovereign Carbon of carbon retention services is a first step, that allows Registry in January 2025. This initiative, based on policymakers, civil society, and the general public to the ‘polluter pays’ principle, requires air and mari- quantify and target a necessary compensation from time transport companies to report emissions and the international community. Gabon’s status as a high contribute to a fund, to be used for environmental forest, low deforestation country demands recognition preservation and sustainable development projects.86 through scaled-up international finance. But despite The country also has an ongoing collaboration with the recent growth of climate funds and other green CAFI and other partners to enhance carbon market financing initiatives, such a system is still lacking and readiness. Enhanced technical support and capacity progress remains uncertain, leaving Gabon unable to building need to be provided to strengthen institutions fully capture the value of its carbon services. It is thus in Gabon and other Congo Basin countries, through crucial for the international community to put in place stronger global coordination and efforts. When con- fair, concrete, and adequate means to reward, com- sidering climate financing strategies, Gabon should pensate, and support countries like Gabon for their weigh the social, environmental and economic ben- efforts to preserve forests. If a better global financing efits of climate financing against costs and uncer- 85 Boukandou Mounanga, et al. 2024. Medicinal plants used in Gabon for prophylaxis and treatment against COVID-19-related symp- toms: an ethnobotanical survey. Frontiers in Pharmacology, 15. 86 Gabon Sovereign Carbon Initiative (https://gabon-carbon-solutions.com/en/). 65 tainties. Options to help it achieve a fairer and higher shed light on other important issues for development, share of benefits from carbon retention services in- such as forests’ contribution to water quality, and on clude engaging more strongly in global negotiations to economic aspects of forest preservation such as ur- develop fairer REDD+ mechanisms, stronger cooper- ban and rural productivity. Low labor productivity in ation and financial support to tackle climate change,87 urban sectors could be associated with stronger reli- and the use of nature-based sovereign financing tools ance on natural assets, for instance in peri-urban ar- such as sustainability-linked bonds.88 eas, increasing pressure on forests. At the national and subnational levels, Gabon’s Ideally, a comprehensive development strategy forest ecosystem accounts can be used to inform should combine efforts to promote different sec- fiscal planning and economic policies. Producing tors, making the most out of sustainable activities and updating data on forest ecosystem services is a in agriculture, timber and forest products, and first step to improving decision-making by rendering tourism. The national development plan (PNDT) iden- it more evidence based. It provides policymakers and tifies these sectors as having great potential for growth society as a whole with a broader, fuller picture of the and jobs. It also advocates for strong climate policies, wealth and services generated by forests. National seeing climate financing as a potential opportunity wealth assessments, including key components such to generate more revenues in the future. Yet, beyond as forest ecosystem services, can inform develop- sector promotion policies, Gabon’s forestry-based ment strategies, budget discussions, and broader firms need better operating conditions to thrive and dialogue with civil society, the private sector, and de- contribute to income generation and wealth accu- velopment partners. Forest ecosystem accounts can mulation. In fact, the reforms and actions needed to be used to design spatially differentiated policies to achieve Gabon’s aspirations are valid across sectors. promote sustainable use of forests, that contributes From agriculture to wood to eco-tourism, firms need to more local development and jobs while ensuring reliable infrastructure, logistics, skilled workers, and a that resources remain durable. They can also inform business-friendly regulatory environment, to develop reforms in subsidies and other types of support for their activities. Focusing on key enabling reforms and agriculture and forestry, fiscal transfers, and nation- building strong basic conditions for growth and job al wealth assessments. Deeper analyses could also creation should remain a top priority (Table 11). Photo credit: stock.adobe.com 87 Article 6 of the Paris Agreement enables international cooperation to tackle climate change and to unlock financial support for develop- ing countries. More information on the implementation status and updates on climate financing and cooperation under the Paris Agree- ment is provided by the United Nations Framework Convention on Climate Change. 88 Climate financing options are discussed in the Gabon Country Climate and Development Report (CCDR). 66 Table 11. Policy options to build and preserve Gabon’s national wealth Time Policy Area Action Responsible Entities Frame Building Mobilize more domestic revenues by digitalizing tax Ministry in charge of economy Short to sustainable invoices, ensuring compliance with property taxes by all medium public finances properties, and rationalizing tax incentives. term to sustain investment Prioritize public spending, aligning it with fiscal space, Ministry in charge of economy; Short to in human and and improve spending efficiency by implementing the sectoral ministries medium physical capital new public investment law, reinforcing governance term and transparency of state-owned entities and public procurement, and improving control over human resources. Set and enforce clear and credible targets for fiscal Ministry in charge of economy; Short consolidation and for a countercyclical fiscal policy, sectoral ministries term in order to reduce fiscal, liquidity and debt pressures, while prioritizing targeted social measures to protect the most vulnerable. Integrating Invest in national wealth accounting, including forest Ministries in charge of economy, Medium national wealth ecosystem services, to regularly produce and use planning, environment, forests, term accounting data as evidence to support national, subnational, and other sectoral ministries; in fiscal and sectoral development strategies, budget discussions, Economic, Social and development and public dialogue. Environmental Council; National planning Climate Council; Green Economy Development Agency (AGADEV) Building a Increase and better target spending on education, Ministries in charge of economy, Short stronger training, health, and social protection. health, education, social affairs term human capital Redirect spending to primary education and teacher Ministry in charge of education Short to quality and develop incentives and controls to attract and training medium and retain qualified teachers. term Invest in training and engage with the private sector to Ministry in charge of education Short better align skills with market needs. and training term Investing in Strengthen physical capital by improving project Ministries in charge of economy, Short to infrastructure selection, prioritization, and monitoring, and by focusing planning, energy, transport, public medium on key areas such as transportation and energy. works term Consider financing options such as public-private Ministries in charge of economy, Short to partnerships to alleviate fiscal costs and strengthen planning, energy, transport, public medium private sector participation in infrastructure expansion. works term Managing Build on Gabon’s Extractive Industries Transparency Ministries in charge of economy, Short to nonrenewable Initiative (EITI) membership validation, adopting oil, mining medium natural capital EITI recommendations to advance transparency and term control over oil and mining revenues. Mitigate risks associated with stranded assets by Ministries in charge of economy, Short to prioritizing investments in sectors that stimulate planning, transport, public works, medium regional development, such as infrastructure for agriculture term agricultural trade.  Making the Expand a bonus-malus approach and other fiscal Ministries in charge of economy, Short most of forest policies to promote sustainable wood, agriculture, and planning, forests, agriculture term ecosystems agro-forestry, focusing on increasing local value added and other and jobs, while contributing to conservation goals. renewable natural capital Advance digitalization of wood traceability and forestry Ministry in charge of forests Short permits, and other actions to improve transparency and term controls in the wood sector. 67 Table 11. Policy options to build and preserve Gabon’s national wealth Time Policy Area Action Responsible Entities Frame Making the Promote ecotourism with investments in infrastructure, Ministries in charge of economy, Short to most of forest regulatory policies, promotional campaigns. planning, tourism medium ecosystems term and other renewable Promote knowledge centers to explore medicinal Ministries in charge of economy, Short to natural capital plants and other forest-based wealth sources. planning, forests, higher medium education term Improve agricultural productivity by enhancing soil Ministry in charge of agriculture Short to management practices, increasing fertilizer use, and medium selecting suitable crops to sustainably boost yields. term Improve carbon accounting and legal frameworks and Ministries in charge of economy, Short to pursue international advocacy for sizable, adequate planning, environment, forests; medium global compensation mechanisms; consider climate Green Economy Development term financing options such as sustainability-linked bonds. Agency (AGADEV) Photo credits: alamy.com; shutterstock.com; stock.adobe.com 68 Annex 1. Data issues in estimating wealth in due to a lack of advanced exploration, limited mining CEMAC infrastructure, and insufficient documentation on the informal or artisanal sector. The World Bank follows internationally recognized valuation principles from the System of National For the valuation of renewable natural capital, such as Accounts (SNA) and the System of Environmental- agricultural land, timber, marine fish stocks, and re- Economic Accounting (SEEA) to evaluate all wealth newable energy, the same NPV-RVM approach used components. However, estimating wealth requires re- for non-renewable natural capital is applied, with one liable and complete data, which are not always avail- important difference: for non-renewable resources, able for many CEMAC countries. the asset’s lifetime is determined by the ratio of current production to current reserves, while for renewable re- To evaluate capital product stocks, the CWON fol- sources, it is assumed to be 100 years. In a country lows the guidelines of the SNA and best international with a high forest density like Cameroon, the difficulty practices, such as those of OECD countries, by using often lies in estimating the revenues and costs of tim- the perpetual inventory method. This method requires ber products, as well as agricultural land rental rates. data on investments, asset lifetime, and depreciation This is further complicated by illegal log exports and patterns. Data on capital stocks, compiled using this the limited control of the state over the forestry sec- approach, are available for most countries through the tor. A major limitation of the CWON evaluation is the Penn World Tables (PWT). However, to ensure accu- non-valuation of carbon retention services, which are rate data, it is necessary to maintain a continuous re- particularly crucial for the forest in Cameroon, with its cord of the capital stock by adding new investments peatlands and carbon absorption capacity, offering a and subtracting depreciation at each period, which global service but not yet sufficiently compensated. also requires regular censuses. This approach is not This lack of valuation prevents full recognition of the always consistently applied by statistical institutions ecological importance of Cameroon’s forests and hin- in the CEMAC region. ders the necessary funding for their preservation. CWON adopts the Net Present Value – Resource Rent The CWON uses the lifetime income approach de- Valuation Method (NPV-RVM)89 approach to measure veloped by Jorgenson and Fraumeni (1989, 1992a, the value of a country’s stock of fossil fuels, minerals, 1992b) to estimate human capital wealth, which is or metals based on the present value of expected rent generally the largest wealth asset across countries. flows until the resource is exhausted. Resource rent According to this approach, human capital is esti- is calculated by subtracting extraction costs from the mated as the present value of the future labor income generated revenues. The nominal values of assets for that could be generated over the lifetime of the wom- non-renewable natural capital are estimated from var- en and men currently living in a country. The imple- ious public databases, such as those from the IEA, mentation of this approach requires data from various the US Geological Survey, and the United Nations sources, including population by age and gender from Statistical Division, as well as licensed sources like the UN’s World Population Prospects, employment Rystad Energy and Wood Mackenzie. CEMAC coun- and labor force participation data from the ILO, surviv- tries have significant oil and gas reserves that are reg- al rates from the Global Burden of Disease Study, as ularly evaluated by global energy companies and or- well as education and earnings profiles from the UN ganizations, providing more reliable data. Established and harmonized household and labor force surveys of and ongoing investments in the energy sectors are the World Bank. often prioritized by governments. However, for miner- als and metals, data are often incomplete, particularly Source: CWON, 2024. 89 The NPV-RVM approach calculates the present value of future resource rents to estimate the wealth derived from natural assets. https://datacatalog.worldbank.org/int/search/dataset/0042066. 69 2. Improving national wealth Nations database, a country’s human capital is as- estimation: using Törnqvist volume sessed using a monetary measure-based approach. index and real chained USD In this approach, human capital wealth is estimat- ed based on the present value of future earnings Previous editions of CWON, prior to 2024, calculat- for its labor force, including employed workers and ed wealth trends at constant prices using the GDP self-employed individuals. This estimation meth- deflator, a common practice in national accounting. od thus assesses the future labor incomes to be However, this method has limitations, as it considers generated by the current working population, thus only domestic production flows and excludes import- viewing human capital as an asset that generates ed goods. For example, in oil-dependent economies income streams over time. It takes into account fac- such as Gabon or Congo, GDP deflators are influ- tors such as population size and structure, lifespan, enced by oil prices but may not reflect the cost of im- education attainment, and labor market experiences. ported consumer goods such as vehicles, machinery, The CWON data on human capital wealth comple- or electronics. This creates distortions in analyzing ments the World Bank’s Human Capital Index (HCI), real wealth trends and capturing the real purchasing which is an indicators-based approach to measuring power of national wealth. human capital. The HCI measures the level of pro- ductivity that a child born today can expect to attain To improve accuracy, CWON 2024 uses the Törnqvist when reaching working age. It is based on key health volume index to measure changes in total wealth and (child and adult survival, child mortality, and stunt- its components. In this approach, the relative changes ing) and education (expected years of school and in the physical assets of a nation, such as the size of harmonized test scores) indicators. These different its fish stocks or the number of workers in the labor measures help provide a comparative picture of a force, are weighted by their relative economic impor- country’s human capital, which is a primary driver of tance (as measured by their shares in nominal wealth). sustainable growth and poverty reduction; increases For instance, the volume of timber assets is measured in human capital are associated with higher earnings in hectares, while the volume of oil assets is measured for individuals, increased national income, and stron- in barrels. Since these assets are expressed in differ- ger social cohesion. ent units, the Törnqvist index enables their combina- tion by weighting each asset’s change by its value Source: CWON 2024. share, removing unit constraints or difficulties in asset comparisons from calculations. 4. Forest and other ecosystems in Gabon The index is chained to a base year (2019), and all values are expressed in 2019 chained U.S. dollars, re- Forest ecosystems found in Gabon include: moving inflation and price-related distortions. These § Lowland forests, which are forests in low alti- chained values can’t be directly compared with other tude, commonly below 700m above sea level. indicators like GDP or investment, which are usual- § Submontane forests, located in a transition ly in constant dollars. However, CWON also reports zone between montane and lowland forests, nominal values of national wealth components in typically starting from around 700-1100 m current USD, enabling comparisons with other mac- above sea level. roeconomic indicators. This new methodology en- § Swamp forests, which are seasonally and per- hances the accuracy of wealth measurement, making manently inundated forests that occur along it a valuable tool for assessing long-term economic rivers and poorly drained areas. sustainability. § Mangroves, which are coastal forests made up of salt-tolerant trees and shrubs. 3. Estimating the value of a country’s human capital wealth Other natural ecosystems in Gabon are: § Savannahs, a mix of scattered trees/shrubs Different methods can be used to measure human and open grasslands with distinct wet and dry capital. In the World Bank’s Changing Wealth of seasons. 70 § Wetlands, which are areas where land is sat- urated with water throughout the year or seasonally. 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