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Gabon - Economy

Gabon's economy is dominated by oil. Economic conditions in Gabon weakened throughout 2015 and into 2016 as the government adjusted its budget to account for the steep drop in oil prices. Gabon rejoined OPEC on July 1, 2016.

In 2012, Gabon produced a total of 242,000 barrels per day (bbl/d) of crude petroleum compared with 251,000 bbl/d in 2011 and 252,400 bbl/d in 2010. The Organization of the Petroleum Exporting Countries estimated Gabon’s total proven crude oil reserves to be 2 billion barrels. In 2012 oil revenues comprised roughly 46% of the government’s budget, 43% of gross domestic product (GDP), and 81% of exports. Oil production has been declining rapidly from its high point of 370,000 barrels per day in 1997. Some estimates suggest that Gabonese oil will be expended by 2025. In spite of the decreasing oil revenues, planning has only recently begun for an after-oil scenario.

Gabonese public expenditures from the years of significant oil revenues were not spent efficiently. Overspending on the Transgabonais railroad, the oil price shock of 1986, the CFA franc devaluation of 1994, and low oil prices in the late 1990s caused serious debt problems that still plague the country.

Gabon earned a poor reputation with the Paris Club and the International Monetary Fund (IMF) over the management of its debt and revenues. At World Bank and IMF insistence, the government embarked in the 1990s on a program of privatization of its state-owned companies and administrative reform, including reducing public sector employment and salary growth, but progress was slow. Successive IMF missions criticized the government for overspending on off-budget items (in good years and bad), over-borrowing from the Central Bank, and slipping on the schedule for privatization and administrative reform. However, in September 2005, Gabon successfully concluded a 15-month Stand-By Arrangement with the IMF. Another 3-year Stand-By Arrangement with the IMF was approved in May 2007.

Because of the financial crisis and social developments surrounding the death of President Omar Bongo and the elections, Gabon was unable to meet its economic goals under the Stand-By Arrangement in 2009. Consultations with the IMF are ongoing. The Bongo Ondimba administration has voiced a commitment to work toward an economic transformation of the country but faces significant challenges to realize this goal.

Gabon's oil revenues gave it a strong per capita GDP of $8,600, extremely high for the region. On the other hand, a skewed income distribution and poor social indicators misrepresent the situation if only GDP is taken into account. The richest 20% of the population receive over 90% of the income while about a third of all Gabonese live in poverty.

The economy is highly dependent on extraction of abundant primary materials. Prior to the discovery of oil, logging was the pillar of the Gabonese economy. Today, logging and manganese mining are the other major income generators. Recent explorations point to the presence of the world’s largest unexploited iron ore deposit. For many living in the countryside without access to employment in extractive industries, remittances from family members in urban areas or subsistence activities provide income.

Many foreign and local observers have consistently lamented the lack of diversity in the Gabonese economy. Various factors stymied additional industries - a small market of about 1 million people, dependence on French imports, inability to capitalize on regional markets, lack of entrepreneurial zeal among the Gabonese, and the fairly regular stream of oil "rent". Further investment in agricultural or tourism sectors is complicated by poor infrastructure. The small processing and service sectors that do exist are largely dominated by a few prominent local investors.

The emerging Gabonese economy is based on the domestic conversion of these raw materials, as explained by President Ali Bongo Ondimba in his agenda for social change: "The Industrial Gabon component will draw on the domestic conversion of our raw materials into goods. For it is true that no country can grow solely by exporting raw materials. The dynamic trend started with the ferro-manganese production will thus be consolidated, thanks to the exploitation of new manganese deposits, the construction of new railway sidelines and the exploitation of iron from Belinga. In the long term, Gabon has the vocation to become a metallurgy centre, with a dynamic fabric of SMEs exporting iron-based products to the whole sub-region and beyond. Similarly, a petrochemicals centre will develop, with the conversion of hydrocarbon resources and the production of fertilizer."

Despite anticipated lower oil revenues, the government is expected to continue to invest in health in 2015 through the 2011-15 National Health Strategy (Plan National de Développement Sanitaire, PNDS). The plan aims to improve the overall governance of health care, reduce infant and maternal mortality, and invest in infrastructure. Some of Gabon's achievements are noticeable, particularly with regard to its health insurance coverage, with the National Insurance and Social Welfare Fund (Caisse Nationale d’Assurance Maladie et de Garantie Sociale, CNAMGS) launched in 2007. Initially focused on providing insurance for the most vulnerable citizens, the programme was extended in 2010 to cover government workers, and again in 2013 to cover private sector employees, who were previously registered under the National Social Security Fund.

African uranium mines became nuclear places, the role of African ore in shaping the transnational uranium market, placing African uranium at the center of nuclear history reveals how the scientific, technological, political, or occupational designation of a material or activity as "nuclear" was often a matter of contention. The stakes of that designation were high, and remain so, with profound consequences for the legal and illegal circulation of uranium and other radioactive materials. The Maboumine carbonatite complex was reportedly prospective for niobium, tantalum, and uranium.

Oklo natural reactors

The natural reactors found at the Oklo uranium mine in Gabon constitute a unique investigation setting as spontaneous fission reactions occurred two billion years ago. At the time of “early” Earth, element 92 was so highly enriched in uranium-235 (the isotopic fraction was about 32 percent) that it might have posed a severe threat for a “criticality accident” had it not been diluted by vast quantities of neutron absorbing matter.

In May 1972 a worker at a nuclear fuel–processing plant in France noticed that uranium ore samples from the Oklo deposit in Gabon, uranium 235 constituted just 0.717 percent. Elsewhere in the earth’s crust, on the moon and even in meteorites, uranium 235 atoms make up 0.720 percent of the total. In 1953 George W. Wetherill of the University of California at Los Angeles and Mark G. Inghram of the University of Chicago had noticed that some uranium deposits might have once operated as natural nuclear fission reactors. Today even the most massive and concentrated uranium deposit cannot become a nuclear reactor, because the uranium 235 concentration, at less than 1 percent, is just too low. But this isotope is radioactive and decays about six times faster than does uranium 238, so the fissile fraction was much higher in the distant past. For example, two billion years ago (about when the Oklo deposit formed) uranium 235 must have constituted approximately 3 percent, about the level of modern artificially enriched uranium that fuels most nuclear power stations.

Fifteen natural fission reactors have been found in three different ore deposits at the Oklo mine in Gabon, West Africa. These are collectively known as the Oklo Fossil Reactors. The natural reactors formed in Oklo fissioned more than 10 tons of uranium-235 over several hundred thousand years and created 4 tons of plutonium before shutting themselves down. Over the following 2 billion years, the plutonium disappeared, but the peculiar isotopic composition of leftover depleted uranium gave the secret away. The Oklo reactors have been extensively studied due to potential similarities to proposed long-term high level nuclear waste repositories.