Gabon is a small equatorial country of just over one million people on the Atlantic coast of Africa. It became independent in 1960. Reflecting its colonial heritage, Gabon's economic, linguistic and cultural ties with France remain strong.
Gabon continues to have one of the highest per capita income figures in sub-Saharan Africa - over US$ 4,000, but its income distribution is extremely skewed and almost half of its citizens live below the poverty line. The economy remains heavily dependent on oil, manganese and timber extraction. Attempts to diversify the economy have met with little success, since investment is hindered by high labor costs, various non-tariff trade barriers, modest incentives in the investment code, and the policies of promoting stability and the status quo above conditions of transparency, competition and change.
The discovery of oil in the late 1970's led to boom-and-bust development in the 1980's, marked by the rapid growth of debt. The January 1994 devaluation of the CFA franc had psychological effects in Gabon, but beyond the simple sticker shock of price rises, the parity change did not translate into the kind of positive competitive boost which occurred in other former French West African colonies. Gabon's major exports of oil and minerals are denominated in dollars and have little domestic value-added, so they were largely unaffected. Gabon has little industry and agriculture is very developed (70 percent of its food is imported), so the classic scenario for devaluation-led growth was largely irrelevant.
Oil production did increase, but this was the result of the decision to disregard Gabon's OPEC quota in order to generate more revenue (Gabon subsequently left OPEC in June 1996). Gabon is currently producing around 400,000 barrels of oil per day. After the CFA franc devaluation, imports dropped (particularly in the category of consumer goods) and merchants tended to replace French goods with others from Asia or South Africa. French products did regain some ground in the following years and France remains the largest importer into Gabon.
The United States is Gabon's biggest customer, buying over US$ 1.9 billion in crude oil in 1996. It is the country's second biggest supplier (after France), with almost 10 percent of the market - mostly selling heavy equipment for the oil services industry, to forestry and mining concerns, and for public works. Japan is in third place, supplying mainly four-wheel-drive vehicles and electronic equipment. The European Union (taken together as the eleven previous core countries minus France) chalks up about 28 percent of the market.
Gabon's infrastructure, built mostly during the boom years of 1974-78 and 1982-85, is fairly sophisticated when compared to that of its neighbors, but does not extend far outside of Libreville, the capital city. The roads outside the capital are poorly developed and inadequately maintained. Telecommunications, air and rail transport, and oil refining are managed by inefficient parastatals targeted for privatization. Telecommunications is an area with potential for U.S. exporters.
For more information, do not hesitate to contact us