Country FilesCentralGabon Country Profile 2015: Live by oil, die by oil

Fri,17Nov2017

Posted on Tuesday, 24 November 2015 09:00

Gabon Country Profile 2015: Live by oil, die by oil

By The Africa Report

altCampaigning for Gabon's 2016 presidential elections has already begun. President Ali Bongo Ondimba has launched a series of anti-corruption investigations to improve his governance credentials and is seeking to improve his weak performance in delivering on promises like building 5,000 new housing units per year.

Former AU Commission chairman Jean Ping, who resigned from the ruling Parti Democratique Gabonais in February 2014, is looking to unite the opposition.

The Union Nationale opposition party – banned by the government but still operating – has lacked direction during the long illness of leader André Mba Obame and a divided opposition has little hope of dislodging Bongo in the single-round presidential election.

A falling oil price, however, is the biggest threat that the government now faces.

Ping is highly critical of the government, launching a series of heavily publicised and wide-ranging attacks against endemic corruption and the lack of infrastructure, but he has not proposed a strong platform of policies of his own.

With few oppositionists in positions of authority, Ping and his allies have a long way to go to build up a national or regional base upon which to challenge Bongo.

Foreigners targeted

The opposition has targeted presidential cabinet director Maixent Accrombessi for what they say is his disproportionate influence on the running of the government machinery.

Accrombessi is originally from Benin and some oppositionists have been using xenophobic rhetoric about the 'légion étrangere' of foreign advisers around Bongo. For his part, Accrombessi seems to be stepping somewhat out of the spotlight. The government's audits of past spending revealed large waste and fraud.

Current and former regime barons are being investigated, but oppositionists and lawyers' representatives express extreme doubts about the impartiality of the judiciary. Some officials have begun returning money in order to avoid prosecution.

Bongo insists that he has recognised the mistakes in attempts to improve electricity, water and housing and is now pulling out the stops before 2016.

Bongo's programme targets economic diversification, and he has set a deadline of 2020 for the country to stop exporting raw materials, be they timber, oil or minerals.

altThe mining sector is getting more attention with progress on the construction of a metallurgical complex in Moanda. Mining company Comilog produced its first tonne of silicomanganese from that site in August 2014.

Iron, gold and other mining projects are moving forward but the flagship Belinga iron ore mine in north-eastern Gabon awaits the results of more studies before new investors are brought in for the mine and associated rail, power and port projects.

Diversification plans stalled

India's Tata Chemicals pulled out of Singaporean company Olam's planned fertiliser project in Port-Gentil in 2014, meaning there is no clear timeline for building the plant.

The government and South Korea's Samsung have discussed plans for a new refinery in Port-Gentil, but it, too, is unlikely to get started soon.

While the government talks up diversification, oil is the main game in town. The reduction in the oil price in late 2014, from more than $100 in August to around $80 in October, represents a serious threat to Gabon's public finances. The price assumption in the 2014 budget was $97, so there will be significant shortfalls.

While Bongo has created new sovereign-wealth vehicles to smooth fluctuations in the oil price, they are still too young to make much difference now.

Companies have been drilling both onshore and offshore as Gabon's production continues to decline from its height of more than 370,000 barrels per day (bpd) in 1997.

Production was just over 230,000bpd in 2013 and the authorities predict it will fall to 100,000bpd by 2024 without any major new discoveries. Several companies are chasing deep-water pre-salt reserves analogous to those found offshore of Brazil.

The government completed a bidding round in October 2013 and companies should be ramping up exploration activities soon.

As a sign of the rising role of the state in the natural resource sector, the Gabon Oil Company and the Société Équatoriale des Mines are becoming ever more active.

 



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