A pot of gold

A country with rich resources, Gabon’s potential is yet to be realised

Suraj Shah

Gabon lies of the west coast of Africa and shares borders with Cameroon, Equatorial Guinea and the Republic of the Congo. It has a population of 2.17 million people. Gabon’s GDP in 2017 was $14.62 billion, with it's real GDP growth rate being 1.1% in 2017. The GDP per capita was $7220.69 in 2017. Agriculture equates to just 5% of GDP, industry amounts to 44.7% and services amounts to 50.4%. However, 64% of the labour force work in agriculture, 12% in industry and 24% in services. This makes it an industrialising country, which produces agricultural products such as cocoa, sugar, palm oil and coffee. It has industries such as extracting and refining petroleum, gold, food and beverages, textiles, manganese. Gabon’s unemployment rate is 19.5%, which shows with more FDI and government investment it still has the potential to grow. The population below the poverty line is 34.3%, which still shows that it has a lot to improve on. It has an extremely high-income inequality. The HDI measure (a composite measure to measure development in a country consists which consists of the GNI per capita, life expectancy, average years of schooling for adults aged 25 and expected years of schooling for children of school-entering age) showed that the country is 7th in the HDI rankings for African countries and has a global rank of 110. Gabon had an inflation rate of 2.7% in 2017 which has demonstrated monetary discipline. Its balance of trade is $1384.80 which is promising as it shows sustainability within the economy as less public debt is accumulated. Their largest export partners are China. The main commodities of which they export are crude oil, timber, manganese and uranium. The main commodities that it imports are foodstuffs, machinery and equipment, chemicals and construction materials. The president of Gabon is Ali Bongo Adimba since October 2009, who became president after the death of his father (Omar Bongo) in 2009. Presidents are elected by a universal vote for a seven-year term. The National Assembly of Gabon has 120 deputies elected for a five-year term. It is a former French colony, but it gained independence from France on the 15th July 1960. The main language is still French, and France predominates the country’s foreign, cultural and commercial in-

fluences. Gabon is famous for having huge amounts of greenery (with around 85% of land being forest) and natural beauty. There is some ecotourism, which generates money for the economy. This paradise also has stunning beaches which results in high levels of tourism. A typical reason of why people know of Gabon is due to the Arsenal striker PierreEmerick Aubameyang. He’s one of

the best African footballers and one of the best strikers in the world. He has a huge Instagram following of 8.9 million followers. Gabon has a warm, moist climate with temperatures ranging from around 23 to 32 degrees which makes it very attractive for tourism and agriculture. Also, as it has a

tourism and agricultural sectors in means the government has more money to spend on public services like health and education to increase development and the standard of living for Gabonese people. The first oil discovery in Gabon was near the capital, Liberville, when it was still a French colony. The record year of oil production was in 1996, when it produced a staggering 365,000 barrels per day. In 2016, it produced 227,000 barrels per day. It has oil reserves of 2 billion barrels and gas reserves of 530mcm. The oil industry currently accounts for over 50% of Gabon’s GDP, and 80% of the diminishing production and a fall in oil prices have hurt the economy. With Gabon’s government realising that natural resources don’t last forever, they invested heavily in infrastructure such as roads, which creates better accessibility to different parts of the country which encourages more FDI which allows the they create jobs, increasing the disin the local economy, this results in the government being able to collect more tax revenue, this means that they can spend more money on public services such as health or education which increases development. Gabon have heavily invested into the agricultural sector in an attempt again to make the most out of the brilliant weather for growing crops, particularly in the agrifoods sector. They have also heavily invested in the secondary sector by improving the quality of factories, which in turn increases the attraction for TNCs to get their products manufactured in Gabon. China have invested a lot of money into Gabon, as a result they have created new markets, so the country is less reliant on the oil and gas industry. For example, the Chinese company TBEA, has invested 180 million euros into a hydropower project. However, Gabon shouldn’t get too carried away with the Chinese investment because China tends to over-invest into many developing countries, not specifically for

trade with that country, but to take over assets. They make a developing country get into a lot of debt with China, and eventually seize the as-

sets they originally wanted to capture. For example, Sri Lanka got into debt with China after receiving a lot of FDI and the Chinese eventually seized a Sri Lankan port called Ham-

Gabon's relatively stable climate means that the tourism and agricultural sectors

are able to operate all year.

relatively stable climate, there would multiplier effect to occur as when be no seasonal unemployment as the TNCs set up factories/offices abroad, particular can make money all year posable incomes of workers, meanlong, resulting in a higher GDP, which ing that workers spend more money

country’s export earnings. Therefore,

bantota. Gabon can improve its economic and social wellbeing by reducing corruption. It is rated 124th by the corruptions perceptions index (out of 180 countries). The government can also create more jobs in rural areas, for example, build some factories, this means that more people will be employed, which contributes to higher economic growth, which results in higher development. To reduce the very high inequality, the government could possibly introduce a concept like the national minimum wage, this would also reduce poverty. They could also do this by increasing income tax especially for those who earn high wages and redistribute it to the poor or invest in a project which creates jobs. The country has made good initial steps which are heading away from being totally reliant on the oil and gas industry, now they just need to encourage even more FDI in lesser industries, like agriculture and tourism

which are sustainable. However, it has done a terrific job over the last 30 years to develop as much as they have, many countries blessed with vast amounts of natural resources, like Congo should follow in Gabon’s footsteps and use their resources as an advantage not a hinderance.