Gabon Emergent

Keith Boyfield - April 2012


A return visit to Gabon, the rapidly growing oil-rich former French colony bordering Cameroon and Congo, offered an excellent opportunity to see the remarkable strides this country is making terms of infrastructure development .  Gabon is currently the sixth largest oil producer in Africa with 30 fields in production. According to latest estimates compiled by BP, Gabon has 3.7 bn barrels of proven reserves, the largest in its continental region. The country also benefits from very large natural gas deposits, estimated at over 39 bn cubic metres.

Long dependent on commodity exports such as oil and manganese, the Government is now determined to diversity its economy and attract inward investment to build up its manufacturing and service sector. This strategy is already reaping rewards. Major investors such as Olam International have opted to invest in palm oil cultivation and processing and it is also the leading investor in the Nkok Special Economic Zone, which has attracted 40 companies from nine different countries. Development of this 1,126 hectare site has now moved into phase two of development, ahead of schedule. A $60 m loan agreement for this second phase has now been completed between the Gabonese government, Olam International and the Central African Development Bank  (BDEAC). Another 1,500 hectare economic zone is being developed at Port Gentil by Olam International and the Indian group, Tata Chemicals, which is constructing a major fertilizer plant.

Gabon aims to become a regional hub for financial services, new information technology, higher education and health care. In order to fulfil this vision the Gabonese government has brought in Bechtel to co-ordinate these initiatives through the Agence National des Grands Travaux (ANGT). The idea behind this initiative, observes Henri Ohayon, the head of the ANGT,  is to coordinate the work of separate ministries which, hitherto, tended to operate too much as separate silos. The National Plan for Infrastructure includes 21 major projects and its total investment budget amounts to more than $11 bn over the next six years.



Gabon’s role as co-host of the Africa Cup of Nations (CAN) soccer tournament this year served as a catalyst for infrastructure development. Mr Ohayon estimates that around $500 million was committed to pre tournament preparations including the new stadium in Libreville, built by the Chinese; improvements to the road network;  and the total rebuilding of Franceville airport.

What has been achieved at Franceville is certainly impressive. Last September, as our photographs demonstrate, the airport and its associated facilities, including the baggage hall, were in a pretty sorry state. However, when World Economics’ Africa Editor landed from Libreville in February the airport terminal and control tower, along with car parks and other facilities, had been completely rebuilt under the watchful eye of Bechtel. The facilities now available to travellers can be compared to the best one finds anywhere in Europe or the US. When one considers that all this has been achieved in just five months it presages speedy development of the planned new international airport outside Libreville. The airport serving Gabon’s other main city, Port Gentil, is similarly being upgraded and will now be able to accommodate direct flights from Europe.



Gabon is blessed with deep sea ports, yet its harbour facilities have been in urgent need of upgrading. This is particularly true of the Owendo facility in Libreville, which could only handle two vessels at any one time. These bottlenecks are now being tackled to facilitate much more rapid loading and unloading of cargo. Key to this initiative is an agreement signed in November 2010 with the Singapore Port Authority. Under this public private partnership agreement a new deepwater port will be built in Mayumba in Southern Gabon

Meanwhile, a nationwide programme of road construction is under way, concentrated on the main corridors of development to cities such as Franceville. By 2016, a total of 3,600 km of paved road is due to be built. This will help the exploitation of iron ore and manganese resources (Gabon is the world’s second biggest exporter) while also providing port access for mining operations further inland in neighbouring countries such as DRC.

Energy and water are the key utilities that will underpin this ambitious economic development. Gabon has launched a major investment programme with regard to water resources, sewage and sewerage. It was significant that the country recently hosted a major international symposium  whose main focus was how to improve the management of the Nile, Lake Chad, Senegal, Niger and Volta basins. The under-development of water resources, coupled with the deterioration of water quality and a lack of skills and expertise around water management, is one of the more pressing problems Gabon currently has to tackle.

Under the Gabon Emergent Development Plan, the country is seeking to enhance its power generation resources. The pace of development is startling. Gabon aims to double its energy production by next year, bringing it to 1000 MW while simultaneously making the country less reliant on fossil fuels. Outside Franceville, the Chinese are constructing a massive hydro electric dam at Grand Poubara, which will generate 160 MW of power. The project is on schedule for completion in 2013.

While power generation and the supply of clean water and adequate sewage and sewerage facilities are crucial perhaps the critical catalyst for economic development is a step change in telecommunications and broadband capability. Key to this goal will be Gabon’s scheduled connection in November 2012 to the ACE submarine cable, which joins South Africa to Europe.  This connection will provide Gabon with a 1.5 terabyte bandwith, which should do much to improve the country’s current patchy internet facilities.

Improved internet facilities also act as a driver for education an,d contact with the outside world. Compared to a decade ago,  Gabon’s population – dominated by well educated young people – are far more familiar with global trends and fashions. Improved access to the internet and the worldwide web will accelerate this trend but it will also provide fresh challenges for the country’s political leaders since voters will be well aware of the achievements made by their peers.

 

Our table shows that growth in GDP was seriously impacted by the global slowdown in 2008/9. This led to lower demand for oil but demand has subsequently recovered and there has been a rebound in mining activities along with a surge in foreign direct investment. Note the fluctuations in GDP per capita. Gabon has a relatively modest population, estimated by the UN to total 1.44 million – 80 % of whom live in urban locations.

Gabon: Key Economic Growth Indicators (US$)