In a press release published Thursday from Washington (USA), the Monetary Fund (IMF) affirms that Gabon’s economic growth would be 3% in 2024 compared to less than 3% in 2023.
Here is the full press release :
A team from the Monetary Fund (IMF) led by Aliona Cebotari stayed in Gabon from January 23 to February 6, 2024, to meet with authorities and representatives of the private sector as part of the Article IV consultations. The discussions focused on revitalizing economic growth and increasing living standards through the acceleration of structural reforms and greater transparency while guaranteeing budgetary sustainability and good management of public finances.
At the end of the mission, Ms. Cebotari made the following statement:
“Gabon faces significant challenges, including declining oil production, stagnant per capita income, high unemployment, weak governance and a fragile fiscal situation. IMF staff welcomed the first measures taken by the Transition authorities with a view to greater transparency and strengthening public finance management, which clearly demonstrate their desire to meet these challenges. However, stronger measures are needed to ensure the sustainability of the fiscal situation, intensify transparency reforms and revive growth.
“After a slowdown in 2023, growth is expected to accelerate in 2024-25 to reach 3 percent thanks to the dynamism of the non-oil sector. In the medium term, growth would stabilize slightly below this level—insufficient to significantly increase per capita income—but potential growth will depend heavily on the implementation of the necessary reforms. Towards the end of 2023, inflation fell below the regional ceiling of 3 percent and would remain around this level in the absence of further shocks. Credit growth, financed by the increase in deposits, is strong despite the tightening of regional monetary policy. After a strong surplus in recent years thanks to rising commodity prices, the current account balance is expected to gradually decline in the medium term due to falling oil revenues.
“Transparency and governance reforms, some of which have already been initiated by the authorities, should continue because they will be essential to meeting economic challenges. These efforts should include in particular an inventory of all flows, assets and liabilities (direct and contingent) of the State; A reporting comprehensive overview of the financial situation of the State and public enterprises; the publication, in accordance with the legal provisions in force, of the reports produced by the government’s external auditor; and, above all, the publication of oil and mining contracts.
“The government has inherited a difficult budgetary situation. In 2022 and 2023, election-related spending widened the non-oil deficit to double digits as a percentage of non-oil GDP, and was financed in part by a substantial accumulation of arrears. In the absence of an immediate fiscal adjustment, deficit levels for 2024-25 could be difficult to finance in the currently stressed global financial environment, and public debt would continue to grow. At the same time, the need to improve the living conditions of the population and stimulate growth will require a prioritization of spending needs and a revival of revenue mobilization efforts given severe budgetary constraints. These difficult trade-offs can be mitigated by focusing on high-impact, low-risk investments that remove barriers to growth, on social spending, and on broadening the tax base by tackling exemptions. and integrating underutilized resources across the public sector.
“The authorities have initiated reforms aimed at improving the management of public finances; these will be essential to strengthen the budgetary situation. The centralization of all resources and payments in the Single Treasury Account and prudent management of liquidity, the establishment of a regulatory framework for the governance and control of public enterprises, as well as better management Public investment processes are among the reforms that are also expected to produce significant effects. Some of them have already been launched.
“To accelerate the economic diversification necessary for growth in per capita income, the authorities are aware that efforts should focus on eliminating the main constraints weighing on the business environment by giving priority to infrastructure spending , by strengthening governance, ensuring the predictability of the fiscal environment and paying state arrears.
“The mission would like to thank the Gabonese authorities and other partners for open and fruitful discussions and for their warm hospitality. »
Source : COM FMI