2017 Index of Economic Freedom

Gabon

overall score58.6
world rank103
Rule of Law

Property Rights35.9

Government Integrity37.6

Judicial Effectiveness26.7

Government Size

Government Spending81.0

Tax Burden77.0

Fiscal Health96.1

Regulatory Efficiency

Business Freedom50.6

Labor Freedom58.4

Monetary Freedom83.0

Open Markets

Trade Freedom61.8

Investment Freedom55.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 1.6 million
  • GDP (PPP):
    • $34.6 billion
    • 4.0% growth
    • 5.3% 5-year compound annual growth
    • $18,639 per capita
  • Unemployment:
    • 20.5%
  • Inflation (CPI):
    • 0.1%
  • FDI Inflow:
    • $623.9 million
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Economic growth in Gabon has slowed. The government’s continued reliance on oil revenue has led to budget shortfalls, and efforts to encourage diversification are underway. However, efforts to improve the business environment, reduce regulations, and increase investment have progressed inconsistently. Recent increases in economic freedom have not reached the greater population, and many of Gabon’s people remain in poverty.

The regulatory structure remains highly bureaucratic. Investment restrictions and the rigid system for starting an enterprise make it difficult to do business. Competitiveness is hindered by costly tariffs and nontariff barriers. The legal process is slow and cumbersome, and the judiciary lacks independence and consistency when applying the law.

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Background

In 2009, Ali Bongo Ondimba became president, succeeding his father, Omar Bongo, who had ruled Gabon for more than 40 years. Opposition leaders accused the Bongo family of electoral fraud to ensure dynastic succession. In 2011, Bongo’s Gabonese Democratic Party (PDG) took 95 percent of the seats in parliamentary elections that were boycotted by the opposition. There are no presidential term limits in Gabon, and Bongo secured his second seven-year term in the heavily disputed August 2016 elections. Due to the oil wealth of a few, Gabon has one of Africa’s highest average per capita incomes, but most Gabonese are poor.

Rule of LawView Methodology

Property Rights 35.9 Create a Graph using this measurement

Government Integrity 37.6 Create a Graph using this measurement

Judicial Effectiveness 26.7 Create a Graph using this measurement

Protection of property rights and contracts is not strongly enforced. The judiciary is inefficient and not independent. Public frustration with the dominant PDG party’s cronyism grew during the boom years, when increased petroleum revenues failed to produce improved living standards for much of the population because of rampant corruption. Payoffs are common in the commercial and business arenas, particularly in the energy sector.

Government SizeView Methodology

The top individual income tax rate is 35 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax. The overall tax burden equals 13.1 percent of total domestic income. Government spending has amounted to 25.2 percent of total output (GDP) over the past three years, and budget surpluses have averaged 0.7 percent of GDP. Public debt is equivalent to 43.9 percent of GDP.

Regulatory EfficiencyView Methodology

The regulatory framework still confronts potential entrepreneurs with significant bureaucratic and procedural hurdles. Labor regulations are outdated and applied inconsistently. In accordance with IMF recommendations, Gabon eliminated fuel subsidies in February 2016 after a dramatic drop in oil revenues, but the state continues to influence prices through subsidies to state-owned enterprises and direct control of the prices of other products.

Open MarketsView Methodology

Trade is important to Gabon’s economy; the value of exports and imports taken together equals 74 percent of GDP. The average applied tariff rate is 14.1 percent. The government screens foreign investment, and investment is discouraged by the judicial and regulatory regimes. The underdeveloped financial sector remains state-controlled. Credit costs are high, and access to financing is scarce.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius74.70.0
2Botswana70.1-1.0
3Rwanda67.64.5
4Côte d'Ivoire 633.0
5Namibia62.50.6
6South Africa62.30.4
7Seychelles61.8-0.4
8Swaziland61.11.4
9Uganda60.91.6
10Burkina Faso59.60.5
11Benin59.2-0.1
12Mali58.62.1
13Gabon58.6-0.4
14Tanzania58.60.1
15Madagascar57.4-3.7
16Nigeria57.1-0.4
17Cabo Verde56.9-9.6
18Democratic Republic of Congo56.410.0
19Ghana56.2-6.8
20Guinea-Bissau56.14.3
21Senegal55.9-2.2
22Comoros55.83.4
23Zambia55.8-3.0
24São Tomé and Príncipe 55.4-1.3
25Mauritania54.4-0.4
26Lesotho53.93.3
27Kenya53.5-4.0
28The Gambia53.4-3.7
29Togo53.2-0.4
30Burundi53.2-0.7
31Ethiopia52.71.2
32Sierra Leone52.60.3
33Malawi52.20.4
34Cameroon51.8-2.4
35Central African Republic51.86.6
36Niger50.8-3.5
37Mozambique 49.9-3.3
38Liberia49.1-3.1
39Chad492.7
40Sudan48.8N/A
41Angola48.5-0.4
42Guinea47.6-5.7
43Djibouti46.7-9.3
44Equatorial Guinea451.3
45Zimbabwe445.8
46Eritrea42.2-0.5
47Republic of Congo 40-2.8
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