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- GDP (PPP):
- $36.3 billion
- 5.1% growth
- 5.9% 5-year compound annual growth
- $22,924 per capita
- Inflation (CPI):
- FDI Inflow:
Gabon’s economy has moved toward greater economic freedom over the past five years, but progress has been uneven. Underperforming in many critical areas, the economy continues to be hampered by the legacy of state-led development. Open-market policies have not been advanced strongly, and lingering non-tariff barriers undercut competitiveness.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 59.0 (up 0.7 point)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 105th
- Regional Ranking: 15th in Sub-Saharan Africa
- Notable Successes: Monetary Freedom and Control of Government Spending
- Concerns: Rule of Law and Open Markets
- Overall Score Change Since 2012: +2.6
A bureaucratic investment regime and lack of access to financing preclude entrepreneurial growth and perpetuate overreliance on oil. The absence of an independent and fair judiciary weakens the rule of law and further undercuts prospects for sustainable economic development.
President Omar Bongo ruled Gabon from 1967 until his death in 2009. His son, Ali Ben Bongo, was elected to succeed him. Opposition leaders accused the Bongo family of electoral fraud to ensure dynastic succession. In 2011, Bongo’s Gabonese Democratic Party took 95 percent of the seats in parliamentary elections that were boycotted by the opposition. The Bongo family is the subject of a long-running corruption investigation in France. Due to the oil wealth of a few, Gabon has one of Africa’s highest average per capita incomes, but most Gabonese are poor. Gabon is the ninth-largest oil producer in Sub-Saharan Africa, but oil production has been declining steadily in recent years. The government is working to reduce dependence on oil and to diversify the economy by spending more on education and infrastructure.
Public frustration with the ruling party’s clientelism grew during the boom years when, because of rampant corruption, increased petroleum revenues failed to produce improved living standards for much of the population. Business and commercial payoffs are common, particularly in the energy sector. The judiciary is inefficient and not independent. Protections for property rights and contracts are not strongly enforced.
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 10.6 percent of total domestic income. Government spending amounts to 29.2 percent of total domestic output. The budget surplus has been reduced to below 2.1 percent of GDP, but public debt amounts to around 28 percent of total domestic output.
The regulatory framework subjects potential entrepreneurs to significant procedural hurdles, and licensing requirements are time-consuming. Labor regulations are outdated and applied inconsistently. The government cut fuel subsidies in response to a dramatic drop in oil revenues in 2015 but continues to influence prices through payments to state-owned enterprises and direct control of the prices of other products.
Gabon’s average tariff rate is 14.1 percent. The government restricts imports of certain products, including sugar, eggs, and used cars. Local governments may impose requirements that discourage foreign investment. The underdeveloped financial sector remains state-controlled. Credit costs are high, and access to financing is scarce. The government controls long-term lending through the state-owned development bank.