2014 Index of Economic Freedom

Gabon

overall score57.8
world rank105
Rule of Law

Property Rights40.0

Freedom From Corruption29.1

Limited Government

Government Spending81.7

Fiscal Freedom74.5

Regulatory Efficiency

Business Freedom58.9

Labor Freedom63.0

Monetary Freedom75.1

Open Markets

Trade Freedom61.0

Investment Freedom55.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 1.5 million
  • GDP (PPP):
    • $25.5 billion
    • 6.2% growth
    • 3.6% 5-year compound annual growth
    • $16,548 per capita
  • Unemployment:
    • 21.0%
  • Inflation (CPI):
    • 3.0%
  • FDI Inflow:
    • $702.4 million
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Gabon’s economic freedom score is 57.8, making its economy the 105th freest in the 2014 Index. Its overall score is unchanged from last year, with improvements in business freedom and the management of government spending counterbalanced by deteriorations in freedom from corruption and monetary freedom. Gabon is ranked 14th out of 46 countries in the Sub-Saharan Africa region, and its overall score is lower than the world average.

Over the 20-year history of the Index, Gabon’s economic freedom has stagnated, advancing less than 1 point. Marked improvements of over 25 points in trade freedom and fiscal freedom have been offset by declines in six of the 10 economic freedoms, notably declines of 10 points or more in property rights, freedom from corruption, and investment freedom. Gabon has been mired in the ranks of the “mostly unfree” for two decades. Its score in the 2014 Index is the same as the previous year but remains its highest in a decade.

Gabon’s commitment to structural and institutional reform remains uneven and fragile. More political will is needed to foster an economic environment in which potential entrepreneurs or investors can thrive. Heavy reliance on the oil sector makes the economy highly vulnerable to external shocks and undermines stable economic expansion.

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Background

President Omar Bongo ruled Gabon from 1967 until his death in 2009 when his son, Ali Ben Bongo, replaced him. Reforms under a 1991 constitution included multi-party democracy with freedom of assembly and the press, but the democratic process remains deeply flawed. In December 2011, Bongo’s Gabonese Democratic Party won elections that were boycotted by opposition parties. In February 2012, Raymond Ndong Sima became prime minister. In 2006, oil accounted for over 50 percent of GDP, over 60 percent of government revenues, and over 80 percent of exports. Oil revenue is controlled by the state, and investment has stagnated. Forestry and minerals are also important. The government has pledged to increase transparency and is trying to diversify the economy. GDP grew more than 6 percent per year between 2010 and 2012.

Rule of LawView Methodology

Property Rights 40.0 Create a Graph using this measurement

Freedom From Corruption 29.1 Create a Graph using this measurement

Corruption is widespread, and rampant graft prevents the country’s significant natural resource revenues from benefiting most citizens. The judiciary is inefficient and not independent. Judges may deliver summary verdicts in some cases, and prosecutions of former government officials appear to target opposition members. Protections for property rights and contracts are not strongly enforced.

Limited GovernmentView Methodology

Gabon’s top individual income and corporate tax rates are 35 percent. Oil and land development companies are taxed at separate rates of 35 percent and 25 percent, respectively. Other taxes include a value-added tax (VAT). The overall tax burden is 10.1 percent of GDP. Public spending is just under a quarter of gross domestic output. Public debt recently reached over 20 percent of GDP.

Regulatory EfficiencyView Methodology

The overall business environment remains burdensome. Starting a new business takes seven procedures and slightly less than a month on average. Licensing requirements take over 150 days to complete. Labor regulations are outdated and not applied consistently. The state influences prices through subsidies to state-owned enterprises and direct control of the prices of other products.

Open MarketsView Methodology

Gabon’s average tariff rate is 14.5 percent. Foreign investors may have a difficult time navigating the country’s legal and regulatory systems. The underdeveloped financial sector, dominated by banks, 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.

Country's Score Over Time

Bar Graph of Gabon Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Gabon to other economic country groups

Regional Ranking

rank country overall change
1Mauritius76.5-0.4
2Botswana721.4
3Cape Verde66.12.4
4Rwanda64.70.6
5Ghana64.22.9
6South Africa62.50.7
7Madagascar61.7-0.3
8Swaziland61.24.0
9Zambia60.41.7
10Uganda59.9-1.2
11The Gambia59.50.7
12Namibia59.4-0.9
13Burkina Faso58.9-1.0
14Gabon57.80.0
15Tanzania57.8-0.1
16Côte d'Ivoire 57.73.6
17Kenya57.11.2
18Benin57.1-0.5
19Seychelles56.21.3
20Djibouti55.92.0
21Mali55.5-0.9
22Malawi55.40.1
23Senegal55.4-0.1
24Niger55.11.2
25Mozambique 550.0
26Nigeria54.3-0.8
27Guinea53.52.3
28Mauritania53.20.9
29Cameroon52.60.3
30Liberia52.43.1
31Burundi51.42.4
32Comoros51.43.9
33Guinea-Bissau51.30.2
34Sierra Leone50.52.2
35Ethiopia500.6
36Togo49.91.1
37Lesotho49.51.6
38São Tomé and Príncipe 48.80.8
39Angola47.70.4
40Central African Republic46.7-3.7
41Chad44.5-0.7
42Equatorial Guinea44.42.1
43Republic of Congo 43.70.2
44Democratic Republic of Congo40.61.0
45Eritrea38.52.2
46Zimbabwe35.56.9
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