2018 Index of Economic Freedom

Gabon

overall score58.0
world rank109
Rule of Law

Property Rights29.9

Government Integrity33.4

Judicial Effectiveness27.8

Government Size

Government Spending84.6

Tax Burden74.3

Fiscal Health92.3

Regulatory Efficiency

Business Freedom49.3

Labor Freedom61.7

Monetary Freedom81.4

Open Markets

Trade Freedom60.9

Investment Freedom60.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 1.9 million
  • GDP (PPP):
    • $35.9 billion
    • 4.0% growth
    • 4.3% 5-year compound annual growth
    • $19,056 per capita
  • Unemployment:
    • 18.5%
  • Inflation (CPI):
    • 2.1%
  • FDI Inflow:
    • $703.2 million
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Gabon’s economic freedom score is 58.0, making its economy the 109th freest in the 2018 Index. Its overall score has decreased by 0.6 point, with lower scores for property rights, government integrity, and fiscal health offsetting improvements in investment freedom, government spending, and labor freedom. Gabon is ranked 13th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

The government is trying to reduce Gabon’s economic reliance on oil, rebuild financial buffers eroded by the global oil price slump, and make major structural reforms such as curtailing public spending, reducing tax exemptions, and improving tax administration to improve the business climate and generate economic growth. Recent increases in economic freedom have benefited relatively few. The regulatory structure remains highly bureaucratic, and the rule of law is weak.

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Background

Gabon gained independence from France in 1960 and was ruled by Omar Bongo for more than 40 years until his son, Ali Bongo Ondimba, became president in 2009. 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. Bongo secured his second seven-year term in heavily disputed August 2016 elections. Despite abundant natural wealth, poor fiscal management and overreliance on oil have stifled the economy. Power cuts and water shortages are frequent. 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 29.9 Create a Graph using this measurement

Government Integrity 33.4 Create a Graph using this measurement

Judicial Effectiveness 27.8 Create a Graph using this measurement

Contracts and laws protecting property rights are not strongly enforced, although the recording system for securing an interest in property is reliable. Gabon adheres to African Intellectual Property Office laws and has acceded to other international intellectual property agreements. The judiciary is inefficient and not independent. Corruption is rampant, and officials can demand bribes or engage in other corrupt practices with impunity.

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 21.2 percent of total domestic income. Over the past three years, government spending has amounted to 22.6 percent of total output (GDP), and the budget balance has shifted from a surplus to a deficit. Public debt is equivalent to 62.0 percent of GDP.

Regulatory EfficiencyView Methodology

Gabon lacks clearly established and consistent processes for entering the market, and businesses face bureaucratic delays, high production costs, a small domestic market, and poor infrastructure. Labor laws are rigid. The government is considering reinstating fuel subsidies to preserve social stability, and the state continues to influence prices through subsidies to state-owned enterprises.

Open MarketsView Methodology

Trade is significant for Gabon’s economy; the combined value of exports and imports equals 68 percent of GDP. The average applied tariff rate is 14.5 percent. Nontariff barriers impede some trade. Government openness to foreign investment is above average. The underdeveloped financial sector remains state-controlled. Credit costs are high, and access to financing is scarce. The state-owned development bank controls long-term lending.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius75.10.4
2Botswana69.9-0.2
3Rwanda69.11.5
4South Africa630.7
5Uganda621.1
6Côte d'Ivoire 62-1.0
7Seychelles61.6-0.2
8Burkina Faso600.4
9Cabo Verde603.1
10Tanzania59.91.3
11Namibia58.5-4.0
12Nigeria58.51.4
13Gabon58-0.6
14Mali57.6-1.0
15Guinea-Bissau56.90.8
16Madagascar56.8-0.6
17Benin56.7-2.5
18Comoros56.20.4
19Ghana56-0.2
20Swaziland55.9-5.2
21Senegal55.7-0.2
22Kenya54.71.2
23Zambia54.3-1.5
24Mauritania54-0.4
25Lesotho53.90.0
26São Tomé and Príncipe 53.6-1.8
27Ethiopia52.80.1
28The Gambia52.3-1.1
29Guinea52.24.6
30Democratic Republic of Congo52.1-4.3
31Malawi52-0.2
32Cameroon51.90.1
33Sierra Leone51.8-0.8
34Burundi50.9-2.3
35Liberia50.91.8
36Niger49.5-1.3
37Sudan49.40.6
38Chad49.30.3
39Central African Republic49.2-2.6
40Angola48.60.1
41Togo47.8-5.4
42Mozambique 46.3-3.6
43Djibouti45.1-1.6
44Zimbabwe440.0
45Equatorial Guinea42-3.0
46Eritrea41.7-0.5
47Republic of Congo 38.9-1.1
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