- GDP (PPP):
- $39.8 billion
- 3.4% growth
- 2.1% 5-year compound annual growth
- $15,486 per capita
- Inflation (CPI):
- FDI Inflow:
Gabon’s economic freedom score is 58.1, making its economy the 110th freest in the 2021 Index. Its overall score has increased by 1.4 points, primarily because of an improvement in monetary freedom. Gabon is ranked 15th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.
With the exception of 1999, Gabon’s economy has been in the mostly unfree category since the inception of the Index in 1995. The ruling elite is sustained by oil-sector revenues that, although much reduced this year, give them little incentive to undertake regulatory and institutional reforms that might improve the rule of law, the business climate, or labor freedom.
IMPACT OF COVID-19: As of December 1, 2020, 60 deaths had been attributed to the pandemic in Gabon, and the economy was forecast to contract by 2.7 percent for the year.
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. Bongo secured his second seven-year term in disputed 2016 elections. Despite an apparent stroke in 2018, he continues to govern, and his ruling party won a strong majority in the 2018 legislative elections. Poor fiscal management and overreliance on oil have stifled the economy. Power cuts and water shortages are frequent. Gabon has one of Africa’s highest average incomes per capita, but oil wealth is held by only a few, and most Gabonese live in poverty.
Although secured interests in property are recognized and the recording system is relatively reliable, enforcement of property rights and contracts is weak, and property registration is difficult. The judiciary is inefficient and subordinate to the president. The law is not applied consistently, and bureaucratic delays often undermine the delivery of justice. Dispute resolution takes an average of nearly three years. Anticorruption laws are not enforced, and bribery is widespread in commerce, in business, and particularly in the energy sector.
The top individual income tax rate is 35 percent, and the top corporate tax rate is 30 percent. The overall tax burden equals 10.2 percent of total domestic income. Government spending has amounted to 17.5 percent of total output (GDP) over the past three years, and budget surpluses have averaged 0.01 percent of GDP. Public debt is equivalent to 56.2 percent of GDP.
Introduction of a fast-track business registration process at the one-stop shop has reduced the time needed to start a business, and abolition of municipal stamps to apply for a construction permit has made that process simpler. Data on the labor force and unemployment are not systematically recorded. The collapse of global oil prices has had the positive consequence of forcing cuts in government subsidies.
Gabon has one preferential trade agreement in force. The trade-weighted average tariff rate is 14.1 percent, and two nontariff measures are in effect. The government screens foreign investment, and investment is discouraged by inefficient regulations. The underdeveloped financial sector remains under state control. Credit costs are high, and access to financing is scarce.