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02/19/2013
Economy
Gabon boasts best "country risk" in the sub-region
The New York Forum Africa 2012 in Libreville
Gabon received the most positive assessment in the CEMAC zone (Economic and Monetary Community of Central Africa) from the French group Coface, with a B rating for "country risk" and a C for "business environment".

 This assessment on the average level of short-term non-payment risk from the world's leading credit insurer confirms President Ali Bongo Ondimba's ambition to develop Gabon's economy in the image of globally-facing emerging powers. An agreement just signed between Mauritian conglomerate Ireland Blyth and the Gabonese Government to develop fishery resources - called "a true example of South-South cooperation" - is further proof that his hard work is starting to pay off.

 

Leader of the CEMAC

The time has come for emerging economies to thrive. With risks in developed countries progressively deteriorating since 2008, the gradual improvement of corporate risks in emerging countries is continuing, mainly due, according to experts at Coface, to the slow but steady expansion of their middle classes and the greater resistance of emerging nations to external crises thanks to their "more responsive, but prudent" economic policies. One such example of this trend is Gabon's leading position among the countries of the Economic and Monetary Community of Central Africa (CEMAC). The country now hopes to catch up with the leaders of the African continent, i.e. South Africa, Mauritius, Namibia and Morocco.
 

Gabon, Italy, Russia...

On the 2013 corporate default probability map, Gabon is leading the CEMAC countries as the only nation in the zone to be awarded a B rating for "country risk" and one of only two countries (Cameroon being the other) in the zone to be awarded a C rating for "business environment" On the international level, a B rating was also awarded to Ghana, the Philippines, Spain, Italy and Russia, among others. The C rating for business environment is shared internationally by Georgia, Indonesia, Argentina, Mozambique and Venezuela.
 

Positive signs

The package of reforms initiated by the Gabonese Government since 2009 and the incentives put in place to diversify its production have started to bear fruit. As the 4th largest oil producing country in sub-Saharan Africa and the second largest timber producer, Gabon's economic growth in 2012 was heavily supported by the non-oil sectors. According to the latest report from the French agency, "growth remained robust in Gabon in 2012 thanks to the dynamism of the extractive industries and forestry exploitation." The inversion of the country's debt curve, due to early repayment in 2008 to the Paris Club creditors, has helped to significantly reduce the risk of corporate default.
 
The Gabonese government is working to improve the business environment in Gabon by revising the legal framework of the extractive industries, with the forthcoming introduction of new oil and mining codes. Furthermore, in order to reduce the non-oil budget deficit and anticipate the sector's decline, the country decided to create two special economic zones to support its strategy of diversifying the economy and providing an environment conducive to foreign investment. The country's financial situation, though still heavily dependent on oil, remains strong and is supported by the increase in the selling price of manganese and the firm prices of certain raw materials. According to Coface, "increased timber and oil production and firm prices for exported raw materials led to an increase in the current account surplus."
 

Transformation and international openness

The globalisation of trade relations has made it more necessary than ever for Africa to build relationships with new industry players, as confirmed by Head of State Ali Bongo Ondimba, when he said: "In an international environment marked by fierce competition, we must realise that it is up to us to create a place for Gabon in Africa and the rest of the world." To this end, a new public-private partnership has been signed between the Government of Gabon and Mauritian group Ireland Blyth (IBL), covering an initial investment estimated at €25 million (40% from the Gabonese Strategic Investment Fund, 60% from IBL), with a possible future increase to €100 million, to develop the fishing sector. The mastery of biotechnologies and the vertical integration of the sector will benefit the country's new blue economy. "This is a good example of south-south cooperation and a real opportunity for Gabon to develop and enhance its fishing potential", commented the Gabonese Minister of Agriculture, Livestock, Fisheries and Rural Development.
 
 
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