Our comprehensive assessment of Gabon's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Gabon, as well as the latest industry developments that could impact Gabon's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Gabon before your competitors.
Gabon Country Risk
Annual real GDP growth in Benin will average 5.0% between 2014 and 2023 as consumer spending increases and the country's political stability engenders elevated levels of fixed investment. Nevertheless, a sporadic electricity supply and reliance on cotton production will hold back the pace of economic development.
Benin's political landscape shows little sign of fragility, and will remain one of the most stable, open and accountable in West Africa in the years ahead, enjoined by a free press and a multitude of political parties. Nevertheless, the country faces challenges in the long term such as an overspill of violence from piracy and terrorist activity in the region, and the potential for tribal/ethnic schisms to open.
KEY RISKS TO OUTLK
Gabon Country Risk
The ruling Parti Congolais du Travail has used local elections to consolidate its authority. Political change is more likely to come from within the ruling party than from the country's fragmented opposition.
Lower iron ore prices will delay investment projects in the Republic of the Congo, while government spending cuts reduce infrastructure expenditure. Nevertheless, increasing oil output will keep headline real GDP growth among the fastest in the region.
Long Term Views
President Denis Sassou-Nguesso will reform his country's constitution in order to run for another term in elections scheduled for 2016. The move will prove controversial, raising political tensions in Congo-Brazzaville. Even so, we see little threat to the current government's control over the...
Gabon Industry Coverage (6)
With Gabon's economy so reliant on the hydrocarbons sector, there are a number of reasons why we have revised down our vehicle sales forecasts for 2015-2019.
Firstly, lower oil prices will reduce government income, which will have a knock on effect for a sector reliant on government sales. As we previously pointed out during the audit, the biggest impact will come in the SUV and pick-up segments, which are the most popular, especially for government sale, due to their suitability for the poor state of the roads. In 2013, the two segments combined accounted for around 75% of the total new vehicle market and so any hit to these segments will be the biggest driver of the overall market's performance.
Added to the lower prices is the disruption in the oil sector, and fuel shortages, caused by strikes at the end of 2014. Even when the immediate strike action is over, our Country Risk team expects social unrest to continue in...
Food & Drink
Gabon Food & Drink
President Ali Bongo has proved to be a much more active economic reformer than his father, working hard to court foreign investors into Gabon and diversify the economy away from stagnating oil production. He has invested in infrastructure, brought in foreign experts and launched an ambitious programme of social spending to address widespread poverty. However, we stress that government targets of transforming the country into a major economic centre by 2025 are unreasonably optimistic. Gabon's small workforce, limited domestic market and opaque business environment will all pose obstacles to economic diversification.
Oil-rich Gabon has traditionally been one of Central Africa's most stable countries, but a wave of protests and strikes is yet another sign that Bongo's government is facing rising popular opposition. We predict that the situation will deteriorate in early 2015.
BMI View: Mounting fiscal pressure is undermining the government's ambitious investment plans, while lower growth prospects have dissuaded investors from committing funds to new infrastructure projects. A combination of falling oil revenues, from lower production and prices and higher social spending has pushed the government's fiscal balance into deficit, with infrastructure investment likely to be hit. We have reduced our infrastructure growth forecasts, although we remain positive over the five-year horizon.
The small size of Gabon's construction industry, combined with a number of large projects, should sustain growth over our five-year forecast period. However, growth will remain far below potential. Numerous problems that need to be overcome to secure investment, including improving flows of capital from the government into projects, addressing deep-rooted...
Oil & Gas
Gabon Oil & Gas
BMI View: A string of significant discoveries in Gabon's deepwater offshore offer upside risk to the country's longer term oil production outlook, although a challenging operating environment, the strains of a lower oil price environment and long project lead times all pose risk to the downside. The country's gas outlook remains heavily bearish, due to a low level of investment in midstream infrastructure, a lack of export options and limited domestic offtake.
Pharmaceuticals & Healthcare
Gabon Pharmaceuticals & Healthcare
BMI View: Spending on pharmaceuticals in Gabon will be driven by the continued development of the country's National Health Insurance Scheme, and particularly by the expansion of the list of reimbursable drugs this quarter. Commercial opportunities exist in the Gabonese pharmaceutical market, which is becoming increasingly attractive to drugmakers due to an improving regulatory environment.
Headline Expenditure Forecasts
Pharmaceuticals: XAF50.94bn (USD104mn) in 2014 to XAF54.14bn (USD103mn) in 2015; +6.3% in local currency and -0.8% in US dollar terms. Forecast in line with Q115 in local currency terms...
BMI View: Our Q115 West and Central Africa report analyses latest industry, regulatory and macroeconomic developments in the telecoms markets of seven countries: Cameroon, Côte d'Ivoire, the Democratic Republic of Congo (DRC), Gabon, Mali, Mauritania and Senegal. As mobile subscriptions growth slows down in these markets, operators will increasingly shift their resources towards advanced data services to sustain revenue growth. Their efforts will be complemented by the proliferation of low-cost smartphones and tablets as well as cheaper and more reliable access to international bandwidth connectivity via submarine cables.
The average mobile market growth for the seven countries in our coverage in Q314 was 4...