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 debate over a possible change to the national constitution, which would allow President Denis Sassou-Nguesso to run for a third term, has polarised Congo-Brazzaville at the start of 2015 and will heighten political tensions in the run up to next year's elections.
The economic outlook for Congo-Brazzaville remains broadly positive, though the slump in oil and iron ore prices will have an impact on short-term macroeconomic fundamentals.
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)
After suffering a contraction in 2014, we forecast a recovery in the auto market in 2015 as the government audit comes to an end. However, growth in vehicle sales will be tempered by the oil price decline, which will affect government and consumer spending.
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...
Food & Drink
Gabon Food & Drink
The drop in oil prices has prompted us to revise down our forecast for economic growth in Gabon in 2015 to 4.9%, from a previous 5.5%. This is based on an expectation of lower government consumption and export income as a result of lower oil revenues. We have also revised our forecast for 2016 to 5.3%, from 5.6%, for the same reason. In addition to moderately lower growth, we expect the country's macroeconomic health to deteriorate sharply in 2015, and with risks remaining elevated over the medium term. We stress that government targets of transforming the country into a major economic centre by 2025 remain unreasonably optimistic. Gabon's small workforce, limited domestic market and opaque business environment will all pose obstacles to economic diversification.
Additionally, the country's small population, relative to its regional peers, will continue to weigh on food and drink industry prospects....
BMI View: Despite lower oil prices the government announced its intention to continue to invest in infrastructure development. While the issuance of a eurobond may help this goal, given the incompatibility of these ambitious spending commitments with the new reality of low oil prices, we expect a reduction in planned government expenditure in coming years. As such, we forecast growth to slow after 2016, although we remain positive over the 10-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...
Oil & Gas
Gabon Oil & Gas
BMI View: The outlook on Gabon's upstream sector is relatively bearish, as maturing oilfields and a lack of new production push output into terminal decline. New fiscal terms that increase the state's role in the oil and gas sector and levies imposed on the operators are also likely to add downside to the production profile. However, shallow water pre-salt developments offer substantial upside risk, in the second half of our forecast period. Deepwater pre-salt exploration remains highly prospective, although may feel strain in a lower oil price environment. We expect little growth in the upstream gas sector, due to the lack of export options and limited demand domestically.
Pharmaceuticals & Healthcare
Gabon Pharmaceuticals & Healthcare
BMI View: Gabon's reliance on importing its pharmaceuticals will continue over the long-term with seemingly little interest from international drugmakers to manufacture locally. Gabon's domestic pharmaceutical manufacturing scene is very basic, with manufacturers unable to supply the demands of the population.
Headline Expenditure Forecasts
Pharmaceuticals: XAF50.94bn (USD104mn) in 2014 to XAF54.14bn (USD91mn) in 2015; +6.3% in local currency and -12.7% in US dollar terms. Forecast unchanged from Q215 in local currency terms but revised downwards in US dollar terms.
Healthcare: XAF410.36bn (USD840mn) in 2014 to XAF456.18bn (USD765mn) in 2015; +11.2% in local currency and -8.7% in US dollar terms. ...
BMI View: Our Q315 West and Central Africa report analyses latest industry, regulatory and macroeconomic developments in the telecoms markets of seven countries: Cameroon, Cote d'Ivoire, the Democratic Republic of the Congo (DRC), Gabon, Mali, Mauritania and Senegal. Strong growth over the last decade will lead to more saturated market conditions towards the end of our forecast and 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. Despite this, regionally 3G/4G shares of the mobile markets will remain lower than that of the more advanced peers in Europe and Middle-East.