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: The outlook on Gabon's upstream sector is relatively bearish, as maturing oilfields and a lack of new production push output into terminal decline. 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. ...