Gabon

THE GABONESE REPUBLIC is a country in western Africa with significant poverty, despite abundant oil and mineral reserves. Gabon's small population and oil revenues contribute to one of the highest per capita incomes in the region. Its Gross Domestic Product (GDP) [Page 413]in 2004 was $5,900 per person, which is four times that of most sub-Saharan African countries. There is a widening gap between the rich and poor, however. Approximately 80 percent of Gabon's population are classified as poor by Gabon's Department of Statistics.

Traditional sources of income in Gabon are timber and manganese production. The discovery of oil off the Gabon coast in the early 1970s led to a significant increase in the country's national income. Poverty remained widespread despite reductions in its severity. Oil revenues reduced extreme poverty from more than half of Gabon's population in 1968 to 11 percent in the early 1990s. Most of Gabon's population remains below the poverty line and people in rural areas have extremely limited access to basic social services. In spite of Gabon's abundance of natural resources, burdensome foreign debt and questionable leadership have hindered its economy. Gabon's foreign debt has made it difficult to devote significant financial resources to poverty reduction programs and economic development.

Developed nations and international organizations have worked with Gabon to reduce its poverty and improve the economy. Most of this aid has been conditional on improved fiscal discipline by the Gabonese government and agreements to privatize much of the publicly owned businesses. In 1994–95, the International Monetary Fund (IMF) provided a one-year standby arrangement. In late 1995, the IMF began a three-year Enhanced Financing Facility (EFF) at near-commercial rates. France provided Gabon with significant financial support in January 1997 after Gabonese leaders met IMF-mandated economic targets for mid1996. Later in 1997, the IMF criticized the Gabonese government for overspending on off-budget items, borrowing too much from the country's central bank, and failure to keep the schedules for privatization and administrative reform. In October 2000, the IMF granted Gabon $119 million of standby credit.

Gabon rescheduled the payment of its official debt by signing an agreement with the Paris Club in December 2000. The Paris Club is an informal group of creditor countries that work to find sustainable solutions to the debt repayment difficulties of debtor nations. Gabon signed an additional debt repayment agreement with the United States in December 2001. Further IMF standby arrangements and Paris Club debt rescheduling occurred in 2004 and 2005.

The Gabonese government began a $2.9 million antipoverty program in January 2002. This included laws to fight corruption and the embezzlement of public funds. Fiscal mismanagement remains a problem in Gabon. In spite of official priorities to reduce poverty and reinforce state institutions, Gabon's 2003 budget included the construction of a senate building, presidential palace renovation, and vehicle purchases for members of the government. Critics claim the Gabonese government needs to introduce new technologies, improve the country's infrastructure, and train female farmers in order to effectively combat the nation's poverty.

...