Country Report Gabon February 2009

Summary

The president, Omar Bongo Ondimba, who has skilfully eliminated most forms of political opposition through a combination of co-option and repression, will remain the dominant political figure.
As the political system largely depends on his patronage network, the greatest risk to stability would be MrBongo's sudden departure from power.
The sharp decline in oil revenue caused by falling oil prices, combined with the rise in unemployment owing to the impact of the global economic downturn on the forestry and mining sectors, is likely to lead to rising social unrest.
The forecast sharp fall in oil prices will also have a major influence on the government's economic policy, as it will be the first time since 2002 that the government risks running into payment difficulties.
Despite an increase in oil output, real GDP growth is forecast to slow to 2.8% in 2009, as the global economic downturn hits non-oil sectors, before rising to 3.1% in 2010, as activity in the mining and forestry sectors picks up.
Average annual inflation is expected to fall to 3% in 2009, reflecting lower global food and oil prices, and to rise again in 2010, to 3.5%, in line with commodity price increases and strong domestic demand.
The current account is forecast to return to a deficit equivalent to 12.1% of GDP in 2009 and 7% of GDP in 2010, owing to the expected sharp fall in oil prices.

The regime has charged three leading anti-corruption activists and two journalists with intent to disseminate propaganda and to incite a rebellion against the authorities.
The incident has shown that the regime is adopting a tougher stance against dissidents to avoid the kind of large protests that almost brought an end to MrBongo's rule during the 1990s.
MrBongo has reshuffled the cabinet without changing any of the main posts. However, by co-opting two former members of an opposition party into the government, the president has successfully weakened the opposition.
The government has announced a series of measures to offset the impact of the global economic downturn, but their effect is likely to be limited.
After falling for the first time in almost ten years owing to depressed global demand, manganese output is expected to fall further in 2009.
The Belinga iron ore project, which has continued to suffer delays caused by disagreements between the Chinese consortium and the government, is unlikely to start before 2010.

Source: Country Report

This report covers the following industry codes:
SIC Code: 1;10
NAICS Code: 11;212