Country Report Gabon March 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 MrBongos sudden departure from power.
The sharp decline in oil revenue caused by falling oil prices, combined with the rise in unemployment stemming from the impact of the global 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 governments 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 move into deficit, by the equivalent of 8% ofGDP in 2009 and 7.1% of GDP in 2010, owing to the expected sharp fall in oil prices.

The ruling Parti democratique gabonais (PDG) obtained a clear majority in the senatorial elections on January 18th.
Strike action has continued to affect economic activity: minimum services have not been met at the countrys hospitals and the police have dismantled the barricades erected by forestry workers protesting against job losses.
According to unconfirmed reports, five US senators close to the new US president, Barack Obama, have sent a letter to Mr Bongo expressing their concern over recent arrests of civil society activists.
The reputation of the regional central bank, Banque des Etats de lAfrique centrale (BEAC), has been damaged as it was reported in late January that it was facing substantial losses on its investments in financial markets.
Areva Gabon, a newly constituted 100% subsidiary of French nuclear power company Areva, has announced that it is to start a new uranium exploration programme in Haut-Ogooue province in the south-east of Gabon.

This report covers the following industry codes:
SIC Code: 60;10
NAICS Code: 52;212