Economy of Gabon

The economy of Gabon is characterized by strong links with France, large foreign investments, dependence on skilled foreign labor, and decline of agriculture. Gabon on paper enjoys a per capita income four times that of most nations of Africa, but its reliance on resource extraction industry fail to release much of the population from extreme poverty, as much of 30% of the population lives under the poverty threshold

Top Sectors in Gabon

Energy in Gabon

Energy in Gabon comes from two main sources, fossil-fuels and hydroelectricity. Gabon also relies heavily on oil for its export revenues, exporting both crude oil and petroleum. In terms its oil reserves, the country is one of the richest in sub-Sharan Africa, ranking 5th after Nigeria, Angola, Sudan, South Sudan, and Uganda. Renewable energy in the form of solar power is virtually nonexistent. Gabon is among Africaâ€™s biggest crude oil producers. However, the country aims to diversify its economy by further developing its agriculture, fisheries, technology, and ecotourism sectors.

oil industry in Gabon

Gabon, a former OPEC member (1975-1994) that rejoined in 2016, is the sixth-largest oil producer in sub-Saharan Africa.The first national oil company was the SociÃ©tÃ© Nationale PetroliÃ¨re Gabonaise but it was disbanded in 1987. The government of Gabon controls all petroleum and mineral rights within the state. In 2011 a presidential decree created the Gabon Oil Company (GOC). This new entity works in partnership with international companies operating in Gabon and operates two fields: Obangue and Remboue.

Tourism in Gabon

Tourism in Gabon is underdeveloped.Despite this, attractions include beaches, ocean and inland fishing facilities, the falls on the OgoouÃ© River, and the Crystal Mountains.Tourists also come to see the famous hospital founded by Dr. Albert Schweitzer in LambarÃ©nÃ©.Hunting is legal in specific areas from December to September.

Transport in Gabon

Modes of transport in Gabon include rail, road, water, and air. The one rail link, the Trans-Gabon Railway, connects the port of Owendo with the inland town of Franceville. While most of the country is connected by roads, not all areas are accessible. Much of the road network remains unpaved, and it primarily revolves around seven "national routes" labeled N1 through N7. The largest seaports are Port-Gentil and the newer Owendo, and 1,600 km of inland waterways are navigable. There are three international airports, eight other paved airports, and over 40 with unpaved runways. Nearly 300 km of pipelines carry petroleum products, mainly crude oil.

Gabon - Key Economic Indicators

Exports and Imports

Gabon's economy heavily relies on resource extraction. Oil dominates their exports, accounting for around 80%. Timber and manganese are other significant exports. Their main trading partners are China, the United States, and France. Imports focus on machinery, vehicles, and fuel, primarily from France and other European nations.

Balance of Trade

Gabon typically enjoys a trade surplus, meaning the value of their exports exceeds their imports. This surplus helps generate government revenue and foreign reserves. However, fluctuations in global oil prices can significantly impact this balance.

Infrastructure Development

Despite resource wealth, Gabon's infrastructure development faces challenges. The total road network is estimated to be around 8,000 kilometers, with a focus on major towns and the coast. However, rural areas often lack proper roads. The government is investing in improving transportation infrastructure, including railways and ports.

Fiscal Policy

Gabon's government spending prioritizes infrastructure development, social programs, and maintaining a large public sector. Tax collection is an ongoing area of focus to improve government revenue and reduce reliance on oil income.

Monetary Policy

As a member of the Central African Economic and Monetary Community (CEMAC), Gabon adheres to a common monetary policy set by the Bank of Central African States (BEAC). This policy focuses on maintaining regional financial stability.

Trade Agreements

Gabon participates in several regional trade agreements, like the Economic and Monetary Community of Central Africa (CEMAC) and the Economic Community of West African States (ECOWAS). These agreements aim to facilitate trade with neighboring countries.

Environmental Regulations

Gabon boasts significant rainforests and protected areas. The government is establishing environmental regulations to promote sustainable resource management and combat deforestation. These regulations may encompass logging practices, waste disposal, and wildlife protection.

Tax System in Gabon

Corporate tax rate: The standard corporate tax rate in Gabon is still 35%. However, there are lower rates for specific sectors, such as Public institutions: 20%
Sales tax: Gabon utilizes a Value Added Tax (VAT) system. The current VAT rate is still 18%, applied to most goods and services.
Property tax: A property tax system exists in Gabon, with rates likely varying depending on location and property type. Specific details on these rates are difficult to find.
Payroll tax: Gabon has a payroll tax system. Both employers and employees contribute to social security funds through payroll tax deductions. The exact contribution rates might require further research.
Tax deductions and credits: Specific details on tax deductions and credits are limited, but there are likely allowances for typical business expenses that can reduce taxable income. This can lighten the tax burden for businesses. Additionally, Gabon offers tax incentives for companies in certain sectors, like free zones and special economic zones, to encourage investment.
Tax compliance: The efficiency of tax collection in Gabon is an ongoing area of improvement. The government is actively working to strengthen tax administration to increase revenue collection. According to a 2023 report by the International Monetary Fund (IMF), these efforts are showing some progress.
Tax burden: Compared to some neighboring countries, the overall tax burden in Gabon is considered moderate for both individuals and businesses. The tax-to-GDP ratio in Gabon sits at around 10.3%, which is lower than the OECD average but has shown a slight increase in recent years.

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Gabon

20 Nov 2024

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