Front Matter

Front Matter Page

© 2004 International Monetary Fund

February 2004

IMF Country Report No. 04/28

Gabon: 2003 Article IV Consultation and Staff-Monitored Program—Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Gabon

Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2003 Article IV consultation with Gabon and staff-monitored program for Gabon, the following documents have been released and are included in this package:

  • the staff report for the 2003 Article IV consultation and staff-monitored program, prepared by a staff team of the IMF, following discussions that ended on October 1, 2003, with the officials of Gabon on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on October 27, 2003. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.

  • a staff supplement of November 5, 2003 updating information on recent developments.

  • a Public Information Notice (PIN) summarizing the views of the Executive Board as expressed during its November 10, 2003 discussion of the staff report that concluded the Article IV consultation.

  • a statement by the Executive Director for Gabon.

The document(s) listed below have been or will be separately released.

Letter of Intent sent to the IMF by the authorities of Gabon*

Memorandum of Economic and Financial Policies by the authorities of Gabon*

Statistical Annex

Technical Memorandum of Understanding*

*May also be included in Staff Report

The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.

To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to

Copies of this report are available to the public from

International Monetary Fund • Publication Services

700 19th Street, N.W. • Washington, D.C. 20431

Telephone: (202) 623-7430 • Telefax: (202) 623-7201

E-mail: • Internet:

Price: $15.00 a copy

International Monetary Fund

Washington, D.C.

Front Matter Page



Staff Report for the 2003 Article IV Consultation and Staff–Monitored Program

Prepared by the African Department

(In collaboration with other departments)

Approved by the Amor Tahari and Juha Kähkönen

October 27, 2003

  • The Executive Board completed Gabon’s 2001 Article IV consultation on April 1, 2002. Performance under the 18-month Stand-By Arrangement approved on October 23, 2000 was mixed, and only the first two reviews were completed.

  • Against a backdrop of declining oil production and low growth in the non-oil economy, the authorities have requested Fund support for a program designed to adjust the economy through fiscal reforms and the removal of impediments to private sector development. To strengthen the track record, a staff-monitored program has been established through end-2003. The letter of intent and memorandum of economic and financial policies are attached to this report.

  • A staff visit to assess performance in 2002 and progress in policy implementation took place in Libreville during February 4–12, 2003. Discussions on the 2003 Article IV consultation and a medium-term reform program were held in Libreville during March 27-April 10, 2003. Further discussions on the program took place at headquarters during the periods July 23–25, August 25–29, and September 29-October 1, 2003. The staff team comprised Messrs. Sacerdoti (head), Ntamatungiro, Stern, Blavy (all AFR), and Ms. Guillé (Assistant, TGS). Mrs. Glennerster (PDR) participated in the last set of meetings. Mr. Nguema Affane, Advisor to the Executive Director for Gabon, participated in the meetings. The mission worked closely with the World Bank staff on structural issues. The mission had meetings with Mr. Toungui, the Minister of State in charge of Finance, Economy, Budget, and Privatization; other ministers and senior officials from the Ministry of Planning, the Ministry of Civil Service, and the Ministry in charge of Anticorruption and Poverty Reduction; the National Director of the regional central bank (BEAC); and other senior government officials. The mission also met with members of the Constitutional Court and representatives of the private sector.

  • Municipal and senatorial elections were held in December 2002 and February 2003, respectively. These elections, like the parliamentary elections organized in December 2001, were won by the President’s ruling party (Parti Démocratique Gabonais, PDG) and its allies. The next presidential elections are scheduled for late 2005.

  • Gabon has accepted the obligations of Article VIII, Sections 2(a), 3, and 4, and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions. The authorities have consented to publish the staff report.

Table of Contents

  • Executive Summary

  • I. Introduction

  • II. Main Challenges

  • III. Recent Economic Developments

  • IV.Recent Adjustment and Reform Efforts

  • V. Policy Discussions

  • A. Medium-Term Objectives and Macroeconomic Policies

    • Fiscal policy over the medium term

    • Fiscal policy in 2003

    • Budgetary targets for 2004 and key policies

    • Monetary policy and financial sector issues

    • External sector policies

  • B. Structural Reforms, Governance, and Poverty Reduction

    • Civil service reform

    • Privatization and restructuring of public enterprises

    • Forestry sector

    • Price liberalization

    • Governance and transparency

    • Private sector development policies

    • Social policy and poverty reduction

  • C. Medium-Term Risks, Vulnerabilities, and Debt Sustainability

  • D. Statistical Issues

  • VI. Program Monitoring

  • VII. Staff Appraisal

  • Boxes

  • 1. External Competitiveness

  • 2. Soundness of the Banking Sector

  • 3. Structural Measures Implemented in 2002 and the First Half of 2003

  • 4. Prospects for the Diversification of the Non-Oil Economy

  • 5. Microfinance Institutions

  • Figures

  • 1. Selected Real and External Sector Indicators, 1999–2006

  • 2. Nominal and Real Effective Exchange Rates, January 1993–June 2003

  • 3. Government Fiscal Operations, 1999–2006

  • Tables

  • 1. Selected Economic Indicators, 2000-06

  • 2. Fiscal Operations of the Central Government, 2001–04

  • 3. Fiscal Operations of the Central Government, 2000–06

  • 4. Balance of Payments, 2000–06

  • 5. Monetary Survey, 2000-04

  • 6. External Debt Outstanding and Scheduled Debt Service, 2000-06

  • 7. Income and Social Indicators, 1980-2000

  • Appendices

  • I. Letter of Intent

    • Attachment 1: Memorandum of Economic and Financial Policies

    • Attachment II: Technical Memorandum of Understanding

  • II. Relations with the Fund

  • III. Relations with the World Bank

  • IV. Assessing External and Public Sector Debt Sustainability

  • V. Bank of Central African States: Safeguards Assessment

  • VI. Statistical Issues

Executive Summary

  • The continued decline in oil production and the absence of sustained adjustment policies have contributed to Gabon’s uneven economic performance over the past three years. Oil production dropped by about 17 percent between 1999 and 2002, although in 2002 the decline was very small. Activity in the non-oil sector, which in 2000 and 2001 showed significant recovery after the recession of 1999, weakened markedly in 2002, when real growth fell to less than 1 percent.

  • Following the weakening of public finances in 2001, in 2002 the authorities made efforts to strengthen fiscal management, but these were hampered by overruns in security and sovereignty expenditures and by support for public enterprises. On the positive side, in 2002, non-oil revenue increased by 1.7 percentage points of GDP to 13.9 percent, reflecting improved revenue collection efforts, including a revamping of tax administration.

  • The pace of structural reforms has accelerated since mid-2002, as the authorities took steps to strengthen budgetary management capacity, improve governance, and foster private sector development. These reforms included the adoption of the anticorruption legislation, the revamping of the computerized budget information system, the reform of the procurement code, and the finalization of financial audits of oil companies.

  • In early 2003 budgetary targets were established in consultation with Fund staff for the first half of 2003, in order to establish a track record. The fiscal targets for end-June 2003 were met, with a shortfall in non-oil revenue offset by lower expenditure. Prudent budgetary implementation enabled the repayment by end-June 2003 of all external debt-service arrears to multilateral institutions, as well as arrears on post-cutoff-date debt and debt service under the last Paris Club rescheduling owed to bilateral creditors.

  • To strengthen further the track record before discussing a possible Fund-supported program, a staff-monitored program has been established for the period September-December 2003, within the framework of the authorities’ medium-term program. Measures identified as prior actions have been implemented.

  • The authorities’ 2003-06 program aims at fostering diversification of the economy and growth, and reduction of poverty, through sustained fiscal adjustment and comprehensive structural reforms. In particular, the structural component focuses on enhancing governance and public finance management, promoting public enterprise restructuring and privatization, and improving the business climate, so as to promote greater domestic and foreign investment.

  • While the authorities’ program constitutes an important step towards addressing Gabon’s challenges, it will need to be strengthened further if debt is to be put on a sustainable path. As the envisaged fiscal adjustment is already very ambitious, focus should be placed on structural reforms designed to boost non-oil sector growth.

Front Matter Page

Public Information Notice (PIN) No. 03/137


November 20, 2003

Corrected on: January 27, 2004

International Monetary Fund

700 19th Street, NW

Washington, D. C. 20431 USA

Telephone 202-623-7100

Fax 202-623-6772

Front Matter Page



Staff Report for Article IV Consultation and Staff-Monitored Program

Supplementary Information

Prepared by the African Department

(In collaboration with other departments)

Approved by Reinold van Til and Juha Kähkönen

November 5, 2003

Front Matter Page

November 10, 2003