Gabon: Request for a Three-Year Extended Arrangement Under the Extended Fund Facility—Supplementary Information
Author:
International Monetary Fund. African Dept.
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Publication Date:
26 Aug 2021
eISBN:
9781513592107
ISBN:
9781513592107
Language:
English
Keywords:
staff appraisal; conclusion of contract; percent of goods; orders on the Ministry; purchase of goods; Arrears; Capital spending
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The Gabonese economy was gradually recovering from the 2014 oil price shock when it was hit by the Covid-19 pandemic. Decisive confinement measures have helped save lives, but the pandemic and the fall in oil prices have severely hit the economy, increasing unemployment and poverty. With a weak economy and increased COVID-19 related spending, the fiscal deficit has widened, with a sharp increase in public debt. Emergency financing from the IMF through the Rapid Financing Instrument (US$299.61 million) helped meet urgent balance of payment needs in 2020. Growth is expected to resume in 2021 but the pandemic has made the economic outlook very challenging and generated sizable financing needs over the medium term.

Abstract

The Gabonese economy was gradually recovering from the 2014 oil price shock when it was hit by the Covid-19 pandemic. Decisive confinement measures have helped save lives, but the pandemic and the fall in oil prices have severely hit the economy, increasing unemployment and poverty. With a weak economy and increased COVID-19 related spending, the fiscal deficit has widened, with a sharp increase in public debt. Emergency financing from the IMF through the Rapid Financing Instrument (US$299.61 million) helped meet urgent balance of payment needs in 2020. Growth is expected to resume in 2021 but the pandemic has made the economic outlook very challenging and generated sizable financing needs over the medium term.

Title page

GABON

REQUEST FOR A THREE-YEAR EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY—SUPPLEMENTARY INFORMATION

July 27, 2021

Approved By

Vitaliy Kramarenko (AFR) and Geremia Palomba (SPR)

Prepared by the African Department

1. This supplement provides an update on the authorities’ efforts to clear external arrears and on the completion of one prior action, based on new information that has become available since the staff report was issued to the Board. It does not alter the thrust of the staff appraisal.

Update to Text Table 7. Gabon: External Arrears in 2021

article image
Source: Gabonese authorities.

2. Staff obtained an update on the authorities’ efforts to clear external arrears through July 23, 2021. As committed in their MEFP, the authorities have cleared external arrears to multilateral creditors (African Development Bank, the Central African States Development Bank, and the Islamic Development Bank), and cleared official bilateral arrears arising from commercial claims where the sovereign guarantee was triggered. As noted in the Staff Report, in line with the Fund ‘s Lending-into Arrears Policy, they have also reached out to remaining external commercial creditors to share relevant information regarding their financial difficulties and provided them with an opportunity to give inputs on their strategy to clear the arrears owed to them.

3. The authorities have confirmed that they have completed the prior action on the publication of COVID-19-related procurement contracts. In particular, they published 500 procurement contracts, invoices, or payment orders on the Ministry of Economy website,1 amounting to CFAF 57 billion (Table 1). The contracts, invoices, and payment orders published thus far represent 86.9 percent of the total purchase of goods and services and cap ital expenditures related to the COVID-19 response in 2020 (CFAF 51.8 billion) and 80 percent of the same type of Covid-19-related expenditure (goods and services and capital expenditure) in 2021 up to end-April (CFAF 15 billion). The authorities have indicated that, in line with the expedited processes permitted under the opinion issued by the Court of Accounts (No. 0006/19–20/CC/CC/GC of June 3, 2020), many COVID-19-related procurements were completed via the issuance and payment of invoices rather than the conclusion of contracts.

Table 1.

Gabon: COVID-19 Spending — RFI Commitments Summary as of July 26, 2021

article image
Source: Gabonese authorities.

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Cover IMF Staff Country Reports
Gabon: Request for a Three-Year Extended Arrangement under the Extended Fund Facility-Press Release; Staff Report; Supplementary Information, and Statement by the Executive Director for Gabon
Author:
International Monetary Fund. African Dept.
Volume/Issue:
Volume 2021: Issue 189
Publisher:
International Monetary Fund
ISBN:
9781513592107
ISSN:
1934-7685
Pages:
133
DOI:
https://doi.org/10.5089/9781513592107.002