Gabon: A Substantial Increase in Funding in 2023

Borrowings higher than initially forecast

In 2023, the Gabonese government significantly increased its financing by making greater use of financial markets, both domestic and foreign. Initially, Gabon planned to raise 877.5 billion FCFA, but this amount was revised to 1,258.3 billion FCFA, an increase of 43%. This increase is part of the Transformation Acceleration Plan (PAT), launched by former President Ali Bongo, aimed at supporting the country’s economic diversification and the emergence of new productive sectors.

Mobilization in financial markets and use of funds

Gabon’s financing increase in 2023 was marked by a growth of 127.1% compared to 2022, with funds coming mainly from the domestic market (64.7%) and external financing (35.3%). These loans were mobilized to finance projects in the defense, telecommunications, infrastructure and public services sectors. Among these projects, the Gabon Infrastructure Sector Support Program (PASIG) and the rehabilitation of the Transgabonaise benefited from these funds. However, the majority of the funds (88.6%) were allocated to balancing the country’s budget.

Debt under control according to Libreville, but worrying for the IMF

Although Gabonese authorities claim that public debt is under control, the International Monetary Fund (IMF) is concerned about the rising debt-to-GDP ratio, which will reach 70.5% in 2023, exceeding the 70% threshold set by CEMAC for sustainable debt. The IMF projects that debt could rise to 78.9% by 2025, while Gabon’s annual economic growth is expected to remain modest at around 3% in the coming years.

Conclusion

The increase in Gabon’s financing in 2023 shows a willingness to pursue structuring projects while maintaining a balanced budget. However, the IMF’s concerns highlight the need for Gabon to control its public debt in order to ensure long-term economic viability, especially in a context of moderate growth.