In 2016 and 2017, the African Development Bank granted two budget support to Gabon, to support the country’s reforms aimed at restoring macroeconomic stability following the collapse of oil prices and rebuilding its finances.
However, the return to balance is slow, and the persistence of budget deficits in 2018 has led the Gabonese authorities to seek additional support.
The Board of Directors of the Bank responded favorably to this request by granting a loan of 100 million euros. This loan will finance the third phase of the Economic and Financial Reform Support Program, called PAREF-III.
This phase will consist of strengthening the consolidation of public finances and supporting the diversification of the economy. In the long term, it will have to contribute to a lasting restoration of the balance of the finances by reducing the budget deficit to 0.5% of the gross domestic product (GDP) in 2018, to move to a surplus balance as early as 2019. In addition, non-oil revenues, which represent 10.8% of GDP in 2018, should increase to 11.7% in 2019.
Other objectives assigned to PAREF-III: improve the business climate, foster economic growth of at least 3% in 2019, reduce payroll by 10% in (2019) compared to 2016 and lower by at least 40% , as of September 30, 2019), the stock of debt owed to the member companies of the Club de Libreville (a set of creditors of the Gabonese State constituted in the form of an economic interest group).
“This new budget support from the Bank will increase its support to the Gabonese economy, which is recovering, of course, with difficulty, but gradually. Estimated at 1.2% in 2018, growth should be 3.1% in 2019 and 5% in the medium term, “said Ousmane Doré, the Bank’s Central Africa Director-General.
With an active portfolio estimated at 763.3 million euros, Gabon is one of the three main clients of the African Development Bank. The activities financed by the Bank in Gabon as part of its Country Strategy Paper ( CSP ) for the period 2016-2020 are in line with the Bank’s Gabon Emerging Strategic Plan (PSGE) and High 5s.
