Press Release: IMF Staff Mission Completes Discussions on the Fourth Review of the Stand-By Arrangement with Gabon
May 31, 2005
"A staff team from the International Monetary Fund, led by Mr. Roger Nord, visited Gabon during May 16-26, 2005. Its discussions with the Gabonese authorities reviewed the performance of the Gabonese economy through end-March 2005 and developments and prospects for the remainder of 2005.
"Much has been achieved since the economic program supported by the stand-by arrangement was initiated in May 2004. Significant progress has been made in implementing structural reforms aimed at diversifying the Gabonese economy and strengthening non-oil growth. Fiscal policy has been prudent, characterized by expenditure control and a judicious use of the additional revenue resulting from high oil prices. Domestic and external debt has been reduced, thereby improving the medium-term outlook for public finances. Against this background, the mission's assessment is that performance against the targets of the stand-by arrangement is satisfactory and warrants recommending approval of its fourth and final review.
"The outlook for the economy in 2005 is positive. Against the background of stable oil production, the mission expects non-oil growth to reach at least 3 percent, led by continued strength in manganese exports and a strengthening recovery in the timber sector. Over the medium term, Gabon faces the challenge of finite oil resources, requiring continued fiscal consolidation and reforms to strengthen both the efficiency of the public sector as well as the environment for private sector development. Current high oil prices represent an opportunity to place Gabon's public finances on a durable sound footing that should not be squandered.
"Against the background of the satisfactory performance of the current program, the mission had preliminary discussions with the Gabonese authorities on their request for a multi-year arrangement to succeed the stand-by arrangement once its expires. The discussions will continue over the coming months and the IMF mission looks forward to the completion of ongoing steps allowing for the elaboration of a multi-year arrangement."