Press Release: Statement by the IMF Mission Chief for Gabon
March 13, 2007Press Release No.07/46
The following statement was issued today in Libreville by Roger Nord, the IMF mission chief for Gabon:
"Over the past two weeks, an IMF team visited Libreville for discussions on policies and structural reforms that could underpin the government's far-reaching economic program. Understandings were reached, in principle, on a program that could be supported by the IMF through a three year Stand-By Arrangement. During its stay, the mission held constructive discussions with Prime Minister Jean Eyéghé Ndong and members of his government, as well as other senior officials. In addition, the mission met with the President of the Senate, the President of the Economic and Social Council, the national director of the Bank of Central African States (BEAC), representatives from the private sector, and the donor community.
The critical challenge facing Gabon is to prepare the economy for the post-oil era and make decisive progress in poverty reduction. The current buoyant level of oil prices represents an opportunity to address pressing infrastructural and social needs. But history has taught us that oil prices can be very volatile and oil production in Gabon is expected to decline over the medium term. This is the time, therefore, to reduce decisively Gabon's fiscal imbalances and its vulnerability to swings in oil prices.
To this end, the medium-term economic program aims at putting public finances on a firm path toward long-term sustainability, support the diversification of the Gabonese economy, and boost progress in poverty reduction. A critical objective of the program is to ensure that public spending remains within the limits defined in the budget and that public debt, which represents a heavy burden for public finances and has been a factor of financial vulnerability in the past, is significantly reduced and carefully managed in the future. A key role falls to strengthening oil revenue administration and public financial management with the objective of raising the effectiveness and quality of public spending to ensure a higher return on investment in infrastructure and social services. At the same time, the program will aim at boosting private sector development, a precondition for growth, employment creation, and durable poverty reduction. Strengthening governance and transparency, including through Gabon's participation in the Extractive Industries Transparency Initiative, will be critical in this effort.
The understandings reached with the authorities are subject to approval by the management and Executive Board of the IMF. In the period ahead the government intends to firm up some of the policy undertakings and implement a number of actions to help underpin program objectives. Provided that this reform momentum is maintained, the IMF Executive Board could consider the request for a Stand-By Arrangement in May."