Statement of an IMF Staff Mission at the Conclusion of a Visit to GabonPress Release No. 08/80
April 9, 2008
A staff mission from the International Monetary Fund (IMF) headed by Mr. Cyrille Briançon visited Libreville from March 26-April 8, 2008 to conduct policy discussions and examine developments in Gabon's reform program supported by a three-year Stand-By Arrangement with the IMF.
Mr. Briançon issued the following statement at the end of the mission:
"The mission held constructive meetings including with Mr. Jean Eyeghe Ndong, Prime Minister; Mr. Paul Toungui, State Minister, Minister of Economy, Finance, Budget, and Privatization; Mr. Richard Onouviet, Minister of Planning, Development Programming and Regional Development; and Mr. Hervé Nze-Nong, National Director, Bank of Central African States (BEAC). The Fund mission met also with representatives of the private sector, donors and lenders.
"The state of the Gabonese economy and its medium-term outlook, meeting the challenges posed by the downward trend of oil production, and diversifying and strengthening competitiveness of the economy were the focus of discussions.
"The mission welcomed the robust growth of 6 percent that Gabon recorded in 2007 noting the dynamic performance of the non-oil sector and domestic demand, and the sustained increase in the commodities market. Oil production also picked up slightly. Inflation, however, reached 5 percent on average in 2007 reflecting the combined effect of rising prices of foodstuffs and retail fuel products, as well as pressure from domestic demand.
"The implementation of macroeconomic policies and structural reforms slowed in late 2007 posing risks to the economic outlook. On fiscal policy, while the deficit declined from its 2006 level, at 13.3 percent of non-oil GDP at end-2007 it exceeded its target by 1.6 percentage points of non-oil GDP. This reflected overruns in major expenditure categories including higher fuel subsidies. The mission welcomed progress in implementing the oil revenue-forecasting model that will help project and monitor oil revenues. In other areas, such as public financial management, reforms have been delayed.
"The mission encouraged the government to pursue a prudent fiscal policy and reduce the barriers to competition, in order to lower inflation. In particular, the mission called on the authorities to bring government expenditure more firmly under control, including fuel price subsidies, with the aim of keeping the non-oil fiscal deficit at the projected program level, while implementing the planned poverty reducing social measures. The mission notes that further structural reforms are essential for improving governance and the business climate. In this context, the mission urged the authorities to complete the remaining reforms.
"Discussions will continue in the weeks ahead to enable the authorities to define and deepen the strategies and measures needed to facilitate achievement of the macroeconomic and structural objectives set for 2008 and the medium term."