## 1gabea2020003 - EXECUTIVE SUMMARY

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### Context and Request for IMF Support
- Authorities requested a purchase under the Rapid Financing Instrument (RFI) of 50 percent of quota (SDR 108 million) to be used as budget support to address urgent balance of payment (BoP) needs and mitigate the risk of disorderly fiscal or BoP adjustment.
- This additional request will bring the total purchases under the RFI to 100 percent of quota in 2020.
- The RFI was judged the appropriate instrument given the urgency of the BoP need and high uncertainty that prevented completing a final review under the Extended Arrangement before it expired on June 18, 2020.
- In their attached LOI, the authorities indicated strong intention to request a new Fund-supported program to help preserve macroeconomic stability and debt sustainability and achieve higher and more inclusive growth.
- Date of document: July 24, 2020.

### Recent COVID-19 Response and Health Measures
- Lockdown lifted on April 28 and State of Emergency ended on May 11; a night-time curfew and strict social distancing guidelines remain in place.
- Laboratory capacity increased to perform up to 10,000 tests per day, with strategy to achieve full testing coverage.
- Execution data through July shows:
  - Over 50 percent of resources devoted to sanitary measures were used.
  - Over 60 percent of resources devoted to social measures were used.
  - Resources devoted to support businesses have barely been spent; a one-stop shop was created to analyze company requests.
- As of mid-July 2020:
  - 273 firms applied for support; 233 were approved for a reduction of 50 percent on the Withholding Synthetic Tax (ISL).
  - With more than 52,000 tests realized, more than 2.3 percent of the population have already been tested.

### COVID-19 Epidemiological Indicators (as reported)
- Average 63.4 new daily cases per 1,000,000 people in June.
- As of July 15, 2020, there were 6,121 confirmed cases (2,843 cases per million people).
- Mortality: 22 deaths per million inhabitants (total of 46 deaths).
- ICU COVID-19 patients: average 12 per day since June; other hospitalizations: average 77 per day since June.
- Males accounted for around 59 percent of cases.
- Information dates referenced: July 8, 2020; July 14, 2020; July 15, 2020.

### Economic Impact and Near-term Outlook
- In Q1 2020:
  - Oil production increased by 5.3 percent y/y, but oil exports declined by about 20 percent.
  - Wood exports declined by 11 percent.
  - Turnover in the manganese industry fell by 12.5 percent.
  - Total non-oil tax revenues declined cumulatively by 11 percent in April 2020 (y/y); VAT dropped by about 16 percent (y/y).
- EMBI spreads on government bonds:
  - Spiked from around 350 basis points (bps) in January 2020 to around 1500 bps in early April, then retreated to around 727 bps as of July 20.
- Moody’s changed the outlook on Gabon’s Caa1 rating from stable to positive in early July 2020.
- Baseline macro projections and assumptions:
  - Assumes Gabon will comply with OPEC agreement and cut oil production by 21 percent in 2020.
  - Overall real GDP expected to contract by 2.7 percent in 2020 (previously -0.4 percent in the Staff Report for RFI-1).
  - Current account deficit projected at 9.5 percent of GDP in 2020, 1 percentage point of GDP higher than envisaged at the time of RFI-1.
  - Imports projected to be higher despite weaker domestic activity due to upward revisions to capital and COVID-19 related spending.

### Projections and Selected Key Macroeconomic Numbers (baseline)
- Overall real GDP growth:
  - 2017 Act.: 0.5; 2018 Est.: 1.0; 2019 Prog.1/: 3.4; 2020 Prel.: 3.8; Proj. 2020: -2.7; 2021: 2.1; 2022: 4.1; 2023: 4.3; 2024: 4.3; 2025: 4.3.
- GDP deflator (annual percent change): series includes -8.6 (RFI-1.2/), -7.9 (Proj. 2020), 3.3 (2021), 3.1 (2022), 2.7 (2023), 3.4 (2024), 3.0 (2025).
- Inflation (yearly average consumer prices): 2.7, 4.8, 3.0, 2.0, 3.0, 3.0, 3.0, 3.0, 2.5, 2.5, 2.5, 2.5 (series).
- Exports, f.o.b. (annual percent change): 17.8, 14.0, 12.1, 14.9, 0.6, -30.4, -31.7, 6.1, 10.5, 6.0, 5.6, 5.0 (series).
- Overall current account balance (percent of GDP): -1.1 (2019), -0.3 (2020), -2.0 (2021), -8.5 (2022), -9.5 (2023), -6.3 (2024), -3.6 (2025).

### Fiscal Measures and Revised Finance Law (RFL) 2020
- RFL projects the non-oil deficit to widen to about 9 percent of non-oil GDP, from 5.7 percent projected in the RFI-1 staff report and 4.2 percent in the initial finance law (IFL).
- RFL revisions include:
  - Non-oil revenue revised downward due to lower activity, constraints to tax compliance, and tax relief measures.
  - Health-related spending stepped up by 0.5 percent of GDP.
  - Social spending increased by 0.3 percent of GDP.
  - Other current spending cuts implemented.
  - Both domestically- and foreign-financed capital expenditures revised downward from the 2020 IFL due to project delays and reprioritization.
- Text Table 3 summary (selected entries; units Billions of CFAF and percent of GDP where shown):
  - Oil Revenue: 684.0, 398.4, 394.9, 6.6, 4.4, 4.5 (series across columns in source).
  - Non Oil Revenue: 1245.0, 1047.2, 949.4, 12.0, 11.7, 10.7.
  - Current expenditure: 1278.0, 1351.0, 1367.9, 12.4, 15.0, 15.4.
  - Capital expenditure: 513.0, 354.3, 379.5, 5.0, 3.9, 4.3.
  - Nonoil balance: -303.0, -390.0, -595.9, -2.9, -4.3, -6.7.
  - Overall balance (cash basis): 152.0, -245.0, -481.1, 1.5, -2.7, -5.4.

### COVID-19 Related Financing and Execution (selected, as of July 2020)
- Execution of COVID measures (Billions of CFA francs):
  - Sanitary measures: initial 66.16; updated 66.13; execution 33.94; execution rate 51.4.
  - Social measures: initial 47.92; updated 25.01; execution 15.82; execution rate 63.3.
  - Payment of utilities: initial 5.09; updated 9.08; execution 8.64; execution rate 96.0.
  - Free public transportation: updated 6.04; execution 4.08; execution rate 68.0.
  - Others (e.g., food bank): initial 42.9; updated 10.0; execution 3.10; execution rate 31.0.
  - Tax relief measures for firms: initial 83.0; updated 83.0; execution 0.03; execution rate shown as 30.0 but source table shows 0.03 execution.
  - Emergency funds and moratorium for firms: initial 225.0; updated 225.0; execution 0.00; execution rate 0.0.
  - Total: initial 422.0; updated 399.10; execution 49.79; execution rate 12.5.
- Donor support mobilized post-RFI-1:
  - Additional Euro 100 million (0.7 percent of GDP) in budget support from the African Development Bank (AfDB) to be disbursed by end-2020.
  - US$9 million from the World Bank (a health sector project).

### Financing Strategy, Remaining Gaps, and IMF Support
- Overall deficit projected at 5.4 percent of GDP (cash basis).
- Authorities plan a hybrid financing strategy including:
  - Issue additional government securities on the regional market (1.0 percent of GDP).
  - Reduce government deposits accumulation at the BEAC.
- With a proposed further purchase under the RFI, staff projects a remaining financing gap of about 0.7 percent of GDP.
- Scope for additional domestic financing is limited; staff recommends relying on external concessional borrowing to close the remaining gap.
- Recommendations include developing a contingency plan and considering additional expenditure reprioritization while protecting spending that benefits the most vulnerable.
- A successful refinancing of the commercial bridge loan from AFREXIM due in 2020 would ease debt service and pressures on the financing gap.
- Staff supports the authorities’ request for a purchase under the RFI in the amount of SDR 108 million (50 percent of quota), bringing total purchases under the RFI to 100 percent of quota.

### Public Debt Dynamics, Vulnerabilities, and SOE-related Fiscal Risks
- Public debt remains sustainable but debt dynamics have worsened and risks increased since RFI-I.
- Under the baseline, public debt will rise to 75 percent of GDP in 2020 and 2021 due to inclusion of validated past domestic arrears and higher deficits and lower growth, then decline gradually to 60.2 percent in 2025.
- Gross financing needs (GFN) average 12 percent of GDP over 2020−25, compared with a historical average of 4 percent of GDP over 2009−19.
- Interest payments projected to absorb 17 percent of government revenues on average over the coming five years.
- Public debt is particularly vulnerable to real GDP growth and exchange rate shocks; debt profile risks are high.
- Stronger financing assurances in 2020−21, including debt reprofiling, would be critical to mitigate near-term risks.
- SOE risks:
  - Fiscal risks include implied guarantees due to debt accumulation, cash flow shortages driven by abuses and weak revenue collection, institutional risks, and wage bill management.
  - Support to SOEs should be well designed and targeted to avoid bailouts covering inefficiencies, mismanagement, and governance weaknesses.
  - An IMF technical assistance mission is programmed in FY2020 to support capacity to assess fiscal risks, including from SOEs.

### COVID-19 Emergency Spending Transparency and PFM Reforms
- Commitments to safeguard emergency spending quality:
  - Report quarterly on the spending of emergency funds.
  - Commission an independent, third-party audit within six months of disbursement and publish results online within nine months of the end of each relevant fiscal year.
  - Publish related procurement contracts online within 30 days of being awarded, along with beneficial ownership information and ex-post-delivery reports.
- Involvement of the Court of Accounts and the National Commission to Combat Illegal Enrichment (CNLCEI) in monitoring is noted.
- PFM and governance actions taken or underway:
  - Public presentation to Parliament about sanitary and economic measures and health infrastructure improvements (May 2020).
  - Transmission of all oil and mining contracts and licenses of private companies with the Gabonese government to the BEAC in June 2020.
  - Council of Ministers reaffirmed commitment to expedite submission of Gabon’s application to EITI (June 12, 2020).
  - Completed audit of the 2015−17 domestic arrears; government validated FCFA 282 billion of identified domestic arrears and preparing a strategy to settle the stock with priority on SMEs.
  - Authorities started settling overdue loans of up to CFAF 100 million to SMEs in June 2020.

### Financial Sector and Banking System
- Banking system at end-December 2019 reported healthy:
  - Solvency ratio at 17 percent (minimum 10.5 percent).
  - Short-term liquidity ratio close to 140 percent (minimum 100 percent).
- COVID-19 could increase NPL ratios and provisioning requirements; need to avoid accumulation of new arrears.
- COBAC measures:
  - Banks instructed to utilize a capital conservation buffer of 2.5 percent to absorb pandemic-related losses.
  - Banks requested to adopt a restrictive dividend distribution policy.
  - Plans to set up closer monitoring of banks’ liquidity.
- BEAC actions:
  - Monetary easing in March 2020: decrease in policy rates and increase in liquidity provision.
  - June 2020: relaxation of eligibility criteria for private and public collateral to be refinanced by BEAC.
- Financial soundness indicators (selected):
  - Total bank regulatory capital to risk-weighted assets: 15.1 (2019).
  - Non-performing loans to total loans: 11.4 (2019).

### Risk Assessment Matrix — Key Risks and Recommended Responses
- Domestic risks (Relative Likelihood: Medium; Impact if Realized: Medium):
  - Disruption in domestic oil production: reprioritize fiscal spending; enhance facility maintenance and encourage exploration.
  - Deterioration of domestic political conditions: communicate program benefits; step up governance reforms.
  - Intensified domestic COVID-19 transmission: enforce social distancing; ramp up health preparedness; secure resources and ensure transparency in COVID spending.
- External risks (Relative Likelihood: High; Impact if Realized: High):
  - Prolonged COVID-19 outbreak: reprioritize spending; accelerate structural reforms; energize external support.
  - Oversupply in the oil market: increase non-oil revenue; reprioritize spending; accelerate reforms to support private sector growth.
  - More protectionism: improve business environment; diversify exports and markets; reprioritize spending.
- Note: Relative likelihood definitions: “low” <10 percent, “medium” 10–30 percent, “high” 30–50 percent.

### Supplementary Letter and Additional Information (July 30–31, 2020)
- Since the April 9, 2020 RFI purchase, Gabon’s outlook deteriorated; 2020 GDP forecast revised from -0.4 to -2.7 percent.
- Urgent BoP and fiscal gap of about FCFA 215 billion (after accounting for the April 9 RFI purchase).
- As of July 26, 2020, about 7,000 confirmed COVID-19 cases and 49 deaths, concentrated in Libreville.
- Government requests an additional RFI purchase equivalent to SDR 108 million (approximately USD 148.8 million), corresponding to 50 percent of quota.
- External financing approvals noted:
  - AfDB approved on June 24 EUR 100.5 million in budget support.
  - World Bank and AFD approved combined projects bringing USD 5 million of additional resources.
- Transparency and governance commitments reiterated, including online publication of procurement contracts and independent audits.
- New information: technical issue led to official bilateral arrears to Canada of US$124,056; authorities issued payment instructions; staff received assurances of non-objection from the Executive Director representing Canada.
- Authorities reaffirm commitment to strict fiscal discipline, avoid new arrears, and return public debt-to-GDP ratio to a downward path by 2022.
- Authorities expressed interest in a successor arrangement following expiration of the EFF in June 2020.

### Staff Appraisal and Policy Recommendations
- Staff finds the authorities’ fiscal response to COVID-19 appropriate in addressing healthcare needs, protecting vulnerable households, and supporting small businesses.
- Staff recommendations:
  - Closely monitor fiscal risks, including those from SOEs.
  - Continue improving governance to ensure proper use of public funds, including COVID-19-related resources.
  - Resume growth-friendly fiscal consolidation once the crisis abates.
  - Develop promptly a reform program addressing immediate and medium-term challenges, potentially supported by a new IMF-supported arrangement.

*Source: IMF staff report content (excerpts provided in the content unit).*

### EXECUTIVE SUMMARY

### 1gabea2020003 - EXECUTIVE SUMMARY

### Context and Request for IMF Support
- Authorities requested a purchase under the Rapid Financing Instrument (RFI) of 50 percent of quota (SDR 108 million) to be used as budget support to address urgent balance of payment (BoP) needs and mitigate the risk of disorderly fiscal or BoP adjustment.
- This additional request will bring the total purchases under the RFI to 100 percent of quota in 2020.
- The RFI was judged the appropriate instrument given the urgency of the BoP need and high uncertainty that prevented completing a final review under the Extended Arrangement before it expired on June 18, 2020.
- In their attached LOI, the authorities indicated strong intention to request a new Fund-supported program to help preserve macroeconomic stability and debt sustainability and achieve higher and more inclusive growth.
- The DSA indicates public debt remains sustainable, though debt dynamics have worsened with significant downside risks. Capacity to repay the Fund remains adequate.
- Date of document: July 24, 2020.

### Recent COVID-19 Response and Health Measures
- Authorities lifted the lockdown on April 28 and ended the State of Emergency on May 11; a night-time curfew and strict social distancing guidelines remain in place.
- Laboratory capacity increased to perform up to 10,000 tests per day, with strategy to achieve full testing coverage.
- Execution data through July shows:
  - Over 50 percent of resources devoted to sanitary measures were used.
  - Over 60 percent of resources devoted to social measures were used.
  - Resources devoted to support businesses have barely been spent; a one-stop shop was created to analyze company requests.
- As of mid-July 2020, 273 firms applied for support; 233 were approved for a reduction of 50 percent on the Withholding Synthetic Tax (ISL).
- With more than 52,000 tests realized, more than 2.3 percent of the population have already been tested.

### COVID-19 Epidemiological Indicators (as reported)
- Average 63.4 new daily cases per 1,000,000 people in June.
- As of July 15, 2020, there were 6,121 confirmed cases (2,843 cases per million people).
- Mortality: 22 deaths per million inhabitants (total of 46 deaths).
- ICU COVID-19 patients: average 12 per day since June; other hospitalizations: average 77 per day since June.
- Males accounted for around 59 percent of cases.
- Information dates referenced: July 8, 2020; July 14, 2020; July 15, 2020.

### Economic Impact and Near-term Outlook
- In Q1 2020:
  - Oil production increased by 5.3 percent y/y, but oil exports declined by about 20 percent due to lower prices and external demand.
  - Wood exports declined by 11 percent.
  - Turnover in the manganese industry fell by 12.5 percent.
  - Total non-oil tax revenues declined cumulatively by 11 percent in April 2020 (y/y); VAT dropped by about 16 percent (y/y).
- EMBI spreads on government bonds:
  - Spiked from around 350 basis points (bps) in January 2020 to around 1500 bps in early April, then retreated to around 727 bps as of July 20.
- Moody’s changed the outlook on Gabon’s Caa1 rating from stable to positive in early July 2020.

### Projections and Key Macroeconomic Numbers (baseline assumptions)
- Baseline assumes Gabon will comply with OPEC agreement and cut oil production by 21 percent in 2020.
- Overall real GDP is expected to contract by 2.7 percent in 2020 (previously -0.4 percent in the Staff Report for RFI-1).
- Current account deficit projected at 9.5 percent of GDP in 2020, 1 percentage point of GDP higher than envisaged at the time of RFI-1.
- Imports projected to be higher despite weaker domestic activity due to upward revisions to capital and COVID-19 related spending.
- Fiscal position will significantly worsen relative to the RFI-1 due to weaker non-oil revenue and COVID-19-related revenue and spending.
- Text Table 2: Projected 2020 export values, prices, and volumes (y/y percent change):
  - Export values: Oil -8.0; 4th & 5th Rev. -48.2; RFI-1 -47.7 (table headers indicate columns but exact mapping preserved as in source).
  - Manganese export value: 3.4; 4th & 5th Rev. -21.0; RFI-1 -9.5.
  - Price: Oil -6.1; 4th & 5th Rev. -45.9; RFI-1 -35.7.
  - Price: Manganese -6.0; 4th & 5th Rev. -11.5; RFI-1 -7.7.
  - Volume: Oil -2.8; 4th & 5th Rev. -6.2; RFI-1 -21.0.
  - Volume: Manganese 10.0; 4th & 5th Rev. 4.0; RFI-1 -1.8.

### Fiscal Measures and Revised Finance Law (RFL) 2020
- RFL projects the non-oil deficit to widen to about 9 percent of non-oil GDP, from 5.7 percent projected in the RFI-1 staff report and 4.2 percent in the initial finance law (IFL).
- RFL revisions:
  - Non-oil revenue revised downward due to lower activity, constraints to tax compliance, and tax relief measures.
  - Health-related spending stepped up by 0.5 percent of GDP.
  - Social spending increased by 0.3 percent of GDP.
  - Other current spending cuts implemented.
  - Both domestically- and foreign-financed capital expenditures revised downward from the 2020 IFL due to project delays and reprioritization.

### COVID-19 Related Financing and Execution (Text Table 1, as of July 2020)
- Initial plan (pre-RFI-1), Updated plan (post-RFI-1), Execution (July 2020), Execution rate (percent) — selected entries (Billions of CFA francs):
  - Sanitary measures: 66.16 (initial), 66.13 (updated), 33.94 (execution), 51.4 (execution rate).
  - Social measures: 47.92 (initial), 25.01 (updated), 15.82 (execution), 63.3 (execution rate).
  - Payment of utilities: 5.09 (initial), 9.08 (updated), 8.64 (execution), 96.0 (execution rate).
  - Free public transportation: - (initial), 6.04 (updated), 4.08 (execution), 68.0 (execution rate).
  - Others (e.g., food bank): 42.9 (initial), 10.0 (updated), 3.10 (execution), 31.0 (execution rate).
  - Tax relief measures for firms: 83.0 (initial), 83.0 (updated), 0.03 (execution), 0.0 (execution rate shown as 30.0 but source table shows 0.03 execution).
  - Emergency funds and moratorium for firms: 225.0 (initial), 225.0 (updated), 0.00 (execution), 0.0 (execution rate).
  - Total: 422.0 (initial), 399.10 (updated), 49.79 (execution), 12.5 (execution rate).
- Donor support mobilized post-RFI-1:
  - Additional Euro 100 million (0.7 percent of GDP) in budget support from the African Development Bank (AfDB) to be disbursed by end-2020.
  - US$9 million from the World Bank (a health sector project).

### Financial Sector and Banking System Risks
- Banking system at end-December 2019 reportedly healthy:
  - Solvency ratio at 17 percent (minimum 10.5 percent).
  - Short-term liquidity ratio close to 140 percent (minimum 100 percent).
- COVID-19 could increase NPL ratios and provisioning requirements, underscoring need to avoid accumulation of new arrears.
- COBAC measures:
  - Banks instructed to utilize a capital conservation buffer of 2.5 percent to absorb pandemic-related losses.
  - Banks requested to adopt a restrictive dividend distribution policy.
  - Plans to set up closer monitoring of banks’ liquidity.
- BEAC actions:
  - Monetary easing in March 2020 (prior to RFI-1): decrease in policy rates and increase in liquidity provision.
  - June 2020: relaxation of eligibility criteria for private and public collateral to be refinanced by BEAC.

### Risks and Scenarios
- Near-term outlook subject to considerable uncertainty and downside risks (Annex I, RAM).
- Baseline premised on temporary nature of pandemic and normalization of global outlook later in 2020.
- Downside scenario: prolonged global COVID-19 outbreak could:
  - Reduce global supply and demand.
  - Further lower oil and other commodity export prices.
  - Disrupt critical imports and capital inflows.
  - Lead to deeper domestic pandemic expansion, intensified human suffering, higher budgetary costs, larger contraction in economic activity, larger fiscal and external financing needs, and increased public debt vulnerabilities.

### Policy Priorities and Authorities’ Actions
- Main priorities: limit spread of virus to save lives; protect the real economy against the dual shock; contain balance of payments deterioration; preserve debt sustainability.
- Authorities’ measures:
  - Strengthen healthcare facilities.
  - Protect most vulnerable households.
  - Support private sector, notably small businesses, via reduction of licensing fees and tax relief (Annex II).
  - Adopted revised budget with larger deficit to accommodate automatic stabilizers and crisis-related emergency revenue measures and spending.
  - Discussions with COBAC and commercial banks to define access modalities for bank-supported state-guaranteed support, with criteria including prior relationship with bank, credit history, and proof of COVID-19-related balance sheet impact.

*Prepared by the Gabon staff team; discussions took place on July 16−17, 2020.*

### 10. The authorities concurred with staff that oil revenue assumptions in the revised

### 10. The authorities concurred with staff that oil revenue assumptions in the revised

### Oil revenue assumptions and fiscal impact
- The 2020 RFL assumes oil production will decline only by 4.5 percent in 2020 (versus 21 percent in staff’s projections).
- The 2020 RFL assumes an oil price at US$30 dollars per barrel, against US$41 per barrel in staff’s baseline.
- While the price effect compensates somewhat the lower projected production, oil revenue in staff’s baseline is expected to be lower than in the RFL by about 68 FCFA billion (0. 7 percent of GDP), widening the overall fiscal deficit and financing gap.
- The authorities recognized that their commitments under the OPEC decision will result in lower oil revenue and create additional fiscal gap despite recent positive developments in oil prices.

### Key fiscal and budget figures (Text Table 3 summary)
- Oil Revenue: 684.0, 398.4, 394.9, 6.6, 4.4, 4.5
- Non Oil Revenue: 1245.0, 1047.2, 949.4, 12.0, 11.7, 10.7
- Current expenditure: 1278.0, 1351.0, 1367.9, 12.4, 15.0, 15.4
- Goods and services: 161.0, 193.0, 192.5, 1.6, 2.1, 2.2
- COVID-19 (goods and services): 0.0, 42.0, 49.0, 0.0, 0.5, 0.6
- Other (goods and services): 161.0, 151.0, 143.5, 1.6, 1.7, 1.6
- Transfers and subsidies: 216.0, 232.0, 222.4, 2.1, 2.6, 2.5
- COVID-19 (transfers): 0.0, 23.0, 25.0, 0.0, 0.3, 0.3
- Other (transfers): 216.0, 209.0, 197.4, 2.1, 2.3, 2.2
- Capital expenditure: 513.0, 354.3, 379.5, 5.0, 3.9, 4.3
- Domestically-financed capital: 220.0, 129.0, 143.2, 2.1, 1.4, 1.6
- Foreign-Financed capital: 293.0, 225.3, 236.3, 2.8, 2.5, 2.7
- Nonoil balance: -303.0, -390.0, -595.9, -2.9, -4.3, -6.7
- Nonoil primary balance: -303.1, -390.3, -595.9, -4.2, -5.7, -8.9
- Overall balance (cash basis): 152.0, -245.0, -481.1, 1.5, -2.7, -5.4
  - Units: (Billions of CFAF)(Percent of GDP) 1/

### Financing strategy and remaining gaps (Text Table 4 summary)
- The overall deficit is now projected at 5.4 percent of GDP.
- Authorities plan a hybrid financing strategy including:
  - Issue additional government securities on the regional market (1.0 percent of GDP).
  - Reduce government deposits accumulation at the BEAC.
- With a proposed further purchase under the RFI, staff projects a remaining financing gap of about 0.7 percent of GDP.
- Scope for additional domestic financing is limited; authorities should rely on external concessional borrowing to close the remaining gap.
- Recommendations include developing a contingency plan and considering additional expenditure reprioritization while protecting spending that benefits the most vulnerable.
- Refinancing the remaining debt service of the commercial bridge loan from AFREXIM due in 2020, if successfully completed, would ease debt service and pressures on the financing gap.

- Text Table 4 (Percent of GDP)
  - Overall balance: 1.5, -2.7, -5.4
  - Net financing: -3.3, -2.9, 0.3
    - Foreign: 1.8, 1.5, 1.7
    - Domestic: -5.1, -4.4, -1.4
  - Financing gap: 1.8, 5.6, 5.1
  - African Development Bank: 0.00, 0.7, 1.5
  - World Bank: 1.1, 1.3, 0.9
  - Residual gap: 0.7, 3.6, 2.7
  - IMF EFF: 0.7, 0.8, 0.0
  - IMF RFI: 0.0, 1.0, 1.0
  - IMF prop: 0.0, 0.0, 1.0
  - Remaining gap: 0.0, 1.8, 0.7

### Public debt dynamics and risks
- Public debt remains sustainable, but debt dynamics have worsened and risks to debt sustainability have increased significantly since RFI-I.
- Under the baseline scenario, public debt will breach the high-risk benchmark and rise to 75 percent of GDP in 2020 and 2021 due to the inclusion of validated past domestic arrears in the debt stock in 2019, higher fiscal deficits and lower growth.
- Public debt would then decline gradually to 60.2 percent in 2025.
- Gross financing needs (GFN) average 12 percent of GDP over 2020−25, compared with a historical average of 4 percent of GDP over 2009−19.
- Projected GFN are slightly lower than in the RFI-1 given higher regional issuance and the assumption that residual financing needs would be met with external debt on commercial terms rather than short-term domestic debt.
- Interest payments would absorb a large share of government revenues over the medium term under current policies (17 percent on average over the coming five years).
- Public debt is particularly vulnerable to real GDP growth and exchange rate shocks, and debt profile risks are high.
- Stronger financing assurances in 2020-21, including debt reprofiling, would be critical for mitigating near-term risks to debt sustainability.
- The authorities confirmed that they do not have any arrears with external creditors.
- Previously implemented measures to address coordination issues continue to be effective in ensuring Gabon remains current on its debt obligations.

### SOEs, fiscal risks, and governance
- Fiscal risks affecting State Owned Enterprises (SOEs) warrant close monitoring; the COVID-19 pandemic could worsen an already weak financial situation of several SOEs.
- Support to SOEs should be well designed and targeted to avoid bailouts that cover inefficiencies, mismanagement, and governance weaknesses.
- The fiscal risk annex to the budget law for FY2020 identified SOE-related risks including:
  - implied guarantees due to debt accumulation;
  - cash flow shortages driven by abuse of employee benefits, problems in revenue collection, and poor accounting practices;
  - institutional risks; and
  - wage bill management.
- An IMF technical assistance mission is programmed in FY2020 to support capacity to assess fiscal risks, including those from SOEs.
- Authorities committed to continue enhancing oversight and enforcing a stronger accountability framework for all public enterprises.

### COVID-19 emergency spending transparency and PFM reforms
- Commitments to safeguard emergency spending quality:
  - Report quarterly on the spending of emergency funds.
  - Commission an independent, third-party audit of this spending within six months of disbursement and publish the results online within nine months of the end of each relevant fiscal year.
  - Publish online the related procurement contracts within 30 days of being awarded, along with the beneficial ownership information for the legal persons receiving those contracts and ex-post-delivery reports.
- Involvement of the Court of Accounts and the National Commission to Combat Illegal Enrichment (CNLCEI) in monitoring is noted.
- Actions taken:
  - Public presentation to Parliament about sanitary and economic measures and health infrastructure improvements (May 2020).
  - Copil members and implicated ministers met with the CNLCEI to provide overview of COVID-19 emergency stimulus package use (early June).
  - All members of Copil are expected to submit asset declaration forms to the CNLCEI.
- Ongoing structural and PFM reforms:
  - List of tax and custom exemptions included as an annex to the 2020 budget law.
  - Executive order (January 2020) to revamp the Treasury committee consistent with IMF TA recommendations.
  - Transmission of all oil and mining contracts and licenses of private companies with the Gabonese government to the BEAC in June 2020.
  - Council of Ministers reaffirmed commitment to expedite submission of Gabon’s application to EITI (June 12, 2020).
  - Reinforcing the Treasury Single Account and enhancing special accounts’ operations compliance with PFM standards.
  - Completed audit of the 2015−17 domestic arrears; government validated FCFA 282 billion of identified domestic arrears and preparing a strategy to settle the stock with priority on SMEs.
  - Authorities started settling overdue loans of up to CFAF 100 million to SMEs in June 2020.

### IMF support, access, capacity to repay, and safeguards
- The authorities requested a purchase under the RFI for 50 percent of quota (SDR 108 million), bringing the total RFI purchase in 2020 to 100 percent of quota.
- The purchase amounts to 1 percent of GDP and would cover 41.4 percent of the estimated financing gap; it would be used as indirect budget support.
- Gabon meets RFI eligibility requirements; urgency precluded a UCT-quality program (final review under EFF expired June 18, 2020).
- Total outstanding IMF credit including the proposed RFI disbursement will amount to 274 percent of quota in 2020, within normal access limits.
- IMF credit outstanding peaks at 5.7 percent of GDP in 2020.
- Total obligations to the IMF projected to rise from 0.05 percent of GDP in 2020 to a peak of 1.3 percent of GDP in 2024.
- Obligations to the IMF will rise from 3.0 percent gross international reserves in 2020 to a peak of 24.4 percent of reserves in 2024 (based on imputed reserves).
- Vulnerabilities to capacity to repay include susceptibility to further commodity price shocks and increased risks to debt sustainability.
- The BEAC has implemented priority recommendations from the 2017 safeguards assessment:
  - BEAC’s secondary legal instruments aligned with its amended Charter.
  - BEAC issued FY 2019 audited financial statements in full compliance with IFRS.
- Gabon will cooperate with any updated safeguards assessment by the IMF as necessary.

### Staff appraisal and policy recommendations
- The COVID-19 outbreak and the fall in commodity prices have dramatically impacted Gabon, deteriorating growth prospects and external and fiscal positions.
- The authorities’ fiscal response to COVID-19 is judged appropriate: addressing healthcare needs, protecting the most vulnerable, and supporting small businesses through licensing fee reductions and targeted tax relief.
- Staff recommendations and assessments:
  - Closely monitor potential fiscal risks, including those from SOEs.
  - Continue improving governance to ensure proper use of public funds, including COVID-19-related resources.
  - Resume growth-friendly fiscal consolidation once the crisis abates.
  - Develop as soon as possible a reform program addressing immediate and medium-term policy challenges, which could be supported by a possible new IMF-supported arrangement.

*Source: IMF staff report content (excerpts provided in the content unit).*

### 23. Staff supports the authorities’ request for a purchase under the RFI in the amount of

### 23. Staff supports the authorities’ request for a purchase under the RFI in the amount of

### RFI purchase recommendation
- Staff supports the authorities’ request for a purchase under the RFI in the amount of SDR 108 million (50 percent of quota), which would bring total purchases under the RFI to 100 percent of quota to address the urgent balance of payments needs arising from the pandemic.

### Assessment of debt sustainability and repayment capacity
- "While risks to the outlook are significant, Gabon’s debt remains sustainable and its capacity to repay the Fund is adequate under the policies committed by the authorities in the LOI."

### Real sector projections (selected)
- GDP at constant prices: 0.5 (2017 Act.), 1.0 (2018 Est.), 3.4 (2019 Prog.1/), 3.8 (2020 Prel.), 3.8 (2021 Fourth & Fifth Rev.), -0.4 (RFI-1.2/), -2.7 (Proj. 2020), 2.1 (2021), 4.1 (2022), 4.3 (2023), 4.3 (2024), 4.3 (2025).
- Oil: -8.4, -2.2, 7.9, 6.8, 2.5, -3.7, -14.9, 1.2, 1.2, 1.2, 1.2, 1.3 (annual percent change series).
- Non-oil: 2.5, 1.7, 2.5, 3.2, 4.0, 0.4, -0.1, 2.3, 4.6, 4.8, 4.8, 4.8 (annual percent change series).
- GDP deflator: 3.8, 7.0, 2.6, 1.7, 0.2, -8.6, -7.9, 3.3, 3.1, 2.7, 3.4, 3.0 (annual percent change).

### Inflation
- Yearly average consumer prices: 2.7, 4.8, 3.0, 2.0, 3.0, 3.0, 3.0, 3.0, 2.5, 2.5, 2.5, 2.5.
- End of period consumer prices: 1.1, 6.3, 3.0, 1.0, 3.0, 3.0, 3.0, 3.0, 2.5, 2.5, 2.5, 2.5.

### External sector (selected)
- Exports, f.o.b.: 17.8, 14.0, 12.1, 14.9, 0.6, -30.4, -31.7, 6.1, 10.5, 6.0, 5.6, 5.0 (annual percent change).
- Imports, f.o.b.: 6.2, -1.9, 8.3, 9.3, 6.0, -7.4, -4.9, -2.1, 4.3, 1.9, 3.0, 4.0 (annual percent change).
- Overall current account balance (percent of GDP): -7.0 (2017), -3.2 (2018), -1.1 (2019), -0.3 (2020), -2.0 (2021), -8.5 (2022), -9.5 (2023), -6.3 (2024), -3.6 (2025), -2.1, -1.0, -0.3 (projection series).

### Fiscal position (selected)
- Overall fiscal balance (commitment basis, percent of GDP): -2.6 (2017 Act.), -1.3 (2018 Est.), 1.8 (2019 Prog.1/), 1.4 (2020 Prel.), 1.4 (2021 Fourth & Fifth Rev.), -2.9 (RFI-1.2/), -5.4 (Proj. 2020), -3.4 (2021), -1.6 (2022), -0.4 (2023), -0.1 (2024), 0.3 (2025).
- Primary fiscal balance (commitment basis, percent of GDP): -0.1, 1.1, 4.1, 3.6, 3.7, 0.1, -2.3, -0.5, 1.2, 2.4, 2.6, 2.8.
- Overall fiscal balance (cash basis, percent of GDP): -3.4, -1.6, 1.7, 0.8, 1.5, -2.7, -5.4, -3.5, -1.6, -0.3, 0.0, 0.4.
- Non-oil primary balance (in percent of non-oil GDP): -9.7, -7.6, -4.6, -5.8, -4.2, -5.7, -8.9, -6.4, -4.0, -2.3, -1.9, -1.4.
- Total public debt (percent of GDP): 62.6, 60.6, 56.5, 58.7, 55.6, 68.7, 74.7, 74.4, 71.7, 68.1, 64.0, 60.2.
- External public debt (including to the IMF, percent of GDP): 38.7, 40.0, 40.5, 39.2, 42.3, 49.8, 50.6, 53.5, 54.7, 54.5, 52.6, 50.1.

### Central government accounts (selected, Billions of CFA francs and percent of GDP)
- Total revenue and grants (Billion CFAF): 1,423 (2017 Act.), 1,581 (2018 Act.), 1,868 (2019 Act.), 1,931 (2020 Act./Prel.), 1,946 (2021 Fourth & Fifth Rev.), 1,463 (RFI-1.2/), 1,369 (Proj. 2020), 1,476 (Proj. 2021), 1,714 (Proj. 2022), 1,888 (Proj. 2023), 2,071 (Proj. 2024), 2,255 (Proj. 2025).
- Oil revenue (Billion CFAF): 574, 583, 719, 747, 684, 398, 395, 410, 430, 448, 463, 477.
- Non-oil revenue (Billion CFAF): 849, 997, 1,148, 1,184, 1,245, 1,047, 949, 1,066, 1,284, 1,440, 1,608, 1,777.
- Total expenditure and net lending (Billion CFAF): 1,649, 1,702, 1,692, 1,796, 1,806, 1,720, 1,848, 1,796, 1,878, 1,928, 2,079, 2,215.
- Current expenditure (Billion CFAF): 1,350, 1,270, 1,293, 1,320, 1,278, 1,351, 1,368, 1,289, 1,366, 1,445, 1,531, 1,611.
- Capital expenditure (Billion CFAF): 133, 248, 317, 281, 513, 355, 380, 507, 512, 483, 548, 604.
- Overall balance (commitment basis, Billion CFAF): -226, -121, 176, 136, 140, -257, -478, -320, -164, -40, -940 (series).
- Overall balance (cash basis, Billion CFAF): -297, -147, 167, 84, 152, -245, -481, -327, -158, -31, 250 (series).
- Financing gap (Billion CFAF, residual gap and IMF): Residual gap entries include 114, 114, 72, 72, 72, 32, 5, 72, 72, 72 (table shows multiple lines); IMF-EFF listed as 114 in several years and IMF-RFI-1 listed as 88 (Prop. IMF-RFI 89).

### Financing of the fiscal deficit (selected, Billions of CFA francs)
- A. Overall fiscal deficit (cash basis): 296.6 (2017), 146.5, -166.8, -83.7, -152.4, 245.2, 481.1, 327.2 (projection series).
- B. Other financing needs: 695.4, 550.2, 946.9, 630.4, 1423.1, 1286.1, 1096.0, 648.2.
- Amortization (including arrears): 581.9, 478.9, 613.0, 544.0, 1,000.1, 983.4, 1,014.9, 510.2.
- Identified sources of financing (total): 390.2, 375.5, 412.4, 243.8, 1,083.7, 1,025.5, 1,117.6, 633.1.
- Exceptional financing (excluding IMF): 487.8, 207.3, 295.5, 230.2, 115.0, 180.6, 214.9, 0.0.
- IMF-related items: IMF-EFF 113.9 (mem. item), IMF-RFI-1 88.0, Prop. IMF-RFI 89.2.

### Balance of payments (selected, Billions of CFAF)
- Current account (Billions of CFAF): -606 (2017), -302 (2018), -110 (2019), -28 (2020), -209 (2021), -761 (2022), -839 (2023), -593 (2024), -365 (2025), -221, -117, -33 (projection series).
- Goods (net): 1,431; Exports of goods (fob): 3,101; Hydrocarbons: 2,069; Imports of goods (fob): -1,670 (2017 Act. figures presented; series continues across years).
- Financial account (overall): -449 (2017), 489 (2018), -309 (2019), 535 (2020), 407 (2021), 380 (2022), 287 (2023), 194 (2024), 201 (2025), 236, 102 (series).
- Overall balance (Billions of CFAF): -650 (2017), -212 (2018), -21 (2019), -336 (2020), 326 (2021), -354 (2022), -459 (2023), -306 (2024), -170 (2025), -201, 197, 0 (series).
- IMF-RFI-1 flows: 88 (noted in financing lines); Prop. IMF-RFI flows 89 (noted).

### Monetary and financial sector highlights
- Gross government deposits in BEAC (Billion CFAF): 314.9, 315.0, 438.4, 232.2, 732.9, 388.7, 232.2, 263.4, 315.4, 364.1, 393.3, 425.9 (table entries).
- Broad money (M2) annual percent change: -3.9, 15.7, 14.2, 1.2, 16.0, 5.0, 5.0, ... (series across table).
- Financial soundness indicators (selected): Total bank regulatory capital to risk-weighted assets: 8.3 (2015), 8.1 (2016), 12.9 (2017), 13.7 (2018), 15.1 (2019); Non-performing loans to total loans: 5.3, 6.6, 9.1, 9.6, 11.4 (2015–2019).

### Indicators of capacity to repay the Fund (selected)
- Fund obligations based on existing credit (in millions of SDRs, principal): 0.0 (2020), 6.0 (2021), 23.8 (2022), 74.6 (2023), 116.5 (2024), 89.5 (2025), 62.5 (2026), 56.6 (2027), 38.7 (2028), 14.9 (2029), 0.0 (2030), 0.0 (2031).
- Total obligations based on existing and prospective credit (in millions of SDRs): 4.8 (2020), 16.1 (2021), 33.7 (2022), 97.1 (2023), 175.7 (2024), 132.8 (2025), 64.3 (2026), 57.7 (2027), 39.2 (2028), 15.1 (2029), 0.0 (2030), 0.0 (2031).
- Total obligations based on existing and prospective credit (in millions of US$): 6.8, 22.8, 48.0, 138.9, 251.3, 189.9, 91.9, 82.5, 56.1, 21.6, 0.1, 0.0 (2020–2031 series).
- Outstanding Fund credit (in millions of SDRs): 591.1 (2020), 585.1 (2021), 561.3 (2022), 473.2 (2023), 302.7 (2024), 172.7 (2025), 110.2 (2026), 53.6 (2027), 14.9 (2028), 0.0 (2029 onward).
- Net use of Fund credit (in millions of SDRs): 216.0 (2020), -6.0 (2021), -23.8 (2022), -88.1 (2023), -170.5 (2024), -130.0 (2025), -62.5 (2026), -56.6 (2027), -38.7 (2028), -14.9 (2029), 0.0 (2030–2031).

*Sources: Gabonese authorities and IMF staff estimates and projections.*

### Annex I. Risk Assessment Matrix

### Annex I. Risk Assessment Matrix

### Domestic Risks
- Disruption in domestic oil production caused by aging fields and lower than expected production from new projects.
  - Relative Likelihood: Medium
  - Impact if Realized: Medium
  - Recommended Policy Response:
    - Reprioritize fiscal spending and enhance the efficiency of spending, while supporting non-oil activity during shutdowns.
    - Enhance facility maintenance and plan adequate investment for refurbishment, and encourage exploration and discovery of new oil.
  - Note on impact: Fiscal revenues and exports are susceptible to oil production declines, with potential spillovers to the non-O&G sector.

- Deterioration of domestic political conditions.
  - Relative Likelihood: Medium
  - Impact if Realized: Medium
  - Recommended Policy Response:
    - Communicate the benefits of the government’s macroeconomic program and enhance the inclusiveness of the approach to economic management.
    - Step up efforts to improve governance.
  - Note on impact: Given perceptions of poor governance and corruption it may be difficult to maintain a sustainable consensus to govern. This could compromise the macroeconomic stabilization gains made over the last three years and derail key reforms.

- Intensified domestic transmission of the COVID-19 pandemic.
  - Relative Likelihood: Medium
  - Impact if Realized: Medium
  - Recommended Policy Response:
    - Continue to enforce social distancing regulations.
    - Ramp up crisis preparedness in the health system to cope with a potential surge. Expand emergency assistance.
    - Intensify efforts to secure sufficient resources to address COVID-19 impact, including from development partners.
    - Ensure efficient use of COVID-19 emergency resources, including by closely monitor their development and enforcing full transparency.
  - Note on impact: A significant spread could undermine economic activity, disrupt domestic supply and transportation, and possibly fuel unrest.

### External Risks
- Prolonged COVID-19 outbreak.
  - Relative Likelihood: High
  - Impact if Realized: High
  - Recommended Policy Response:
    - Reprioritize fiscal spending and enhance the efficiency of spending.
    - Accelerate reforms to address structural weaknesses aimed at supporting private sector growth.
    - Energize external support through better compliance to donors’ conditionality and emphasizing the merits and needs of Gabon’s development strategy.
  - Note on impact: Adverse impact on growth through less foreign direct investment inflows and external support. Demand for export products and their prices would fall, hurting the domestic economy.

- Oversupply in the oil market.
  - Relative Likelihood: High
  - Impact if Realized: High
  - Recommended Policy Response:
    - Increase non-oil revenue to help build fiscal buffers.
    - Reprioritize fiscal spending and enhance the efficiency of spending.
    - Accelerate reforms to address structural weaknesses aimed at supporting private sector growth.
  - Note on impact: Increase volatility and complicates macroeconomic management. Fiscal revenues and exports are susceptible to oil price volatility, with potential spillovers to the non-hydrocarbon sector.

- More protectionism.
  - Relative Likelihood: High
  - Impact if Realized: High
  - Recommended Policy Response:
    - Continue improving the business environment to attract further investments and diversify the economy.
    - Reprioritize fiscal spending and enhance the efficiency of spending, while supporting non-oil activity.
    - Diversify the structure of the economy and export products and markets.
  - Note on impact: Demand for export products and their prices would fall, hurting the domestic economy.

### Notes on the Risk Assessment Matrix
- The Risk Assessment Matrix (RAM) shows events that could materially alter the baseline path (the scenario most likely to materialize in the view of IMF staff).
- Relative likelihood definitions (staff’s subjective assessment): “low” indicates a probability below 10 percent, “medium” a probability between 10 and 30 percent, and “high” a probability between 30 and 50 percent.
- The RAM reflects staff views on the source of risks and overall level of concern as of the time of discussions with the authorities. Non-mutually exclusive risks may interact and materialize jointly.
- “Short term (ST)” and “medium term (MT)” indicate that the risk could materialize within 1 year and 3 years, respectively.

*Source: Annex I. Risk Assessment Matrix, IMF staff.*

### 2. Since the approval of our request for a purchase under the RFI on April 9, 2020, Gabon’s

### 1gabea2020003 - Supplementary Letter and Information on Gabon’s Request for RFI Purchase

### Economic outlook and financing needs
- Since the approval of the request for a purchase under the RFI on April 9, 2020, Gabon’s economic outlook has deteriorated.
- Downward revision in 2020 GDP forecast from -0.4 to -2.7 percent.
- The balance of payments and fiscal position are adversely affected by the collapse in exports and financial inflows, and by revenue losses and spending costs associated with health and economic response plans.
- Urgent balance of payments and fiscal gap of about FCFA 215 billion (after accounting for the April 9 RFI purchase).
- As of July 26, 2020, there are about 7,000 confirmed COVID-19 cases and 49 deaths, with a strong concentration of cases in Libreville.

### Request for additional IMF financial support
- The government requests an additional purchase under the Rapid Financing Instrument (RFI) to avoid immediate and severe economic disruption.
- Requested amount: equivalent to SDR 108 million (approximately USD 148.8 million), which corresponds to 50 percent of Gabon’s quota with the Fund.
- Purpose: help address balance of payments needs, ease pressure on fiscal position, provide fiscal space to fight the spread of the virus and meet population needs.

### External financing from partners and recent approvals
- African Development Bank (AfDB) approved on June 24 EUR 100.5 million in budget support.
- World Bank and AFD approved a combined project related to COVID-19 that brings USD 5 million of additional resources.
- Authorities are holding coordinated discussions with other development partners to close remaining financing gap.

### Policy response to the pandemic and fiscal measures
- Health and economic policies committed in LOI dated April 3, 2020 remain in place, including measures to maintain macroeconomic stability, boost competitiveness and growth, and reduce poverty.
- Fiscal and social measures implemented or expanded:
  - Food distribution program.
  - Support on payments of electricity and rentals.
  - Various tax deferrals and other relief measures.
  - Solidarity fund.
  - Comprehensive economic recovery plan and an economic recovery fund to support firms.
- The Parliament adopted an amended 2020 Budget Law redefining 2020 priorities, updating international oil price and production assumptions, and accounting for COVID-19 impacts.
- Reallocation toward health-related and social spending has reduced fiscal space for capital spending.
- Non-oil fiscal deficit in 2020 will widen to 9 percent from 5.7 percent of non-oil GDP at the time of the RFI-1.
- Authorities commit to strict fiscal discipline and to implement additional measures if necessary to ensure fiscal sustainability, avoid creation of new arrears, and return the public debt-to-GDP ratio to a downward path by 2022.

### Transparency, reporting, and governance commitments
- Commitment to effective and transparent use of public funds, including RFI and COVID-19 funds.
- Specific transparency measures:
  - Separate reporting mechanism for COVID-19 expenditures.
  - On-line publication of all related procurement contracts and beneficial ownership information for legal persons receiving those contracts within thirty days of each contract award.
  - On-line publication of ex post reports on the delivery of procurement contracts.
  - Commission a reputable firm to conduct an independent, third-party audit of all government expenditures and procurement tenders linked to the pandemic; audit finalized with the support of the Court of Accounts and published on-line within nine months of the end of each relevant fiscal year.
  - Quarterly budget execution reports to continue, with specific information on pandemic-related spending.
- Continued adherence to fiscal management practices supported by IMF technical assistance and strengthening capacity to identify and mitigate fiscal risks, including from state-owned enterprises.

### External arrears update
- New information received: due to a technical issue Gabon recently incurred official bilateral arrears to Canada in an amount of US$124,056.
- Gabonese authorities have issued payment instructions; payment not yet received by Canada, so external arrears to Canada currently exist.
- Under Fund arrears policy, the Board may approve Gabon’s RFI purchase to the extent Canada does not object; staff has received assurances of non-objection from the Executive Director representing Canada.

### Medium-term policies and institutional developments
- New government formed on July 16, 2020 (first woman to head a government in Gabon); reiterated commitment to maintaining macroeconomic stability and supporting regional external stability.
- Continued implementation of structural benchmarks under the Extended Fund Facility (EFF) arrangement.
- Audit of domestic arrears by an external auditor resulted in upward revision of public debt figure at end-2019 from 58.8 percent to 62.4 percent of GDP.
- Oil and mining contracts transmitted to the regional central bank (BEAC) as required under new foreign exchange regulation.
- Authorities intend, once crisis eases, to unwind temporary measures and implement growth-friendly fiscal consolidation consistent with the economic recovery plan.
- Continued strengthening of oversight of public enterprises and public debt management to contain fiscal risks and preserve debt sustainability; pursuit of structural reforms to enhance public financial management and competitiveness.
- Authorities reiterate interest in a successor arrangement following the expiration of the EFF arrangement in June 2020.

### Conclusion and staff position
- Authorities request a second purchase under the RFI to meet increasing external and fiscal financing needs arising from the protracted impact of the pandemic.
- Authorities affirm that emergency resources will be used for their intended purpose; public debt continues to be sustainable and capacity to repay the Fund remains adequate.
- Staff appraisal thrust remains unchanged; staff received assurances of non-objection from the ED representing Canada regarding arrears.

*Source: Gabon — Request for Purchase Under the Rapid Financing Instrument — Supplementary Information (July 30–31, 2020).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1gabea2020003.pdf_