IMF Staff Completes 2024 Article IV Mission to Gabon

IMF News, February 15, 2024

Source details

Press Release No. 24/48
Mission dates: January 23-February 6, 2024
Mission leader: Ms. Aliona Cebotari
Purpose: 2024 Article IV consultation—meetings with the authorities and private sector representatives to discuss reviving economic growth, raising living standards, accelerating structural reforms, fostering transparency, ensuring fiscal sustainability, and strengthening public financial management.
Press contact: PRESS OFFICER: Pavis Devahasadin; Phone: +1 202 623-7100; Email: MEDIA@IMF.org

The economy has recovered from multiple shocks emanating from the global and domestic economy.
Growth is expected to settle around 3 percent in 2024-25.
In the medium term, growth should stabilize somewhat below these levels and is “not sufficient to meaningfully boost per capita incomes.”
Inflation fell below the regional ceiling of 3 percent towards end-2023 and is expected to remain around this level in the absence of further shocks.
Credit growth is strong, financed by increasing deposits, despite the tightening of the regional monetary policy.
After a strong surplus in recent years due to higher commodity prices, the current account balance is expected to decrease gradually over the medium term because of lower oil receipts.

Staff welcomed transition authorities’ initial steps towards greater transparency and strengthened public financial management, but noted stronger action is needed.
Recommended transparency and governance actions (as stated by staff):
- An inventory of all state flows, assets, and liabilities (direct and contingent).
- Full reporting of the financial positions of the government and state-owned enterprises.
- Publication of the past reports of the government’s external auditor in accordance with the legal provisions in force.
- Publication of the oil and mining contracts.

The government has inherited a difficult fiscal position.
In 2022 and 2023, election-related spending widened the non-oil deficit to double digits in terms of its share in the nonoil GDP, financed in part by substantial arrear accumulation.
Without firm corrective action, the fiscal deficit in 2024-25 may be difficult to finance in the currently tight global financing environment, and public debt would continue to grow.
Improvement of living conditions and boosting growth will require decisive prioritization of spending needs and re-invigorated revenue mobilization, given tight budget constraints.

Correct fiscal imbalances to bring deficits to financeable levels and pause the increase in debt.
Continue efforts to strengthen transparency and the management of public finances unabated.
Prioritize high-impact, low-risk investments that:
- remove barriers to growth,
- support social spending,
- broaden the tax base by tackling exemptions and bringing on board underutilized resources across the public sector.
Specific public finance management reforms to pursue:
- Centralization of all the funds and payment authority in the Treasury Single Account and careful liquidity management.
- Set up a regulatory framework for the operation and monitoring of state-owned enterprises.
- Better management of the public investment processes.

Views in the end-of-mission statement are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
Based on preliminary findings, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
The mission thanked the Gabonese authorities and other partners for open and fruitful discussions and warm hospitality.

IMF Staff Completes 2024 Article IV Mission to Gabon — Press Release No. 24/48