IMF Executive Board Approves US$553.2 Million Extended Arrangement Under the Extended Fund Facility for Gabon
IMF News, July 28, 2021
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- Published: July 28, 2021
Overview
- The IMF Executive Board approved a 36-month arrangement under the Extended Fund Facility (EFF) for Gabon with access equivalent to US$553.2 million (SDR 388.8 million), or 180 percent of Gabon’s quota.
- The Board’s approval allows for an immediate disbursement equivalent to US$115.25 million for budget support.
- The program aims to support the short-term response to the COVID-19 crisis and lay foundations for green and inclusive private sector-led growth and a strong and sustainable recovery.
Program objectives and access
- Duration: 36 months (three-year extended arrangement).
- Access: SDR 388.8 million (about US$553.2 million), or 180 percent of Gabon’s quota.
- Immediate financing: disbursement equivalent to US$115.25 million for budget support.
- Program supports implementation of the authorities’ 2021–23 Economic Recovery Strategy.
Macroeconomic outlook and risks
- The COVID-19 pandemic and the fall in oil prices severely hit the Gabonese economy, deteriorating fiscal and external balances, and increasing unemployment and poverty.
- The economy is showing incipient signs of recovery, but the outlook remains challenging and contingent on:
- The pandemic path;
- Effective rollout of the vaccines;
- Implementation of structural reforms.
- Downside risk examples:
- A slow rollout of vaccines or further infection waves could delay the recovery to 2022 or beyond.
Policy priorities and recommended reforms
- Near-term: Continue fiscal support to save lives and livelihoods and support the recovery.
- Medium-term: Pace fiscal consolidation with the recovery; once recovery is on a solid footing, pursue more ambitious fiscal consolidation to reduce public debt levels and vulnerabilities while securing high and inclusive growth.
- Key reform areas:
- Improve governance and transparency to enhance domestic revenue (including from the oil and mining sectors) and spending efficiency.
- Strengthen anti-corruption framework.
- Enhance the banking sector and financial inclusion.
- Improve the business environment to promote private investment and inclusive growth.
- Regional coordination: Program is supported by CEMAC regional policy implementation in foreign exchange regulations and monetary policy framework to increase regional net foreign assets, which are critical to the program’s success.
Selected economic indicators and projections
- Population (2017, UN est.): 2.01 million
- Per capita GDP (2017): US$ 7,490
- Quota: SDR 216.0 million
- Literacy rate (2012): 82.3 percent
- Main products and exports: Crude petroleum; Manganese ore.
- Poverty rate (2017): 32.4 percent
- Key export markets: China; European Union, Australia
- Macroeconomic indicators (selected years, as published)
- Output (percent) — Real GDP:
- 2019: 3.9
- 2020 (Est.): -1.8
- 2021 (Proj.): 1.5
- 2022 (Proj.): 3.2
- Output (percent) — Non-oil GDP:
- 2019: 3.3
- 2020 (Est.): -1.7
- 2021 (Proj.): 2.7
- 2022 (Proj.): 3.0
- Prices (percent) — Inflation (End of period):
- 2019: 1.0
- 2020 (Est.): 1.6
- 2021 (Proj.): 2.0
- Central Government Finances (percent of GDP):
- Revenue:
- 2019: 19.5
- 2020 (Est.): 17.6
- 2021 (Proj.): 17.1
- 2022 (Proj.): 18.4
- 2023 (Proj.): 19.2
- Expenditure and net lending:
- 2019: 18.2
- 2020 (Est.): 19.8
- 2021 (Proj.): 20.4
- 2022 (Proj.): 18.7
- 2023 (Proj.): 18.8
- Fiscal Balance (cash basis):
- 2019: 0.8
- 2020 (Est.): -2.5
- 2021 (Proj.): -3.5
- 2022 (Proj.): -0.3
- 2023 (Proj.): 0.4
- Total Public Debt:
- 2019: 59.8
- 2020 (Est.): 77.4
- 2021 (Proj.): 74.7
- 2022 (Proj.): 72.2
- 2023 (Proj.): 70.1
- Central Government Finances (percent of Non-oil GDP):
- Revenue and grants:
- 2019: 29.0
- 2020 (Est.): 23.4
- 2021 (Proj.): 23.3
- 2022 (Proj.): 24.9
- 2023 (Proj.): 25.5
- Oil:
- 2019: 11.2
- 2020 (Est.): 9.0
- 2021 (Proj.): 6.8
- 2022 (Proj.): 7.9
- 2023 (Proj.): 8.0
- Non-oil:
- 2019: 17.8
- 2020 (Est.): 14.4
- 2021 (Proj.): 15.7
- 2022 (Proj.): 17.0
- o/w Current:
- 2019: 27.0
- 2020 (Est.): 26.3
- 2021 (Proj.): 27.7
- 2022 (Proj.): 25.4
- 2023 (Proj.): 25.0
- o/w Capital:
- 2019: 4.2
- 2020 (Est.): 3.6
- 2021 (Proj.): 4.8
- 2022 (Proj.): 4.9
- 2023 (Proj.): 4.6
- Non-oil primary balance:
- 2019: -5.8
- 2020 (Est.): -7.4
- 2021 (Proj.): -7.1
- 2022 (Proj.): -4.9
- 2023 (Proj.): -3.4
- Basic non-oil primary balance 1/:
- 2019: -4.2
- 2020 (Est.): -6.1
- 2021 (Proj.): -3.0
- 2022 (Proj.): -0.2
- Money and Credit:
- Broad Money (percent change):
- 2019: 1.2
- 2020 (Est.): 7.1
- 2021 (Proj.): 11.7
- 2022 (Proj.): 12.4
- Credit to the private sector (percent change):
- 2019: 2.2
- 2020 (Est.): 5.4
- 2021 (Proj.): 6.2
- 2022 (Proj.): 7.0
- Balance of Payments:
- Current account (percent of GDP):
- 2019: -0.9
- 2020 (Est.): -6.0
- 2021 (Proj.): -4.8
- 2022 (Proj.): -2.9
- FDI (percent of non-oil GDP):
- 2019: 7.3
- 2020 (Est.): 7.8
- External Debt (percent of GDP):
- 2019: 39.2
- 2020 (Est.): 46.0
- 2021 (Proj.): 44.4
- 2022 (Proj.): 45.3
IMF Press Release No. 21/233, July 28, 2021.
