Gabon: Selected Issues
IMF Staff Country Reports, May 31, 2024
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- Gabon: Selected Issues
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Bibliographic details
- Published: May 31, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400277900.002
Major findings on sovereign spreads
- Analysis covers determinants of sovereign spreads in 50 Emerging Market and Developing Economies using a fixed effects panel model.
- Main factors that increase Gabon’s spreads:
- weak governance,
- high public debt,
- weak economic performance,
- a poor government payment record of accomplishment,
- social vulnerabilities.
Quantified impacts and scenarios
- Bringing indicators for government effectiveness, regulatory quality, and the fiscal position to the median for sovereigns rated Banks Board Bureau by Fitch, and clearing external government arrears, could:
- help reduce spreads by at least 500 bp,
- save at least 0.4 percent of gross domestic product in annual interest costs.
- Investment grade bond spreads are approximately 200 basis points, which is around 400 basis points below Gabon’s February 2024 level.
Policy implications and recommendations
- Strengthen governance indicators: government effectiveness and regulatory quality.
- Improve fiscal position toward medians for comparable sovereign ratings.
- Clear external government arrears to improve payment record of accomplishment.
- Strengthen growth drivers and economic diversification to improve long-term economic performance and funding costs.
Additional contextual points
- The paper leverages empirical results from the panel model to draw lessons specifically aimed at improving Gabon’s funding costs.
- Emphasis on both near-term fiscal/governance measures and longer-term structural reforms (growth drivers, diversification).
Source: Gabon: Selected Issues, May 31, 2024 (IMF Staff Country Reports).
Content in this bundle
- Gabon: Selected Issues; IMF Country Report No. 24/145; May 10, 2024