Our comprehensive assessment of Gabon's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Gabon, as well as the latest industry developments that could impact Gabon's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Gabon before your competitors.
Gabon Country Risk
Annual real GDP growth in Benin will average 5.0% between 2014 and 2023 as consumer spending increases and the country's political stability engenders elevated levels of fixed investment. Nevertheless, a sporadic electricity supply and reliance on cotton production will hold back the pace of economic development.
Benin's political landscape shows little sign of fragility, and will remain one of the most stable, open and accountable in West Africa in the years ahead, enjoined by a free press and a multitude of political parties. Nevertheless, the country faces challenges in the long term such as an overspill of violence from piracy and terrorist activity in the region, and the potential for tribal/ethnic schisms to open.
KEY RISKS TO OUTLK
Gabon Country Risk
The ruling Parti Congolais du Travail has used local elections to consolidate its authority. Political change is more likely to come from within the ruling party than from the country's fragmented opposition.
Lower iron ore prices will delay investment projects in the Republic of the Congo, while government spending cuts reduce infrastructure expenditure. Nevertheless, increasing oil output will keep headline real GDP growth among the fastest in the region.Â Â
Long Term Views
President Denis Sassou-Nguesso will reform his country's constitution in order to run for another term in elections scheduled for 2016. The move will prove controversial, raising political tensions in Congo-Brazzaville. Even so, we see little threat to the current government's control over the...
Gabon Industry Coverage (6)
In the first quarter of 2014 we revised up our forecast for 2013 new vehicle sales in Gabon from 3.8% to 9% y-o-y, on the back of a better than expected vehicle sales performance in the first half of 2013, when the Union of Automotive Industry Representatives (URAI) estimated that new vehicle sales grew 9% y-o-y, 3,062 units, in H113. We are of a similar view this quarter. We forecast total sales to rise 7.8% in 2014, to 6,225 units. Growth will average 8.1% in 2014-2018. Passenger car growth will average 7.98%, with 5,300 units shifted in 2014.
While this is partly owing to favourable base effects from nearly a 10% y-o-y decline in sales in 2012 (and over a 14% drop in car sales), the URAI attributes the growth to the resurgence in public and private sector activity during 2013, which clearly translated into increased vehicle demand. We believe that the vehicle demand could have also been bolstered byÂ the strong euro which has lowered the...
Food & Drink
Gabon Food & Drink
President Ali Bongo has proved to be a much more active economic reformer than his father, working hard to court foreign investors into Gabon and diversify the economy away from stagnating oil production. He has invested in infrastructure, brought in foreign experts and launched an ambitious programme of social spending to address widespread poverty. However, we stress that government targets of transforming the country into a major economic centre by 2025 are unreasonably optimistic. Gabon's small workforce, limited domestic market and opaque business environment will all pose obstacles to economic diversification.Â Additionally, the country's small population, relative to its regional peers, will continue to weigh on food and drink industry prospects.
Per capita food consumption growth (local currency) in 2014: +3.7%; compound annual growth rate (CAGR)Â 2013 to 2018: +3...
BMI View: The government's ambitious investment plans are likely to be undermined by growing fiscal pressure. A combination of falling oil revenues, from lower production and prices, and higher social spending has pushed the government's fiscal balance into deficit, with infrastructure investment likely to be hit. As such, we hold a tempered outlook for growth, although r emaining positive over the five- year horizon.
Gabon's small construction industry size, combined with a number of large projects should sustain growth in positive territory over the five-year horizon, with annual average growth of 5.1% anticipated. However, given the small size of the sector, combined with a substantial project pipeline, this growth rate is far below potential. Numerous problems that need to be overcome to secure investment, including improving flows of capital...
Oil & Gas
Pharmaceuticals & Healthcare
Gabon Pharmaceuticals & Healthcare
BMI View: Â This quarter has seen the expansion of the National Health Insurance and Social Security (CNAMGS) to include the entire private sector, and funding for the scheme has also been increased. This continued expansion, coupled with a high burden of disease , will drive the need for pharmaceutical products providing opportunities for drugmakers. The continued presence of counterfeit drugs and insufficient healthcare infrastructure are weaknesses of the pharmaceutical market in Gabon.
Headline Expenditure Forecasts
Pharmaceuticals: XAF50.85bn (USD102mn) in 2013 to XAF53.06bn (USD108mn) in 2014; +4.3% in local currency and 6.1% in US dollar terms.Â Forecast revised downwards from Q414.
BMI View: Our Q414 West and Central Africa report analyses latest industry, regulatory and macroeconomic developments in the telecoms markets of seven countries: Cameroon, CÃ´te d'Ivoire, the Democratic Republic of Congo (DRC), Gabon, Mali, Mauritania and Senegal. The greatest growth area in these markets is the broadband sector, which should benefit from improved international connectivity, investment in wireless data networks and cheaper devices. The mobile operators in the region will also seek to expand their non-voice services portfolios to create new revenue streams that will offset the sluggish revenue growth from traditional services. Â
The average mobile market growth for the seven countries in our...