Country Information: Gabon

Gabon is based in Africa and offers many opportunities for trade for UK companies.

General Information
Official language:
English (from 12th October 2012); formally French
Other languages:
Fang, Myene, Bakeke, Bapoonou
Capital City:
Libreville (containing nearly 50% of Gabon’s population)
Currency:
Communaute Financiere Africaine (CFA) Franc
Flag:
Green, Yellow and Navy Blue Horizontal stripes.  Green symbolises the forest, yellow the equatorial sun and blue the water from the sea and sky
Land Area:
270,000 sq km

Location
Gabon is located in Central Africa, bordering the Atlantic Ocean at the Equator, between Cameroon in the north, the Republic of the Congo to the east and south and Equatorial Guinea to the north west.

Geographical Features
The climate is equatorial tropical with rain forests covering over 85% of the land mass. Geographically Gabon can be described as having a narrow coastal plain, a hilly interior and Savannah in the East and South.  The coastal lowlands (which range in width from 18-25 miles) border a rocky escarpment that ranges in height from 600-2000 ft and is more than 60 miles wide.  Rivers have carved deep channels through the escarpment.  The north coastline is deeply indented with bays, estuaries and deltas, providing natural shelters.  South of the Ogome River delta the coastline changes into lagoons and mangrove swamps.

The escarpment develops into a mountainous region with the Cristal mountain range to the North of Libreville and the Chailla Massif in the centre.  The highest peak is Mt. Iboundiki (5,165 ft)

There are 9 provinces in Gabon (each named after the river that separates them) and apart from Libreville (on the River Komo) the other main urban centres of Gabon are Port-Gentil (Southern coastline), Oyem (North interior), Mekambo and Makokau (North East interior), Lambarene (Central), Franceville and Mouila (South interior)

Natural Resources
Petroleum, Natural Gas, Diamonds, Niobium, Manganese, Gold, Timber, Iron Ore, Hydro power

Agricultural Products
Rubber, Cocoa, Sugar, Coffee, Palm Oil, Okoume softwood (for making plywood), Cattle
2/3 of working population work in agriculture

Politics
Gabon achieved independence from France in 1960 and since then has been one of the most politically stable countries in Africa.  There are 40 ethnic groups in Gabon (Fang largest at 40%), but internal political divides are limited, mainly due to relative prosperity from oil exports and partially due to the presence of French troops.  France still has a military base in Gabon.  However, Gabon’s dependence on oil has made its economy and political stability hostage to oil price fluctuations.  When oil prices fell in the late 1980s opposition to the then President, Omar Bongo, increased, culminating in demonstrations in 1990.

These demonstrations ushered in political liberalisation and a multi-party system was introduced in 1991 with a Presidential term of 7 years.  Nevertheless, President Omar Bongo remained in power until he died on 8th June 2009 of a cardiac arrest in Barcelona.  He had maintained power for over 40 years and was succeeded by his son, President Ali Bongo Ondimba on 16th October 2009.  Presently opposition parties remain fragmented and argumentative.

However, President Ali Bongo is under attack from another area – namely France.  In 2012 extensive investigations started in Paris on allegedly “ill-gotten gains” where 3 serving African leaders and their families are under investigation over whether they embezzled state funds to acquire vast assets in France.  The Bongo clan supposedly has the biggest property portfolio with preliminary French police reports indicating 39 properties in France and 90 French bank accounts.

Perhaps not surprisingly President Ali Bongo has reacted with a degree of anger at these accusations and one of his actions has been to replace French as the official language of Gabon, with English.

Economics
Gabon joined the world bank in 1963 and since 1985 it has had both a trade surplus and balance of payments surplus.  This is mainly due to the country having a small population (just under 1.5 million), but extensive natural resources, especially oil.  The oil is a mixed blessing.  Oil revenues consist of 46% of the Government’s budget, 43% of GDP and 80% of its exports.

The long term trend for Gabon’s oil production is for decline as production falls from mature fields and fails to be offset by new volumes.  Output is predicted to average 243,000 barrels per day in 2013, falling to 235,000 barrels per day in 2017.  However, a series of recent discoveries in Gabon’s deepwater and sub salt acreage underscore the untapped potential. (This information comes from Gabon’s Oil and Gas Report, Q3, 2013)

Gabon does have other resources such as Manganese, Niobium, Gold and Phosphate.  All mining operations are the property of the State.  Exclusive rights to mine can only be provided by the Ministry of Mines, Energy and Petroleum.  Manganese is presently mined by Comilog (Compagnie Miniere de l’Ogooue SA) in the Moanda region (near Franceville in SE Gabon) from the bedded oxide deposits in the early Proterozoic Francevilliam Basin.  It is estimated these mines have reserves of 250 million tonnes with a metal content of 48%-52%. The US Geological Survey estimates that 1.5 million tonnes of Manganese was mined in 2011. However, in 2011 a Damages complaint was issued against Comilog by people in the region due to health issues allegedly caused by water sources being polluted by mud and waste from Manganese mining.  In addition, a lot of fishing grounds have also had to be abandoned.

These environmental concerns continue to grow, especially since Manganese mining is being promoted in other parts of Gabon as well.  For example, Huazhou Mining signed an agreement in 2010 to operate a mine in Central Gabon at M’Bembele (200 km SE of Libreville).

There are also infrastructure problems.  The building of the Transgabonais Railway has provided a cost effective shipping route from Moanda to Owendo port.  But the exploitation of the Mekambo and Belinga iron fields in NW Gabon (believed to be some of the world’s richest iron deposits) has been put on hold until the Transgabonais Railway can be extended 225 kg from Booue to Belinga.  It is estimated that these fields could have reserves of 1 billion tonnes of ore with 60%-65% iron content.  There is also potential to develop a Niobium field near Mabounie, which could produce 15% of global niobium requirements. However, all of these potentialities are on hold until the infrastructure can be developed. It might also be a good idea to withhold development plans until environmental and civil factors can also be properly developed, to ensure that any such mining brings profit to the country and is properly regulated with regards to environmental health concerns.

Gabon also produced 350,000 metric tonnes each of clinker and hydraulic cement.  As a building material, cement is seen as a sign of wealth in Gabon.  All government buildings are made of cement and most urban centres.  This is in direct contrast to housing in the countryside which is made of anything from wood, bark, brick and sometimes mud with palm frond roofs.

There are present moves to improve infrastructure and housing around Gabon’s forestry and agricultural industries.  However, there are growing concerns about the danger that the logging industry is having on Gabon’s forests and eco-structure, due to lack of oversight by Gabon’s Government over international logging companies (who reputedly don’t respect technical standards), lack of management and research into the real environmental impact of logging and the reported waste.

Gabon also has a small manufacturing sector, but growth in this arena is presently limited by a shortage of skilled labour, high costs and an inadequate infrastructure.

As oil reserves diminish, eco-tourism could grow in economic importance.  Gabon’s rain forests have lowland gorillas and most of Africa’s remaining forest elephants.  In 2002 in an unprecedented move, President Bongo designated 10% of Gabon’s land mass into National parks (13 in total) in order to protect the wildlife and flora from attack.  They have a zero tolerance policy towards poaching and their reaction to constant attacks on their elephant population has been unremitting.  On 27th June 2012, to send a message to the rest of the world about their intolerance, they burnt 4,825 kgs of seized ivory.  However, these national parks were established without any consultation with the indigenous population and conflicts have been brewing for some time since the local communities were not offered any alternatives to their traditional hunting, fishing and religious activities.

Although Gabon has one of the highest per capita incomes in the Sub Saharan Africa region, there is unequal income distribution, with a big wealth gap difference between the urban rich and rural poor (richest 20% have 90% of income) and so Gabon does have three major challenges at the moment.  The first is to combat poverty (presently 1 in 3 of the population is on the breadline), the second to decrease the high unemployment rate (presently standing at 27% of the working population) and the third is to try and equalise the unequal distribution of income.Gabon, in comparison to a number of other countries, is experiencing a period of growth.  In 2012 the GDP growth was 5.7% and it is estimated that the figure for 2013 will be 6.2%. Prices for commodities such as oil, manganese and timber are presently increasing and this helped produce robust growth in 2012.  But there were also internal investments undertaken for the Africa Cup of Nations in 2012 and there continues to be increasing public investment and upturns in areas other than oil, such as mining.  Gabon has plans to be an emerging economy by 2025 based on three pillars of Green Gabon, Industrial Gabon and Service-Industry Gabon.

Airports – 14 paved, 31 unpaved (internal air flights vary dramatically in quality)
Railway – 649 km Transgabonais Railway runs from Franceville to Owendo port (Libreville)
Roads – 937 kg paved, 8,233 km unpaved (during rainy season Oct-Dec & Feb-May roads only passable with a 4-wheel vehicle and sometimes not even then)
Waterways – 1600 km (310 km on Ogooue River and on its tributaries Ivindo and N’Govnie)
Sea Ports – Gamba, Libreville, Lucinda, Owendo, Port-Gentil

Main Exports
In 2012, Gabon’s exports were an estimated US$ 10.2 billion
The main export items are crude petroleum, forest products, Manganese, Uranium Ores and Cocoa

Main Export Partners
Japan (23.9%), USA (16.9%), Australia (11.2%), India (7.3%), China (5.4%), Spain (4.1%)

Main Imports
In 2012, Gabon’s imports were an estimated US$ 3.638 billion.
The main import items are Machinery and equipments, Chemicals, foodstuffs, Construction Materials and Capital goods.

Main Import Partners
France (28.1%), China (12.8%), USA (9.4%), Belgium (5.8%) and Cameroon (4.7%)

Doing Business in Gabon
It can be a challenge working in Gabon, although there are changes afoot to try and change certain bureaucratic and legal barriers.  The advice given by experienced traders is to (where possible) invest in the training of locals; be very patient – things do move slowly in Gabon; be prepared for bureaucratic hurdles; know the right people – get introductions to the Chamber of Commerce for example, and please note that credit cards are presently not widely accepted and credit card fraud is rife.  Gabon is a cash based economy, so travel out there prepared to deal in cash.

Certain types of behaviour are not tolerated.  Personal use of any type of narcotic drug (if caught) carries severe penalties and possible prison sentences.  Dealing in drugs, on the other hand, carries a mandatory death penalty.  Homosexuality is not widely accepted in Central Africa and in certain circumstances is deemed illegal.  It is forbidden to take photos of military and government buildings.

As with all international travel, take care not to visibly demonstrate great wealth or to travel alone in isolated areas or during the nighttime.  Crime (robbery, armed attacks and rape) is increasing in Libreville and Port Gentil and car jacking is a problem, as is piracy along the coast.  When driving police checkpoints are common and drivers are often asked to show their passport, driving licence and vehicle registration documents.  Medical facilities are limited, particularly in rural areas, so extensive travel insurance is recommended. Please note that there is no British Embassy in Gabon.  If required, assistance can be given by the British Honorary Consulate in Libreville.

Basic Business Etiquette
The Gabonese are a very spiritual and dynamic people.  Although there is a degree of unity in their behaviour, there are small but significant differences between the various ethnic groups with regards to the ceremonies for births, deaths, initiation, healing rituals and the casting out of evil spirits.  The Gabonese are a very communal people and can form close relationships relatively quickly.  Personal space is neither needed nor respected.  When they are interested in something they will stare and they are very straightforward and direct in their speech.  For example, they have no problem with calling things as they are, identifying someone by his or her race and asking for something if it is wanted.

Socialising is the main form of entertaining and doing business and so meetings are generally held during lunch or dinner.  Urban Gabonese often dine western style, the main meal of the day being in the evening.  Meetings and business talk will consist of a long ‘social’ talk and the real business is only done at the end.  It is a good idea to study facts about Gabon, such as their history, and to show a keen interest in someone’s cultural background.  However, don’t bring up the topic of ethnic relations in Gabon or the political system.  These are both sensitive subjects.

When meeting someone for the first time, a firm handshake and a ‘hello’ are suitable as a greeting.  Muslims bring their hand to their chest after shaking hands and you should follow suit.  It is best to greet people using their title and last names.  French is the principle business language in Gabon (even with the recent declaration concerning English) but translators are available to assist.

For men, a lightweight suit and tie are suitable business attire and it is acceptable for jackets to be removed on warm days.  For women a suit, or a blouse and skirt are best for daytime appointments.  The Gabonese do tend to be slightly late for meetings, but expect others to be on time.  Meetings are usually held at the hotel or their offices, depending on the circumstances.

After greetings, business cards are always exchanged and should be given and received with both hands at all times.  The card should be studied for a few minutes and then kept in sight – either on the table or in a card case.  It should not be put straight into a pocket.  Never write on a business card given to you by someone else.

Gift giving can be complicated, but the safest kind of gift is a pen or similar object with a company logo or a picture book of the visitor’s home country.

Special Economic Zones
Gabon has introduced a number of attractive fiscal benefits to encourage inward investment through the development of their Special Economic Zones (SEZ).  For example, Nikok SEZ is geared towards forest activity and adding value to raw materials exported from Gabon.  The fiscal advantages include:

Full exemption from tax for the first 10 years
Concessional Tax of 10% for the following 5 years
Full exemption from Customs Fees and Duties on imported materials such as machinery and the export of manufactured products.
Exemption from VAT
Relaxed labour laws and 50% reduction in the price of power.

Development Sectors
Petroleum and Oil Extraction Services
Green Technology
Internet Services and Applications
Airport Management and Flight operations
Power Generation
Agricultural Services
Health Care and Education

Political Disputes
There is a present dispute with Equatorial Guinea over sovereign rights to three islands, Mbanie, Cocotiers and Congas in Corisco Bay, which hold the key to potentially oil-rich offshore waters.  This dispute has been ongoing since 1972, but gained emphasis in February 2003 when the then President’s son, Ali Bongo, visited Mbanie and declared that this 30 hectare island, inhabited by a handful of fishermen, was part of Gabon.  The underlying problem is that Africa’s present boundaries were drawn up by European Colonizers 100 years previously, but without any real degree of accuracy, especially in maritime waters.  It does appear that Spanish colonial authorities in Equatorial Guinea did remove a French presence from the islands in the mid 1950’s without any protest from Paris.  However, with the belief that rich oil fields now lie in this area, combined with the independence of both Gabon and Equatorial Guinea in the meantime, that this long past action is no longer deemed to be a determining factor in the decision on who owns what.  Until the matter has been decided and legally accepted by both countries, any oil exploration of the area will need to wait.  I am guessing that a 50/50 equal split is not going to be an acceptable solution to the problem.

Export Documentation
As with most countries, documents such as a commercial invoice and full packing list is required for all shipments, and in many cases a Certificate of Origin is also required.  Please note that Goods in Transit insurance can only be obtained in Gabon, so CIP and CIF shipments are not possible.  There are also specific documents required especially for Gabon. These are as follows:

BIC Certificate
BIC (Borderau D’Identification des Cargaisons) Certificate is required for all shipments.  This document can only be obtained from the Gabonese Transport Agency and any shipments arriving in Gabon without this certificate can be heavily fined, anything from 70%-110% of the CIF/CIP value of the cargo.  Since 75% of this fine is charged to the transport company and 25% to the consignee, most transport companies will refuse to load any cargo destined for Gabon without this certificate.  It is not possible to obtain this certificate in Gabon once the goods have been shipped: the BIC must be obtained in the country of export.  It is also possible to obtain an Electronic Cargo Tracking Note (BIETC) which has the same function as a BIC.

Certificate of Conformity
The Gabonese authorities require that imports must meet their quality standards.  The department which has been mandated to undertake measures for quality control of products and to promote the standardisation of products in industry and commerce is the Agence Gabonaise de Normalisation (AGANOR).  Their objective is to ensure that all imports comply with approved Gabonese technical requirements.

To this end a Gabonese Conformity Assessment Programme is being set up known as Programme Gabonais d’Evaluation de Conformite (PROGEC).  This programme verifies that a mandatory Certificate of Conformity is required for Gabonese Customs clearance.  The Certificate will confirm that the products being shipped comply with the agreed technical requirements and any shipments arriving in Gabon without this certificate can be liable to severe delays in clearance, as well as penalties.  In some circumstances, the goods can be returned to the exporter.  The required Certificate of Conformity can be obtained from local Intertek offices once the programme is up and running.  PROGEC was due to commence on 1st October 2013, but has been postponed presently.  New commencement dates to be advised.

 

Maria Narancic from Point to Point Export Services is an independent international trade adviser who assists organisations world wide with their international trade projects, documentation, Documentary Credits and import/export training.  She is based in the United Kingdom.  If you require any further assistance with the matters mentioned above, please do contact us by e-mail on info@point-point.com
 

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