Gabon can boost new sectors in the green economy to promote sustainable and resilient growth for all its people in the years to come, conclude two new World Bank reports published today.
A transition to a greener, less resource-dependent economy would require ambitious reforms to open up new drivers of growth, create jobs and reduce poverty and inequality, highlights the Gabon Country Economic Memorandum report, Towards More Inclusive and Greener Growth.
“Gabon has an opportunity to develop new sectors and unlock sustainable, resilient and inclusive growth that would serve the country well in the years to come,” said Aissatou Diallo, World Bank’s Resident Representative for Gabon. “We look forward to partnering with Gabon on a new economic paradigm, supported by public policies and governance, that is better suited for the challenges the country faces.”
The report notes that the country has taken some steps to diversify its economy away from oil, yet progress has been slow. It recommends reforms and investments in the following priority areas:
- Bolstering human capital by strengthening technical and vocational education and training at the earliest stage of the school curriculum and aligning the education system to real employment opportunities. This will help address the problem of high unemployment and skills mismatch, particularly among Gabonese youth. Social protection programs also need to be redesigned and expanded. The establishment of a flagship social assistance program that is well-funded and well-targeted, and not limited to health insurance, would significantly help reduce poverty.
- Stimulating private enterprise: The private sector is constrained by low competitiveness and barriers to investment and the predominance of the public sector in the economy. A more favorable business environment, including an enabling regulatory framework and improved investment laws, would help stimulate entrepreneurship and attract foreign direct investment.
- Enhancing trade in goods and services: Gabon’s exports, beyond natural resources such as oil and manganese, remain exceedingly low. The country needs to develop a strategic roadmap to boost cross-border trade, particularly within the continent; improve the logistics and trade infrastructure, especially its transportation network; and work with regional and other trade partners to reduce tariffs.
- Greening growth: As Gabon looks to diversify its economy, green growth presents an opportunity to achieve that goal. This can include efforts to grow and revive the country’s agricultural, fishery, and manufacturing production and exports, and stimulating ecotourism, environmental services, and digital services; promoting sound environmental practices across sectors with export potential, including leveraging trade in carbon credits linked to the preservation of rainforest and the carbon capture potential this offers; and streamlining procedures to facilitate cross-border trade (including through digitalization).
“Sustained efforts and investments in these areas could help propel economic growth that is resilient against the volatility of global energy and other commodity markets,” said Cindy Audiguier, lead author of the Towards More Inclusive and Greener Growth report.
In a new edition of the Gabon Economic Update, also published today, the authors analyze the country’s agriculture sector and provide recommendations on how Gabon could boost regional food trade as a new driver of food security and regional integration.
Gabon has strong agricultural potential, but the country remains heavily dependent on food imports. While the Government is supporting smallholder farming, the Gabonese Initiative for Achieving Agricultural Outcomes with Engaged Citizenry (GRAINE) has had mixed results. Trade in agricultural products is hampered by many obstacles, inflating the cost of many food items to citizens by as much as 14%.
A World Bank survey conducted for this report found that 24% of traders said they were subject to discretionary fees along trade corridors. A previous World Bank survey found that about 46% of the total cost paid for customs clearance of a 10-tonne truck between Cameroon and Gabon was reported to result from unofficial fees.
To increase efficiency and transparency of commercial activities and improve passage of goods, Gabon should take steps to further digitize customs services, simplify import and export documentation, and rationalize the number of checkpoints while improving the capacity and efficiency of relevant government agencies.
“Gabon could capitalize on basic investments made in recent years and leverage the comparative advantage it has in sectors such as agriculture, fisheries, digital services, and forestry. This will support the Government’s efforts towards economic diversification and create the much-needed jobs for Gabonese citizens,” said Sonia Barbara Ondo Ndong, co-author of the reports.
Distributed by APO Group on behalf of The World Bank Group.