ALI BONGO WILL NOT LISTEN TO THE IMF WARNINGS. ALI BONGO N’ECOUTERA PAS LES AVERTISSEMENTS DU FMI
This article was published in Financial Afrik
Gabon: the obvious IMF recipes
In a global economic environment marked by a drastic drop in the price of oil, Gabon, which derives half its budget revenue from the black gold, may still increase its resilience and boost its growth estimated at 4% in 2015, while diversifying its economy.
This is the conclusion reached by Montfort Mlachila, the Head of Mission of the International Monetary Fund (IMF) in this Central African country. And proposed measures in the short and long term.
According to the institution, Gabon must in the long term, boost its growth by diversifying its economy so that it is less dependent on oil, "which will make it stronger."
And in the short term, "the government must live within its means by doing two things: first, generate additional revenue outside the oil sector, including reducing the scope of tax exemptions. Then take a number of measures to better control the growth of the wages mass."
Moreover, "they must prioritize capital expenditures and focus on projects that have the highest benefit or the highest economic returns."
The question is to adjust spending in line with what is available in terms of revenues, the IMF said. "On the one hand, the government can potentially generate additional income from the rest of the non-oil sector. Thus, the loss of oil revenues can be, to some extent, offset by additional measures that can raise additional revenue. "
Similarly, "the government may establish or strengthen its social safety net by a number of things," including the development of agriculture in rural areas.
And in urban areas, Gabon must "improve its social safety net through the introduction or expansion of cash transfers to the most vulnerable segments of the population."
More generally, prescribes the institution, the government must improve the business climate in the country to promote investment. Indeed, "the government is fully aware that there is a skilled labor shortage in various economic activities. So by investing more in training, particularly in vocational training, there is a potential to improve the performance of the economy, including developing the skills necessary to help diversify into other new areas. "
For the record, the IMF noted at the end of 2015 that Gabon's growth prospects have deteriorated since its analyses done in 2014. A phenomenon accentuated by insufficient budgetary adjustment to offset falling oil prices, the main risk affecting the outlook .
In 2016, its economic growth rate is expected to fall to 3.2%.