ECONOMIC PROSPECTS AND INVESTMENT

OPPORTUNITIES IN GABON

FIRST UK-GABON INVESTMENT FORUM 2012

HE. LUC OYOUBI, MINISTER OF ECONOMY, EMPLOYMENT, AND SUSTAINABLE

DEVELOPMENT

London, 29th November 2012

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INTRODUCTION

Gabon is a young economy which today fits in the scheme of structural reforms in order to become an emerging country by 2025.

These structural reforms have been initiated in order to make the Gabonese growth more regular and inclusive, and should help our country to emphasize its large investment opportunities.

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TABLE OF CONTENTS

Economic prospects-Short-term horizon-Medium/long-term horizon

Investment opportunities-Undeniable assets-A strong sectorial attractiveness

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ECONOMIC PROSPECTS

-Short-term horizon-Medium/long-term horizon4

SHORT-TERM HORIZONSLIGHT DOWNTURN OF THE GROWTH RATE (1)

Since 2009, Gabon growth rate has been high and stable (around 7%).

Table 1: Gabon GDP Growth rate

Source: Ministry of Economy 5

SHORT-TERM HORIZON SLIGHT DOWNTURN OF THE GROWTH RATE (2)

The growth rate should according to our estimations remain high in 2013 despite a slight downturn.

Our country’s 2013 growth rate is still high and even higher than the one of many other regional peers.

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SHORT-TERM HORIZON STRONG MACROECONOMIC CONDITIONS

Macroeconomic conditions are still robust.

Table 2: Selected economic indicators

Source: Ministry of Economy

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SHORT-TERM HORIZON A NEW DEVELOPMENT STRATEGY

A new development strategy called “the Emerging Gabon Strategic Plan”.

This strategy aims at diversifying our country’s economy.

So, it is important to take the potential impact of this strategy into account to analyze Gabon’s economic prospects.→ Analyze of economic prospects at the medium/long-term horizon. 8

MEDIUM/LONG TERM HORIZON THE DIVERSIFICATION OF THE ECONOMY (1)

The results of the diversification process are becoming apparent.

Gabon’s growth is now able to face potential reversal of market conditions.

Graph 1: The diversification of the economy

Source: Ministry of Economy9

2009 2010 2011 2012 2013 2014 2015

-4

-2

0

2

4

6

8

10

12

14

Total GDP Oil GDP Non oil GDP

MEDIUM/LONG TERM HORIZON A CAREFUL EXTERNAL DEBT MANAGEMENT STRATEGY

Gabonese public finances are sustainable

Table 3: Evolution of Government indebtedness rate

Source: Ministry of Economy

Reduction of public payment period from 120 days to 30 days.

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2012 2013 2016 2019 2020 20260

5

10

15

20

25

15.6

2022.4

15.513.6

3.8

Indebtedness rate

MEDIUM/LONG TERM HORIZON SOCIAL PEACE AND POLITICAL STABILITY

The promotion of economy diversification would create many jobs throughout the country → inclusive growth and poverty reduction.

Many other measures have been taken in order to promote social peace and political stability:-Reform of the social insurance fund -Modernization of health infrastructures

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MEDIUM/LONG TERM HORIZON INCREASE OF LOCAL WORKERS EFFICIENCY

Many investments have been done for both non-specialized and vocational training/education.

Firms which want to settle in Gabon can expect to have well trained local workers.

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INVESTMENT OPPORTUNITIES

-Undeniable assets-A strong sectorial attractiveness

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UNDENIABLE ASSETSGEOGRAPHICAL ASSETS

Gabon is the hub of many destinations in the central African region and can be a turntable for exchanges with South Africa.

Gabon is member of two sub-regional groupings -EMCCA and ECCAS - →represents a potential market of more than 130 million consumers.

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UNDENIABLE ASSETS A FAVOURABLE INSTITUTIONAL FRAMEWORK (1)

International governance asset: Liberal economic system open to foreign

investors since 1989.

Gabon is member of several multilateral organizations including:-World Trade Organization;-World Bank;-Multilateral Investment Guarantee Agency.

Gabon has also ratified many other bilateral and international conventions of the United Nations System.

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UNDENIABLE ASSETS A FAVOURABLE INSTITUTIONAL FRAMEWORK (2)

Business environment: Gabon has ratified the Harmonization Treaty for Business Law in

Africa and The Treaty for the intra-Africa Conference for Social Prevention (CIPRES).

Gabon has adopted a Law (law n°015/98) governing the investment chart in the Gabonese Republic. This chart has subsequently resulted in the adoption of specific investment codes in the areas of Forestry, Mining, and Tourism.

Gabon has created two institutions devoted to the promotion of investment and trade:-The Center for the Development of Enterprises (CDE) in order to facilitate the creation of companies in a relatively short period of time.-The Agency for the Promotion of Invetsments and Exports (APIEX).

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UNDENIABLE ASSETS A ROBUST BANKING AND MONETARY SYSTEM

Gabon is member of the Zone Franc so, its money is linked to the euro→a cautious monetary policy.

Growing interest of big African banks for Gabon (Ecobank, UBA…).

Banks contribute to open up the country through the development of agencies all around the territory. 17

UNDENIABLE ASSETS THE PROMOTION OF FREE ECONOMIC ZONES

Creation of free economic zones throughout Gabon to encourage new growth areas by attracting investors, and to bring industry closer to raw material sources.

The final objective is to give more value added to our natural resources, to create employment, and to increase revenues both for the government and the population.

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UNDENIABLE ASSETS DEVELOPMENT AND MODERNIZATION OF INFRASTRUCTURES (1) The President Ali BONGO ONDIMBA decided since his

election to raise the total amount of investment. Table 4: Evolution of public investment

Thanks to those additional financial funds, road infrastructures have been improved.

Modernization and expansion of ports in Owendo and Port-Gentil through the signature of an agreement in November 2010 with the Singapore Port Authority.

Construction of a multimodal dry port in Port-Gentil and of a deepwater port in Mayumba for the exports.

Source: Ministry of Economy,

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A STRONG SECTORIAL ATTRACTIVENESSTHE MINING SECTOR (1)

Prerequisites: In addition to reserves of oil and gas, Gabon

has sizeable mineral resources (iron, gold, diamonds, magnesium, cobalt…).

Recent explorations revealed more than 900 potential mineral deposit sites in Gabon.

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A STRONG SECTORIAL ATTRACTIVENESSTHE MINING SECTOR (2)

Efforts realized by the Gabonese Government: Development of a national Mines and Hydrocarbons

industry by the creation of specialized firms ( “the Gabon Oil Company”, the “Compagnie Equatoriale des Mines”, and “Gabon Steel”).

By 2016 Gabon aims to have developed an institutional framework that is attractive for private investments.

Several industrial projects are underway :-In the manganese sector: creation of metallurgical plants in Moanda. -In the iron sector: the planned Belinga industrial complex. 21

A STRONG SECTORIAL ATTRACTIVENESSTHE AGRICULTURAL INDUSTRY (1)

Prerequisites: Gabon is made up of about one million hectares of

humid savannas perfectly suited to bio-fuel production.

Currently, this sector only accounts for 5% of GDP.

Efforts realized by the Gabonese Government: Creation of a special agricultural economic zone

which will allow the development of agricultural production and of food processing industry.

Restructuration of the institutional and regulatory framework, to develop agricultural land even in outlying areas as well as related infrastructures.

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A STRONG SECTORIAL ATTRACTIVENESSTHE AGRICULTURAL INDUSTRY (2)

Implementation of many projects in order to develop some specific sectors:-Intensive food-production industries;-Agro-pastoral farms;-Integrated poultry rearing.

The palm oil, the rubber, and the coffee/cocoa industries will also be relaunched.

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A STRONG SECTORIAL ATTRACTIVENESSFISHING RESOURCES

Prerequisites: 800 kilometers of preserved coastline in

Gabon.

Efforts realized by the Gabonese Government: Drafting laws in order to set up a national

fishing industry and to develop outlets for a valuable market.

The new laws pay attention to fishing stock and resources and aim to develop fisheries and to review fishing access rights.

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A STRONG SECTORIAL ATTRACTIVENESSFORESTS (1)

Prerequisites: Forests represent more than 80% of Gabon’s

territory. The country enjoys from a mosaic of 6

ecosystems: mangroves, forests, savannas, wet environments, mountains and plateaus.

Some of the regions are still totally prestine territory

1000 species of plants have been listed in Gabon.

This sector has besides been chosen by the President to be the spearhead of our development strategy and future growth.

Positive externalities related to the environment field.

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A STRONG SECTORIAL ATTRACTIVENESSFORESTS (2)

Environment is considered as a promising sector all over the world.

The objective is to put Gabon at the leading position in certified tropical hardwood sector.

Efforts realized by the Gabonese Government: Special economic zones devoted mainly to the

wood-processing industry that offer various tax advantages have been created.

The exploitation network is hardly touched in the wood industry despite its huge potential.

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A STRONG SECTORIAL ATTRACTIVENESSSOCIAL HOUSING

The President Ali BONGO ONDIMBA decided to back the building of 35.000 accommodations to meet the local demand by 2016.

Local supply is insufficient to meet the demand.

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CONCLUSION (1)

Thanks to the dynamism of the Gabonese President and his government, growth is high and diversified, the external debt management strategy is prudent, country risk is reduced, social peace and political stability are secured, and the quality of local workers is improved.

Our country benefits from undeniable assets to and strong sectorial attractiveness with the promotion of the mining sector, of agricultural and food processing industries, of fishing resources, of wood and forest economy, and of social housing.

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CONCLUSION (2)

The association of those elements makes Gabon an attractive market and destination for potential foreign investors.

Foreign capital is consequently welcome to Gabon in order to take advantage of the opportunities offered by the ambitious reform agenda conducted by the Authorities.

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Thank you!

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