WHY IS GABON SO RICH?
Easy question to answer: It has plenty of oil and gas and also huge rainforests covering nearly 90% of its total land area delivering some of the best hardwoods in the world. And then there is also its well-developed manganese mining sector.
But oil has been the country’s wealth mainstay. Gabon is Africa’s fifth-largest oil producer, chiefly from offshore fields that stretch from the main oil centre of Port-Gentil to Mayumba in the south. The big supermajors such as TotalEnergies are operating here, as do experienced developers such as Perenco. It was long thought that the oil that was discovered in 1931, would run out, but now companies such as BW Energy and Vaalco are making new discoveries. According to the Organisation of Petroleum Exporting Countries (OPEC), Gabon has two billion barrels of offshore and onshore reserves.
All this for a country with only about 2,35 million people! Little wonder that it registers a very high enviable GDP per capita of US$ 6 500. Real GDP grew 3% in 2022, up from 1,5% in 2023.
“Get those kids out of the water right now!” I’ve taken my two young children for a paddle in the shallows of the Atlantic opposite the Okoumé Palace hotel where we’ve been living. Now an angry, elderly (I think) French lady is shouting at me. “Those logs can kill them you know!” She’s right. There are massive logs rolling around in the breakers that could certainly crush a person. They’re far from where the kids are splashing but one never knows if an especially large wave will rise… The hardwood logs are cut, tied and floated down the Komo river but some of them break away and float off.
THE DILEMMA OF THE ’APRÈS-PÉTROLE’ (AFTER PETROLEUM)
“The oil boom is over. My country will have to start developing more of its other resources.” A very high-level Gabonese politician is expressing his concern. It’s 1986 and the oil price has dropped drastically and it’s going to have a strongly adverse effect on Gabon. Everyone is scared of the looming ‘après-pétrole’ time to come.
A recent World Bank report lists mining, agriculture, timber and fisheries as sectors that can be further developed. Given Gabon’s vast jungle and relatively unspoilt coast line, eco-tourism is added. (Although Libreville, Port-Gentil and Franceville rank high on the list of the world’s most expensive cities.) The bank praises Gabon for its efforts to develop a green economy and refers to its clean energy programmes too.
Some success in diversification of the economy is being registered. In 2022, the non-oil sectors grew 2,3% and observers believe that this share will grow faster in the years to come.
STRONG ATTENTION TO AGRICULTURE AND FORESTRY
The agriculture sector has been relatively underdeveloped in Gabon. Yet stimulation of this sector will bring substantial benefit given that it employs some 40% of the population. The policy is to boost cash crop growth through international investment. Palm oil and rubber are obvious targets but other products include sugar, coffee, cocoa, soya and maize.
The arrival of the major Singapore-registered agri-industrial group, Olam, in 1999 marked a strong upturn in agricultural activity. The company has two palm oil mills, a palm kernel crushing plant, and has set up a fertilizer company. It has also developed large rubber tree plantations. In a recent announcement, India and Gabon have agreed to develop an agricultural special economic zone.
Arise Integrated Industrial Platforms is a joint venture between the Africa Finance Corporation and the Africa Transformation and Industrialisation Fund. It has developed the Nkok Special Economic Zone and multi-sectoral park near Libreville as well as special economic zones in Ikolo in Lambaréné and Mpassa-Lebombi in Haute-Ogooué Province. These zones house diverse industries but many are involved in the processing and beneficiation of hard, tropical woods.
AND NOW A MAJOR OPPORTUNITY IN THE MINING SECTOR
When I lived in Gabon in the mid-1980’s and was working on an agriculture project there, I had the privilege of witnessing one of the world’s most ambitious rail projects – the Trans-Gabon or Transgabonais – 670 kilometres long, cutting largely through almost impenetrable jungle from Owendo port to Franceville well into the interior.
The project was seen by all in Gabon as a lifeline to open up the country. But raising the required US$ 1,65 billion to cut a swathe through the dense vegetation was difficult. However, this was finally achieved in 1983, when an international consortium interested in a uranium discovery as well as the known iron ore deposits, provided the funds.
Following the re-opening of the Chinese economy, the steel mills in China are restocking with iron ore and the global price is on an upward trend.
The Belinga iron ore deposits are located deep into the interior on the borders with Cameroon and the Republic of the Congo. They are said to hold one billion tons, rivalling the much-publicised Simandou deposits in Guinea. They were discovered as long ago as 1895 but despite a few attempts, have remained unexploited due to financing and transport logistics issues. Undoubtedly one of the biggest unworked deposits in the world! The Trans-Gabon rail line stood ready to unlock this treasure trove.
Now Fortesque Minerals of Australia and its local partner have concluded a deal to at last mine the Belinga iron ore, rail it down to the coast, and ship it out through Owendo Port which now has a minerals handling facility. The world’s fourth largest iron ore mining house has stated that it will start operations in the second half of 2023.
And this is not the only iron ore project on the cards!
Another Australian miner, Havilah Resources, has expressed interest in relaunching the Milingui iron ore project in Nyanga Province in the south. It will use the future Mayumba Port to export its production. Genmin has said that its Baniaka and Bakoumba iron ore projects situated in the iron ore mining hub in south-eastern Gabon will start up in 2024.
AND INTO THE FUTURE
In the face of its diminishing oil resources, Gabon is making headway with its diversification, and could soon be well recognised as the ‘pearl of central Africa’. While the economy grows, the forests and coast are still being largely protected and renewables are being prioritised. And this has lead the World Bank to give the country another flattering title: “climate champion.”
