Leader of tiny, oil-rich Gabon puts his nation on financial fast. Collapse of oil prices forcing wealthy nation to cut back on affluence
When Gabon recently reelected straight-talking President Omar Bongo to a third seven-year term, he quickly made it clear that black Africa's richest state (in per capita terms) must tighten its belt. The collapse of world oil prices has sorely squeezed the smallest member of the Organization of Petroleum Exporting Countries (OPEC). Last year, Gabon recorded its first balance of payments deficit in a decade when gross domestic product (GDP) fell 3 percent.
After Nigeria, this tiny nation is the second-largest black African oil exporter, and it is the world's third-largest manganese producer. It is pro-Western, and one of Africa's most stable states. Gabon is the main black African export market for the United States. The French export some $800 million a year in goods to this West African nation - constituting almost 50 percent of Gabon's imports.
Oil provides some 80 percent of exports, 65 percent of government revenue, and 50 percent of gross domestic product. In 1984, it lifted annual per capita gross national product to nearly $3,430, exceeded only by Libya in Africa.
``Times are hard. We are in a financial Ramadan,'' President Bongo said in one election speech. Ramadan is the Muslim month for fasting.
The squeeze is expected to hit immigrant workers from neighbor states hardest. But many Gabonese have grown used to a relatively affluent life style.
Despite the introduction of an austerity program in February, which, among other measures, cut Gabon's $1.9 billion national budget by $184 million, froze wages for civil servants and the public sector at 1985 levels, and placed tight price controls on essential commodities, the financial situation has continued to deteriorate. The balance of payments deficit is expected to widen substantially while GDP is expected to decline by some 25 percent in 1986, according to economists.
Prices for Gabonese grades of oil have averaged $13 a barrel in 1986 - about half of their 1985 average. With output expected to drop 7 percent, officials forecast that oil export earnings will decline by some 60 percent.
Bongo is expected to announce new austerity measures soon, as part of a medium-term adjustment program supported by an International Monetary Fund (IMF) loan. Additional sharp cuts in government expenditure and continuation of the freeze on wages and prices are anticipated.
Transport and housing allowances for civil servants are likely to be trimmed and parastatal jobs could be shed if the government pushes through its plan for privatization.
Talks are expected to be held early next year with official and commercial creditors to reschedule the country's estimated $1.2 billion foreign debt. The government stopped servicing this debt in mid-September.
The dramatic reversal in the Gabonese economy, say observers, resulted in the nation's current struggle. While many other African nations were struggling with recession, Gabon's ``problem in the mid-1970s was rapid oil-based economic growth,'' says one analyst. That growth, according to Western diplomats, was - as is true in many African nations blessed with oil - often mismanaged. Initially there was a great deal of wasteful spending and profiteering by foreign, mainly French, contractors. By the early 1980s, however, Bongo began to clamp down.
Gabon is fortunate in having a tiny population - some 1 million people - and great oil and mineral wealth. The oil wealth did not have to trickle down very far to reach many of the people. But most of it stayed in the attractive sea-front capital, Libreville, and the oil towns of Port Gentil and Franceville, observers say. IMF austerity packages initiated in other African nations have tended to hit urban dwellers such as these the hardest.
The election campaign focused on Bongo's economic and social achievements after 20 years of rule. Some 80 percent of Gabonese children go to school. Health services have greatly improved and infant mortality is down by two-thirds. There has been a massive investment in communications and the continent's largest transport project, the $2.8 billion trans-Gabon railway, is due to be opened by Bongo on Dec. 30.
The President describes it as a ``symbol of national unity,'' which will facilitate development of the manganese, uranium, and iron ore riches of Gabon's isolated interior.
In a country with more than 40 tribal groups, unity is one of Bongo's key themes. In June, he freed 28 members of the banned opposition who had been sentenced in 1982 to 20 years hard labor. According to US diplomats here, there are no political prisoners.