Many oil-producing countries have had to adjust to the recent fall in oil prices. Minister for Economy, Investment and Foresight, Regis Immongault, explains how Gabon is coping.
When the ratings agency Fitch downgraded Gabon's investment grade in May to B+, it didn't come as a surprise. Many oil-producing countries have suffered a similar fate. But Regis Immongault (right), Gabon's Minister for the Economy, Investment and Foresight, is not too concerned. The former Minister of Mines, Industry and Tourism is confident Gabon can weather the storm and insists investment plans will remain on track. Immongault doesn't think the downgrading was entirely justified--in fact, Moody's, another ratings agency, maintained its ranking--but he suggests the move vindicated the country's strategy of developing infrastructure and diversifying the economy. Oil is vital to Gabon, he admits, but not as important as some assume.
"The fact that we are withstanding the fall in the oil price a lot better than in previous occasions shows that diversification of the economy is a reality," he says. "The oil sector is a big contributor to the economy, true, accounting for 50% of government revenues and 85% of export revenues. But as a percentage of GDP, it was some 20% and this will continue to fall in 2015.
"We are succeeding in diversifying our economy and our emphasis as a government will continue to be to prime the private sector and create the conditions for it to blossom--that is, good infrastructure and a conducive business environment. We want mining, timber, agriculture, fishing and services to all be important axes of economic growth and this is happening today."
However, some policies put in place to diversify the economy have endured criticism. A beneficiation law in 2010 which stopped companies exporting timber in its raw form resulted in a considerable slowdown in activity in 2011. But Immongault says that despite that fall, the industry has since picked up--with 25% growth in 2014--and claims Gabon is succeeding in creating a hub in the transformation of wood.
"Today, the major challenge we are facing in this particular sector is a skills deficit [because it is growing so rapidly], so the law has had the desired impact," he says. "It is within our means to become a leading player in this industry. If you come and visit we can take you to specialist training centres we have built and invested in to tackle the skills shortage."
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