Introduction
Gabon is a country on the west coast of Central Africa, formally known as the Gabonese Republic. Gabon is bordered on the northwest by Equatorial Guinea, on the north by Cameroon, on the east and south by the Republic of Congo, and on the west by the Gulf of Guinea. It has a population of 2.1 million people and covers an area of roughly 270,000 square kilometres. The coastal plains, the mountains in the centre, and the savannah in the east are the three separate regions. Libreville is Gabon’s capital and largest city and French is the official language.
[the_ad id=”151208″] [the_ad id=”151230″]
Originally settled by Pygmies, they were quickly supplanted and assimilated by Bantu tribes. Gabon’s Myeni-speaking Kingdom of Orungu emerged in the 18th century. Its capacity to buy and sell slaves made it a strong commerce hub. The slave trade ended in the 1870s, and the kingdom crumbled. Gabon has had three presidents since its independence from France in 1960. Gabon adopted a multi-party system and a new democratic constitution in the early 1990s, improving electoral transparency and reforming several government institutions.
Gabon is one of the richest countries in Sub-Saharan Africa, with the fifth highest HDI in the area and the fifth highest GDP per capita (PPP) in all of Africa, thanks to abundant petroleum and foreign private investment. However, because of income inequality, a sizable percentage of the population remains impoverished.
Facts about Gabon economy:
Gabon’s economy is marked by close ties to France, major international investments, reliance on skilled foreign labour, and agricultural decline. Gabon enjoys a per capita income four times that of most nations in sub-Saharan Africa.
Oil is Gabon’s main source of revenue. Oil revenues account for 46 percent of the government’s budget, 50 percent of GDP, and 81 percent of exports. However, from a high of 370,000 barrels per day in 1997, oil output is now quickly falling. According to some projections, Gabonese oil will be depleted by 2026. Despite declining oil income, planning for an after-oil world is only now begun. Although there have been recent offshore discoveries, oil production is still on the decline.
Iron ore mining is another key natural resource in Gabon. In 2012, the government declared that it would examine the amount of iron ore at the Belinga site before giving the concession to a mining company.
Gabon’s debt and income management earned it a bad reputation with the International Monetary Fund (IMF). Gabon successfully completed a 15-month Stand-By Arrangement with the IMF in September 2005. In May 2007, the IMF approved a new three-year Stand-By Arrangement. Gabon was unable to reach its economic targets under the Stand-By Arrangement in 2009 due to the financial crisis and socio-political developments surrounding President Omar Bongo’s death and the elections.
Although Gabon’s oil profits have given it an unusually high per capita GDP of $8,600, compared to the rest of the region, there is a skew in the income distribution and low social indicators. The richest 20 percent of the population make over 90 percent of the money while nearly a third of the Gabonese population lives in poverty.
Gabon’s economy is heavily reliant on mining, yet primary resources are plentiful. Logging was Gabonese economy’s cornerstone before the discovery of oil. Logging and manganese mining are the second most important sources of revenue nowadays. According to recent explorations, the world’s largest unexploited iron ore deposit may exist.
The lack of diversity in the Gabonese economy has been criticized by both foreign and domestic analysts. Various constraints have hampered the growth of new sectors, including a tiny market, reliance on French imports, inability to capitalize on regional markets, a lack of entrepreneurial fire among Gabonese, and a reasonably consistent supply of oil “rent.”
Poor infrastructure makes further investment in the agricultural or tourism sectors difficult. A few prominent local investors dominate the tiny processing and service sectors that do exist.
The government began a program of privatization of state-owned firms and administrative reform in the 1990s, including cutting public sector employment and compensation increases, at the request of the World Bank and IMF, but progress has been gradual. The new government has stated its intention to work toward the country’s economic development, although it faces substantial obstacles in achieving this aim.
Can a foreigner start a company in Gabon?
There is no law prohibiting or limiting foreign investment in Gabon. Foreign investors are treated similarly to Gabonese counterparts when buying property, negotiating licenses, signing contracts, or establishing new businesses.
Is it a good idea to start a business in Gabon?
Gabon, according to the policies of the Head of State, HE Ali Bongo Ondimba, is a stable democratic republic with a true culture of peace and a liberal economic system. To entice new enterprises to the country, he has implemented a genuine investment attractiveness program.
A corporation can be lucrative if it is strong enough to overcome the hurdles it meets in Gabon. Gabon’s legal and fiscal structure is conducive to foreign investment. The country’s economic growth, strategic geographic location, political and social stability, and natural resource development have all enticed many foreign businessmen to set up shop in Gabon.
Advantages and disadvantages of doing business in Gabon?
Some advantages are:
- An abundance of natural resources.
- The country’s strategic location along the Gulf of Guinea.
- Political stability.
- Its membership of the CEMAC and several other international organizations.
- The government’s plan to diversify the economy through the “Emerging Gabon Strategic Plan”.
- Gabon is the 5th largest oil producer in sub-Saharan Africa.
- Africa’s 2nd largest producer of wood.
- No restrictions or limitations for foreign investors concerning converting, transferring or repatriating funds associated with an investment in Gabon.
- Free convertibility of its currency with foreign currencies by being part of the franc zone.
Some disadvantages are:
- Economy remains dependent on revenue generated by the exportation of hydrocarbons.
- High cost of production factors which is often linked to inadequate transport and energy infrastructure.
- High unemployment and levels of poverty. More than one-third of the population lives below the poverty line.
- Burdensome bureaucratic procedures,
- The lack of a clearly established and consistent process for companies to enter the small domestic market.
- Rigid labour laws.
- Inconsistent application of customs regulations.
- High risk of corruption.
- Stock of domestic and external arrears is not cleared yet.
- Reliance on imports of food and capital goods.
Types of businesses to start in Gabon
Oil
Many businesses continue to benefit from the petroleum industry. Due to the natural decline of aging oil fields, the government is focusing on developing offshore, deep-water resources in order to meet a goal of tripling oil production by 2026. The focus on offshore development in Gabon should create new opportunities for oil and gas technologies and services.
Gabon is amending its hydrocarbons law in attempt to entice new investment into the country’s cash-strapped oil sector.
Wood
Companies that process timber have options. Gabon wants to increase exports of forest products. Gabon produced 270,000 cubic meters of tropical veneer with the support of the Olam Corporation, which operates the SEZ.
Gabon was Africa’s fourth largest sawn wood producer and 26th globally. The SEZ in Gabon already produces steel rebar, furniture, veneer, plywood, and other wood goods. The large area, modern port, and long-term tax advantages should entice investors.
Owendo’s New Owendo International Port opened in October 2017. The Owendo container terminal’s length, draught, and equipment (two ship-to-shore and four container gantry cranes) meet international port regulations. It serves ship owners, importers, and exporters well. 6,000 TEU (Twenty-foot Equivalent Units) vessels may be handled efficiently. The port is run by Bolloré.
Mining
Gabon has a rich soil with over 900 mining indicators, with manganese, iron, gold, and limited soil being the most important. However, Gabon’s mining industry is largely manganese-based and contributes only 4% of the country’s GDP.
Mining equipment firms can provide cranes, draglines, trucks, and tractors. In June 2015, COMILOG, a subsidiary of ERAMET, opened a plant for domestic manufacturing of value-added manganese products. Mining licenses for iron ore, copper, gold, diamonds and other minerals have also been obtained. There may be potential mining prospects near the Belinga iron ore deposit, one of the world’s largest iron ore resources.
Agriculture
Gabon imports beef, poultry, cheese, and beverages. This high-cost import from Europe causes a trade imbalance and puts pressure on the currency. In July 2018, the government restricted import exemptions and announced measures to increase domestic food production, starting with poultry.
As part of its “Gabon Agricultural Achievement and Engaged National Initiatives” programme, Gabon has been working on agricultural development since 2014. (GRAINE). The project is financed by the African Development Bank and the World Bank and initiation and management is done by Olam.
Tourism
Gabon’s biodiversity is diverse. There is opportunity for international tourism to enjoy the country’s amazing animals, landscape, beaches, and weather while engaging in nature-based activities and extreme sports. The country’s virgin woodlands have earned it the moniker “Last Eden.” But practically every form of tourism infrastructure is required.
Roads are bad, plane travel is expensive, and “package” tours are underdeveloped. The few lodges in the parks lack visitor amenities. There is potential for enterprises in housing, water and waste treatment, healthcare technology, aviation infrastructure and maintenance, road building, and education as Gabon modernizes and enhances its existing infrastructure.
Real estate
Gabon has one of the highest rates of urbanization in the world at 85%. Despite significant demand from families and institutional operators, the action has not exploited the real estate sector’s potential.
The property market is in strong demand, with a housing deficit of around 50,000 units, largely social housing. A location’s share of 40 million USD every year, and the private sector more than 48 million USD.
How do I start a business in Gabon?
Starting a business, or company, in Gabon takes approximately 58 days. The steps involved in registering a company in Gabon are:
- Deposit the legally required capital in a bank and obtain the deposit evidence.
- Verify and reserve the company name.
- Obtain extracts of criminal record of the company manager.
- Deposit and register the company’s articles of association with the public notary.
- Deposit documents with the Investment Promotion Agency.
- Pay fees and obtain receipt.
- Publish the notice of company formation in a legal journal.
- Notify the Ministry of Labour the commence of operation.
- Register the employees with the Social Security authorities.
Hiring employees in Gabon
As an employer, it’s important to make sure your company complies with all of the local laws for staffing in Gabon. The Gabonese constitution states that all citizens have the right to obtain employment and that employers cannot discriminate against them based on their, race, sex, religion, origins or opinions.
While Gabon’s laws against discriminatory practices may not be as extensive as the legislation in some other countries, compliance is still essential. Failure to follow these regulations could result in costly operational delays for your company.
Gabon has a diverse population that speaks many different languages, including French and Fang. If you don’t have employees who speak these languages, hiring an interpreter who can work with you to hire the best candidates is a must.
Employment compliance regulations in Gabon require you to construct a fixed or indefinite verbal or written employment contract. Fixed-term contracts can be used for up to two years and can be renewed once. Compensation, perks, termination clauses, and more should all be included in all employment contracts. Furthermore, all compensation and salary payments should be made in Central African CFA francs rather than any other currency.
FAQ
What advantages are there in doing business in Gabon?
Gabon, is a stable democratic republic with a true culture of peace and a liberal economic system. To entice new enterprises to the country, it has implemented an investment attractiveness program.
What challenges can I expect when expanding my business to Gabon?
There is a lack of a clearly-established and consistent process for companies to enter the market, lengthy bureaucratic delays, high production costs, a small domestic market, rigid labour laws, and limited and poor infrastructure.
What type of business can I start in Gabon?
There are many opportunities in the oil, mining, wood, agriculture, tourism and real estate industries.
What is the corporate tax rate in Gabon?
The CIT rate is fixed at 30%. The CIT rate is 35% for companies operating in the oil and mining sectors and 25% for other entities.
How long does it take to incorporate a business in Gabon?
Starting a business, or company, in Gabon takes approximately 58 days.
Table of Contents:
