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Gabon Aims To Cut Yawning Poverty Gap By Ending Its Dependency On Oil

The Guardian

 

Gabon is 85% rainforest. Flying over the giant canopy, the miles pass without a glimpse of the forest floor.

Then a bald patch emerges. In the clearing in Awala, which has become Africa’s biggest industrial plantation, men in boots tend to thousands of small palm trees in long rows.

They are setting the scene for palm oil production, which the government says is one of the best ways to tackle the country’s terrible inequality. Gabon is one of Africa’s richest countries, but many of its citizens are among the poorest – a malady common in countries rich with natural resources.

Its tiny population of 1.9 million and huge oil wealth mean in 2015 it had a GDP per capita of about $8,300 (£6,446), one of the highest in the continent. However, a third of its citizens live below the poverty line, and unemployment stands at more than 20% – 35% among young people.

The plantations, the government hopes, will create jobs in rural areas and help the country diversify away from oil. “Inevitably, when you have a country which suddenly gets quite a considerable revenue, and you don’t have production on the market level, the result is the atrophy of other sectors,” says Gabon’s economic minister, Regis Immongault. “The result is that costs go up, marginalising part of the population.

“We don’t try to hide the poverty. Although there is growth, it is not necessarily inclusive. There is still a level of precariousness that we should absolutely fight.”

The need to diversify industry has grown more urgent as falling oil prices have slashed the country’s income, with a knock-on effect on the poorest citizens.

With a still relatively unskilled workforce, attracting foreign investment is key, according to the country’s president, Ali Bongo Ondimba. His bold ambition is to turn Gabon into an emerging economy by 2025.

“Ali Bongo is very sharp and he could see that the difficulty with producing raw materials was that it doesn’t create many jobs,” says Paul Melly, an associate fellow at Chatham House. “His goal has been to move Gabon to a higher-tech, skilled economy.”

Bongo has signed deals worth $4.5bn with three Asian companies. One is Singapore-based Olam, which is developing 100,000 hectares (247,105 acres) of oil palm trees in Gabon. The company has also collaborated with the government to set up a 1,000 hectare special economic zone, in a 40-60% public-private partnership. The government offers special terms to any foreign firm willing to build inside the zone.

There are no taxes or customs duties for the first 10 years. The zone offers fast-tracked documentation – you can create a company in 48 hours, or get an investor’s visa in three days.

The walled-off zone is in Nkok, just outside the capital, Libreville, on a road that is being rebuilt. Just inside the gate, two concrete panthers gaze down from a large replica of the national coat of arms.

Warehouses containing logs, scrap metal and workers are inside the walls. Most of the land is empty, although it is a constant race against the forest to keep it so. Here, abandoned cars don’t just sit and rust, they are swallowed by the jungle.

 

Most of the warehouses are used to process timber – one of the country’s main exports. However, Gabon has banned the export of raw logs to ensure materials are transformed in-country, to create more jobs.

 

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Many of the skilled jobs – in Nkok and on the plantations – are done by foreign workers while Gabonese are trained.

 

Bongo, who became president in 2009, has sought to distance himself from the legacy of his late father, Omar, who was president for 42 years and was accused of squandering Gabon’s oil wealth. To great fanfare – and widespread cynicism – Bongo announced last year that he would “give up” his share of the inheritance from his father. He has also implemented a successful health insurance system for poor people funded by a 10% levy on the turnover of mobile phone companies.

 

Gagan Gupta, the head of Olam in Gabon, believes that the strategy is working: the new factories and plantations are helping to reduce poverty. In Mouila, in Gabon’s south-west, a plantation meant a $1.5m monthly salary injection into what was previously a subsistence economy, according to Gupta.

 

“Putting money in is very easy,” he says. “The more difficult bit is how you make a public-private partnership work. The government brings the ability to give investors ease of doing business. We bring technical experience. We bring credibility. When we go to the banks and say we’re executing it, the banks are much more comfortable that if Olam is doing it, it’ll get done.

 

“What the government does not bring, which helps us, is interference. About 6,000 people work in the extractive industry. And with us, you have about 9,000 people working in a project that’s six years old. Olam and the government of Gabon have brought relevant contributions to this partnership and actually made a success [of it].”

 

However, big plantations like Olam’s are a serious threat to biodiversity and rural populations, according to a 2013 report by Brainforest, an environmental NGO in Gabon.

 

Building up other industries to lower oil dependency could have taken other, more sustainable routes, Brainforest said.

 

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“Gabon is very dependent on other countries for its food. So their efforts to diversify away from oil should have been focused on planting food crops, so as to move towards self-sufficiency,” says Brainforest’s Protet Essono-Ondo. “But since 2009, the government has been focused on agribusiness, specifically palm oil and rubber, even though various studies have shown that people’s priority is food crops and vegetables.”

 

Most of the jobs created were “precarious seasonal jobs, without any security or sustainability,” says Essono-Ondo.

 

He added there is not enough consultation about government initiatives to attract business, and the awarding of contracts is murky.

 

Ultimately, Melly says, delivering results for the poorest will depend on how strong the government’s willpower is, or the leverage donors can still exercise. “In other countries they can still strike a bargain, and if you’re in Mali or Benin, you’re not in a position to argue. That’s not the case in Gabon.”

 

The question is whether the hundreds of thousands Gabonese living below the poverty line will get a share in the success this time around.

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