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IMF Executive Board Approves a US$147 Million Disbursement under the Rapid Financing Instrument to Gabon to address the COVID-19 Pandemic

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Via IMF (Den Internationale Valutafond)

IMF Executive Board Approves a US$147 Million Disbursement under the Rapid Financing Instrument to Gabon to address the COVID-19 Pandemic







April 9, 2020















WASHINGTON DC –
The Executive Board of the International Monetary Fund (IMF) today approved
the disbursement of SDR108 million (about US$147 million) to be drawn under
the Rapid Financing Instrument (RFI). This will assist Gabon in meeting the
urgent balance of payments needs stemming from the COVID-19 pandemic and
the terms of trade shocks.

The COVID-19 pandemic and concurrent collapse in oil prices are expected to
put the economy under extreme stress, particularly in a context of limited
financial buffers. Economic activity will slow, and the fiscal and external
positions will weaken, creating significant additional financing needs. In
addition to immediate measures of containment, including border closures
and curfews, the authorities are also taking significant steps to
strengthen health policy responses and support households and firms.

The RFI funds will help create fiscal space for essential COVID19-related
expenditure and catalyze donor support. The size and impact of the shocks
is, however, subject to a considerable margin of uncertainty. The IMF
continues to monitor Gabon’s situation closely and stands ready to provide
policy advice and further financial support if needed, in collaboration
with other donors.

Following the Executive Board discussion. Mr. Mitsuhiro Furusawa, Deputy
Managing Director and Chair, made the following statement:

“The COVID-19 pandemic and collapse in oil prices have weakened the
macroeconomic outlook, with the possibility that the pandemic could turn
more severe and persistent than anticipated with lasting impact on
commodity prices, growth, and fiscal and external positions. Economic
activity would recede, and the fiscal and external positions will weaken,
creating additional financing needs. In response to the shocks, the
authorities have announced several containment measures including border
closure, school closings and curfews. They are scaling up health care and
social expenditure by reprioritizing spending, and are considering
supportive measures for businesses and households. The regional Central
Bank and Banking Commission are taking steps to support growth and preserve
financial sector stability.

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“In the short term, a temporary widening of the budget deficit is warranted
to contain the virus outbreak and offset the social and economic impact of
the pandemic. Additional external support will also be essential. The IMF
emergency support under the Rapid Financing Instrument will support the
authorities’ policy response and catalyze donor support.

“The authorities should stand ready to suspend all emergency measures once
the crisis subsides. Over the medium term, public debt needs to be put back
on a firmly downward path. The decline in oil prices will necessitate
faster fiscal adjustment and economic diversification. Sustaining the
reform momentum of recent years to achieve a more revenue-based and
growth-friendly fiscal consolidation, enhance governance and debt
management, and improve the business climate, will be critical.”


Table 1. Gabon: Selected Economic Indicators

Population (2017, est. United Nations): 2.01 millions
GDP per capita (2017) : USD7,490

Quota: SDR 216.0 millions Literacy rate (2012): 82.3 %

Main products and exports: Oil, Manganese. Poverty rate
(2017) : 32.4%

Key export markets: China; European Union, Australia.

Macroeconomic Indicators

2016

2017

2018

2019

2020

2021

Est.

Proj.

Proj.

Output (%)

Real GDP

2.1

0.5

0.8

3.4

-0.4

3.6

Non-oil GDP

3.3

1.7

1.9

2.5

0.4

3.9

Prices (%)

Inflation (end of period)

4.1

1.1

6.3

1.0

3.0

3.0

Inflation (average)

2.1

2.7

4.8

2.0

3.0

3.0


Central government finances (% of GDP)

Revenues

17.1

16.4

16.9

19.4

16.3

17.4

Expenditure and net lending

22.1

19.0

18.2

18.2

19.2

18.8

Non-oil primary balance (cash basis)

-6.6

-3.4

-1.6

0.7

-2.7

-1.5

Total public debt (% of GDP)

64.2

62.9

60.6

58.7

68.7

65.2


Central government finances (% on non-oil GDP)

Revenues and grants

24.2

23.6

25.0

28.7

21.4

22.7

Oil

7.2

9.5

9.2

10.9

5.8

5.8

Non-oil

17.0

14.1

15.8

17.8

15.3

16.9

Expenditure and net lending

31.2

27.4

26.9

26.9

25.1

24.6

o/w current

24.0

22.4

20.1

19.8

19.8

17.9

o/w capital

6.9

2.2

3.9

4.2

5.2

6.7

Non-oil primary balance

-11.0

-9.7

-7.6

-5.8

-5.7

-4.0

Basic non-oil primary balance 1/

-6.9

-8.6

-5.0

-4.2

-2.7

0.3

Money and credit

Broad money (% change)

-5.2

-3.9

15.7

0.9

5.0

6.0

Credit to the private sector (% change)

-5.6

-3.0

6.2

2.2

1.6

3.1

Balance of payments

Current account (% GDP)

-10.4

-6.9

-3.2

-0.8

-8.5

-5.9

FDI (% non-oil GDP)

6.5

7.7

7.2

7.4

7.8

7.7

CEMAC Foreign Reserves (months of extrazone imports)

2.3

2.4

2.8

3.6

3.5

3.8

External Debt (% GDP)

37.4

38.7

40.0

39.3

49.8

47.5

Sources: Gabonese authorities, World Development
indicators, and IMF staff estimates.

1/ Excludes externally-financed capital expenditures.

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IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Lucie Mboto Fouda

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson








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