Via IMF (Den Internationale Valutafond)

IMF Executive Board Approves a US$152.61 Million Disbursement Under the Rapid Financing Instrument to Gabon to Address the COVID-19 Pandemic







July 31, 2020











  • This is the second disbursement under the Rapid Financing Instrument (RFI) to help Gabon address urgent balance of payment needs stemming from the COVID-19 pandemic.
  • Weaker external demand and a deepening of the impact of the COVID-19 pandemic have further deteriorated growth prospects and worsened external and fiscal positions.
  • The additional resources provided under the RFI will help boost healthcare, protect the most vulnerable and support the private sector, notably small businesses.

WASHINGTON DC –
The Executive Board of the International Monetary Fund (IMF) today
approved a purchase of SDR108 million (about US$152.61 million) under
the Rapid Financing Instrument (RFI). This is the second purchase under
the RFI to Gabon since the onset of the pandemic. It aims at helping
Gabon in meeting its urgent balance of payments needs. This follows the
Executive Board’s decision of April 9, 2020 to double temporarily the
annual access limit under the RFI to 100 percent of quota (see IMF Policy Paper No. 20/018). Today’s purchase
brings total IMF COVID-19 support under the RFI to Gabon to US$299.61
million.

The authorities have been implementing commendable measures to limit
the spread of the COVID-19 pandemic. However, since the approval of the
first RFI purchase on April 9, 2020 (
see IMF Country Report No 20/109
), weaker external demand
and a more pronounced impact of containment measures have further
deteriorated growth prospects and worsened external and fiscal
positions. Lower domestic activity and the impact of crisis-related
measures on non-oil government revenue and spending, combined with
losses in oil revenue are putting significant pressures on public
finances and public debt. The authorities adopted a revised budget with
a larger deficit to accommodate automatic stabilizers and
crisis-related emergency spending. They are also taking steps to ensure
proper use of COVID-19 emergency resources, including an ex-post audit
of crisis-related spending and the publication of all crisis-related
procurement contracts.

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

“The dual COVID-19 pandemic and the terms of trade shocks continue to
severely affect human conditions and hamper growth prospects in Gabon.
The economic contraction has deepened since the first Rapid Financing
Instrument (RFI) request in April 2020, and external and fiscal
positions have worsened, giving rise to additional financing needs.
Public debt remains sustainable, but downside risks have increased
significantly. The near-term outlook remains subject to considerable
uncertainty and downside risks.

“The authorities’ measures to limit the spread of the COVID-19 pandemic
while safeguarding debt sustainability and improving reporting are commendable. A
package of monetary easing measures was approved by the regional
central bank. The Gabonese authorities adopted a revised budget focused
on addressing imminent healthcare needs to save lives, protecting the
most vulnerable, and supporting the private sector, notably small
businesses. The revised budget contemplates a larger deficit to
accommodate automatic stabilizers and crisis-related emergency
measures. The authorities are also committed to further improve
transparency and public financial management to ensure proper use of
COVID-19 emergency resources.

“The IMF emergency assistance will support the authorities’ policy
response and catalyze donor support. Contingency planning as well as
close monitoring of financial sector vulnerabilities also remain
critical to preserve macroeconomic stability.

“The authorities’ commitment to promote strong and inclusive growth
over the medium term is welcome. Measures to achieve a more
revenue-based and growth-friendly fiscal consolidation, enhance
governance and debt management, and improve the business climate, will
be critical to put public debt on a firmly downward path, and help
sustain strong and inclusive growth.”

More information

IMF Lending Tracker (emergency financing request approved by the IMF
Executive Board)


https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker

IMF Executive Board calendar


https://www.imf.org/external/NP/SEC/bc/eng/index.aspx


Gabon: Selected Economic Indicators

Population (2017, UN est.):

2.01 million

Per capita GDP (2017):

US$ 7,490

Quota:

SDR 216.0 million

Literacy rate (2012):

82.3 percent

Main products and exports:

Crude petroleum; Manganese ore.

Poverty rate (2017):

32.4 percent

Key export markets:

China; European Union, Australia

Macroeconomic Indicators

2016

2017

2018

2019

2020

2021

Est.

Proj.

Proj.

Output (Percent)

Real GDP

2.1

0.5

1.0

3.8

-2.7

2.1

Non-oil GDP

3.3

2.5

1.7

3.2

-0.1

2.3

Prices (Percent)

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 (Percent of GDP)

Revenue

17.1

16.4

16.9

19.5

15.5

15.8

Expenditure and net lending

22.1

19.0

18.2

18.2

20.9

19.2

Fiscal Balance (cash basis)

-6.6

-3.4

-1.6

0.8

-5.4

-3.5

Total Public Debt

64.2

62.9

60.6

58.7

74.7

74.4


Central Government Finances (Percent of Non-oil GDP)

Revenue and grants

24.2

23.6

25.0

29.0

20.4

20.8

Oil

7.2

9.5

9.2

11.2

5.9

5.8

Non-oil

17.0

14.1

15.8

17.8

14.2

15.0

Expenditure and net lending

31.2

27.4

26.9

27.0

27.6

25.3

o/w Current

24.0

22.4

20.1

19.8

20.4

18.1

o/w Capital

6.9

2.2

3.9

4.2

5.7

7.1

Non-oil primary balance

-11.0

-9.7

-7.6

-5.8

-8.9

-6.4

Basic non-oil primary balance 1/

-6.9

-8.6

-5.0

-4.2

-5.7

-1.6

Money and Credit

Broad Money (Percentage change)

-5.2

-3.9

15.7

1.2

5.0

10.0

Credit to the private sector (Percentage change)

-5.6

-3.0

6.2

2.2

-6.5

3.1

Balance of Payments

Current account (Percent of GDP)

-10.4

-7.0

-3.2

-0.3

-9.5

-6.3

FDI (Percent of Non-oil GDP)

6.5

7.6

7.1

7.3

7.7

7.8

CEMAC Foreign Reserves (months of extrazone imports)

2.3

2.4

2.8

3.8

3.4

3.5

External Debt (Percent of GDP)

37.4

38.7

40.0

39.2

50.6

53.5

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

1/
Excludes externally-financed capital expenditures.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Lucie Mboto Fouda

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

@IMFSpokesperson








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