Following a coup, a contentious election and four different finance ministers – all within the past three years – Gabon is turning back to the International Monetary Fund to help put its fiscal house in order.<\/p>\n
Its push for an IMF loan – a prerequisite \u200bto unlocking investor cash and other international funding – could help stabilise the Central African OPEC-member’s finances. It will also likely have significant implications for its cash-strapped regional \u200cneighbours.<\/p>\n
However, while investors and ratings agencies view an IMF programme as crucial, worries over Gabon’s debt transparency and the government’s will to push through tough reforms have bred skepticism.<\/p>\n
“The programme is far from a done deal,” said Jose Mantero, sovereign analyst at Fitch Ratings.<\/p>\n
“Significant obstacles remain, including the government’s expansionary fiscal policy and the likelihood of drastic, unpopular reforms, both of which are politically challenging in the current environment.”<\/p>\n
The Fund on Friday wrapped up a 10-day visit to Gabon – \u200bits first since the government said it wanted an IMF loan after toying with the idea of tapping the market for over a year.<\/p>\n
Concluding the visit, the\u00a0IMF said\u00a0talks would \u200bcontinue, adding that prudent policies were critical to safeguarding stability not only in Gabon, but in the broader region as well.<\/p>\n
The talks were the first \u2060since several nations in the Central African Economic and Monetary Community (CEMAC) signalled they too would seek IMF help amid a regional funding crunch that has left low-rated nations with limited financing options.<\/p>\n
GABON’S PATCHY \u200bRECORD, DATA CONCERNS COMPLICATE IMF PUSH<\/strong><\/p>\n Years of political instability have saddled Gabon, the second-largest CEMAC economy, with an economic crunch and dwindling reserves.<\/p>\n Ahead of last week’s visit, the finance ministry said turning to the \u200bIMF was “part of the government’s will to strengthen transparency, budget rigidity and sustainability of public finances.”<\/p>\n The government has yet to make a formal request to the IMF for a new programme.<\/p>\n Meanwhile, its patchy track record and transparency concerns could complicate Gabon’s wooing of the Fund. Its last programme – a three-year facility approved in 2021 – “veered off-track” just a year later, according to the IMF.<\/p>\n And non-profit Open Data Inventory, which assesses countries based on the openness of official statistics, ranks \u200bGabon 171st out of 198 countries.<\/p>\n “The challenge in Gabon is a lack of data,” said Carmen Altenkirch, emerging markets sovereign analyst at Aviva Investors.<\/p>\n Poor data makes it difficult to know how much fiscal \u200badjustment – for example spending cuts, revenue increases, or a combination of both \u2013 Gabon would require.<\/p>\n “We still have some concerns as to the magnitude of fiscal spending in 2025, the level of public debt,” said Yvette Babb, a \u200cportfolio manager \u2060at William Blair.<\/p>\n That fog means the IMF may not even know yet what authorities must do to get a loan, making a deal unlikely until later this year, according to Babb.<\/p>\n What data is available, meanwhile, is concerning. Fitch Ratings warned late last year that the large fiscal deficit in the 2026 budget will make obtaining an IMF loan difficult.<\/p>\n REGION UNDER STRESS, PRESSURE ON GABON TO CLEAN UP ITS ACT<\/strong><\/p>\n Gabon\u2019s push to get back into the IMF’s good graces matters beyond its borders.<\/p>\n Civil\u00a0unrest flared\u00a0last year in Cameroon, the CEMAC bloc’s largest economy, after a contentious election handed 93-year-old President Paul Biya an eighth \u200bterm. Security issues pervade the region, which also includes \u200bChad, Republic of Congo, Equatorial Guinea and \u2060the Central African Republic.<\/p>\n Gabon had increasingly leaned on the CEMAC market for borrowing, Fitch Ratings said, but serious liquidity stress in the region means fresh funding beyond rollovers will be scarce.<\/p>\n “From a liquidity perspective, the regional market is extremely tight with limited ability to issue long-dated bonds locally,” said Daniel Lebetkin, \u200bAfrica Debt Financing Director at Citi.<\/p>\n International markets are also expensive for Gabon and fellow CEMAC nations such as Republic of Congo, both of which \u200bhave debt ratios that \u2060exceed the key threshold of 70% of GDP.<\/p>\n In November, Republic of Congo raised $670 million in a private placement priced with a reoffer yield of 13.7% – beyond what many analysts deem sustainable.<\/p>\n Cameroon and Republic of Congo routinely ask investors for financing via private placements, said Thys Louw, a portfolio manager with the emerging markets fixed income team at Ninety One.<\/p>\n “The only way out, really, for the region is to all be on IMF \u2060programmes,” he said.<\/p>\n Recent \u200boil price spikes, driven by war in the Middle East, help oil producers. But a lack of financing options with \u200bdebt repayments looming is nonetheless piling pressure on Gabon to do what is required to satisfy the IMF, investors said.<\/p>\n “It’s a game changer in the sense that there is regional pressure on (Gabon’s) government to fall in line and make good on this,” \u200bsaid William Blair’s Babb.<\/p>\n","protected":false},"excerpt":{"rendered":" Following a coup, a contentious election and four different finance ministers – all within the past three years – Gabon is turning back to the International Monetary Fund to help put its fiscal house in order. Its push for an IMF loan – a prerequisite \u200bto unlocking investor cash and other international funding – could […]<\/p>\n","protected":false},"author":6,"featured_media":18542,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":4,"jnews-multi-image_gallery":[],"jnews_single_post":{"subtitle":"","format":"standard","override":[{"template":"1","parallax":"1","fullscreen":"1","layout":"right-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"top","share_float_style":"share-monocrhome","show_featured":"1","show_post_meta":"1","show_post_author_image":"1","show_post_date":"1","post_date_format":"default","post_date_format_custom":"Y\/m\/d","show_post_reading_time":"0","post_reading_time_wpm":"300","post_calculate_word_method":"str_word_count","show_zoom_button":"0","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"1","show_comment_section":"1","number_popup_post":"1","show_post_related":"1","show_inline_post_related":"1"}],"image_override":[{"single_post_thumbnail_size":"crop-500","single_post_gallery_size":"crop-500"}],"trending_post_position":"meta","trending_post_label":"Trending","sponsored_post_label":"Sponsored by","disable_ad":"0"},"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":{"view_counter_number":"0","share_counter_number":"0","like_counter_number":"0","dislike_counter_number":"0"},"footnotes":""},"categories":[28,32,2362],"tags":[181,1163],"class_list":["post-20120","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-central-africa","category-economy","category-featured","tag-gabon","tag-international-monetary-fund-imf"],"_links":{"self":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts\/20120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/comments?post=20120"}],"version-history":[{"count":1,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts\/20120\/revisions"}],"predecessor-version":[{"id":20121,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts\/20120\/revisions\/20121"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/media\/18542"}],"wp:attachment":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/media?parent=20120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/categories?post=20120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/tags?post=20120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}