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Gabon Infrastructure Report Q1 2012
Business Monitor International, Dec 2011, Pages: 47
Business Monitor International's Gabon Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Gabon's infrastructure industry.
BMI View:
Though Gabon is one of West Africa's oil producing countries, with a respectable 250,000b/d output in 2011, the oil windfalls have not translated into investment in the country's deteriorating infrastructure. Gabon relies on official development assistance and foreign funding to support infrastructure projects, a pattern believed to continue in the coming years as oil output declines. Low industry value and minor expansion make for an unimpressive growth story in the construction sector to the end of our forecast period in 2021.
The news that Indian infrastructure firm RPP Infra Projects has secured funding from ECOBANK of Libreville and BDEAC Bank for the first phase of a EUR250mn (US$356mn) housing project in Gabon is a positive development in a country where accessing financing barriers remains prohibitive. BMI believes Gabon's construction sector, like the country as a whole, will continue to rely heavily upon official development assistance over the coming years.
French infrastructure companies spearhead foreign involvement in Gabon. Major players active in the country's infrastructure sector include Bouygues, EDF and Veolia. However, bilateral ties with China and India have also strengthened in recent years with China's Sinohydro having been awarded the largest road reconstruction contract - for the PR1 highway project.
A small construction industry and prohibitive business environment limit the potential returns from Gabon's infrastructure sector. In BMI's Infrastructure Risk/Return ratings Gabon achieves a score of 30 out of 100, one of the lowest in sub-Saharan Africa (SSA).
Political risk is a pivotal consideration in Gabon. The situation deteriorated in August 2011 when Gabonese President Ali Bongo Ondimba dissolved the main opposition party, reversing previous minor democratic successes. BMI forecasts 4.5% real GDP growth for 2011 in Gabon on the back of elevated oil prices, but this figure will begin to tail off from 2014 in line with declining output from maturing fields.
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