Gabon to Raise Spending Next Year as Oil Production Increases
Gabon plans to boost spending 6.2 percent next year as oil and mining production advances, according to draft budget estimates from the Finance Ministry.
Crude output is forecast to rise 1.4 percent to 11.4 million metric tons as large oil fields see a surge in volumes while mining production, mainly of manganese and gold, will climb 15 percent, according to a statement distributed to reporters today in the capital, Libreville. Government spending is set at 3.34 trillion CFA francs, up from 3.14 francs in 2013.
The Central African nation in September lowered its 2013 growth forecast to 6.1 percent from an earlier projection of 7.1 percent and compared with a rate of 5.3 percent last year. Expansion, which has been buoyed by rising public investment, is forecast at 6.8 percent in 2014, according to the International Monetary Fund. Together, oil and manganese exports account for 45 percent of gross domestic product, according to the IMF. Tullow Oil Plc (TLW) and Total SA (FP) are among companies operating in Gabon.
While Gabon was one of the first sub-Saharan African nations to raise a Eurobond in 2007 and it’s considered a middle-income nation with per capita income of more than $11,000, the gap between rich and poor is wide. A-third of its citizens live in poverty and 20 percent of working-age people don’t have jobs, according to the Washington-based lender.
The budget was calculated using an average Brent crude price of $98.5 a barrel and manganese at $269.2 per ton. Production of manganese, used to harden steel, is forecast to rise 14.8 percent to 4.6 million tons, according to the budget.
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