For Gabon, among Africa’s top oil producers, it has been a rough few years – the economy of the central African nation has been hit hard due to the global decrease in oil prices and political upheaval over the 2016 presidential elections.
On Tuesday (June 20), the IMF announced a $642 million extended fund facility for the country’s for recovery of its economy, which had slumped to 2.1% growth in 2016 from 3.9% in 2015. Gabon’s current oil production was 200,000 barrels per day, down by nearly a third from a peak of 370,000 bpd in 1997. Crude accounted for 80% of exports and around 60% of budget revenue, as per World Bank figures.
Gabon returned to the OPEC fold as its smallest oil producer in July 2016, after a 22-year absence from the production quota-setting cartel. Within a few months, it was part of the OPEC agreement for voluntary cuts in production in order to buoy historically low prices and pinch supplies.
While announcing the credit facility, the IMF stressed that growth could return to 4-5% if the government focused on diversification with large investments in agriculture, logistics and other non-oil commodity sectors.
The visit of the Gabonese foreign minister Pacome Moubelet-Boubeya to India earlier this week was therefore seen as part of his government’s efforts to diversify the economy. Of the two agreements signed during his visit, one was to “commit” to the Indian-led renewable energy initiative, the International Solar Alliance.
There were also discussions on India’s two lines of credit – $14.5 million for housing and $67.19 million for broadcasting facilities – which have remained unimplemented for years.
The Gabonese foreign minister was here to also woo the private sector, with meetings lined up not just in Delhi, but also Kolkata and Mumbai. This could be a somewhat uphill struggle, as bilateral trade has fallen sharply from $921.06 million in 2013-14 to below $200 million in 2015-16. But, there is some Indian presence to build on – Oil India Limited and Indian Oil Corporation are exploring an onshore block, while Airtel bought a local Gabonese mobile network in 2010.
India could also potentially be part of Gabon’s next big-ticket commodity rush. The country has one of the world’s largest iron ore deposits at Belinga, whose one billion tonnes remain untapped due to its distance from viable transport links to the coast. Indian state-owned consultancy RITES has completed a detailed project report for building railway links to the coast, which Moubelet-Boubeya indicated could be another area for “partnership” with India.
While the economy is going through a tough period, Gabon is also politically recovering from the controversial 2016 presidential election. President Ali Bongo Ondimba was declared the winner, but the results were disputed by his rival candidate, former Africa Union chairperson Jean Ping. There were violent clashes, which left several dead and the parliament building in Libreville set on fire.
While political tensions remain, the Gabonese government took the contrarian decision – at least going by current African sentiment – of inviting the International Criminal Court (ICC) to conduct an investigation, with the ICC team visiting Gabon this week for a preliminary probe.
In an interview with The Wire, Moubelet-Boubeya discusses his country’s ties with India, as well as the rationale for inviting the ICC and Gabon’s statement criticising Qatar for supporting terrorism.
Excerpts from the interview:
What is the agenda of your visit to India?
I came to India because we want to strengthen the relationship that Gabon has with India, both economic and political cooperation. So I had a meeting with external affairs minister [Sushma Swaraj]. During that meeting, we actually went through different cooperation points. It is a large cooperation that we have. It started in 1985. After the meeting, we also signed two agreements – one for general diplomatic consultations and second one is a commitment to support the initiative by India in solar energy [the International Solar Alliance].
We will do whatever we can so that this initiative could become a priority not only for India – but also for other countries with great solar opportunities. The question of climate change and environment is very important one for us. We need to develop and produce electricity as well, so that we can supply different plants for economic reasons. Having the sun 98% of the year, it would be a pity if we couldn’t use that energy to power, to power our plants and daily needs of our population.
Gabon is one of Africa’s biggest oil producers. Why do you feel the need to invest in solar energy?
Oil is not going to be there forever. We have seen that as oil producer, whenever price of oil changes, our economy is very much impacted as well. So, we need to have sources of energy that are stable, that are permanent, not costly and that you can be using now or in a thousand years. Concerning oil we do not know whether it is going to be around for 20 or 50 to 60 years.
Gabon had committed to cut down 9000 bpd in oil production as part of the OPEC agreement. Will you stick to it?
That is the agreement that OPEC took last year that if you have to stabilise the prices, then every country has to make an effort. In Gabon, we committed ourselves to cutting production. For the time being, we will abide with whatever we said that we will do.
Speaking of the oil price slump, there was a resulting sharp downturn in Gabon’s economy. Has your oil industry begun to recover?
Maybe the oil industry is going to recover… At one time, the price was even below $30 and now the price is at around $50. But the lesson that we have to learn from that is that we have to continue to diversify our economy and not just depend on oil to finance development in Gabon. And this was what Gabon has been doing… and this is why I am here as well, talking with the private sector to encourage them to come to Gabon to invest.
Ten years ago, oil represented almost 80% of the national budget. But for the last seven to eight years, we brought that to around 40%. We hope to bring it under 40% within three to four years, so that we can continue our growth and development regardless of what is the situation of the price of oil.
Have you come to India with any specific proposals of investment?
We came looking for partnerships. We want Indian business people to look at Gabon as a place to invest, as a place to make money as well as to create jobs for the benefit of the Indian companies and the people of Gabon.
We have 12 main domains of interests in Gabon, raw materials, agriculture, housing as well, general infrastructure, road building, airports, ports… But we need people to come here and invest, to see it as a business opportunity.
There has been a sharp decline in bilateral trade volumes in last two years. How do you plan to tackle that?
One of the reasons that I am meeting with people of chambers of commerce here in New Delhi and then travelling to Calcutta and Mumbai is to speak with people who are interested in investing in Gabon.
We do not only request for public money to invest in Gabon. We want those who have the money to invest, who can see real business opportunities. Gabon is a nice place, over 267,000 square kilometres. The country is a place to be built, constructed. So many opportunities.
China is Gabon’s largest trading partner. The first foreign visit by President Bongo after his re-election was to China. Don’t you think that India has missed the bus?
No, no. India has missed no bus at all. India is one of our major partners. For the last two years, we have had 23 Indian companies who came to Gabon to settle there…and I have just invited my colleague, the external affairs minister to visit Gabon, as soon as possible.
We will also see how to arrange the state visit of president of Gabon to India in first semester of 2018. Because India is one of our strong partners, as we share a lot in common and we need as well to learn a lot from India. And we know that India has the necessary expertise to exploit [resources], if I can say that.
What do you mean when you say that that Gabon has much to ‘learn’ from India?
We need to learn how to have stable growth of 6-10%. I mean India is one of the most important members of BRICS. As far as economy goes, you can see all the advances that India has made in the scientific world, in research and training and medicine, in transformation of different sectors. And from its people as well, learning from the culture of India as well.
Besides meeting with the foreign and finance ministers, you also met with railway minister Suresh Prabhu. Are you planning any new rail-related project?
We have a big reserve of iron ore, and we have to build a railway between Belinga (mine) and the various ports and link with other railway lines. We had an Indian company – RITES – which had already made a detailed project report. I just wanted to meet the minister to tell him that work was very well done. So, there is an opportunity as well for India and Gabon to partner. This [project] is going to be big. The exploitation of Belinga is very important.
India had offered two lines of credit to Gabon, what is their current status?
These two lines of credit were requested by Gabon. One was to support social housing in Gabon and the second is to build a telecom tower. We will hopefully using those two lines of credit, as housing is a problem in Gabon.
These two credit lines were offered some time ago. Why have they still not been utilised?
Yes, we had to review what we needed to do with the line. We wanted to use the money properly. When we use it, we want to show real investment has been made.
We thought that the first project that we had was not sufficiently developed, because it was to build 300 houses only. We believe that for amount [US$14.5 million], we can get more houses than 300.
When I go back, the ministry of finance will take up the project where we left it. He will do it as quickly as possible.
Even for the second line of credit, everything has been almost done. We have to complete the feasibility study and select the proper contractor as well.
For the last three to four years, we went through several processes in Gabon – elections, reforms of our economy. All these are now behind. So now it is time to come back to what we started and go further.
This week, a team from the ICC will be in Gabon. When most African countries are thinking of withdrawing from the ICC, your country has requested it to conduct a probe into post-election violence. Why did you go down this path?
Because, we are a member of the ICC. We signed the treaty of Rome. We are party of it. So whenever we see a problem, the body to be approached is ICC. This is what we did in early September and they are coming here now as part of the preliminary process. From whatever conclusions they have, we will see what to do next.
Does that mean that you don’t agree with the accusation of other African countries that the ICC is prejudiced against Africa?
That’s a question of national sovereignty, so I am not allowed to comment on what other countries are doing. For us, Gabon is a member of the ICC and we actually asked them to come and investigate whatever happened to Gabon. So, I cannot comment on what other countries should do or should not do.
Ahead of the ICC team visit, an opposition activist was arrested for threatening the president.
I thought it was like a joke! Because if you are serious and want to explode, you don’t want to go on TV and announce it in public. (That’s why) In the beginning, I thought it was prank of another kind. He is with the police, asking questions and they are going to see if he is normal or insane or mentally unstable.
After the cutting of ties with the GCC, Gabon had criticised Qatar for fomenting terrorism. Why did Gabon issue a statement on this development, when it is not directly impacted?
We didn’t criticise Qatar. What we did, we actually met in Riyadh. All the countries including Qatar. At the Riyadh summit, everybody took the commitment that nobody was going to be engaged in supporting terrorist attacks…and the world was surprised to see some declaration made on television by Qatar. So some of the countries – the countries who were in Riyadh – they condemned what Qatar did. Saudi Arabia, UAE, Egypt and Gabon was in Riyadh. So we also condemned.
— SPAENG (@Spa_Eng) May 20, 2017
Terrorism is not a question of country or continent. It is a question that concerns every single country in the world. Whatever could happen in mid-east, Europe or world, can happen here in India, can happen to Africa and to Gabon. So this is a fight for us all.
The transcript has been edited for clarity.