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Doing Business in Gabon: 2014 Country Commercial Guide for U.S. Companies

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Doing Business in Gabon: 2014 Country Commercial Guide for U.S. Companies Doing Business in Gabon: 2014 Country Commercial Guide for U.S. Companies INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2010. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES. Chapter 1: Doing Business In Gabon Chapter 2: Political and Economic Environment Chapter 3: Selling U.S. Products and Services Chapter 4: Leading Sectors for U.S. Export and Investment Chapter 5: Trade Regulations, Customs and Standards Chapter 6: Investment Climate Chapter 7: Trade and Project Financing Chapter 8: Business Travel Chapter 9: Contacts, Market Research and Trade Events Chapter 10: Guide to Our Services Return to table of contents Chapter 1: Doing Business In Gabon Market Overview Market Challenges Market Opportunities Market Entry Strategy Market Fact Sheet link Market Overview Return to top Gabon is located on the Gulf of Guinea in Africa and has a population of approximately 1.1.6 million. President Ali Bongo Ondimba launched a reform plan for Gabon after years of corruption and infrastructure neglect. The “Emerging Gabon” initiative focuses on sustainable development, services, and manufacturing. Gabon’s largest industries are petroleum, minerals (mostly manganese), and timber. It has plans to develop its agricultural sector and improve its national infrastructure. The economy remains heavily dependent on oil, but the government is committed to diversifying to other sectors. Gabon’s gross domestic product (GDP) was estimated at $19.4 billion in 2013, up from $17.3 billion in 2012 (International Monetary Fund). Gabon’s average per capita income of $17,053 was the second highest in sub- Saharan Africa in 2013, trailing only Equatorial Guinea. However, Gabon’s income distribution is extremely skewed and its rankings on human social indicators do not reflect its relative wealth. Gabon belongs to the Economic and Monetary Community of Central Africa (Communauté Economique et Monétaire de l’Afrique Centrale, CEMAC). As a CEMAC member, it uses the Central African franc (CFA), which is pegged to the euro (CFA 656 = € 1). President Ali Bongo Ondimba was elected president in 2009. His predecessor was his father, President Omar Bongo, who led the country for 42 years. Gabon is a multiparty democracy, but the ruling Gabonese Democratic Party (PDG) controls nearly every seat in parliament and most local offices. Presidential and National Assembly elections are scheduled to take place in 2016. A former French colony, Gabon gained independence in 1960, but maintains strong economic, political, and cultural ties with France. Market Challenges Return to top Gabon is a difficult place to do business due to excessive bureaucracy, a lack of a clearly-established and consistent process for companies to enter the market, lengthy bureaucratic delays, high production costs, a small domestic market, rigid labor laws, limited and poor infrastructure, outdated laws and regulations, a cumbersome judicial system, and inconsistent application of customs regulations. In the International Finance Corporation’s 2014 “Ease of Doing Business” rankings, Gabon ranked 163 out of 189 economies. There has been little discernable progress in recent years in improving the business climate. The economy remains heavily dependent on the extractive industries, including oil, manganese, and timber. Gabon has serious capacity constraints that impede diversification efforts. Gabon’s lack of modern infrastructure makes doing business across the country costly and time-consuming, if not impossible in some remote areas. Gabon's dependence on the export of raw materials leaves it vulnerable to external factors, such as the current worldwide economic recession. Market Opportunities Return to top The petroleum sector provides opportunities for U.S. companies. Gabon is currently engaged in negotiations to award contracts for the development of its deep-water and ultra-deep water. The timber and forest sector has been drastically altered due to the government’s 2009 decision to prohibit the export of untreated wood and raw timber in support of local production of wood products to encourage a wood-based manufacturing sector. In September 2011, President Bongo Ondimba officially inaugurated the Nkok Special Economic Zone (SEZ), a joint initiative between the Gabonese Government and Olam International, for timber processing and other manufacturing. The SEZ is struggling to attract businesses and commence full operations. Olam is also developing rubber and palm-oil plantations and a chemical fertilizer plant in different locations throughout the country. These projects also include infrastructure development in the form of roads, the construction of a palm-oil refinery and the possible development of a port at Mayumba in the southwest. There are opportunities for U.S. mining support companies to provide cranes, draglines, trucks and tractors. Manganese is the main mining activity but other firms have obtained prospecting/exploration licenses for iron ore, copper, gold, diamonds, and other minerals. In the future there may be opportunities for mining in the area surrounding the Belinga iron ore deposit, believed to be among the largest iron ore deposits in the world. The Gabonese government is currently conducting an internal audit of the mine. As Gabon modernizes and improves existing infrastructure, there are opportunities for U.S. firms in housing, water and waste treatment, healthcare technology, aviation infrastructure and maintenance, road construction, and education. Opportunities may exist within the telecommunications sector as Gabon is connected to a fiber optic cable designed to increase bandwidth and competition among internet service providers. Market Entry Strategy Return to top There is a small U.S. business community in Gabon, concentrated in the oil, infrastructure, telecommunications, and accounting sectors, which led to the creation of the American Business Association of Gabon in 2012. Consulting with established U.S. firms in Gabon is often useful for interested U.S. investors. It is imperative for interested U.S. firms to consider placing a negotiator in Gabon throughout the negotiations to obtain contracts and establish a presence, and that individual must speak French. Visiting the country and meeting key players in the government are vital to doing business in Gabon, as is having a presence on the ground during often lengthy contract negotiations. Gabon is a member of the World Trade Organization (WTO), the Economic and Monetary Community of Central Africa (Communauté Economique et Monétaire de l’Afrique Centrale, CEMAC), and the CEMAC’s Bank of Central African States (Banque des Etats de l’Afrique Centrale, BEAC). Return to table of contents Return to table of contents Chapter 2: Political and Economic Environment For background information on the political and economic environment of the country, please click on the link below to the U.S. Department of State Background Notes. http://www.state.gov/r/pa/ei/bgn/2826.htm Return to table of contents Return to table of contents Chapter 3: Selling U.S. Products and Services Using an Agent or Distributor Establishing an Office Franchising Direct Marketing Joint Ventures/Licensing Selling to the Government Distribution and Sales Channels Selling Factors/Techniques Electronic Commerce Trade Promotion and Advertising Pricing Sales Service/Customer Support Protecting Your Intellectual Property Due Diligence Local Professional Services Web Resources Using an Agent or Distributor Return to top There are local companies that act as agents or distributors for US companies. Contact a U.S. Department of Commerce district office to find an agents/distributors service (ADS). If Commerce records do not already contain suitable prospects, the office will ask the U.S. Embassy in Libreville for information. Establishing an Office Return to top The Agency for Investment and Export Promotion (APIEX) and the Center for Company Development (CDE) replaced the former Agency for the Promotion of Private Investment (APIP) and aim to simplify procedures for establishing offices in Gabon. APIEX works to attract foreign companies to invest in Gabon and to support Gabonese exports while the CDE ensures the development of professional and private investors in all the African, Caribbean, and Pacific (ACP) country members. The CDE is designed to serve as a ’single window” where foreign investors and domestic companies can acquire the necessary paperwork to do business in Gabon, but as a practical matter, this system has many deficiencies and there is generally poor coordination within the Gabonese government that often results in lengthy delays for firms seeking approval for their projects and the necessary approvals to implement projects on schedule and on budget. The CDE has representation of government services, including Immigration and utilities and has also deployed offices in several provinces of Gabon. CDE and APIEX also encourage foreign companies to invest in Gabon. For more information contact: APIEX l'Agence de Promotion des Investissements et des Exportations General Manager Ms. Nina Abouna Tel. +241-07-65-31-40 http://www.apiex.ga/ Center for Company Development (CDE) Tel. +241-06-22-38-10 Direction Général du Commerce Ministère du Commerce B.P. 561, Libreville, Gabon Tel. +241-76-83-03; +241-74-59-25 Fax +241-72-15-40 Direction Générale des Impôts Ministère du Finance B.P. 165, Libreville, Gabon Tel. +241-01-79-53-76 Fax +241-01-76-59-74
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