Gabon WT/TPR/S/86 Page 69
IV. TRADE POLICIES BY SECTOR1
(1) AGRICULTURE
(i) Overview2
1. Gabon covers an area of 26.8 million hectares. About 20 million of them are classified as forest or savannah (75 per cent of the country) and almost all the rest is classified as agricultural land, which is used for crop farming and pasture. Virtually all of this area is the property of the State (Law 14/63).
2. Agricultural production is dominated by two types of activity. On the one hand, peasant farmers work the land near their villages independently. The land is worked either under the ownership system or the concession system. Concessions are granted without charge and may not be called into question unless the land is not kept in production. New concessions are also granted over uncultivated land and fall under the jurisdiction of the village authorities. Ownership rights have been recognized over land entered in the property register (Law 14/63) and may sometimes be granted on land in production. The power of assignment is held by the provincial authorities, subject to the consent of the village community.
3. Thirty-eight per cent of the area under cultivation by peasant farmers is used to grow plantains, for production of 250,000 tonnes a year. Manioc accounts for 37 per cent of the area planted, for production of 220,000 tonnes a year. Other root crops – taro, yams, sweet potatoes – and maize take up 21 per cent of the area under cultivation and production is 60,000 tonnes a year. Almost all plantain, manioc, other root crops and maize production is used for domestic consumption.
4. Peasant farmers face major structural problems: the low productivity of an activity essentially intended for on-farm consumption and therefore largely unmechanized; the rural exodus, which does not encourage the development of more profitable agriculture3, and the difficulty of meeting demand by the large cities (where most of the population lives), owing to problems with overland transport (see below) and logistics. Over time, this combination of problems has reduced the average income of peasant farmers and their standard of living, which has contributed to the rural exodus and to weakening the sector. However, agriculture continues to be of high social importance, since the rural population still accounts for 25 per cent of the population.
5. In an attempt to ease the difficulties of supplying cities with fresh produce, in 1992 the government established marketing gardening areas (truck gardens and family plots) on the outskirts of cities, where farmers could operate close to the market. Their activities are supported by the Institut gabonais d'appui au développement (IGAD) [Gabonese Institute for Development Support].4 The total area set aside for that purpose is nearly 113,000 square metres, but just 32 per cent is actually under cultivation.
1 The basic sources for this chapter are information presented to the WTO Secretariat by the Gabonese authorities and the following documents: Ministère du commerce, du tourisme, du développement industriel et de l’artisanat (2000b); Ministère de l'économie, des finances, du budget et de la privatisation (1999, 2000a, 2000b); and IMF (1999, 2000a). 2 The Gabonese authorities have provided the WTO Secretariat with restricted information on the agricultural sector prepared by the Ministry of Agriculture, Livestock and Fisheries. 3 Average growth in the population of Libreville, the capital of Gabon, was an estimated 8.3 per cent from 1960-1993, while the figure for the country’s population as a whole was an estimated 2.4 per cent. 4 IGAD is supported by the Government of Gabon, Elf Gabon, Caisse française de développement and Mission française de coopération. WT/TPR/S/86 Trade Policy Review Page 70
6. The other main line of agricultural production is based on the activities of State-owned enterprises. Since 1980, the government's agricultural policy has revolved around the creation of eight agri-businesses intended to boost Gabon's capacity to meet its own food requirements and to reduce spending on imports. The main companies are AGROGABON (palm oil and soap), AGRIPOG (truck farming), HEVEGAB (rubber), SIAEB (poultry), SMAG (eggs), SMOG (flour), SOCAGAB (coffee and cocoa), SOGADEL (livestock), SOSUHO (sugar cane and sugar refining), EAULECO (mineral water), SOBRAGA (beer and other carbonated beverages), and SOCIGA (cigarettes).
7. Gabon's cash crops are mainly rubber, cocoa and coffee. Rubber production, which was close to 11,000 tonnes in 1998, fell sharply in 1999. Production of 3,677 tonnes in that year was due to the fact that fewer trees were tapped since the decline in the price of natural rubber on international markets means that export earnings were low. Earnings were about CFAF 5 billion in 1996, CFAF 4 billion in 1998 and over CFAF 2 billion in 1999. Coffee and cocoa grown on unmechanized plantations and the crops produced by SOCAGAB are purchased by Caisse CAFÉ-CACAO which sells them on the domestic market and exports the surplus to the Netherlands, Italy and Spain. However, Gabon is a minor producer of those crops, with a total of 65.5 tonnes of cocoa in 1998/99 and 34.8 tonnes of coffee.
(ii) Agricultural policy
8. Gabon has a long history of using the main agricultural policy instruments – border measures and production subsidies – and control of prices and mark-ups on products sold on its domestic market to support its State-owned enterprises on that market. They benefited from monopolies over the production, import and sale of imported and domestic products. They also benefited from government investments in production units and infrastructure and from different tax breaks, which were actually production subsidies. However, they were subject to administrative controls over prices and mark-ups, which are still in place in many enterprises in order to prevent abuse of their dominant position. The example of the palm oil and soap industry illustrates the measures in question and their evolution over the period 1976-2000 (Box IV.1).
9. Despite the different types of support provided by the government, the financial situation of most of the enterprises declined sharply during the 1990s. Only SMAG posts profits, while the others post losses. Gabon's authorities have priced the cumulative losses (before subsidies) at CFAF 32.9 billion over the period 1987-1992. Other types of subsidies for these businesses include tax benefits in their founding agreements, such as exemptions from duties and taxes on all imports (including imports to complement domestic production) and taxes on inputs.
10. The current status of border measures applicable to finished products is as follows:
- The only import ban is on sugar (until 2004) to enable Sucaf-Gabon (which has taken over the operations of the privatized company SOSUHO) to retain its monopoly over production and sale on the domestic market;
- some imported agricultural products in direct competition with locally produced or manufactured products – edible oil, soap, cigarettes, natural mineral water – are subject to a 30 per cent tariff, which is the maximum under the CET, to which a temporary 20 per cent surcharge is added;
- import licences are required for different kinds of meat and are subject to a 10 per cent charge on the CIF value; Gabon WT/TPR/S/86 Page 71
Box IV.1 Measures to support the palm oil and soap industry since 1976
The palm oil industry was established in 1976 to help supply the domestic market and earn income from exports. It was composed of industrial oil-palm plantations, an oil refinery, a bottling unit and a soap factory and was given to the AGROGABON company. The company also has a monopoly over the sale of edible oil on the domestic market.
Domestic edible oil consumption is 12,000 tonnes and demand is almost completely covered by AGROGABON, which exports its surpluses at a loss and imports edible oil to complement domestic production. The market for household soaps is an estimated 6,000 tonnes and AGROGABON covers about 40 per cent of it, while imports make up the rest.
Measures to support the industry on the domestic market first took the form of administrative controls over prices and mark-ups on edible oil and soap. They were kept in place under Order 541 of May 1989, even though Gabon has liberalized the mark-ups on imported and local products.
The domestic market was opened up to greater competition in the context of CACEU's fiscal and customs reform. Customs duties on salad oil and soap are 30 per cent today, which is the maximum CET, to which a temporary surcharge of 20 per cent is added, for a cumulative rate of 50 per cent.
On the fiscal front, AGROGABON has a 25-year founding agreement that expires in 2004. Under it, the company benefits from a full exemption from import duties and taxes and from indirect taxes on raw materials and key inputs used to obtain finished products. This duty and tax exemption also applies to edible oil and soap imported to help meet domestic requirements, which permits the company to earn additional profits.
The Government has also provided financial support. From 1988-1992, AGROGABON's cumulative financial losses were CFAF 5.5 billion, which were covered by an investment program, with the debt service paid by the State.
AGROGABON is slated for privatization.
Source: Information provided by Gabonese authorities.
- a minimum price of CFAF 1,000 per kilogram is applied to poultry and poultry and poultry cuts (SIAB's production cost is about CFAF 980 per kg), for which Gabon has obtained authorization from the Customs Valuation Committee until 1 January 2003, under Annex III, paragraph 2, of the Agreement5;
- excise taxes on products such as beer (22 per cent), wine (22 per cent), other alcoholic beverages (32 per cent), mineral water (32 per cent), cigarettes and cigars and other ready-to-use smoker's articles (28 per cent), are calculated on the basis of customs value, increased by the customs duty in the case of imports, and on the basis of the factory door price after an abatement established by the Ministry of Finance for local products; and
- domestic poultry, sugar, mineral water and beer benefit from a reduced VAT rate of 10 per cent, while an 18 per cent VAT is levied on imports of the same products.
5 G/VAL/M/14 contains the report on the committee’s meeting, G/VAL/14 contains the committee’s decision and G/VAL/W/38 gives the officially-established minimum values. WT/TPR/S/86 Trade Policy Review Page 72
It should be noted that the arithmetic mean of customs duties in the agricultural sector is below the bound level in List XLVII (Table AIII.2).
11. The State-owned edible oil, household soap, sugar, coffee and cocoa companies retain a monopoly over the sale of imported and domestic products. The palm oil (Box IV.1), rubber, coffee and cocoa industries also have monopolies over exports.
(iii) New directions in agricultural policy
12. Clearly, Gabon has not profited greatly from its agricultural policy. Its main impact has been to increase the price of food, which significantly reduces the public's purchasing power. It is difficult to determine the extent of sector protection afforded by border measures, given the use of non-tariff measures. However, one indication is that the arithmetic mean of the duties applied in the sector (HS 01-24) is 23.5 per cent, which is higher than the simple average of duties applied to all products of 18.2 per cent.
13. Apart from the significant costs of the policy, the country relies more and more heavily on imports of agricultural products and uses a large part of its petroleum income to feed the population, rather than laying the groundwork for the post-petroleum economy. On average, agricultural products make up 17 per cent of annual imports (Chapter I (2)). However, those imports are mostly products that are not available on the domestic market (wheat, rice, meat).
14. The growing importance of agricultural imports is due to strong population growth (2.4 per cent between 1972 and 1992), coupled with a significant medium-term drop in agricultural production (-1.4 per cent between 1972 and 1992)6 and changes in the public's eating habits. This situation is particularly apparent in Libreville, Gabon's capital, which is home to half the country's population. As a study on the balance between consumption and supply conducted by the Ministry of Agriculture, Livestock and Fisheries shows, imports now cover 59 per cent of the city's food requirements (Table AIV.1) but by 2025 the figure will rise to almost 75 per cent.
15. This worrisome situation has led the government to change the direction of its agricultural policy, with the objective of boosting the country's capacity to be self-reliant in food and reduce its spending on imports. The new policy is based on heightening competitiveness and developing the private sector. The first pivotal point in the new policy is to gradually phase-out government involvement in agriculture through privatization. SOSUHO, which produced sugar in the Haut- Ogooue region, was privatized in 1998 and its activities were taken over by the Sucaf-Gabon company. AGROGABON, AGRIPOG, HEVEGAB, SMAG and SOGADEL are slated for privatization and consideration is being given to winding up SIAEB.
16. The second pivotal point is to develop and strengthen small and medium-sized enterprises in the vicinity of cities and farming activities in rural areas. The government intends to increase its assistance to the sector through horizontal measures rather than through traditional targeted subsidies, while maintaining a policy of market openness in the context of CACEU. These new measures are set forth in a bill that is still under debate.
6 The importance of the agricultural sector in Gabon’s economy has been in decline for quite some time. In 1999, it was only one tenth as important as the oil sector and accounted for 4.7 per cent of GDP. Gabon WT/TPR/S/86 Page 73
(2) FISHERIES
(i) Overview7
17. Gabon lies on the Atlantic coast of central Africa and its coastline is 800 kilometres long. Fishing potential is significant in its exclusive economic zone, which covers 213,000 km2 in accordance with the United Nations Convention on the Law of the Sea, with the continental shelf extending for 35,000 km2.
18. Gabon has maritime fish stocks of an estimated 372,000 tonnes, which are mainly composed of small pelagic fish (230,000 tonnes); groundfish (140,000 tonnes); and shrimp (2,000 tonnes). Some species have good potential, particularly Spanish sardines, crustaceans and molluscs (crabs and deep-water shrimp), since the traditional groundfish species (sea bass, sea bream, threadfins, etc.) are being fully fished. Also, Gabon has access to an estimated 550,000 tonnes of tuna in the Gulf of Guinea, composed of albacore (100,000 tonnes), skipjack (400,000 tonnes), and bigeye (50,000 tonnes).
19. Although not well studied, Gabon's inland fisheries resources are particularly interesting, in view of the many rivers and lakes in the interior fed by the warm, humid equatorial climate. The main river is the Ogooue, which is 1,200 km long.
20. The country harvests these resources through an industrial fishery, a traditional fishery and a deep-sea fishery. Industrial fishing is carried out by a 59-vessel fleet, 27 of which fly the Gabonese flag and 32 fly foreign flags. The fleet is composed of trawlers, shrimp boats and line-fishing vessels. The catch by the industrial fishery was 13,984 tonnes in 1998.
21. The traditional fishery takes place in zones reserved for that purpose (Law 1/82), including rivers and estuaries and a coastal strip three nautical miles wide. The fleet is composed of 1,725 dugout canoes used by about 5,000 fishermen. In 1998, the traditional fishery produced 40,087 tonnes or about 73 per cent of Gabon's fish landings. Aquaculture is still in its infancy in Gabon, producing just 558 tonnes in 1998, although there is good potential for this activity.
22. Deep-sea fishing is only carried out by vessels flying foreign flags, under bilateral agreements. The catch is sold on foreign markets.
23. Fish consumption in the country is about 40 kg per person per year. Domestic market requirements are an estimated 60,000 tonnes and the difference is covered by imports. Fish product imports include canned, fresh, frozen, salted and dried fish from Mauritania, Angola, Morocco, France, Spain, Norway and Portugal. Gabonese fish exports include crustaceans, molluscs and frozen fish. The main export markets for these products are China, the European Union and the countries of the sub-region.
(ii) Fisheries policy
24. The texts governing the use of fish resources in Gabon are:
- Law 1/82 known as framework law for water and forests; - Decree 62 which regulates fisheries in Gabon;
7 See "Gestion des pêches, de la biodiversité and de l'environnement au Gabon", Report presented at the ACP-EU course on fisheries management and biodiversity, Dakar, Senegal, 12-23 April 1999 [on line]. Available at: http://www.cgiar.org/iclarm/fishbase/training/countryreports/dakar/gabon.html [6 February 2001]. WT/TPR/S/86 Trade Policy Review Page 74
- Order 1/97 which defines the base and rates for fishing licences; and - Decision 675 which establishes a period for biological recovery of the shrimp fishery in the country.
25. Law 1/82 puts the Ministry of Water, Forests, Fisheries and Reforestation in charge of the environment and nature conservation. It regulates fishing techniques, equipment, seasons and grounds with a view to conservation and protection of the resource. The ministry regulates the activities of fishermen, who may not fish without a licence, whose base and rate is established in Order 1/97. In addition to the licence, the traditional and industrial fisheries are required to pay a royalty whose rate varies in function of the size of the fleet.
26. Access to the deep-sea fishery for foreign vessels is based on bilateral agreements, in accordance with the United Nations Convention of the Law of the Sea. Gabon has reached fishing agreements on tuna stocks that are not currently being fished by Gabonese:
- With the European Union, signed in 1999, which authorizes 42 tuna seiners and 31 longliners to fish in Gabonese waters; and
- with the Federation of Japan Tuna Fisheries Cooperatives, signed in 2000, which authorizes 30 Japanese longliners to fish in Gabonese waters.
27. In return for allowing EU vessels to fish in Gabonese waters (without reciprocity in European Union waters), the agreement commits the EU to pay a financial counterpart to Gabon8 composed of:
- €270,000 a year to be spent at the discretion of the Gabonese authorities;
- €1,215,000 for the duration of the protocol to be spent on different activities to support the Gabonese fishery, subject to an annual report on the management of the country's water and forest resources; and
- royalties to be paid by the European shipowners holding licences to fish in Gabonese waters (€25 a tonne), payable in advance when the licence is issued.
The agreement with the Japanese federation also provides for actions to develop the fishery financed by the Japanese government.
28. As for Gabon's fish exports, the countries of destination have standards in place for product quality and production hygiene. The EU system is based on the HACCP principle.9 The Directorate-General of Fisheries has established a quality assurance policy based on HACCP that is
8 The EU has reached many agreements of the same type with other African countries in the context of its common fishing policy, which was notified to WTO under Article XVI.1 of GATT 1994 as a subsidy program for the sector (G/SCM/N/60/EEC). Total financial support from the Community under these agreements was estimated as €300 million in 1997 in a report on the agreements requested by the European Commission. That sum represents 82.5 per cent of the financial contribution to the partner countries, with the remainder coming from shipowners. Third countries’ share of direct value added is 19 per cent, with two thirds of that sum coming from licence fees (IFREMER, 1999). 9 Council Directive 91/493/CEE establishing sanitary regulations governing the production and sale of fish products and Council Directive 93/43/CEE on the hygiene of foodstuffs. For a commentary on Hazard Analysis and Critical Control Point (HACCP), see the ACP-EU Joint Assembly (1998). Gabon WT/TPR/S/86 Page 75
applied to products exported to the EU, in accordance with the rules that apply on those markets. Gabon is on List II of countries authorized to export to the EU, but hopes to move up to List I.
29. The border protection measures established under CACEU's CET and Gabon's General Code of Direct and Indirect Taxation are customs duties, plus excise taxes, where applicable, and VAT. The simple mean of customs duties on fish (HS 03) is 23 per cent, and 30 per cent on prepared fish products (HS 1604); the bound duties are 60 per cent.
(3) FORESTS
(i) Overview10
30. The virgin forest is one of Gabon's most valuable assets and covers 20 millions hectares or two-thirds of the country.11 The forest forms part of the Congo Basin ecosystem which is the second-largest in the world, after the Amazon. The forest straddles six countries: Cameroon, the Central African Republic, the Democratic Republic of Congo, Congo, Equatorial Guinea and Gabon. It constitutes a large carbon sink.
31. In the hot, humid equatorial climate, Gabon's forest receives up to 2,500 mm of rainfall a year. It contains 8,000 species of plants, including precious tropical wood such as okoume and ozigo. The forest wildlife is chiefly composed of snakes, monkeys, chimpanzees and gorillas, forest elephants and birds such as toucans and grey parrots. In addition to logging, the forest has tourism potential that is largely undeveloped.
32. Logging companies are active throughout the country. Logging first began along the coast where transport was easier, but has gradually moved eastward where felling and transportation conditions are more difficult. In the 1980s, logging extended to the centre-east and the south-east. Logging companies have built unpaved access roads, since permanent infrastructure would have to withstand the heavy rainfall. The logs cut in the interior are transported by river or by railway to the coast.
33. Okoume is the main wood logged in Gabon. It is a native species, best for peeling and appreciated on foreign markets, with ozigo and other species coming a poor second. The latter, however, have considerable development potential, which is beginning to be tapped. In 2000, Gabon produced nearly 2,800,000 m3 of wood, with okoume and ozigo accounting for 1,750,000 m3, and other species for 865,000 m3.
34. Ninety per cent of the wood produced is exported, with processed wood accounting for about 9 per cent. In 2000, 2,625,000 m3 of logs were exported in contrast to 121,000 m3 of processed wood (mainly edged lumber, veneer and plywood).12 The main export markets for Gabonese wood in 2000 were China (39 per cent), followed by France (32 per cent). In broader terms, Asia absorbs 53 per cent of exports and Europe 32 per cent.
10 See World Resources Institute (2000). 11 http://library.berkeley.edu/EART/maps/africa-veg.gif. 12 Also see International Tropical Timber Organization (2000), Table 1-1-d. WT/TPR/S/86 Trade Policy Review Page 76
Graph IV.1 Okoume and ozigo production and exports from 1987-98
(thousands of cubic meters)
2,000 250 Okoume Ozigo 1,800 (left-hand scale) (right-hand scale) 1,600 200 Production Production 1,400 Exports Exports 1,200 150
1,000
800 100
600
400 50
200
0 0 a 1987 88 89 90 91 92 93 94 95 96 97 98
a Projection.
Source: World Resources Institute (2000), A first look at logging in Gabon , World Resources Institute: Washington D.C.
35. Earnings from wood exports have been highly volatile in recent years (Graph IV.1). In 1998, in the wake of the Asian crisis, production, exports (in particular) and prices were hard hit. The recovery in 1999 was spectacular: wood production increased by 8.6 per cent and exports jumped by 33.2 per cent. Export prices for okoume and ozigo also recovered in 1999, by 26.1 per cent and 14.2 per cent, respectively.13 The improvement continued in 2000, with growth in exports of 32 per cent, under the combined influence of a 12 per cent rise in the export price of okoume and ozigo and an increase in the volumes exported. The Gabonese authorities note that the demand for wood has strengthened partly because Cameroon has ceased to export logs.
(ii) Forest policy
36. Almost all of Gabon's forests are in the public domain (Law 14/63). Use of forest resources is guided by Law 1/82, the framework law for water and forests. A forestry bill was tabled in parliament in 1997 and is still under debate (see below). The procedures for applying Law 1/82 are defined in regulations, whose coverage is still not complete.14
37. The forest domain is classified into two main categories:
- Reserved forests, which are lands with permanent, identified forestry potential and which, in principle, are used for logging; and
- protected forests, which are lands that have not been identified as having forestry potential and which may therefore be used for farming.
13 Ministère de l’économie, des finances, du budget et de la privatisation (2000a), p. 7. 14 World Resources Institute (2000). Gabon WT/TPR/S/86 Page 77
38. Forest management is the responsibility of the Water and Forests Administration, which reports to the Ministry of Water, Forests, Fisheries and Reforestation, the ministry in charge of the environment and conservation. The administration's functions are to manage the country's forest resources and to supervise and protect them and prevent misuse. However, the Gabonese authorities have stated that there is a shortage of human resources to carry out all of those functions.15 The Water and Forest Administration currently has a staff of 285 to manage a forest covering 20 million hectares, including 45 engineers. In other countries, the norm is to have one engineer per 200,000 hectares of forest and therefore Gabon needs another 55 engineers.
39. Gabon's forests are logged by zone:
- The first zone is reserved for nationals and covers close to 5 million hectares in the province of Estuaire on the country's Atlantic coast16; and
- the second zone is in the interior and covers 10 million hectares in the basin of the Ngounie, the Nyanga and Moyen-Ogooue up to Ogooue-Ivindo, where logs are mainly carried by water, and 5 million hectares in the centre-east and south-east along the railway line between Booue-Lastourville-Franceville.
Regardless of the zone, villagers are given priority in forests in the immediate vicinity of their villages.
40. Law 1/82 states that companies may not log without a logging permit issued in the form of a decree by the Water and Forests Administration. Permits are granted and renewed upon payment of a fee whose base and rate are established by decree. In addition to the permit, logging is subject to an area tax whose rate varies according to the area under licence. The law also establishes that the same company may not hold more than 200,000 hectares under licence.
41. La Société nationale des bois du Gabon (SNBG) holds a monopoly over the sale of okoume and ozigo. It also regulates the harvest of those species by logging companies. The latter are required to sell their production at a fixed price that is regularly negotiated according to export sales conditions. SNBG alone is authorized to enter into sales contracts on the international market except for direct sales (10,000 thousand m3 per month) that the Ministry of Water and Forests allows logging companies, particularly for their factories in France.
42. One of the government's objectives in the sector is an "industrialization policy to promote the processing of a larger percentage of the raw materials" and "a protection and incentive policy to increase participation by Gabonese in forest development" (Article 2 of Law 1/82). To that end, the law stipulates that logging permits for areas larger than 15,000 hectares (industrial permits) are only granted on the condition that a local wood processing industry be established that uses at least 75 per cent of the logs. Since this requirement has not been observed in practice17, Cabinet decided in 1996 to introduce a more aggressive wood processing policy whose objective is to increase exports of locally-processed wood rather than logs.18
43. Logging companies come under the corporate tax system applicable to non-oil companies and the largest of them are also required to joint the Gabonese Investment Fund (Chapter III (3) (ii)).
15 Also see World Resources Institute (2000), p. 21. 16 A strip of forest at least five kilometres wide on both sides of railway tracks, navigable waterways and arterial highways also forms part of the first zone. 17 Ministère de l’économie, des finances, du budget et de la privatisation (1999), p. 41. 18 Ministère de l’économie, des finances, du budget et de la privatisation (2000a), p. 7. WT/TPR/S/86 Trade Policy Review Page 78
Since most of the wood is exported, VAT exemptions apply. However, an export duty is charged on roundwood (15 per cent of the f.o.b. value), while the duty on processed wood has been lifted in order to encourage local wood processing (Law 13/99). Export duties accounted for 88 per cent of fiscal revenues from wood in 1999, with the remainder coming from logging permits.19
44. One important aspect of Gabon's forest policy is the relatively high level of border protection. Imports under all tariff headings for processed and unprocessed tropical wood20 are subject to a duty of 30 per cent, which is the maximum CET in CACEU, and a VAT of 18 per cent, for a cumulative rate of 53.4 per cent.
(iii) New directions in forest policy
45. Logging and exports of tropical wood had long been Gabon's primary source of wealth, prior to the beginning of oil production in the 1960s. In 1957, wood accounted for 87 per cent of the country's exports, plummeting to about 7 per cent in 1995-99. The importance of oil revenues has saved the forests from intensive logging for decades but the authorities foresee that wood will regain its central role in the post-oil economy (Chapter I (5)). Moreover, logging has grown strongly in the 1990s, with 56 per cent of the forest under concession in 1999, compared to 24 per cent in 1994.21
46. In 1996, the authorities realized that there were shortcomings in the legal framework governing forestry (Law 1/82 and the partial regulations issued). They have to do, in particular, with sustainable management under the international conventions to which Gabon is party and the contribution that the sector makes to the economy, since little of the wood is processed. As a result, the executive branch has drafted legislation for the sector (Forestry Code) that was presented to parliament but sent back to the executive with a request to include provisions for applying the code, since this aspect is absent from the legal framework currently in place.22
47. With respect to sustainable forest management, Gabon is a member of the International Tropical Timber Agreement (1994), whose ITTO Libreville Action Plan: 1998 to 2000 had the objective of ensuring that tropical wood sold on international markets in 2000 would come from sustainably-managed forests. Gabon is also a signatory to the International Convention on Climate Change and the Convention on Biological Diversity, which call upon their members to take steps for environmental conservation. Accordingly, the Forestry Code establishes a single type of logging permit, "concession under forest management", for areas from 15,000 to 600,000 hectares, which will not be granted or renewed unless a company has submitted a forest management plan that responds to its requirements. Gabon will also introduce the certification program envisaged in the code, which is being designed by an inter-agency task force with support from the WWF.
48. With respect to wood processing, resolutions adopted by Cabinet in May 1996 called for the substitution of exports of roundwood by exports of processed wood, which would require a large number of processing units to be built (which should have been the case under Law 1/82).23 In 1998, Gabon only had about 20 sawmills and four wood peeling plants. Therefore, the proposed Forestry
19 World Resources Institute (2000) finds that Gabon, in comparison with Cameroon, only obtains some of the potential fiscal revenues from the sector owing to its very low level of taxes on areas under permit, which have not been raised in decades. 20 Chapter 44 and Section 9403 of the Harmonized System. 21 World Resources Institute (2000), p. 36. 22 The Gabonese authorities have presented information to the WTO Secretariat on the proposed forest code and the draft code itself. 23 Document of the International Tropical Timber Organization ITTC(XXVIII)/9/Rev.2 [On line]. Available at: http://www.itto.or.jp/inside/report.html#review [12 February 2001]. Gabon WT/TPR/S/86 Page 79
Code also establishes that "concessions under forest management" will not be granted or renewed unless companies have submitted productions plans that include the establishment of processing units.
(4) MINES
(i) Oil
(a) Overview
49. Gabon is the third-largest producer and exporter of oil in sub-Saharan Africa, after Nigeria and Angola.24 Oil contributes close to 80 per cent of export earnings, 60 per cent of the national budget, and almost 40 per cent of GDP. Consequently, developments in domestic production and oil prices have a determining influence on Gabon's economy (Chapter I (2)). Although the sector has been the prime source of the country's wealth since the 1960s, its future is uncertain because production has been dropping since 1997 (Graph IV.2). The Gabonese authorities hope to spur investment in the sector, while thinking seriously about the post-oil profile of the economy.
Graph IV.2 Production and export prices of Gabonese oil, 1992-99
Millions of tonnes US$ per barrel 25 25 Production (left-hand scale) Export prices (right-hand scale) 20 20
15 15
10 10
5 5
0 0 1992 93 94 95 96 97 98 99 a a Estimates
Source: International Monetary Fund (2000), Gabon: Statistical Annex, IMF Staff Country Report No. 001/154; International Monetary Fund (1999), Gabon: Statistical Annex, IMF Staff Country Report No. 99/12.
50. Gabon's oil fields cover a total of 250,947 km2, divided between onshore and offshore blocks. In 1999, production was 111.9 million barrels, a reduction of 13 per cent over 1998, and a further drop took place in 2000. This decline is largely explained by the natural depletion of the Rabi field (an estimated 26 per cent between 1998 and 1999), which is the country's largest field, and in the fields in the Mandji system (an estimated 15 per cent between 1998 and 1999). The two main
24 See United States Government, Department of Energy, Energy Information Agency (2000a, 2000b). WT/TPR/S/86 Trade Policy Review Page 80
producers, Shell Gabon and Elf Gabon, control 83 per cent of domestic production. About 90 per cent of the oil is exported as crude and the two main markets are the United States and the EU.
51. In 2000, the country had estimated reserves of 2,500 million barrels, double the 1996 level. However, the authorities point out that most of the fields with easy access are already being worked. Onshore, the central basin has plenty of free blocks but access is difficult and exploration involves major technical risks and very high exploration costs. Offshore, the shallow water blocks are virtually all assigned. The authorities proposed the first deep-water blocks in 1999, which also present economic and technical difficulties. In this context, company expectations regarding oil prices on the international market in the medium and long terms will have a decisive influence on the development of new fields in Gabon25 and the pace at which the post-oil economy sets in.
(b) Oil policy
52. Exploration and production of fossil fuels is governed in Gabon by:
- Law 15/62 of 2 June 1962, amended, which sets out a mining code, and Decree 981/PR of 16 October 1970, which establishes the conditions for applying the mining code;
- Law 14/65, which reforms mining taxation, amended by Ordinance 38/79/PR of 23 December 1979; and
- Law 14/74, which regulates oil exploration and production, amended by Law 14/82.
53. There are three ways of gaining access to the country's oil reserves:
- By bidding;
- by obtaining a permit after negotiations by mutual agreement with the State; and
- by taking over an existing permit partially or entirely.
54. There are two types of contracts between oil companies and the government. Concessions are governed by the provisions established in founding agreements between each company and the government, which last for a minimum of 75 years. Oil companies are also subject to payment of a proportionate royalty calculated on the basis of production (Law 14/74). After concessions were abolished in 1983, almost all contracts have taken the form of 'exploration and production-sharing agreements' negotiated between the government and a company, which establish the terms and conditions of the undertakings of each party, including environmental responsibilities. Such contracts grant two types of exclusive permits, one for exploration and the other for production, each for a total of 20 years, including renewals. They are initially issued in the form of a decree and renewals are issued under an order by the minister responsible for oil.
55. The companies that that hold mineral titles for oil and their associates are required to pay the following taxes, duties and fees for exploration and production: the proportionate royalty, the fee for area, the signing bonus, the production bonus, corporation tax, fixed mining duties, registration fees, the stamp tax, registrar's fees and customs duties. To import supplies, materials, products, machinery, equipment and tools to be used exclusively in oil prospecting and exploration, companies and their
25 The scenario for 2000-2020 established by the International Energy Agency suggests that prices will remain stable until 2010, followed by a gradual increase until 2020 (IEA, 2000). Gabon WT/TPR/S/86 Page 81
subcontractors benefit under Article 241 of the CACEU Customs Code, which allows for duty- and tax-free entry or temporary admission.
56. The trade policy measures applied to imported oil and petroleum products are a 10 per cent tariff and an 18 per cent VAT, with the VAT also applying to national production sold on the domestic market. Gabon also levies a temporary surcharge of 20 per cent on industrial and automobile lubricants.
(ii) Other mineral resources
(a) Overview26
57. Gabon is the world's third-largest producer of manganese, after South Africa and China. COMILOG (a State-owned company with private sector participation) works the Moanda deposit in the south-eastern part of the country and the manganese is transported to the coast for shipping by the Transgabonais railway. Annual production in 1999 was about 1,900 thousand tonnes, which was mostly exported to the United States and the EU. Manganese contributes 7 per cent of Gabon's export earnings. Available reserves are an estimated 45,000 tonnes.
58. Manganese is an essential metal in steel production27 and 90 per cent of world production is used for that purpose. Therefore, demand on the international market depends directly on the steel industry, which itself is procyclical. The United States, for example, is one of the largest steel producers in the world, but it does not produce manganese and imports most of its requirements from Gabon. The price of manganese is fixed through negotiations in contracts between buyers and sellers. Information on prices indicates a drop in 1994-95, followed by a recovery in 1996, with the levels holding steady since then.
59. Gabon also produced uranium until June 1999, when production ceased owing to depletion of the deposit.
60. Gabon has a large iron deposit (which is not mined), phosphates and other minerals (gold, diamonds, lead, zinc, titanium and others). It produces small quantities of gold, which are not sufficient to meet domestic demand by industry and jewellery manufacturers.
(b) The Mining Code
61. Until the new Mining Code was adopted in 1999 (Law 11/99), the legal framework governing mining was the same as for the oil industry, fleshed out in each case with specific regulations. The new Mining Code "governs prospecting, exploration, production processing, ownership, possession, transportation and marketing of useful mineral substances, with the exception of liquid and gaseous hydrocarbons and groundwater, which are subject to special regimes" (Article 2). The code incorporates all the pre-existing specific regulations that applied to mining in Gabon, particularly:
- Law 18/68, which establishes a royalty on minerals taken from mines in the public or private domains; and
26 See United States Government, U.S. Geological Survey (2000); and Africa Today (2000). 27 Steel contains an average of 0.7 per cent manganese. Technological progress in the 1980s has led to a reduction in the manganese content in steel of about 20 per cent (United States Government, U.S. Geological Survey, 2000). WT/TPR/S/86 Trade Policy Review Page 82
- Decree 00869/PR/SEMERH/DGMG of 14 November 1968, which regulates mines throughout the country, Decree 2441/PR/MMERH/DGM of 30 December 1975, which amends the general regulations governing mines in the Libreville area; Decree 00905/PR/2ème VP–MMH/DGMG of 17 June 1983, which amends the general regulations governing mines in the Lambarene and Mouila regions; and Decree 586/PR/MMERH/DGMG, which sets the sales price for minerals from mines in the Libreville region.
62. The Mining Code establishes that all useful mineral substances found in the soil and subsoil are the property of the State. They are divided into two main categories for the purposes of mining policy:
- "Substances subject to concession" under the mining regime are useable as raw materials for industry or crafts or as a source of energy; and
- "substances not subject to concession" under the mining regime are usable as construction materials and as ameliorants in agriculture, except for phosphates, nitrates and other similar materials.
63. Access to useful minerals is generally gained in three stages. First, the company applies for a prospecting licence to the Ministry of Mines, which may grant one for a maximum of two years, non- renewable, for one or more substances, in a given zone. It is compulsory to inform the ministry of the prospecting results. The second stage for substances subject to concession consists of applying to the ministry for an exploration licence, which may grant one for a period of three years, twice renewable.28 The licence is a mining title which must be accompanied by an agreement with the government covering the rights and obligations of both parties. The main rights and obligations include:
- Exemption from corporate tax, personal income tax and the minimum flat-rate tax for the duration of the agreement (initial period and renewals);
- reimbursement of the VAT invoiced by local suppliers of goods and services;
- payments by the company for work performed or information compiled in advance by the authorities; and
- the list of imported supplies, materials, products, machinery, equipment and tools to be used exclusively for exploration, which benefit from temporary admission.
64. The third stage is mining the deposit. The company applies to the Minister of Mines for a mining licence or a concession. Mining licences are granted under a ministerial decree for a period of 10 years, renewable for a further five years. Concessions are granted under a presidential decree, on the proposal of the Minister of Mines, for 25 years, renewable for a further 10 years. Mining licences and concessions are only granted after a study has been conducted on the impact of the operation on the environment and the local population and the mining agreement has been modified to reflect the results. Mineral titles for exploration and production give the holder the right to freely dispose of the minerals mined. However, possession, transportation, processing and marketing of precious stones, radioactive substances and strategic substances require authorization from the Minister of Mines.
28 Exploration for substances not subject to concession requires a licence which may be granted for two years, renewable once. Gabon WT/TPR/S/86 Page 83
65. The holders of mining licences or concessions are required to pay an annual royalty based on the profits earned from the sale of their minerals (stocks excepted). This royalty is established in ad valorem terms on the difference between the sales price (f.o.b.) and the costs of transporting the mineral from the mine to the point of delivery. It is actually an exit tax – set at 3 per cent for magnesium in 2000 – plus all levies related to transport. The range of rates is included in each agreement, and the rate is progressive depending on annual production (Article 150).
66. All mining companies and their associated companies are required to pay the following taxes, duties and fees: corporation tax, individual income tax, minimum flat-rate tax, investment income tax, licence duty, tax on developed and undeveloped land and VAT. However, the holders of mining licences may deduct part of their investments in operating the mine and their investments in environmental rehabilitation and protection. Under Article 241 of the CACEU Customs Code, goods and equipment may be imported by companies engaging in mineral and oil exploration duty free.
67. The trade policy measures applied to imports of mineral products (Chapter 26 of HS) are a 10 per cent tariff and an 18 per cent VAT, with the exception of manganese which is duty free.
(5) INDUSTRY
(i) Overview
68. Gabon does not have many industries apart from those that process raw materials, such as the agri-food business, the wood industry (sawmills and wood peeling) and refineries. Gabon's other industries are chemicals, construction materials (cement, clinker and beton) and the secondary processing of metals.
69. The country also has a textiles and clothing industry, carried out by industrial enterprises and semi-industrial workshops that make haute couture garments. Consequently there is a market for imports of cheap and mid-range clothing and footwear.
(ii) Sectoral policy
70. Gabon is banking on an industrial development strategy. The Investment Charter (Law 15/98) establishes general conditions for investing in the country, with the exception of certain sectors, particularly natural resource-based industries and tourism, which are governed by specific codes (Chapter III (4) (iii)). The country also offers tax incentives for industrial investors (Chapter III (4) (ii)). For example, corporation tax, personal income tax and the minimum flat-rate tax are not levied on 'new' companies in the business income category until the end of the second fiscal year (30 per cent reduction in the third year).
71. Gabon maintains tariff treatment in which the simple mean of the rate applicable to end products (20 per cent) is higher than the average rate applicable to semi-manufactured goods (14.6 per cent), thereby providing the manufacturing sector with effective levels of protection that are higher than the nominal rates indicate (Chapter III (3) (iii) (b)). Escalation is more marked in the textiles and clothing industries, where most inputs are taxed at 15 per cent (Chapters 52, 54, 55, 58-60 of the HS), while finished goods (Chapter 61 of the HS) are taxed at 30 per cent (Table AIII.1). WT/TPR/S/86 Trade Policy Review Page 84
(6) SERVICES
(i) Transport29
(a) Overview
72. There are four modes of transport in the sector:
- Overland transport;
- railway transport;
- maritime and river transport; and
- air transport.
73. Gabon's road network is about 7,800 kilometres long, with just 12 per cent paved.30 The first of its two arterial highways runs east-west from the Congolese border to Libreville (887 km), and the second runs north-south, joining the Cameroon and Congolese borders. The many unpaved roads make overland transport difficult, particularly in the rainy season.
74. Rail transport is provided by Transgabonais, which runs between Libreville and Franceville in the south-east. The railroad was built in 1986 to facilitate the transport of wood and manganese produced by COMILOG.
75. The road and railway systems have developed in Gabon in the light of national needs and possibilities and are therefore not integrated into a common infrastructure together with the CAEMC partners. This absence is a significant drawback in the common market project, since it is difficult for an economic operator installed in one country to supply another. The Council of Ministers of CAEMC is therefore planning to build an integrated network.31
76. The country has 3,300 kilometres of navigable rivers. The main artery is the Ogooue, which however, is not navigable along its entire course. Apart from transporting people, the river carries logs, oil and farm products from the interior of the country to the ports and the large urban markets on the coast.
77. Maritime transport is another essential element in the economic life of Gabon. Most of the country's wood, oil and manganese production is exported, requiring specialized port facilities that are built by the extractive industries. Wood and manganese are mainly shipped from Owendo and Port- Gentil and oil from Port-Gentil and Gamba. Port-Gentil and Owendo receive imported goods, mostly shipped in containers. Import volumes account for just 16 per cent of flows in view of the large volumes of raw materials that are exported. There is no international transport of people or merchandise in transit to neighbouring countries.
29 Ministère de le planification, de l’environnement et du tourism (1999). 30 Latrite-topped roads account for 52 per cent of the network and dirt roads for 36 per cent. 31 Regulation 9/00/CEMAC-067-CM-04 on the adoption of an integrated road system in CAEMC as a priority. Gabon WT/TPR/S/86 Page 85
(b) Transport policy
Road transport
78. The authorities have established a road improvement program which, in the first stage, will pave the 2,000 kilometres of arterial highways. The program absorbs about one quarter of the government's total investment budget each year and is supported by lending agencies and foreign donors. The authorities must also solve the problem of highway management by developing codes applicable to operators and the means of enforcing them.
Rail transport
79. Gabon's government withdrew from railway operations in 1999 when it granted a 20-year concession to a private operator, the Compagnie d'exploitation du chemin de fer transgabonais.
River and maritime transport
80. The regulatory system governing river transport was developed in the 1970s but the key provisions are not applied. The State-owned Compagnie de navigation intérieure (CNI), which holds a monopoly over passenger and freight transport by river, has suspended its activities; only private operators now provide service. The authorities point out that "de facto liberalization of river and lake transport is already a reality".32 They attach priority to updating the regulatory framework.
81. As for maritime transport,33 Ordinance 4/92/PR gives the Conseil gabonais des chargeurs (CGC) [Gabonese Council of Shiploaders], which has its headquarters in Paris, control over and management of traffic rights for all maritime shipments generated by Gabon's foreign trade (chiefly wood, since manganese and oil are shipped by the mining and oil companies themselves) and imports of all kinds.34 CGC collects a 'development fee' which has replaced all the other fees it charged.
82. Maritime transport is divided into several categories. The transport of wood, particularly to Asia, is shared by 12 shipping companies, nine of which are foreign. The transport of containers to Europe is shared by five companies, with one of them, SDV, having a majority presence. (The Gabonese national shipping company, SONATRAM, holds exclusive rights over 40 per cent of liner traffic by regulation, but the provision is not applied in practice because SONATRAM has ceased operations).
83. The ports are managed by the Office des Ports and Rades du Gabon (OPRAG) [Ports and Harbours Authority of Gabon], a State-owned company that is being privatized. The Gabonese authorities note that the general condition of the ports is unsatisfactory. The operation of commercial ports is shared by seven maintenance, stevedore and pilotage firms, one of which, the Société nationale d'acconage and de transit (SNAT), is a State-owned company undergoing privatization. SNAT has a monopoly over maintenance, consignment and transit, but does not exercise it in practice.
84. An analysis of the costs of transport and associated fees indicates that for imports they are 21 per cent of the value before duties and a study conducted by the authorities points out that that
32 Ministère de le planification, de l’environnement et du tourism (1999), "Plan d'action portuaire, maritime and fluvial", p. 7-5. 33 Gabon has included existing and future preferential measures for the national operator in its final list of exemptions under Article II of GATS (GATS/EL/34). 34 CGC was established under Law 7/71 but is currently governed by Ordinance 7/88/PR on its reorganization. WT/TPR/S/86 Trade Policy Review Page 86
"freight rates to ship a container between Europe and Gabon or the Far East and Gabon are higher than for other African countries. Part of the difference is due to the light tonnage transported by Gabon, with a population of just over 1 million".35 Export costs and associated fees amount to 51 per cent of the value.
Air transport
85. Air transport is provided by Air Gabon (70 per cent of arrivals and departures from Libreville), a State-owned company currently being privatized, and several foreign operators share international routes with it under traffic rights contracted in bilateral agreements.36 Air transport is equally important for carrying merchandise.
86. Air transport is also used to travel to the interior and Gabon's air infrastructure is among the densest in Africa. It includes about 60 airports around the country. The companies that operate flights are Air Gabon and some private companies.
(ii) Telecommunications
(a) Overview
87. Gabon has about 47,000 regular telephone lines operated by Gabon Télécom, the only operator of stationary telephone services. Service for the 98,000 cellular phones is provided by three mobile telephone operators: Libertis (51 per cent), Telecel (18 per cent) and Celtel (30 per cent). In total, Gabon has 138,000 telephone hook-ups to serve a population of about 1.2 million. The telephone density rate is therefore 11.5 per cent, which is low, given the average income (about US$4,000). Other African countries with comparable averages income have much higher rates of 25 per cent to 35 per cent.37
88. The low telephone density is primarily the consequence of the poor condition of the country's telephone system. It is currently operated by Gabon Télécom, a company created in 2000 out of the l'Office des postes and télécommunications (OPT) [Postal and Telecommunications Service] which was split in two and is slated for privatization in 2001. Mobile telephone use is rare and highly dependent on users' disposable monthly income. For the average Gabonese, access to telephone communications is through the fixed network, which is unable to meet demand owing to low investments over the years that translate into an obsolete infrastructure (network, telephone exchange, transmitters).
89. The charges for national, international and mobile communications are fixed by order of the Ministry of Communications and were last modified on 1 August 2000 (Order 433/MCPTI of 28 July 2000).
90. The Internet is in its infancy in Gabon. There are only 3,000 subscribers out of a population of about 1.2 million, for a penetration rate of less than 0.3 per cent. Apart from the low telephone density, the explanation lies in the scant use of personal computers. One factor is their high cost
35 Ministère de le planification, de l’environnement et du tourism (1999), "Situation du secteur portuaire, maritime et fluvial", p. 2-13. 36 The agreements currently in effect are with Angola, Benin, Cameroon, the Central African Republic, Congo, Côte d'Ivoire, the Democratic Republic of Congo, Equatorial Guinea, Guinea, Mali, Morocco, Nigeria, Sao Tome and Principe, Senegal, South Africa, Togo, the United Kingdom, France, Italy and the United Arab Emirates. 37 BIPE (2000). Gabon WT/TPR/S/86 Page 87
(customs duty of 10 per cent and VAT of 18 per cent for a cumulative total of 29.8 per cent).38 In May 1998, OPT launched its first network, which is linked to Europe by France Télécom and to the United States by Cable & Wireless. Monthly Internet charges are established according to use, as follows: five hours for US$10.30, ten hours for US$19.20 and unlimited use for US$90.
91. An historical difficulty in telecommunications networks in African countries is the lack of cabling with other continents, which means that the only possible access is via satellite. Gabon is a member of the INTELSAT consortium. International communications and Internet services are supplied only by satellite. The African continent's integration with international networks should improve in the near future when an under-sea cable is laid that will link Europe to Asia, passing through western and southern Africa.39 Landfalls are planned for 13 countries, including Gabon's neighbours. A link for Gabon would be equally possible under an agreement with the operator. The cable can carry voice telephone signals, data and television. It should lead to a reduction in international communications costs and better Internet penetration, which will facilitate trade among African countries and with countries elsewhere.
(b) Sectoral policy
92. A radical change took place in sectoral policy in 2000 under Ordinances 7/2000/PR, 8/2000/PR and 9/2000/PR. The first split the OPT in two, creating Gabon Télécom and Gabon Poste, whose regulations were established respectively in Ordinances 8/2000/PR and 9/2000/PR.40 In addition, a regulatory agency was created for postal and telecommunications services, directed by a consultant, and reporting to the Minister of Postal and Telecommunications Services.
93. Gabon Télécom is being privatized. The goal is to sell some of the shares to private operators, provided they are Gabonese nationals or enterprises established under Gabonese law, on the condition that the State, alone or in partnership with such enterprises, retains more than one-third of the capital.
94. Article 6 of Ordinance 8/2000/PR announces the government's objectives for the sector as:
- "Establishing a policy to liberalize the entire telecommunications sector in order to respond to the diversified demand for new services, while guaranteeing the delivery of a good quality public service at a reasonable price, particularly by increasing the density of lines in the existing system, expanding geographic coverage and developing services in rural areas;
- laying the groundwork for fair and effective competition that can develop the telecommunications sector by introducing new operators of networks and services, while respecting the licences provided for in this Ordinance and the legislative and regulatory provisions applicable to Gabon regarding competition law; and
- promoting a supervisory and regulatory function that is independent from the operation of the networks and the provision of the services."
38 Mandrault (2000). 39 BIPE (2000). 40 OPT was a public agency holding a monopoly over telephone, telegraph and postal services. Its moveable assets and immovable property, staff, and monopolies were transferred, as appropriate, to Gabon Télécom and Gabon Poste. Ordinance 8/2000/PR consolidates the applicable provisions of Ordinance 45/71, establishing the Postal and Telecommunications Service Code. WT/TPR/S/86 Trade Policy Review Page 88
95. Licences to establish and operate radioelectric networks to provide mobile telephone service and primary service or local voice service are governed by a licensing system. Licences are granted by the minister responsible after a call for bids, with the approval of the sector regulatory agency. Licences are granted on the condition that royalties be paid to the government and are valid for a maximum of 10 years. Refusals to issue a licence must be justified and are open to legal challenge.
96. An exclusive licence will be granted to Gabon Télécom for the stationary telephone system for five years, until 2005, when the system will be opened to competition. Gabon Télécom is required to take charge of the universal service during the licence. After it expires, suppliers of basic telecommunications services may also be required to provide universal service.41 Until that time, they must make a contribution to the special universal service fund. The fund is managed by the sector regulatory agency and is used to subsidize development of a network of telephone booths in the interior.
97. Gabon opened the mobile telephone market in 2000 by granting three licences (see above regarding the operators and their market share).
98. Article 20 of Ordinance 8/2000/PR states that "the provision of telecommunications services for data transmission and processing, including value added services, is free of restriction, provided that the essential requirements and the provisions regarding national defence and public security are respected."
99. Operators who hold licences apply for interconnection to the concessionaire of the public network (Gabon Télécom for the time being), which is required to respond within 45 days. The financial conditions of the ensuing agreement must ensure that "the charges cover actual use of the transmission network and service and reflect the corresponding costs" (Article 55). Agreements are subject to approval by the sector regulatory agency. The agency has the right to require changes in them "in the event it deems that competition or the inter-operability of the services are not guaranteed" (Article 56). Gabon Télécom's asking price for interconnection must be made public and approved by the agency.
100. The ordinance states that the use of radioelectric frequencies is subject to authorization by the Telecommunications Regulatory Agency and the establishment of an infrastructure of radioelectric stations. Materials imported for that purpose must be approved by the regulatory agency. Assignment of frequency bands is the agency's responsibility. It has not yet defined the procedures for assigning Hertz frequencies, since it is awaiting the advent of third-generation services.
(iii) Tourism42
(a) Overview
101. Business travellers form the bulk of visitors to Gabon, with the average stay being 2.5 days. Such visits are mostly to Libreville, which has the necessary hotel and restaurant capacity. The occupancy rate is close to 60 per cent. Gabon also has leisure tourism capacity, including recreation centres (Jardins de la Peyrie, beaches, Pointe Denis and Ekwata Loisir), and more than 140 tourism sites and reserves (Iguela, La Lope, Moukalabam, Sette-Cama, Wonga-Wongue). The latter have potential for ecotourism in view of the diversity of plants and animals they contain. Ecotourism is
41 Suppliers of telecommunications services are also required to ensure that numbers in the same geographic area are transferable. 42 The Ministry of Trade, Tourism, Industrial Development and Crafts has presented the WTO Secretariat with a summary of the national tourism policy. Gabon WT/TPR/S/86 Page 89 currently the fastest-growing type of tourism in the world. Elephants, African buffalo, antelopes, monkeys and rare birds can be sighted in Gabon.
(b) Tourism policy
102. Despite the country's potential, the authorities note that the country's earnings from tourism are low. Gabon officially launched a new tourism development policy in 1997, which was completed and strengthened in 2000 by Ordinance 2/2000/PR on the regime applicable to investments in tourism. The order provides for incentives for companies that start up in the sector.
103. The authorities are aware of obstacles to sector development, particularly the lack of financial capital for tourism, the weak commitment of banks to an activity they view as a risk, the absence of a tradition of tourism and difficulties with transportation in the interior. Other obstacles are also apparent, such as the high cost of air travel, food – which is mostly imported – and telecommunications (see above). Liberalization of air transport and telecommunications, which forms part of the government's plans, could offer advantages for developing Gabon's tourism potential.
104. The new strategy for tourism development includes a policy of building tourism projects in the following poles: Libreville and vicinity, Lambarene and vicinity, Franceville and vicinity, the coast from Port-Gentil to Mayumba, Mouila and vicinity, and Grand Nord. The authorities envisage three types of tourism: up-scale, holiday lodges and mid-range tourism facilities. Tourism projects require the approval of the Minister of Trade and Tourism.
105. The new investment regime in the sector applies to tourism-related companies classified and certified as such by the Minister of Trade and Tourism, and to enterprises participating exclusively in a project approved by the minister. Tourism-related enterprises are defined in the broad sense of the term, since they invest in the following areas: construction of tourist accommodation and related activities (swimming pools, marine facilities, casinos, cafes, etc.) or restoration of existing facilities; transportation of tourists by land, sea or air; recreation (fishing and hunting); and organization of tourist stays and excursions. The purchase of vehicles to transport tourists (boats, aircraft, automobiles) is included in the definition of investments in tourism.
106. Three categories of facilities are planned. Administrative facilities include the introduction of a tourist visa, measures for tourist protection and safety, establishment of a corps of eco-guides and free radio and television time to promote activities during the first three months of operation. For new tourism-related enterprises, customs facilities include a full exemption from import duties and taxes for 10 years for all materials, tools, equipment and new means of tourist transport to develop their operations.
107. Tax facilities for tourism-related companies and enterprises participating exclusively in an approved project include exemptions from corporation tax (for companies) or personal income tax (individual entrepreneurs) during construction of the project and for the first eight years of operation. Additional tax facilities for such companies during the next eight years of operation include exemption from corporation tax on half the taxable profits (companies) or personal income (individuals) and during the next three years of operation, the write-off of losses against profits. Tourism enterprises are also exempted from the property tax for six years after completion of their project and, at the end of that period, they benefit from a tax ceiling of 10 per cent of the rental value of their property, with an abatement of 80 per cent in the first year, 60 per cent in the second, 40 per cent in the third and 20 per cent in the fourth. Other tax advantages are also granted to tourism- related companies. In return, those companies and enterprises participating exclusively in an WT/TPR/S/86 Trade Policy Review Page 90
approved project undertake to give priority to employing Gabonese workers and to respect environmental protection legislation.
108. The tourism sector is included in Gabon's specific commitments under GATS made at the conclusion of the Uruguay Round. Hotels and restaurants and travel agencies and tour operators' services appear in Schedule GATS/SC/34. Investment projects, certain categories of personnel (managers, senior executives and specialists) and all business development in Gabon require approval from the minister in charge.
(iv) Banks and insurance companies
(a) Overview43
109. Gabon has a well-developed private financial sector and a diversified supply of financial services for consumers, enterprises and farmers. The Banque internationale pour le commerce and l'industrie du Gabon (BICIG) [International Bank for Business and Industry of Gabon] finances SMEs and large companies; the Banque gabonaise de développement (BGD) [Gabonese Development Bank] focuses on financing real estate investments and consumer goods; the Union gabonaise de banque (UGB) [Gabonese Union of Banks] offers classic banking operations and finances foreign trade; the Banque gabonaise and française internationale (BGFI) [Gabonese and French International Bank] and BGFI Participations take part in operations involving participation in equity and long-term debt and financial engineering operations; and CITIBANK finances the short- and long-term operations of large companies working on government projects (short- and medium-term international financing in Eurocurrency).
110. Financial leasing operations are carried out by the Société gabonaise de crédit-bail (SOGABAIL) [Gabonese Financial Leasing Company] which finances operations for automotive supplies, the forestry industry, public works and the procurement of professional equipment. BICIBAIL (Banque internationale pour le commerce and l'industrie Bail) [International Bank for Commercial and Industrial Leasing] finances leases of professional equipment and BGFIBAIL (Banque gabonaise and française Bail) [Gabonaise and French Leasing Bank] finances leases of professional equipment as well.
111. A State-owned company is also involved in the financial sector – Société nationale d'investissements du Gabon (SONADIG) [National Investment Corporation of Gabon] – which finances business development in priority sectors that require government participation. The government also supports the development of small and medium-sized enterprises through the Fonds d'expansion et de développement de la petite et moyenne entreprise gabonaise (FODEX) [Small and Medium-Sized Gabonese Business Development Fund]44 and the Fonds d'aide et de guarantie aux PME [SME Assistance and Guarantee Fund].45 Access to low-cost housing has been supported since
43 Agence pour la création d'entreprises (1999). 44 FODEX is active in four fields: 50 per cent financing for project feasibility studies and 50 per cent of the cost of supervision by certified firms during the first three years of a project; investment loans covering up to 70 per cent of the cost of a project; equity-type loans to strengthen own funds; loan guarantees of up to 50 per cent of outstanding capital loans. FODEX acts through intermediary commercial banks, particularly BGD, BNCR and Banque populaire. 45 The fund provides direct assistance or guarantees or both. Guarantees cover loans taken by enterprises from commercial banks up to a maximum of 80 per cent of the principal and interest. Direct assistance takes the form of loans from the fund itself for a stipulated time to SMEs. The fund can also invest in SMEs to build up their equity, but only for a five-year period. Gabon WT/TPR/S/86 Page 91
1997 by the Compte de refinancement de l'Habitat (CRH-Gabon) [Housing Refinancing Account] whose purpose is to refinance mortgage loans made by banks.
112. All forms of insurance are offered by the five main companies that are active in the Gabonese market: AXA Gabon (formerly UAP), OGAR (groupe Athénas), Assurances nouvelles gabonaises (ANG), Assurances industrielles et commerciales (ASSINCO) and Gabon Vie. There are also a number of brokerage firms: ACG (Groupe ASCOMA), GRASSAVOY Gabon, PB Conseil, GGAR, SACAR.
(b) Sectoral policy46
113. Monetary cooperation in CAEMC includes three elements:
- The Bank of Central African States (BEAC) issues the Union's currency and guarantees its stability (Chapter I (2) (ii));
- The Central African Banking Commission (COBAC) controls the conditions under which lending institutions operate, oversees the soundness of their financial situation and ensures that the code of ethics governing the profession is respected; and
- The Convention on the Harmonization of Banking Regulations in the Central African States.
114. COBAC is chaired by the Governor of BEAC. BEAC licences credit institutions on the advice of COBAC and appoints the statutory auditors for those companies. That responsibility is shared with the national authority (the Minister of Finance of Gabon), which creates a two-tiered licensing system that can cause delays. COBAC is supposed to give its opinion within a six-month deadline.
115. At the end of 2000, COBAC was supervising about 65 credit institutions in the member countries. It defines the chart of accounts and accounting procedures applicable to lending institutions and prudential regulations (solvency and liquidity ratios, risk diversification, transformation, asset coverage ratio, etc.). On behalf of COBAC, BEAC oversees operations in the member States, in collaboration with the national authorities. COBAC is also a jurisdictional body and can intervene in a disciplinary capacity (warnings, reprimands, bans on certain operations or other types of restrictions on the exercise of banking activities, suspension or dismissal of the statutory auditors or removal of managers, withdrawal of licences), without detriment to the sanctions that may be imposed in their own right by national judicial authorities.
116. In early 1999, the member countries of CAEMC agreed to establish a regional stock exchange, but have not yet decided where it will be headquartered.
117. Gabon is also a member of the Inter-African Conference on Insurance Markets (CIMA) established in 1992 in the Franc Area.47 CIMA's insurance code came into effect in 1995 and established framework regulations for all on-land insurance (maritime, inland waterway and air insurance are excluded). The Commission régionale de contrôle des assurances (CRCA) [Regional Insurance Control Authority] is the body that licences insurance companies. The final decision is
46 Information on the Central African Banking Commission is available at http://www.izf.net/izf/FicheIdentite/COBAC.htm [21 February 2001]. 47 The members are Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Comoro, Congo, Côte d'Ivoire, Equatorial Guinea, Gabon, Mali, Niger, Senegal, and Togo. WT/TPR/S/86 Trade Policy Review Page 92
taken by Gabonese authorities (the Minister of Economic Affairs and Finance), which creates a two-tiered system and can cause delays. CRCA can also impose disciplinary measures.
118. The financial services sector is included among Gabon's specific commitments under GATS made at the conclusion of the Uruguay Round (Schedule GATS/SC/34). In the area of insurance (including life insurance) and banking and other financial services, the principles of market access and national treatment are applied without restriction, except for the movements of individuals. The commitments only apply to certain categories of personnel (managers, senior executives and specialists). The licensing of establishments is subject to the procedures described above. Gabon WT/TPR/S/86 Page 93
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