Embassy of Gabon in South Africa - Business and Commerce

Like many other developing countries, Gabon is currently in the midst of anti protectionist reform efforts. Nonetheless, domestic companies still receive preferential treatment, especially in Gabon’s limited manufacturing agricultural sectors. The petroleum sector is largely unimpeded, however, given the country’s dependence upon foreign partners to drive the industry. Exports include petroleum, manganese, timber and uranium, which together account more than 95% of all exports. Gabon imports virtually all its needs, including machinery, food, metals, and transportation equipment. France is by far, Gabon’s most dominant trade partner, followed by the US, the UK, and the Netherlands.

Agriculture:
The agricultural sector employs 66% of the work force, but produce less than 10% of GDP. Forestay is Gabon’s third-largest industry and expected to become increasingly profitable, due to international administrative changes, a decrease in Southeast Asian competition, and continued price advantages associated with the currency devaluation of 1993. Most agriculture is subsistence based.
Industry:
By contrast, industry, employing only about 30% of the work force, contributes nearly half of GDP. Oil and related industries provides roughly 33% of GDP, 66% of government revenues, and nearly all exports. Most international petroleum trade is conducted with France and other European partners. Gabon has large reserves of manganese. Although providing 40% of GDP, the service sector employs only about 5% of the work force. Most of this service sector is involved in trade support and personal services for the wealthy expatriate community. The rest of the service economy is poorly developed.

Telephones:
Telephone service is available for local and long distance calls 24 hours a day; however rates are very expensive. Service is moderately reliable in the cities, but international calling is unavailable from many rural exchanges.
Fax:
Fax machines are not widely used or available in Gabon. Most major hotels will have fax services, but not many business will. Post office is adequate. Post offices often close a little earlier than posted hours. When addressing mail to Gabon, use post office box numbers rather than street addresses.

Gabon’s capacity to resolve business disputes remains largely untested, with few precedents and little case law from which to draw conclusions. Contact law is largely determined by the circumstance of each case, and is more dependent on surrounding facts and circumstances than on the terms of any agreement. Gabon does not pursue mediation through any international organizations, but parties are free to agree to submit to such in the event of business disputes, and the arbitration may upheld in the courts.

Gabon’s population includes a pool of skilled white-collar workers. Despite high unemployment levels, blue-collar jobs remains largely unpopular with the citizinery. Workers have few rights, employers are fairly free to hire pay, and terminate at will, subject to minimal requirements.

Food products, clothing, cosmetics Construction materials, machinery, Telecommunications equipment

Cocoa, Coffee, Iron, Manganese, Uranium, Petroleum, and wood

Consumer goods, forestry products, mining, petroleum production, telecommunications

Tariff and import taxes. There is a 5% tax on medicines rice, and wheat; a 10% tax on raw materials; a 20% tax on intermediate goods; and a 30% tax on consumer goods.
Licenses and documentation.
Documentation is required for all imports exceeding US845 (500,000 CFA). An export license is also required. All goods entering Gabon must be accompanied by bill of loading.
Prohibited imports. Prohibited imports include sugar, oil, some soaps cement, mineral waters, having the same quality as the Gabonese mineral waters Andza, and firearms and munitions.

Local preference. Although Gabon’s legal system is more equitable than that of many other African nations, some level of local preference is arguably present.
Doing business. By law, all physical or legal persons wishing to do business in Gabon must first request preliminary approval from the Ministry of Commerce. Specifically, the Ministry of Commerce requires a substantial business authorization levy (the levy is changeable; check with the Ministry for current rate); and the establishment of a business card with stamp tax. The Ministry also requires six copies of the firm’s articles of incorporation and the minutes of meeting of the board of directors in which the firm decided on the founding of corporation or branch in Gabon.
Letters of approval. It is customary for companies not engaged in purely commercial activities to seek a letter of approval from the ministry in charge of the activity concerned.
Business entities. The most common business entities are the corporation (Société Anonyme, or, SA) and the limited liability company (Société á Responsablite Limitée, or SARL). The SA must have at least seven shareholders, as well as a chairperson, a board of directors, and a president. The law does not require that the chairman be a physical person.
Registration. Foreign companies may operate a branch in Gabon for up to two years without registering.
International agreements. Gabon is a member of the World Intellectual Property Organization (WIPO) the Berne Convention for Protection of Liberty and Artistic Works, the Paris Convention for the Protection of Industrial Property, and the Patent Cooperation Treaty.

The currency in use the CFA (For or CFA)

The CFA franc is pegged to the Euro. Exchange control regulations apply only to financial transfers outside of the franc zone ( a monetary zone that includes France and its former overseas colonies). Exchange transactions in French francs between the Bank of Central African States (BEAC) and commercial banks take place at the same rate. Buy and sell rates for other foreign currencies are also officially posted, with quotations based on the fixed rate of the French franc and the currency rates posted by the Paris exchange market. Rates include a 25% commission. Exchange transactions with foreign countries must be effected through the Postal Administration or an authorized bank.

The Ministry of Economy must approve all capital repatriation; funds must come from documented salary, wages, or profits.

Gabonese law allows foreign firms to operate as branches, and most enterprises be wholly owned by foreign investors.

The government often does not formally recognize equal national treatment and often favors Gabonese firms.

Taxation requires sophisticated knowledge of complex rules and regulations specific to each country for more detailed information we suggest you refer to the Ernst & Young Corporate Tax Guide and Directory, available from the Ernst & Young accounting office in your country, or from:
Ernst & Young, Immeuble Sonagar, Avenue du Colonel Parant, B.P 1013, Libreville, Gabon, Tel 74-32-17, 74-21-68, Fax 72-64-94
Gabonese companies carrying out business outside Gabon are not taxed in Gabon on the related profits. A Gabonese company is one that is registered in Gabon, regardless of the shareholders’nationality, or where the company is managed or controlled.

Banking.system, There are seven commercial banks in Gabon, and four specialized financial institutions. The local banking system is comprised mostly of French and foreign banks, is fairly sophisticated, and offers most standard banking services.
Credit. Local credit is available to both foreign and local investors in equal terms.
Common currency. All states in the Central African Monetary Zone use a single currency, the CFA franc, which is issued by the BEAC.
Operations account countries. Operations Account countries include Benin, Burkina Faso, Cameroon, Central Africa Republic, Chad, Comoros, Congo, Cote d’Ivoire, Equatorial Guinea, Mali, Niger, Senegal, and Togo.
Payments between any of these countries may be made freely.
Exportation of bank notes. Residents may take out BEAC bank notes up to CFA two million if traveling to other countries in the franc zone. For amounts more than 2 million, funds may be taken out in other means of payment. Travel to other countries carries a limit of CFA 100,000 per day for tourism, or CFA 250,000 per day for business travel.
Capital movement. There are no controls for capital movement between Gabon and France, Monaco, and other Operations Account countries. Capital transfers to other countries require approval, but capital receipts are freely allowed. Foreign currency held in Gabon by residents or nonresidents must be deposited with an authorized bank.

As the third largest producer of oil in sub Saharan Africa (after Nigeria and Angola) Gabon is heavily dependent on its petroleum industry. In 1997, it amounted to CFA 1,225 billion representing around 41% of the Gabonese GDP, around 80 % of total exports and around 60 % of total State revenue. Due to the lower prices in oil and the dollar since 1986, the country has been going through an economic crisis, which lasted until the end of 1991.
The oil wealth, combined with a small population, has given Gabon the second highest income per capita on the African continent. However, it has also exposed the economy, which is very sensitive to fluctuations of the oil price and to the danger of depleting oil resources.
Nevertheless, Gabon will remain a significant, if small, oil producer with some oil reserves estimated between 11 years (1.5 billion barrels) and 37 years (5.0 billion barrels). The fall in the oil sector's share of GDP began in 1985, while it dropped to 17.5% in 1986 with the collapse of world oil prices. The downward trend was slowly reversed in 1987. In 1990, the oil sector raised its share of GDP to 38 % and exports to 80 %, basically due to the opening of the new major oil field Rabi. In 1996 Gabon had seven major oil fields of which Rabi (56%) and Mandji (22%) were the largest.
The oil sector in Gabon has three activities :
Exploitation; by far the most important one, of which production takes a total of 95%,
refinery; research and development.
Production; Crude oil production for 1997 was 18.46 million tons (142 million barrels), against 15 million in 1991.
Five types of crude oil exist in Gabon. They range from a medium to relatively heavy oil with a low level of sulfur. This crude is similar to the "Arab light". The principal types of crude oil currently produced are :
Mandji Blend produced by Elf Gabon and Perenco and marketed as Mandji crude ;
Rabi Light (Elf Gabon) ;
Gamba crude blended with Rabi-Echira crude (Rabi blend), produced onshore by Shell Gabon in the South near Setté Cama ;
Lucina Blend produced by Perenco which results from the mix of Lucina and the light crude of M’Bya ;
Oguendjo Blend (Perenco in the South) produced by blending Oguendjo and Brème.
Other types have mixed qualities of these varieties, such as, Coucal/Avocette (Elf Gabon), Echira (Shell Gabon), Obando (Perenco), Gombé (Perenco).
The State receives oil revenue on the basis of sources : taxes on oil company production, rental fees on exploration permits based on the area covered, and dividends paid by the oil companies.
Prices
Official oil prices are set by the OPEC of which Gabon is a member depending on the OPEC members’ price objectives, and depending on the crude types.
The average price of the Brent in 1997 was USD 19.7 per barrel.
In 1997, average selling prices of Gabonese crude oil were USD 16.54 per barrel for Mandji and USD 18.42 per barrel for Rabi.
Due to the general oil glut, oil prices have slumped on a world wide basis. As a result, the oil companies in Gabon have agreed with the government to an official price, which is periodically reviewed.
Exports
Crude oil exports have steadily declined year after year. From more than 8 million tons (61 million barrels) exported in 1984, the volume went down to 7.2 million tons (55 million barrels) in 1988.
However, with Rabi-Kounga, exports have risen above the 1984 level. Thus, in 1990 12.2 million tons of crude oil have been exported, 16.77 million tons in 1995, 17.36 million tons in 1996 and it raised to 17.54 million tons in 1997.
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The value of exports of crude petroleum and derived products amounted to CFA 1,225 billion in 1997.
Most of the oil is exported to the Gulf Coast of the USA with the rest going to refineries in Europe.
Oil refining
The only refinery in Gabon is run by the " Société Gabonaise de Raffinerie " (SOGARA) in Port-Gentil. It has a maximum annual production capacity of 850,000 tons. In 1997, SOGARA processed 711,219 tons of crude oil, as compared to 765,000 tons in 1996.

The Mining sector accounted for about 5.5 % of total exports in 1997.
Gabon is the world's second largest producer of manganese. It is mined by COMIILOG, a 30% state and private Gabonese investors owned the company in Moanda, in the South-East. In 1997, Gabon exported 2,036 thousand of tons of manganese.
There are also uranium mines in the South-East of the country which are exploited by COMUF. In 1997, the production was 516 tons, as compared to 600 tons in 1996. In 1999, uranium reserves will be depleted.

Gabon has a valuable forestry industry. Before the leadership of the oil industry, forestry was the first economic sector in Gabon. 83% of the country is covered with forests.
Exportation of tropical wood has increased a great deal as of 1993 to reach a peak in 1997 (global export of 2,671,000 cubic meter of logs, of which 70 % of Okoumé). Most wood output is exported as logs although some is processed locally. Government strategy for the forestry industry focuses on the reduction of logs exports. The figures of production for 1998 are decreasing, due to the Asian crisis.

The Société d’Energie et d’Eau du Gabon (SEEG) is responsible for the production and distribution of electricity and water throughout the country.
The year 1996 was marked by the elimination of the State as a shareholder in the SEEG in favor of a joint venture between Vivendi (former Compagnie Générale des Eaux) and the Ireland-based Electricity supply Board International for 51%.
In 1997, net electricity production was 1,060 GWh, (1,040 GWh in 1996) of which about 75 % was produced by the hydroelectric power stations of Kinguélé, Tchimbele and Poubara.

The industrial sector of Gabon expanded in response to the growth in the oil and mining sectors and with the construction of the " Transgabonais " railway. Key industries are concerned with import transformation and processing. The manufactured products are : foodstuffs, drinks, tobacco, printed and published materials, chemicals, construction materials, textiles, metal products.

Confederation Patronale Gabonese
BP 410 - Libreville
Tel: (241) 76 02 43
Fax: (241) 74 86 52
Emal: patronat.gabon@assalo.net

www.inet.ga
www.opt.ga