Outlook for 2011-12

• The president, Ali Bongo Ondimba, will continue to secure his rule over the country and the governing Parti démocratique gabonais (PDG), but grievances against his rule and reform programme will lead to protests and strikes.
• The opposition Union nationale's diverse membership presents a risk to party unity ahead of the next legislative election in 2011. The president's rapprochement with Pierre Mamboundou would set back its cause further.
• Turning Gabon into an "emerging" economy will remain the guiding policy principle, but success will depend on the government's ability to develop much-needed infrastructure and diversify into higher value-added activities.
• Real GDP growth is forecast to average 5.6% in 2011-12 as a new oil well comes online, following the estimated rebound of 5.7% in 2010, supported by public spending and sectors such as wood and manganese.
• Consumer price growth will become positive again after estimated deflation of 1.4% in 2010. External price pressures and a weaker currency will see average inflation of 3.3% in 2011 and of 3.2% in 2012, despite price caps and tax cuts.
• The current-account surplus is forecast to narrow from an estimated 11.5% of GDP in 2010 to an average of 13% in 2011-12 on the back of elevated oil prices and rising non-oil exports.

Monthly review

• A French documentary alleging that the president, Mr Bongo, stole the 2009 election risks stirring political unrest. André Mba Obame, leader of the opposition, Union nationale, declared himself "president-elect".
• Mr Bongo's position is in little danger, and he has denounced the allegations. Former French officials quoted have distanced themselves from the claims.
• Constitutional reforms were passed by an overwhelming majority in the national assembly. While mostly uncontroversial, the opposition did not secure a return of presidential term limits and second-round run-off ballots.
• Work began on a new hydropower dam in Woleu-Ntem region. Generating 40 mw when completed in 2013, it is expected to power 190 villages.
• In early January the government announced cuts to value-added tax and subsidised price caps on selected goods in order to slow the rise in the cost of living as part of a deal with trade unions.
• Shell Gabon and Sinopec's Koula field officially began production on December 10th. With recoverable reserves of 41m barrels, output is expected to reach 22,000-25,000 barrels per day, 10% of the country's current levels.

The Economist Intelligence Unit expects Gabon to remain one of the region's most politically stable countries in 2011-12, although a year after the election of the president, Ali Bongo Ondimba, many leading opposition politicians continue to contest his legitimacy. A particular threat, however, stems from the insistence of André Mba Obame, who leads the Union nationale (UN) party, that he is the rightful winner of the 2009 presidential election. We do not expect him to overturn the general acceptance of Mr Bongo's victory, either domestically or abroad, but his claim has been strengthened by recent unsubstantiated allegations by former French officials that the poll was rigged. Given the bitter relations between the UN and the ruling Parti démocratique gabonais (PDG), the likelihood has increased of localised unrest around the 2011 legislative elections. Port-Gentil, Gabon's economic centre and the scene of the worst unrest after the 2009 presidential election, is a likely flashpoint.

However, there have been recent signs of a rapprochement between another opposition veteran, Pierre Mamboundou, who came second in 2009's presidential election and leads the Union du people gabonais (UPG), and the PDG. As such a move would entail the UPG-the largest opposition party in the National Assembly-both recognising Mr Bongo's legitimacy and supporting his policy agenda in parliament, political stability would benefit as a result. Such plans, though, could be blocked by senior PDG members fearful of losing influence if Mr Mamboundou and other UPG cadres are offered government posts in return for their support. If a deal does fall through, Mr Mamboundou's credibility as an opposition leader will have been damaged by his willingness to negotiate with a regime he previously decried as illegitimate-which would benefit Mr Bongo. A rapprochement with the UPG would increase the government's support among the Punu-Lumbu ethnic group, comprising around 20% of the population and based mainly in the south-west, including Port-Gentil.

Mr Bongo will try to maintain the good relations with the armed forces that he fostered as minister of defence, to prevent them from becoming a threat. Corruption probes and reshuffles of the top military leadership are therefore unlikely. Army discipline is good, and the risk of a coup is low; the expanded French garrison in the capital, Libreville, will increase the deterrent. Nonetheless, the administration will remain under pressure to improve living standards; frequent power cuts and water shortages, decrepit infrastructure and inadequate provision of healthcare and education are both a drag on economic growth and a source of popular anger. The government will need to address these if it is to stem the rise in trade union militancy.

Balancing his desire to root out the patronage networks that marked his father's 42-year regime with preserving political stability, Mr Bongo will continue to maintain a careful ethnic balance in his political appointments and allocate state funds selectively. To achieve this, the president, who is of Téké ethnicity, will need to appeal to political leaders of Fang origin-Gabon's largest. The future of the Fang prime minister, Paul Biyoghé Mba, remains uncertain given the president's dissatisfaction, but any replacement is still likely to be Fang. Mr Mamboundou may therefore be offered a different senior role in any deal.

With a seven-year mandate, the next presidential election is not due until 2016 and Senate elections are due in January 2015. National Assembly elections, however, are expected by December. Although the PDG lost only two seats to the UN in the June by-elections-the PDG defectors seemingly unable to transfer their personal support base-the UN may fare better in the 2011 parliamentary election. However, there is a significant risk that the UN will boycott the poll, given its claim that the 2009 presidential election was stolen, although this would make an overwhelming PDG majority inevitable. Yet if the UN does contest the poll, a good result is not guaranteed. Although led by several heavyweights, party cohesion is fragile as they have little in common beyond shared antipathy towards Mr Bongo: indeed, several leaders were until recently fierce enemies. Thus, whether or not the UN participates in 2011, the ruling party is likely to retain a sizeable parliamentary majority, particularly if it can co-opt the UPG. If this rapprochement fails, though, the PDG may try to tempt elements of the UN leadership back into the fold.

France's preferred partner in central Africa since independence, Gabon's close relations are attested by the hosting of France's regional military base and Mr Bongo's frequent visits to Paris. However, a French judicial probe into the Bongo family's French assets, as well as recent claims by former French officials that his election victory was stolen, may temporarily cool relations. This could hasten warming relations with China, which had soured slightly following delays to the giant Bélinga iron ore project. Links with the US-the main destination for Gabonese oil-will remain favourable, especially given Gabon's relatively good human-rights record. Regionally, Gabon's influence may weaken, as its relatively heavy diplomatic sway depended largely on the late Omar Bongo's close relations with various African leaders. An ongoing border dispute with Equatorial Guinea over the potentially oil-rich zone around the islands of Mbañe, Conga and Cocotiers should not escalate into military confrontation. The support of the EquatoGuinean president, Teodoro Obiang Nguema Mbasogo, for Mr Mba Obame will continue to strain relations.

Economic policy in 2011-21 will be driven by the goal of transforming Gabon into an "emerging" economy able to compete globally for inward foreign direct investment. Achieving this ambitious target will depend largely on the progress of efforts dramatically to accelerate economic growth. To this end, the government will raise investment spending sharply and try to diversify the economy into more value-added activities in order to reduce its dependence on oil, building on policies such as the ban on unprocessed timber exports. However, oil will remain the economy's primary pillar. The government is creating a new state oil firm, Gabon Oil Company, to increase its share of sector revenue and its control of logistics and infrastructure, but addressing concerns about strong labour unions is still a key challenge to encouraging new investment. Another priority will be fighting corruption and waste, building on the purge of "ghost" workers from the public payroll and increasing scrutiny of state spending. Despite an extension to its original Extractive Industries Transparency Initiative deadline, Gabon remains intent on compliance. With the authorities keen to maintain good relations with China and attract investment, a new deal to restart the Bélinga iron ore project can be expected.

Despite buoyant oil revenue, Gabon's fiscal surplus is likely to contract over the forecast period thanks to ambitious public investment plans and costly populist concessions that would increase current spending. The draft 2011 budget submitted to the state council for review in December, full details of which are not yet publicly available, sees spending increase from CFAfr2.2trn (US$4.4bn) in the supplementary 2010 budget to CFAfr2.37trn, funded by buoyant international oil prices. Fulfilling government rhetoric to invest in infrastructure and development, capital spending will accelerate faster than current spending. This will still grow strongly, however; on top of an enlarged public payroll, trade union-appeasing tax cuts and price caps on various consumer essentials came into effect in January, following the bread subsidy implemented in October in response to higher wheat prices. The president has also stated his intention to clear long-standing arrears to the private sector, increasing borrowing from local banks to fund such payments to CFAfr911bn. The public payroll audit will generate some efficiency gains.

The government intends to finance spending through higher oil and other extractive sector receipts, accelerating economic growth and some borrowing. Yet despite higher current spending, the government is unlikely to achieve its overall spending goals owing to limited structural capacity to implement capital spending plans. Reform will improve both revenue collection and budget execution. The historically strong fiscal surpluses should remain relatively low over the forecast period, coming in at 2% and 2.7% of GDP in 2011 and 2012 respectively.

Monetary policy is managed by the regional central bank, Banque des Etats de l'Afrique centrale (BEAC), which prioritises controlling inflation and maintaining the franc's euro peg. The BEAC thus broadly tracks European Central Bank (ECB) policy. However, in July the BEAC cut its main policy rate, taux des appels d'offres (the auction rate), by 25 basis points to 4%, slightly narrowing the differential with record low ECB policy rates. The latter are unlikely to rise until late 2012, given the benign regional inflation outlook, and the BEAC's are unlikely to either. The bank plans to increase access to credit by standardising and capping loan charges across member countries with two new rates, the taux effectif global and the taux d'usure, which should be in operation by early 2011, suggesting possible further loosening of the auction rate.

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With real GDP growth estimated to have rebounded by 5.7% in 2010, following a 1% contraction in the previous year, growth is expected to accelerate in 2011 to 6.1%, easing slightly to 5.1% in 2012. The key driver in 2011 will be a new oil well coming online that could boost waning output by up to 10% to 245,000-250,000 barrels/day (although output at other fields may continue to weaken as fields mature and labour remains restive). Growth will be further supported by investment in and output from other sectors-such as forestry and manganese-that are increasing value-added operations. Services will experience greater demand as rising gross take-home pay boosts private consumption. Fixed investment, such as the construction of Gabon's first special economic zone, will also be important, driven by the government's generous spending plans, which are supported by buoyant oil prices. Banking and telecommunications should also drive non-oil growth.

A combination of base effects, a weaker currency, higher commodity-especially food-and import prices and higher wages and government spending, will see average consumer price growth return to positive territory over the forecast period after 2010's estimated deflation of 1.4% resulting from aggressive price competition from a new mobile telecoms provider. We envisage average consumer price inflation of 3.3% in 2011 and 3.2% in 2012, stemmed by cuts in the rate of value-added tax (VAT).

Being pegged to the euro-at CFAfr655.96:EUR1-the CFA franc fluctuates in line with euro:dollar movements. Even if the US recovery were to stall, the dollar will continue to strengthen in 2011 and 2012 in the expectation of continued low ECB interest rates owing to ongoing euro zone fiscal and sovereign debt concerns more than outweighing the impact of the new round of quantitative easing by the US Federal Reserve (the US's central bank). The CFA franc will continue to weaken, although we have moderated our forecasts slightly. The franc will slide from an average of CFAfr496:US$1 in 2010 to CFAfr547:US$1 by 2012. The French Treasury will continue to guarantee the CFA franc's peg to the euro.

Exports are forecast to rise from an estimated US$7.1bn in 2010 to US$78.2bn by 2012 on the back of elevated oil prices and a strong recovery in mining and forestry output, even if waning oil output clips the impact of improvements in other, smaller sectors such as timber and manganese. Imports are forecast to rise from an estimated US$2.5bn to US$3.1bn over the same period, owing to higher import prices and increased imports of capital goods on the back of the investment programme. That said, a weaker CFA franc could pare demand for non-capital goods imports. The services deficit will rise, as it is largely determined by import-associated transport costs and technical services. The income deficit is expected to reflect fluctuations in export receipts, as it is mainly driven by the repatriation of profits by foreign oil and mining companies. We envisage a current-account surplus of 14.3% of GDP in 2011, driven by higher oil prices and output as well as iron output possibly coming on stream. The surplus will narrow to a forecast 12.2% of GDP in 2012, based on slightly lower oil output and prices.

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In late December André Mba Obame-the secretary-general of the leading opposition party, Union nationale (UN)-returned after a prolonged stay in France to a popular welcome in the Gabonese capital, Libreville, from several thousand of his supporters. The reception was particularly fervent as his arrival came just days after the broadcast on French television of a documentary about Franco-African relations entitled Françafrique. The programme included allegations by several former French officials that the presidential poll held in Gabon in August 2009 was rigged, with French assistance, and that Mr Mba Obame was the rightful winner, as he has claimed ever since. Indeed, Michel de Bonnecorse, who was the adviser on Africa to a former French president, Jacques Chirac, even offered what he claimed to be the true poll scores of the two leading candidates: 42% for Mr Mba Obame and 37% for the president, Ali Bongo Ondimba.

Unsurprisingly, the UN leader has leapt on the documentary's allegations as proof of his claim to have won the 2009 poll. In addressing the crowds that turned out to greet him in Libreville, Mr Mba Obame demanded that Mr Bongo resign, referred to himself as the "president-elect", and vowed to form a government imminently. He has also launched a legal challenge against the conduct of the election-and the subsequent killing of protestors by the security services in the country's economic capital, Port-Gentil-in Belgium, where courts assert universal jurisdiction in such matters.

Meanwhile, the ruling Parti démocratique gabonais (PDG), headed by Mr Bongo, has refuted the claims aired in the documentary, accusing the corrupt Franco-Gabonese old guard of lying in order to defend its privileges against the president's drive to clean up politics. The ruling party's hand was strengthened a few days after the documentary aired, when Mr de Bonnecorse disavowed the allegation he apparently made, claiming that his words had been taken out of context by the programme's producers.

Lacking any better evidence than the unsubstantiated remarks of retired foreign officials who have unclear agendas, Mr Mba Obame is unlikely to overturn the general acceptance of Mr Bongo's victory in Gabon. Moreover, foreign governments have all recognised Mr Bongo as the country's legitimate head of state, so international backing for the UN leader's claim is unlikely to be forthcoming, at least explicitly.

Yet whether or not they are true, claims by former high-ranking officials in the French government that Gabon's presidential election was stolen-worse still, with French complicity-have real potential to destabilise the political scene. The legislative election due this year was already set to be a bitter contest between the country's two main parties. However, there is now a strong chance that the UN will either declare its losses to be the result of fraud or even boycott the poll altogether. Either eventuality would sharply raise the risk of renewed violent unrest in opposition strongholds, particularly Port-Gentil, where the most severe disorder occurred after the 2009 presidential poll and many French interests are located.

Equally, although it is too early to tell whether the legal challenge launched in Belgium will lead to anything constructive, it at least has the potential to keep the issue in the news for months to come. Furthermore, it could turn international opinion against Mr Bongo if it brings to light credible evidence of wrongdoing by him. There have been unsubstantiated local allegations that Mr Mba Obame's legal challenge is being financed by the EquatoGuinean president, Teodoro Obiang Nguema Mbasogo, who is of the same Fang ethnicity as Mr Mba Obame, unlike Mr Bongo, who is Téké. Although little more than speculation, Mr Obiang's well-known support for Mr Mba Obame's presidential campaign continues to be a thorn in the side of relations between Gabon and its northern neighbour.

Further stoking hostilities between the PDG and the UN, on December 28th parliament approved controversial constitutional amendments proposed by the government in October. The reforms were passed by an overwhelming majority of 177 votes to 16, a margin that reflects the tiny representation of opposition parties in the legislature. Many of the changes are uncontroversial and aimed at resolving ambiguities, but several amendments have elicited strong protest from the opposition. The president of the UN party, Zacharie Myboto, declared that the constitutional reforms should have been put to referendum and that they "opened the door to dictatorship".

Although such alarmism is unjustified, there are some valid grounds for concern. In particular, the UN has objected to the new provision to suspend polls in the event of natural catastrophes or the threat of war on the grounds that the decision to defer a ballot could be taken under the influence of a government keen to prolong its mandate. Also troubling were new rules debarring candidates in presidential elections who have not lived in Gabon in the last 12 months or who have ever held an administrative or political post in another country. However, the opposition's main gripe is that the package of reforms did not include its own wish list, which includes the not unreasonable return of term limits on presidents and second-round run-off ballots in presidential elections. Both of these were suspended under the rule of the previous president, Omar Bongo Ondimba, who was the father of the incumbent.

In the Economist Intelligence Unit's democracy index Gabon sees a modest improvement in 2010-in both relative and absolute terms-compared with the previous survey in 2008, rising by six places to 133rd out of 167 countries surveyed globally. Nevertheless, with a score of 3.29, Gabon remains one of a growing number of countries classified as an "authoritarian regime". While remaining in second place behind Cameroon in the six-member Central African franc zone, amongst the 44 countries surveyed in Sub-Saharan Africa, Gabon has climbed from 33rd to 31st place. This, however, was more thanks to the significant deterioration in Rwanda and Côte d'Ivoire than because of inherent domestic improvement; indeed, the average score of the top-30 African countries has actually worsened slightly, from 5.14 to 5.05 (and of all 44 from 4.28 to 4.23).

The marginal improvement in the latest survey does, however, conceal significant potential for further development. The president, Ali Bongo Ondimba, has embarked on an ambitious wholesale reform programme, with the declared intention of breaking from the leadership style of the previous regime. A year in, while the contrast in ruling style is marked, progress has been difficult, in large part because of wholesale political antipathy. Despite the freest election since the imposition of one-party rule in 1968, Mr Bongo's victory in the 2009 presidential election remains highly contested. With a population sceptical of the political class after the long experience of corrupt and disengaged rule, turnout in 2009 of 44.2% was little higher than the 30-40% seen in previous elections. Moreover, despite the emergence of a half-dozen or so parliamentary coalition partners and opposition parties since the 1990 reform of the constitution reinstating the multi-party system, Gabon remains effectively a one-party state, dominated since independence in 1960 by the ruling Parti démocratique gabonais (PDG). Media freedom is improving, with the 2009 election receiving greater and broader coverage than hitherto seen. The self-censorship displayed by journalists and civil society activists should continue to loosen. Corruption in public administration remains pervasive, although on this score too progress is beginning to be felt, notably with a purge of "ghost workers" on the public payroll and the removal in 2010 of the Gabonese former governor of the regional central bank, Banque des Etats de l'Afrique centrale (BEAC), Philibert Andzembé, following a corruption scandal at the bank's Paris office.

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Despite potential for further improvement, fundamental hurdles remain

Mr Bongo's reform programme, if maintained, should see a great improvement in Gabon's Democracy index score at the next survey, but progress will not be easy. The resurgent doubts in early 2011 over the validity of the 2009 presidential election could stir up resentment that had begun to settle as the country gave Mr Bongo the benefit of the doubt to prove his commitment to reform and improving living standards. One of the greatest challenges will thus be engendering a culture of political engagement not dependent on protest and strikes. Public protest by civil society groups and trade unions remains common, in part because of this, with such groups increasingly forcing policy concessions. Furthermore, much of Gabon's social stability has rested on maintaining a careful ethnic balance amongst ministerial positions, with the prime minister being of Fang-Gabon's largest ethnic group-origin. Moving towards a post-ethnic and truly objective and meritocratic system of appointment may cause as many problems as it would solve.

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Democracy index 2010: Democracy in retreat, a free white paper containing the full index and detailed methodology, can be downloaded from www.eiu.com/DemocracyIndex2010.

Note on methodology

There is no consensus on how to measure democracy and definitions of democracy are contested. Having free and fair competitive elections, and satisfying related aspects of political freedom, is the sine qua non of all definitions. However, the Economist Intelligence Unit's index is based on the view that measures of democracy that reflect the state of political freedoms and civil liberties are not "thick" enough: they do not encompass sufficiently some crucial features that determine the quality and substance of democracy. Thus, the index also includes measures of political participation, political culture and functioning of government, which are, at best, marginalised by other measures.

Our index of democracy covers 167 countries and territories. The index, on a 0 to 10 scale, is based on the ratings for 60 indicators grouped in five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture. The five categories are inter-related and form a coherent conceptual whole. Each category has a rating on a 0 to 10 scale, and the overall index of democracy is the simple average of the five category indexes.

The category indexes are based on the sum of the indicator scores in the category, converted to a 0 to 10 scale. Adjustments to the category scores are made if countries fall short in the following critical areas for democracy:

• whether national elections are free and fair;
• the security of voters;
• the influence of foreign powers on government; and
• the capability of the civil service to implement policies.

The index values are used to place countries within one of four types of regime:

• full democracies-scores of 8 to 10;
• flawed democracies-scores of 6 to 7.9;
• hybrid regimes-scores of 4 to 5.9; and
• authoritarian regimes-scores below 4.

In December the president visited Woleu-Ntem to launch a hydropower project that is expected to electrify 190 villages in the region. Mr Bongo inaugurated work on a hydroelectric dam in Mitzic on the river Okano, which is due to be operational by 2013 with a generating capacity of 40 mw. Construction will be carried out by a French firm, EDTE, at an estimated of cost of CFAfr21bn (US$40m), financed by a French bank, BNP Paribas. Woleu-Ntem is a region in which most villages lack electricity supply, so the new dam will be welcomed. However, as most of the country lacks mains electricity supply, sceptical local commentators have concluded that Woleu-Ntem was selected for investment for political reasons-the region is an opposition heartland, and the project will help to curry support for the government in the run-up to the 2011 legislative poll. Whether or not the choice of Woleu-Ntem is politically expedient, the government has ambitious long-term plans to increase national energy production from current levels of around 350 mw to 3,000 by 2030, so investment projects are likely to be announced elsewhere in the coming months.

The government's grand ambitions for the domestic power sector in the long term will do little to assuage popular anger about chronic supply shortfalls that continue to affect the country, however. The government and the French-owned national provider of water and electricity, Société d'énergie et d'eau du Gabon (SEEG), remain at loggerheads over the frequent power cuts and water shortages, with each party accusing the other of failing to honour its respective investment commitments.

An audit of SEEG was due to be published in November 2010, but has been delayed indefinitely. When it is concluded, the audit may serve as the basis for the renegotiation of the company's contract, which is currently due to expire in 2017. If the terms of SEEG's concession are revised, this could result in new players entering the utility sector before 2017. Given the troubled history of relations with the Gabonese state, SEEG currently appears unlikely to win new contracts to operate either the dam at Mitzic or other planned hydroelectric dams at Poubara (the site of two existing dams, in the south-west of the country) and Fougamou (5 km downstream of Mitzic).

In early January the government announced that it would cut value-added tax (VAT) on selected goods in order to slow the rise in the cost of living at a time when global commodity prices are rising. The rate of VAT levied on cement was cut from 18.6% to 5%. Meanwhile, the VAT rate applied to "social" tariffs for water and electricity (available to poor households) was also cut to 5%, while the regular tariffs will be taxed at 10%. The VAT cuts were announced just days after another government intervention to control prices: increasing subsidies on the price of butane gas used for domestic cooking. From January the price of a gas canister is capped at CFAfr5,450 (around US$10), down from CFAfr6,000 previously. The impact on price growth will be moderate, in the expectation that rising global prices should make up for some of the effect of lower taxes. The fiscal impact, however, could be slightly more pronounced in terms of foregone revenue and higher cost of maintaining price caps, eating into Gabon's fiscal surplus. Rising oil prices and output should more than meet the cost of lowering VAT, but is a concern in that it further narrows the tax base.

Officials admitted that it would be difficult to enforce the maximum price outside of the most visible points of sale in the capital, Libreville, so the actual benefit to cash-strapped households may be limited. Nonetheless, the drop in VAT on utilities will be welcomed by ordinary Gabonese, who have become increasingly exasperated that high utility tariffs co-exist with patchy supply. The interventions to lower prices were agreed upon by the government during negotiations with unions to head off the threat of a general strike in the first half of 2010 (September 2010, Economic policy).

Following the announcement in November that the biggest local oil firm, Total Gabon, would begin exploring for oil in several onshore blocks (December 2010, Economic performance), the sector has had more welcome news, this time from the country's second-largest operator, Shell Gabon. On December 10th Mr Bongo officially inaugurated production from the Koula field, Ngounié province, which Shell operates in partnership with Sinopec of China and Addax, a wholly-owned Sinopec subsidiary. The field is estimated to have recoverable oil deposits of around 40m barrels. Output by Shell Gabon (a subsidiary of UK-Netherlands major, Shell, in which the government owns a 25% share) currently averages a reported 60,000-65,000 barrels/day (b/d), but the firm hopes that the contribution from the Koula field will increase this to 82,000-87,000 b/d. This would make it the leading producer in the country if Total's output remains steady, and increase the country's total production by around 10%.

In other positive news for the sector, a French oil firm active in Gabon, Maurel and Prom, announced in January that two test wells drilled in the Onal prospecting block-located a few kilometres inland from Port-Gentil and in which it has an 85% production stake-had produced encouraging results. The company announced plans to bring these reserves on stream by the second quarter of 2011. Maurel and Prom's output averaged 16,900 b/d in the last quarter of 2010, a slightly disappointing result that was the result of unforeseen technical difficulties. Nonetheless, the company's output peaked at over 20,000 b/d at the end of December. Yet despite these positive developments for the sector, Gabon's oil industry still suffers from regulatory uncertainty and industry-wide reluctance to prospect for oil in deep waters offshore, where the country is believed to have the greatest hydrocarbons potential, since the catastrophic oil spill in the Gulf of Mexico last year.

Local downstream activity has also picked up recently. The country's oil refiner, Société gabonaise de raffinage (Sogara), has recently reported a turnaround in its fortunes in 2010, when production topped 900,000 tonnes. This performance represents a rise of over 50% on production in 2009, which totalled just 585,000 barrels. Although the improvement was partly due to much better economic conditions in 2010, the road to recovery has not been easy for the firm, whose biggest shareholders are Total, which owns 44%, and the Gabonese state, which holds 25%. In October the company announced drastic austerity measures that it was undertaking to remain solvent, which included laying off 131 of its 442 workers (October 2010, Economic performance).

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Please see graphic below

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Land area

267,667 sq km

Population

1.48m (2009 estimate, IMF)

Main towns

Population ('000; 2009 World Gazetteer estimates)

Libreville (capital): 733

Port-Gentil: 138

Franceville: 54

Climate

Tropical

Weather in Libreville (altitude 35 metres)

Hottest month, January (23-31°C); coldest month, July (20-28°C); driest month, July (3 mm average rainfall); wettest month, November (373 mm average rainfall)

Languages

French (official), Fang, Myene and other Bantu languages: Batéké, Bapounou, Eshira, Bandjabi

Measures

Metric

Currency

CFA franc (CFAfr), fixed to the euro, backed by a guarantee from the Banque de France. It was devalued from CFAfr50:FFr1 to CFAfr100:FFr1 in 1994, and then converted at par when France adopted the euro in 1999 to trade at CFAfr655.96:EUR1

Time

1 hour ahead of GMT

Public holidays

Fixed public holidays: January 1st (New Year's Day), April 17th (Women's Day), May 1st (Labour Day), August 15th (Assumption), August 16th-17th (Independence Day), November 1st (All Saints' Day), December 25th (Christmas Day)

Movable public holidays: Eid al-Fitr, Eid al-Adha, Easter, Pentecost

Official name

République Gabonaise

Form of state

Unitary republic

Legal system

Based on the constitution of March 1991, amended by the National Assembly in 2003 to remove the restriction on the number of terms that a president may serve

National legislature

The National Assembly (the lower chamber) has 120 members, who are elected for five years by universal adult suffrage; the Senate (the upper chamber) has 91 members, who are elected for six years by municipal and regional councillors

National elections

December 2006 (legislative) and August 2009 (presidential); next legislative election due in 2011 and next presidential election in 2016

Head of state

Ali Bongo Ondimba was elected president in late August 2009 and was sworn in to office in mid-October following a recount of votes

National government

The government is led by the prime minister and an appointed Council of Ministers

Main political parties

Parti démocratique gabonais (PDG, the ruling party); Union nationale (UN); Union du peuple gabonais (UPG); Parti gabonais du progrès (PGP); Rassemblement pour le Gabon (RPG; formerly Rassemblement national des bûcherons); Parti social démocrate (PSD); Union gabonaise pour la démocratie et le développement (UGDD); Alliance démocratique et républicaine (Adere); Cercle des libéraux réformateurs (CLR)

Prime minister: Paul Biyoghé Mba

Key ministers

Agriculture, livestock & rural development: Raymond Ndong Sima

Budget, state reform & civil service: Blaise Louembé

Communications, post & the digital economy: Laure Olga Gondjout

Defence: Angélique Ngoma

Economy, trade, industry & tourism: Magloire Ngambia

Education: Séraphin Moundounga

Energy & water resources: Régis Immongault

Equipment, public works & infrastructure: Flavien Nzengui Nzoundou

Foreign affairs: Paul Toungui

Forestry: Martin Mabala

Health, social affairs, national solidarity & family: Alphonsine Mbié N'na

Housing & urbanisation: Rufin Pacome Ondzounga

Interior, public security, immigration & decentralisation: Jean-François Ndongou

Justice: Anicette Nang Ovinka

Labour, employment & welfare: Maxime Ngozo Issondou

Mines, oil & hydrocarbons: Julien Nkoghé Békalé

Small & medium-sized businesses & crafts: Jean-Félix Mouloungui

Transport: Rémy Ossélé Ndong

Central bank governor

Lucas Abaga Nchama