Towards the end of the 1990s, several leading international agencies warned that Gabon's oil production was in terminal decline. According to at least one prediction, Gabon could expect its oil reserves to have been completely exhausted by 2012 if no significant new finds were made. The economic implications of such a prognosis were self-evident for a country dependent on oil for 45% of its GDP, more than 75% of export earnings and more than 80% of government revenues. The social and political consequences for a state built on the geopolitical allocation of oil rents were equally grave, if less easy to forecast, and were brought into sharp relief after 2002 when Côte d'Ivoire - another former French colonial darling - descended into civil war following a period of economic uncertainty exacerbated by greater local competition for cocoa-rents, deepening poverty, and a growing disconnection between its youthful population and the entrenched political class - phenomena easily transposed to a Gabonese context. Although Gabon was clearly at an earlier stage of degeneration, the warning signs were there, notably in the form of burgeoning industrial militancy at the end of 2003 as the government announced further cutbacks in public-sector expenditure and a crime wave in the country's two principal towns, Libreville and Port-Gentil. In government circles, diversification quickly became a watchword, with regime officials redoubling the hunt for new rents.

Initially, the prospect for success in this endeavour had appeared slim: in 2001, a licensing round for new and recovered acreage was launched but poorly subscribed, with the oil majors seeming to have abandoned Gabon as a major investment destination in favour of Africa's newest 'oil emirate', Equatorial Guinea, or strong prospects in Angola and Nigeria. Nevertheless, by the end of 2005, a distinct air of optimism had returned to Gabon's offices of state. This derives in part from high oil prices and stronger demand for Gabonese petroleum, which has facilitated new investment in marginal or ageing fields, the stabilisation of output, and a rise in revenues. However, given the medium-term downside risks associated with Gabonese oil production, a far greater sense of satisfaction has come from the boom in mining activity and exploration across Gabon - driven primarily by Chinese and Brazilian demand for industrial inputs, which offer the regime of President El Hadj Omar Bongo Ondimba the possibility of a diversification of rent sources, diplomatic relations, and economic activity.

An Embarrassment of Riches

The clearest example of the significance of booming demand for commodities in Gabon was provided in March 2005 when the Gabonese government agreed to form a consortium with four private mining companies - Brazilian mining giant CVRD, China's Sinosteel, the China National Machinery and Equipment Import and Export Corporation (CMEC), and the Franco-Gabonese Ogooué Mining Company (COMILOG) - with a view to exploiting massive iron ore deposits at Bélinga in the north-eastern province of Ogooué-Ivindo. The presence of such deposits has been known since the 1970s, but the transportation and costs associated with evacuating output through densely forested areas had proved prohibitive. As recently as 2003, the South African company Kumba Resources had investigated exploiting the deposits - reputed to be the largest untapped reserves in the world - before deciding that infrastructural requirements rendered the project unviable. Now, with strong iron ore prices encouraging steel producers to seek closer control over supply, while also mitigating the costs of infrastructural development, exploitation of the Bélinga reserves appears increasingly feasible. Awaiting first exports in 2008, the regime can look forward to CMEC's investment in a rail connection from Mt. Bélinga to the Trans-Gabonais Railway at Booué, and the start of work on the construction of a hydroelectric plant and a deepwater port at Santa Clara on the coast, which must also be connected to the Trans-Gabonais Railway at Ntoum.

Other examples of new mining activity abounded in 2005. COMILOG is stepping up production at its manganese mines around Moanda in the south-east (Haut-Ogooué Province). A CVRD subsidiary is prospecting for manganese around Franceville and Okondja (Haut-Ogooué Province). The once commercially unviable manganese deposits at Ndjolé (Moyen-Ogooué Province) are being re-explored by the Industrial and Commercial Mines Company of Gabon (CICMG) - a joint-venture company owned by China's Xuzhou Huayan and Ningbo Huaneng Kuangye. Decisions about exploitation of these deposits should occur at some point during 2006. New exploration for niobium (columbium) - used in aircraft turbines - is taking place in central Gabon, gold prospects at Bakoudou (Haut-Ogooué Province) are good, while Canadian company SouthernEra has continued to locate meta-kimberlites (possible indicators of diamond-bearing pipes) at its Makongonio concession in the south. In July 2005, Mines Minister Richard-Auguste Onouviet - a native of Moyen-Ogooué Province - underlined Gabon's mining potential in the current international environment during a European tour, briefing potential investors on iron prospects in Minkébé, Bélinga, Boka-Boka, Batouala, Mont Mbilan and Milingui; chrome in Booué and Makoko; lead and zinc in Krouossou; and platinum group metals in the Cristal Mountains.

Pioneers and Politics

Given oil's stranglehold on the national economy - and on the elite's rent-seeking mentalities - mining will never replace oil in the affections of the Gabonese ruling elite. That said, forecast GDP growth of 2.2% in 2005 and 2.5% in 2006 will be largely driven by developments in the non-oil sector (including timber). Although higher growth continues to be hampered by weak domestic demand, commodity-related developments should ease the pressure on the regime somewhat. Export-related infrastructural development, some employment opportunities and associated commercial activity should provide a spur to local economies, while the regime will be endowed with new resources for its strategic allocation of services and social infrastructure ahead of the 2006 legislative election.

Historically, control over resources has been a defining dynamic in the exercise of political power in Gabon; the arrival of new resource rents should have a similarly transformational effect on the composition and structure of the current political dispensation. In the early colonial period, French political and commercial interests arranged contingent alliances with coastal elites (ethnic Myéné), who offered access to markets and lucrative logging concessions in return for French protection and recognition of a degree of sovereignty within the inchoate colonial system. As the timber frontier moved inland towards Lambaréné (Moyen-Ogooué Province) and north-west through the ethnic Fang heartlands of Estuaire and Woleu-Ntem, powerful French logging interests coalesced around nascent Fang-dominated nationalist parties, facilitating the rise of a Fang, Léon Mba, as Gabon's first independence president and sealing the progressive marginalisation of the former coastal elites. In the immediate aftermath of Mba's death in 1968, his successor, Omar Bongo, remained largely dependent on majority Fang-centred networks, despite his own origination amongst the minority Batéké in the south-east. The oil boom of the 1970s provided Bongo with the means to create a more appropriate geopolitical environment for his regime and, given the offshore character of most oil development, he enjoyed considerable freedom of manoeuvre to establish a more equitable reallocation of rents, albeit while privileging the coastal hubs of Libreville and Port-Gentil - through massive public expenditure and public-sector employment - and the mining centres around Franceville in the south-east, Bongo's own home region.

Prospecting New Frontiers

Economic stagnation and the austerity imperative of the late 1980s seriously disrupted the geopolitical balance of power, while the restoration of a multi-party system released oppositionist tendencies amongst coastal urban youth - no longer guaranteed government jobs - and among the Estuaire Fang, whose in-built electoral majority could now hope for fulfilment after two decades of marginalisation. Judicious reallocation of rents, commercial opportunities and political access had brought most of the opposition under control by the mid-1990s, although new multilateral demands for austerity in the late 1990s raised the possibility of renewed fragmentation. If not providing a long-term solution to the structural problems of the Gabonese economy, the current commodities boom seems likely to forestall any such disintegration. However, the emergence of new rents in onshore locations will create new regional axes of influence and power, which the regime will seek to co-opt in order to control access to key resources. Although this reconfiguration will be a long-term project, it has already begun, and related developments will emerge in 2006.

The new importance of the Bélinga deposits has lent new influence to the historically marginalised north-eastern province of Ogooué-Ivindo. Since 2004, there has been a distinct rise in 'Ogivin' activism and a growth in the number and visibility of groups demanding greater representation for the province in the highest offices of state. Re-elected for a seventh term in November 2005, Bongo is expected to carry out a government reshuffle in early 2006; the appointment of Ogivin power-brokers seems inevitable. The Ntumu Fang of Woleu-Ntem province, which borders the area around Bélinga, may also benefit: with the Estuaire Fang effectively neutered as an opposition force, the premiership may well be transferred from the latter group to the former, as Bongo attempts to shore up his electoral position ahead of parliamentary polls in December 2006. Greater attention will also be given to preventing fragmentation in the south-east, where former ruling party baron-turned-opposition leader Zacharie Myboto will seek to exploit emerging ethnic Nzébi frustration with their progressive exclusion from high office. Bongo spent heavily in the south-eastern province of Haut-Ogooué during the election campaign; the growing significance of Altogovean manganese deposits will necessitate investments of yet more political capital.

All That Glitters...

The risks associated with reliance on onshore resource extraction may also become apparent, especially if, as might be expected, new rent-seeking opportunities in the interior, combined with reduced living conditions in the coastal metropoles, drive urbanites to return to their rural home regions. Exploitation of local resources by national elites will drive new local demands for social development to a far greater extent than occurred at the height of the oil boom of the 1970s. Portents of such developments occurred in late 2004 in the southern town of Lébamba (Ngounié Province), when police clashed with civilians after barricades were erected by protestors demanding the resumption of electricity supplies to the town, the revision of local authority boundaries, and the supply of materials to the local school. In November 2004, residents in Ndolou (Ogooué-Maritime Province) erected barricades in the town to demand greater involvement by Canadian oil company Panafrican Energy, which operates an installation in the town, in local development projects. Given the often heavy environmental impact of mining operations and low levels of social and human development in virgin territories, demonstrations of this kind might be expected to become more frequent - a potential source of anxiety for the regime and foreign investors alike.

It should be apparent, then, that the commodities boom in Gabon offers challenges, as well as opportunities. Although new mineral rents hold out the prospect of a soft-landing from the decline in Gabonese oil production, they will generate new political and social dynamics to which the regime must respond creatively if it wishes to avoid the consequences of a declining resource base and deteriorating human development indices. New external partners will be in a position to help, but the key responsibility resides with the Gabonese regime. With President Bongo likely to stand down at some point in the coming seven-year term, the commodity boom has presented an unexpected opportunity to deal with the succession in an orderly and peaceful fashion. It is an opportunity it cannot afford to pass up.

Contact: Raul Dary

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