Business is about to boom in the Central African country, but at what cost to accountability?
Multinational companies are queuing up to do business in Gabon, despite questions being raised about the validity of President Ali Bongo Ondimba’s rule.
Among these are South African companies, including Sustainable Forestry Management, run by conservationist Alan Bernstein. It entered Gabon in late 2007 and has a concession for 780000 hectares of land in the south near the town of Mayumba.
Bernstein said the concession was being used for a fisheries programme, agribusiness, timber processing, ecotourism and conservation. Asked about the criticisms of the Bongo government and the allegations that the 2009 election had been stolen, Bernstein chose to present a positive take on the Gabonese government.
“Our perspective on the country is that Gabon represents a democratic and well-administered state in relation to the fundamentals of government and governance,” said Bernstein. “The Gabonese government has shown an enlightened and progressive view towards engaging with foreign investors.”
Gabonese environmental activist and Bongo critic Marc Ona Essangui disagrees. He said Gabon was not a democracy and the “Gabon Vert” programme launched by Bongo to value Gabon’s ecosystem in a “sustainable manner” was just a “slogan” to boost his image.
“The Bongo family uses its position and power to get land and resources for themselves,” said Ona. “They are a business family and are calling in their foreign friends.”
Ona has been a fierce critic of Bongo’s centralisation of power since being sworn in as president on October 16 2006. The president has significantly reduced the size of his Cabinet, combining numerous ministries in a centralisation of power that is defended as streamlining, creating efficiency and a modernisation of the Gabonese state.
He has also gone about setting up numerous government agencies that answer to the presidency and not to the Gabonese Cabinet or Parliament.
The idea, as it is communicated, is to create the space for difficult decisions to be made free of red tape and bureaucracy, but it obviously sacrifices accountability at the same time.
Critics like Ona argue that the agencies cannot be controlled by the government or the Cabinet, yet they have the biggest budgets.
Bongo’s grand plan, dubbed “Emerging Gabon”, aims to diversify the economy and move it away from the state’s heavy reliance on oil revenue, which brings in 51% of the country’s gross domestic product.
The country is blessed with 22-million hectares of rainforest, one million hectares of exploitable arable land and 13 national parks, which will allow for significant development of the timber, agriculture and high-end tourism sectors.
Bernstein said he did not view political instability as a major problem in Gabon. “If we are unable to be successful in Gabon because of issues of political risk, then I do not know where we could be successful. Gabon is an exemplary state in terms of its ambitions to reach developing nation status by 2025 and I think it is achievable.”
Sustainable Forestry Management was established in 2006 and focuses on investing, directly and through joint ventures, in forest-based enterprises that include forestry, agriculture, renewable energy and ecotourism.
Gabon is larger than the United Kingdom, half the size of France and one-fifth the size of South Africa, but it only has a population of 1.5-million people, whereas the UK is home to 62.3-million and South Africa to 48.8-million.
It is no wonder that the company is doing business in Gabon: the country’s millions of hectares of rainforest makes up 88% of its geographical area. These massive rainforest resources make Gabon a “priority country in a priority region”, said Bernstein.
The rainforest, commonly referred to as the planet’s second-largest green lung, captures 70-million tonnes of carbon dioxide every year.
Sustainable Forestry Management has created a joint venture with CDC Gabon, the state-backed banking and financial institution that goes by the name of the Grande Mayumba Development Company.
Mayumba has a population of 3 000 people, but once all its industrial projects are operational in the next 10 years, Bernstein expects the town to house 30 000 people.
Forestry is the main private-sector employer in Gabon and has created 30 000 jobs. However, until Bongo banned all unprocessed log exports in January 2010, the sector was unstructured and there was little beneficiation of wood in the country. More than 60% of forested logs were being exported without any processing and most of it ended up in China.
Bernstein said this was an “important step” by Bongo and companies like his saw it as a “statement of intent” and a “huge opportunity”.
“There was very little beneficiation taking place in Gabon before this move,” said Bernstein. “Now they are starting to look at the value-add.”
Numerous international timber companies have signed up to work with the Gabonese government and a 1000-hectare special economic zone, devoted mainly to the wood-processing industry, is being set up at Nkok, which is about a 30-minute drive from the capital Libreville.
Two million hectares of rainforest nearby have been allocated to the timber sector companies that are investing in the special economic zone.
These companies have been drawn by the significant benefits the Gabonese government is laying on the table. They include a 10-year exemption from corporate tax and another five years at a 10% tax rate. There is no customs duty for 25 years for imported materials and the export of manufactured goods. The companies are exempt from VAT for 25 years and will receive a 50% discount on their electricity costs.
The benefits also include free transfer of funds and flexible employment regulations for foreign workers.
The Gabonese government wants investment and private capital is responding. The first phase of the Nkok special economic zone is fully subscribed already, although it is still just a massive area of levelled earth.
Sustainable Forestry Management may be involved in forestry, but it is only one element of its investment plan in Gabon. Bernstein said its land concession included open savannah areas, which would be used for agriculture such as growing sugar and rice and some livestock farming. There would also be a lot of market gardening to grow a full range of vegetables.
The agriculture sector in Gabon employs about 35% of the population, but it only accounts for 5% of the GDP. The government aims to increase this to 8% – and decrease food imports by 75% – by 2025.
Bernstein said the vast lagoon systems in Gabon were also a major asset, but they needed to be properly regulated because they had been affected by illegal industrial fishing over the years.
He said the company wanted to get involved in sustainable, high-quality fisheries management and would introduce refrigeration and distribution infrastructure that would fundamentally benefit the livelihoods of several hundred fishing families based around Mayumba.
Moving into tourism, Bernstein has started a new company, SFM Safari Gabon, which has a concession to build a series of high-end ecolodges.
It will take place in two phases. In the first, the company will build four facilities, including a high-end boutique hotel in Libreville. The other three will be ecolodges built in the Loango, Pongara and Moukalaba-Doudou national parks.
Gabon’s national parks cover almost 11% of the country’s surface and contain the largest population of leatherback turtles in the world, as well as 50000 elephants and 15000 rainforest gorillas. There are 680 bird species, 13000 butterfly species and hundreds of amphibian, reptile and mammal species.