Document of The World Bank

FOR OFFICIAL USE ONLY

Report No. 40890-GA

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

COUNTRY ASSISTANCE STRATEGY PROGRESS REPORT

FOR THE

REPUBLIC OF GABON

FOR THE PERIOD FY05-09

October 30,2007

Gabon Country Management Unit Africa Region

This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization.

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AAA ABP AFD AtDB CAS CAS CR CEM DPL EIB EITI ESW EU FIAS FSAP FY GDP GEF GPRSP

IBRD

ICR

REPUBLIC OF GABON COUNTRY ASSISTANCE STRATEGY PROGRESS REPORT

CURRENCY EQUIVALENTS Currency Unit:

US$1 = CFAF 498.07 (as o f December 31,2006)

WEIGHTS AND MEASURES Metr ic System

FISCAL YEAR July 1 - June 30

ACRONYMS AND ABBREVIATIONS

Analytical and Advisory Activities Annual Business Plan Agence Franqaise de Developpement African Development Bank Country Assistance Strategy CAS Completion Report Country Economic Memorandum Development Policy Loan European Investment Bank Extractive Industry Transparency Initiative Economic and Sector Work European Union Foreign Investment Advisory Service Financial Sector Assessment Program Fiscal Year Gross Domestic Product Global Environment Facility Growth and Poverty Reduction Strategy Paper International Bank for Reconstruction and Development Implementation Completion Report

IDF IFC IMF MDG MIC MIGA MTEF ODA OPEC

PEMFAR

PEP PER PFM PPP SME SNBG UNDP WBI

Institutional Development Fund International Finance Corporation International Monetary Fund Millennium Development Goal Middle Income Country Multilateral Investment Guarantee Agency Medium-Term Expenditure Framework Overseas Development Assistance Organization of Petroleum Exporting Countries Public Expenditure and Financial Accountability Review Private Enterprise Partnership for Africa Public Expenditure Review Public Financial Management Private-Public Partnership Small and Medium Enterprise Sociktk Nationale des Bois du Gabon United Nations Development Program World Bank Institute

Vice President Obiageli Katryn Ezekwesili Country Director Mary Barton Dock Task Team Leaders Janet Dooley, Olivier Fremond

The CAS Progress Report was produced by a core team including Olivier Fremond, Janet Dooley, Luis Alvaro Sanchez, Dorsati Madani, Rick Emery Tsouck Ibounde, Ne l l i e Sew Kwan Kan, and Amina Adele Temanda under the overall guidance o f Mary Barton-Dock. The preparation o f the CAS Progress Report has been a team effort, which included involvement o f Laurent Debroux, Chantal Reliquet, Silvana Tordo, Ivan Rossignol, Michaela Weber, Boubacar Bocoum, Kingson Apara, Hinh Dinh, Victoria Gyllerup, Renee Desclaux, Alassane Ndiaye, as well as other Gabon Country Team members.

FOR OFFICIAL USE ONLY

Table o f Contents

1 2 3

Developments since the CAS ................................................................................................. 1 FY05-09 CAS Strategic Relevance and Program Implementation .................................. 3 Mid Term Progress toward Results .................................................................................... 5

CAS Pillar 1: Strengthening Management of Public Resources (both natural and Jinancial) for improved social outcomes

3.1 Natural Resource Management and Environment .......................................................... 5 '3.2 Governance ..................................................................................................................... 6

CAS Pillar 2: Improving the Investment Climate to foster sustainable, private sector-led non-oil growth

3.3 Investment Climate and Infrastructure ... . . . . . . . .. . . .. . . ... . . .. . . .. . .. . . . .... . . . ... . .. . . . . .. . . . ... . . .. . . . . . . . . . . . . 7 4 High Case Triggers ................................................................................................................ 8 5 Going Forward ...................................................................................................................... 8

Improving the relationship with the client ...................................................................... 8 Strengthening management o f natural and financial public resources will continue to be a cornerstone ofthe Bank's program in Gabon ....................................................... 9

The World Bank Group agenda will place greater emphasis on diversification and competitiveness during the second half o f the CAS implementation. ....... . , , ... . . . . . . . . . .. 10

5.1 5.2

5.3

'

6 R i s k s ..................................................................................................................................... 11

Annexes:

Annex 1 : Results Matrix o f CAS Mid-Term Annex 2: World Bank CAS Program FY05-09 @ex 3 : High Case Triggers Annex 4: Gabon and the Millenium Development Goals Annex 5: Governance Indicators Country Snapshot (GRICS) Annex 6: Country at a Glance Annex 7: Selected Indicators o f Bank Portfolio Performance and Management Annex 8: IBRD/IDA Program Summary Annex 9: IFC Committed and Disbursed Outstanding Investment Portfolio Annex 10: Summary o f Non lending Services Annex 1,l: Key Economic Indicators Annex 12: Key Exposure Indicators Annex 13 : Operations Portfolio (IBRD/IDA/Grants)

Map: IBRD 33408

12 17 18 19 20 21 23 24 25 26 27 29 30

This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not be otherwise disclosed without World Bank authorization.

GABON

CAS PROGRESS REPORT

1. Gabon i s a middle income country rich in natural resources, notably oil, iron-ore, manganese and forestry. Per capita income i s US$5O0O1 and eighty three (83) percent o f i t s estimated 1.4 mill ion population lives in urban areas. Still, Gabon shares many o f the problems o f a low income country, with human development indicators ranking far below countries with similar income level. Today, as oi l reserves are depleting, the diversification and competitiveness o f the economy i s the greatest challenge. In addition, the country needs to find a path o f shared growth that spreads the benefits o f growth more widely. The authorities have sought the cooperation o f the international community, including the IMF and the World Bank Group, in facing this challenge.

2. The Board o f Executive Directors discussed the FY05-09 Country Assistance Strategy (CAS) (Report No. 3 1882-GA) in May 2005. This Progress Report takes stock o f the progress that has been made in implementing the CAS, charts the way forward to complete the CAS, strengthen the relationship with the authorities, and prepare the path for a fuller engagement with the country in the future.

1 DEVELOPMENTS SINCE THE CAS

3. Reduction Strategy Paper (PRSP) in January 2006, agreed on a follow-up IMFprogram, and made progress in achieving macroeconomic stability and initiating structural reforms. During 2004 and 2005, an IMF program helped restore macroeconomic stability and the Government commenced reforms strengthening governance and transparency and fostering non-oil economic growth. Although two elections slowed the reform process leading to fiscal slippages in 2005 and 2006, since then, the authorities reestablished fiscal discipline and have resumed privatization efforts, including finalizing the liquidation o f Air Gabon in 2006 and completing the privatization o f Gabon Telecom in 2007. They have also resumed reforms in forestry. In May 2007, the Authorities and the IMF signed a new three-year Stand-By Arrangement to reduce fiscal imbalance and the country’s vulnerabilities to swing o i l prices, support the diversification o f the economy and boost progress in poverty reduction.

Since the CAS waspresented to the Board, Gabon finalized its Growth and Poverty

4. depletion of the oil reserves. Economic growth slowed to 1.2 percent in 2006 from 3 percent in 2005 and 1.3 percent in 2004. However, in 2007 the economy i s expected to grow by 5.6 percent2; a stronger non o i l sector performance will compensate decreasing o i l production. Growth o f the non-oil sector has been driven by the vibrancy o f the forestry and mining sectors, mobile phones services, transport3, and government services. The removal o f the SNBG (national timber marketing board) monopoly and strong demand for tropical wood from China and India may lead to a record 18 percent growth o f the forestry sector in 2007. Construction

Over the last three years, economic growth has been positive despite the progressive

US$5,3 10 in PPP

Due to a pick-up in airline traffic led by the arrival o f 3 new international companies after dissolution o f Air Gabon * Data as o f latest published Staff report 3

1

and electricity sectors received a boost from a 25 percent increase o f the public investment program, mainly through public works implemented in the context o f the celebration o f the 2007 Independence Day in Libreville. The agricultural sector (about 6 percent o f total GDP) i s growing, including in response to the implementation o f the Peri-Urban Agriculture Development Program (PADAP) launched in 2004 by the Gabonese Institute o f Development (IGAD).4

5. becoming both an important source o f demand for and investment in natural resources. Manganese output, for example, grew by 8.3 percent as result o f Chinese demand and i t s contribution to increase production capacity. In the f irst half o f 2007, the authorities signed an agreement with China National Machinery and Equipment Import & Corporation to develop the Belinga iron ore deposit, located near the city o f Makokou in the North East o f the country. The project includes the development o f the iron-ore deposit, and the construction o f a hydropower plant, a rai l track, and a deep water port. Chinese investments in Belinga iron ore mine and related projects have been estimated to US$3 billion-about 30 percent o f Gabon's 2006 GDP-according to official sources. The World Bank Group i s discussing these developments with the Government as well as with their partners to ensure that the Belinga development i s done in a manner which i s consistent with Gabon's laws and respects the environment, forestry and tourism potential in the Belinga area.

Natural resources continue to provide opportunities for diversification. China i s

6. Some improvements were made in the social sectors although poverty and reaching the MDGs remain problematic. Although up-to-date statistics are limited, it i s noted that Gabon has succeeded in making primary education available to all, improving net enrolment fiom 88 percent (1990) to 91 percent (2005), with quality s t i l l a concern. In health, infant mortality improved from 155 per 1,000 in 1990 to 60 per 1,000 in 2005. Enrollment o f girls in primary and secondary schools increased, women are obtaining greater access to assets and health services and institutions protect equal constitutional and legal rights for women. Overall, human development outcomes compare favorably with Sub-Saharan Africa but fall short o f countries with similar levels o f per capita income. Gabon i s ranked 124 out o f 177 countries in the 2006 UNDP Human Development Index. In terms o f the MDGs, Gabon i s likely to meet the target for reducing infant mortality and education for all. However, the other MDGs remain unlikely to be achieved. A major challenge i s HIV-AIDS prevalence at 8.1 percent, exceeding the average rate for Sub Saharan Africa. Another challenge i s to reduce poverty that rose from 25 percent (1997) to 33 percent (2005). The government, following on the recent I M F Stand-By Arrangement i s introducing measures to reduce subsidies to the wealthiest households to channel more resources to the poorest. The capacity o f Government to redress the situation through public expenditure will be strengthened once reforms o f the public expenditure system are completed.

7. presidential and legislative elections o f 2005 and 2006 respectively strengthened the participation o f the opposition in the National Assembly. Work i s currently in progress on Public Finance Management including improving the l i n k s between the recurrent and investment budget through the introduction o f a Medium Term Expenditure Framework (MTEF), and the publication o f audit reports from the Cow des Comptes. On public procurement, the number o f

Progress has been achieved on the governance front, mainly in the public sector. The

The objective o f the program i s recruiting unemployed young Gabonese, to train them on agricultural techniques, 4

to provide them organic matter, inputs, farm equipment and to install them on their own account.

2

public contracts executed through invitation to tender increased from 12 percent in 2004 to over 40 percent in 2006. In 2005 the authorities adopted the Extractive Industry Transparency Initiative (EITI) and have since published two EIT I reports, with a third report under preparation.

8. capacity since the writing of the CAS. First, non-oil sector activity has grown steadily and i s expected to continue to grow in the foreseeable future, slowly increasing/diversifying the income and export base o f the country. Second, compared to FY05, higher o i l prices are generating a financial windfall for the government. In addition, in July 2007, the country reached an agreement with the Paris Club to buyback non-ODA outstanding obligations to Paris Club creditors at a 15 percent discount (France agreed to 20 percent discount). The buyback will be financed by using the accumulated fiscal savings from higher o i l prices and by making a call on the regional and international financial markets. The buy back will lower the NPV o f Gabon public debt and further strengthen the creditworthiness o f the country. The debt to GDP ratio has decreased from 39 percent o f GDP in 2005 to 32.5 percent in 2006 and an estimated 27.6 percent in 2007. The debt to GDP ratio i s projected to reach 21.3 percent in 2008. This trend i s expected to continue with the ratio reaching 13.3 percent in 201 05.

Positive economic developments in the country have led to improved debt servicing

2 FY05-09 CAS STRATEGIC RELEVANCE AND PROGRAM IMPLEMENTATION

9. January 2006, maps out Gabon’s reform program to manage the transition from a highly oil dependent economy to a diversified one that harnesses private sector growth and makes progress in poverty reduction. The GPRSP was developed through a participatory process including nine regional consultations which took place from July 2004 to July 2005. It i s designed around four pillars: (i) promoting strong and sustainable pro-poor growth; (ii) improving infrastructure; (iii) improving basic social services (health, education, housing and sanitation); and (iv) improving governance. There i s a high degree o f correspondence between the GPRSP and the CAS diagnostic and program. The GPRSP i s also in line with the World Bank’s Africa Action Plan and the Guidelines on mainstreaming the EITI into CASs, which were developed since the CAS was designed. The revised results matrix shows the alignment between the CAS objectives and the GPRSP. The supporting lending program i s outlined in Annex 2.

The Government’s Growth and Poverty Reduction Strategy (GPRSP), finalized in

10. The CASprogram is on track. Implementation of the Base Case has proceeded as planned, albeit with delays. Three o f the four base case projects have been approved: Local Infrastructure Development (March 2006), the D P L l on Natural Resources (November 2005) and a GEF grant (March 2006). The preparation o f the remaining project in transportation i s well advanced. However, the Local Infrastructure Development Project and the D P L l took 12 and 18 months (maximum time lapse) respectively and much effort to become effective. The GEF grant (approved in March 2006) i s s t i l l not effective. Various factors explain the delays between approval and effectiveness. First, two elections in 2005 (Presidential) and 2006 (legislative) slowed down the adoption o f reforms that were effectiveness conditions. Second, in the case o f Natural Resource Management, disagreement within government halted reforms. Third, the stop-and-go and inertia or resistance from vested interests that are being challenged

IMF, September 2007 5

3

further contributed to the delays, as was the case o f revoking o f logging permits for non tax payers.

1 1‘. of timeliness and quality. Key analytical work already delivered includes the PEMFAR, the MTEF, and a Review o f Infrastructure. Also, during this period, the CAS envisaged implementation o f a FIAS report on doing business constraints. However, the counterparts assess the advice as too generic for their needs and not focused enough on physical ‘bricks and mortars’ projects which the country needs. The work related to public sector management and governance, the PEMFAR and MTEF, has had the best reception. Efforts are underway to improve dissemination o f the Infrastructure Framework Report just completed. On technical assistance, three planned IDF grants for US$500,000 each have not yet taken place. Two (GPRSP implementation; and civil society and Parliamentary capacity building) are not expected to be undertaken due to limited resources, while the IDF grant for HIV/AIDS has been delayed until FY09. Given the weak statistical capacity o f the country, a statistical capacity grant that had not been foreseen in the CAS was approved in FY08.

The AAA program was delivered as intended but the results have been mixed in terms

12. experienced delays in meeting effectiveness conditions. Vested interests resisted the reforms o f natural resource management program. While they were not successful, their action slowed down the pace o f reforms. The other two projects were delayed because o f the late deposit o f counterpart funds and difficulties in getting the law on national parks ratified.

The Bankportfolio continues to be risky. All three active projects in the portfolio

13. Bank Group, and an increased focus on hard investments, particularly road infrastructure. Specifically, the authorities have asked for an increase in the IBRD envelope from US$93 million (high case) to US$168 mill ion to increase the financing available for transport infrastructure. The authorities also appreciate the Bank’s assistance in improving public sector governance and the optimization o f public resources to reach the poor through the rationalization o f the budget process. However, to remain competitive and relevant in Gabon, the Bank needs to step up ways to simplify procedures and reduce transaction costs o f doing business in l ine with the MIC agenda.

The Authorities have expressed their interest in a stronger cooperation with the World

Box 1: FY05-09 Gabon CAS Progress at a Glance

The country development goals and outcomes supported by the CAS program remain relevant, and are in line with the GPRSP that was finalized since the development of the CAS (para. 9, 15) The country i s still seeking Bank support in the priority areas set out in the CAS, but with an increased focus on infrastructure. The IBRD ceiling will be increased by US$75 million for investment lending in infrastructure. (para. 13, 30) Overall implementation of the CAS program i s on track, albeit with some delays. (para. 10) No changes in CAS instruments are planned, however, due to program implementation delays, not all expected outcomes will be h l l y met, particularly on CAS Pillar 2. (para. 15, 30) The high case triggers to move to a second Natural Resource Management DPL have been met, although it will be sequenced to follow the disbursement of the second tranche of the DPLl . High case triggers to move to a diversification project are not judged to have been met, and will be reviewed at the time of the first Annual Business Planning Meeting on the World Bank program in Gabon. (para 27,28) Risks identified in the CAS have not materialized but remain valid. In addition, there are risks to Bank relevance in Gabon, meeting the expectations o f the client, and the Bank’s portfolio quality. (para 38-39)

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14. limited by availability of operational resources. The lack o f resources have curtailed the scope of activity in Gabon, creating a situation at odds with the institutional emphasis on MICs, especially as the authorities have invited the Bank to increase i t s exposure in the country. For example, as noted, the limited administrative budget has prevented the preparation o f two important IDF grants and delayed an important third one on HIV/AIDS as trade-offs to fund the IBRD investment program, in particular supervision o f the ongoing portfolio. If increased administrative resources were available, Bank supervision would increase, particularly for the multi-sector operations, and the two remaining IDF grants would be put forward. As one o f only few countries in Africa that borrow from IBRD, at much higher interest rate than other countries in the region, efforts are underway for Gabon to receive appropriate ‘customer service’.

The capacity of the Bank to implement the technical assistance program has been

3 MID TERM PROGRESS TOWARD RESULTS

15. The ten outcomes defined in the CAS remain relevant to achieving the CAS strategic objectives and supporting the GPRSP. The revised results matrix shows how CAS outcomes are aligned with the GPRSP and provides a status update based on the milestones and project indicators. Measurable progress has been made on the outcomes linked to improved transparency, diversification o f the economy towards non-oil sectors, and strengthened public financial management through the base case lending program and the MTEF work. However, the Bank’s program will not contribute to better delivery o f HIV/AIDS prevention and control services during the CAS period, as the IDF grant that was to be part o f the Bank’s assistance has been delayed.

CAS Pillar 1: Strengthening management of public resources (both natural and financial) for improved social outcomes

3.1 Natural Resource Management and Environment 16. Progress on governance of natural resources management has been slow but positive. The Natural Resource Management DPL1, approved in November 2005, i s seeking major improvements in governance o f Gabon’s natural resources so that they can be used effectively, for the common good, and in a sustainable fashion. The DPL has contributed results in several areas (i) in the Forestry sector, removal o f the SNBG monopoly, a moratorium on the allocation o f new logging permits until a new system o f quota i s finalized; and disclosure o f the l i s t o f logging permits and their tax collection status as well as the cancellation o f 116 logging permits that did not comply with their fiscal obligations; (ii) in the Biodiversity/Environment sector, the finalization o f draft new legislation on national parks and disclosure o f the l i s t and map o f mining and o i l permits in and around national parks; (iii) in the Fisheries sector, the disclosure o f the l i s t o f fishing permits and their tax collection status; and (iv) in the Mining / O i l sector, the formal expression o f Government’s interest to adhere to the EIT I initiative. The DPL sector policy letter provides a roadmap for further improving governance in the sustainable management o f natural resources.

17. tranche. By the completion o f the first DPL (a) transparency will have increased with the introduction o f third-party observers to assist in the enforcement o f the forest law and new

Further gains are expected from the remaining reform agenda and the second DPL

5

auction procedures for the allocation o f logging permits; (b) the SNBG restructuring w i l l have been completed; (c) sustainable forest management practices will be in place; (d) the program’s socio-environmental management plan will be under implementation, including the mandator

(e) a review o f the fisheries sector will have been completed and measures taken to protect fish stocks in fragile and over-exploited waters; and ( f ) a review o f the mining sector will have been completed.

practice o f carrying out an environmental impact assessment prior to any new mining project di ,

18. have published two EITI reports. The f i r s t report (2005) did not cover all the o i l revenues and did not include the mining sector; the second report (March 2007), however, had substantially wider coverage o f government’s o i l revenues and the inclusion o f mining sector revenue for 2005. Publication o f EITI findings included publication o f the reconciled reports o f payments and revenues reviewed by an Independent Administrator. In addition, civil society participated in the Tripartite Committee in l ine with the E IT I Source Book.

The government also started to implement the EITI and is one of the few countries that

19. protecting the environment. The progress achieved through the DPL 1 will need to be consolidated with a second DPL encompassing mining and fisheries sectors. The weak capacity o f the Government wi l l need to be strengthened. And, as with many complex reform programs, entrenched vested interests wi l l need to continue to be overcome to further progress on the reform agenda.

However, significant challenges remain to harness Gabon’s natural resources while

3.2 Governance 20. including in Public Finance Management; service delivery; fighting corruption; and Voice and Accountability. Driven by the PEMFAR exercise, which was well received by the authorities, and the household survey, undertaken with the assistance o f the Bank, the Bank and the Government have developed a strong consensus on major findings: (i) Gabon’s track record on reducing poverty and inequality, and basic social services delivery has been weak compared to countries with the same level o f income per capita; and (ii) this poor performance results from the absence o f linkages between the budget and the country’s development strategy, and the ineffectiveness of the budgetary allocation process.

The Government has initiated efforts to improve governance in the public sector,

2 1. resources. In October 2006, following up on the findings o f the PEMFAR, the Government launched the implementation o f an MTEF. As o f July 2007, the national team had developed MTEFs for health and education, and was developing the central MTEF/macroeconomic model. Also, it has adopted a functional budget nomenclature to aid in the strategic allocation and execution o f the budget. As a consequence, coordination among the ministries in the budget preparation improved. Joint budget negotiations were organized by the Ministries o f Planning (in charge o f the investment budget) and Finance (in charge o f the recurrent budget) and the l ine

Given this consensus, the priority has been to improve the management of public

In addition, as part o f the reform agenda supported GEF project, the Government has reaffirmed i ts commitment to complete an environmental impact assessment and to implement the environmental management plan prior to allocating an o i l exploration permit inside a protected area, which sets a precedent for similar cases that are l ikely to come up in the future given Gabon’s efforts to develop i ts mining sector.

6

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ministries for the preparation o f the 2007 budget. The authorities are in the preparatory stage o f adopting a new integrated computerized budget system and formulating an e-Government strategy with the support o f the Bank and other donors. Regarding procurement, the number o f public contracts executed through invitation to tender increased from 12 percent o f the total public contacts in 2004 to over 40 percent in 2006. Information on public contracts i s now available in a government website.

22. The Anti-Corruption Agenda launched is under implementation. In 2002, Parliament adopted an anticorruption law creating a National Commission against I l l icit Enrichment and a Code o f Ethics. Implementation, however, has moved slowly. The National Enrichment Commission has taken important f i rs t steps, but major challenges to implement the assets declaration system remain. Only one third o f senior staff had filed their income and wealth statements at the end o f December 2005. Capacity building i s needed within the Ministry o f State Control to implement the government’s agenda.

23. 2007, local NGOs were invited to participate in the Tripartite Working Group for EITI. Civi l society organizations are becoming more active in Gabon, but remain weak and lack institutional capacity; many in government remain reticent to accept them as development partners. As a consequence, civil society i s unable to play a strong accountability role. Moreover, transparency o f government decisions also remains an issue as public information i s not readily available (for instance, the “Journal officiel” i s not published on a regular basis). The proposed IDF grants for civil society and Parliamentary capacity building have not yet been able to proceed due to resource constraints. However, as part o f i t s E IT I support, the Bank organized a training seminar for civil society institutions in June 2007.

Limitedprogress has been made improving voice and accountability in Gabon. In

24. Despite preliminary efforts at launching a governance agenda, Gabon continues to rank low in Voice and Accountability and Control of Corruption (Annex 4). According to WBI governance indicators, Gabon fares better compared to Sub-Saharan Africa than countries in the same income category. The country ranks 90 out o f 163 countries in the Transparency International Corruption Perception index. In cross country ratings on Public Sector Management and Institutions Gabon fares poorly on Transparency, Accountability and Corruption in Public Sector but highly on efficiency o f revenue mobilization.

CAS Pillar 2: Improving the Investment climate to foster sustainable, private sector- led non-oil growth

3.3 Investment Climate and Infrastructure

25. While improving the investment climate and infrastructure is extremely important for Gabon’s competitiveness, not much progress can be observed over the past three years. The Government has undertaken reform o f the telecommunications sector and opened the skies with the liquidation o f Air Gabon, but some difficulties have been encountered. The Doing Business database indicates that the business environment i s worsening according to i t s ranks in 2006, 2007, and 2008 (respectively: 129 and 132 out o f 175 countries, and in 2008 144 out o f 178 countries). A Bank review o f the infrastructure sectors highlights the high cost o f energy and road construction, as well as high travel costs that prevent the development o f tourism, gaps in

7

infrastructure regulation, the need to develop frameworks for such subsidies and PPP for planned large-scale infrastructure projects. While regulatory reforms o f this nature affect mostly the non extractive sectors, investment in the natural resource sectors has continued to grow rapidly.

26. The Bank Group’s support for competitiveness needs more time to come together. The package o f Bank activities supporting competitiveness has been coming along slowly. Although the FIAS recommendations identified a series o f shortcomings in the business environment, the government would like to receive complementary analytical work more grounded in the Gabonese reality. The Infrastructure Framework Report has now been completed and the Local Infrastructure Development Project i s just beginning implementation. The transport project is under preparation. The IFC program, including the Private Enterprise Partnership for Afr ica (PEP--IFC’s Technical Assistance arm), has proceeded slowly. As a result, the country has yet to meet the high case triggers for competitiveness (see below).

4 HIGH CASE TRIGGERS

27. Natural Resource Management DPL2 have been met. First, the base case performance i s satisfactory and progress on reforms in the natural resources sector led to the achievement o f the effectiveness conditions needed for the disbursement o f the first D P L in Natural Resource Management. The abolition o f the SNBG monopoly was completed, and the restructuring o f the state owned company is wel l under way. The implementation o f EITI i s also substantially accomplished, and Gabon i s one o f the few countries in the world that has published two EITI reports. ‘However, given the delays in the implementation o f the f i rs t DPL, it i s not expected that this operation will be fully disbursed and the second project prepared by the end o f this CAS period.

The high case scenario was designed on a project basis. The three conditions for the

28. Some progress has been made on the triggers for the Diversification Operation. The privatization o f Gabon telecom i s completed. Some rogress has been made regarding access to finance for SMEs through the IFC and other donors , and on the reduction o f sole sourcing for government contracts, with the mid-term objective o f limiting such contracts to less than 20 percent o f total procurement. However, the implementation o f the recommendations o f the FIAS study has not made traction, as the authorities found the report too generic for their needs. The f i rs t Joint Annual Review o f the Bank program will examine the triggers further before proceeding with this operation.

P

5 GOING FORWARD

5.1 Improving the relationship with the client 29. The focus of the remaining CASperiod will be on strengthening the relationship with the country. The World Bank needs to be more agile and more responsive to client requests. Formal Annual Reviews will be held to build up the relationship with the client and respond better to their needs. Annual Business Planning will help organize the dialogue with the authorities o n Wor ld Bank activities for the coming year, address key portfolio issues and help

The EU in particular 7

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the authorities to develop a common position on key issues. Other donors may partake in the dialogue should they so request. The approach will help align the Bank program with Government’s priorities. In terms o f timing, efforts should be made to organize this at the time o f the Government’s budget cycle and the Bank’s Business Planning process.

30. program; however the Bank will take measures to facilitate program implementation. First, adjustment operations will be designed with emphasis on triggers to enable the project to go to Board rather than effectiveness conditions. Second, building on the practice now, the Country Office will tighten i ts oversight on implementation. Sector managers will increase their oversight as well. Third, improving the dialogue with Government counterparts will be central in the assessment o f the performance o f tasks. Fourth, the Bank will consult with the authorities on the type and form o f Analytical and Advisory Assistance they want within the limits o f the Bank budget. Fifth, the Bank will familiarize government officials, civi l society representatives, and private sector participants with i t s procedures through portfolio reviews to reduce the time it takes for projects to reach effectiveness and improve implementation. Finally, at the time o f the portfolio reviews, Government and Bank will also dialogue and agree on Annual Business Plans of Bank support. The more structured dialogue between the Bank and the authorities will also have a view to explore and help prepare the country for eventual use o f Middle Income Countries (MIC) instruments, such as IBRD buy-downs and in-country systems, and aim for more relevant and timely delivery o f Bank products. The CASPR i s in l ine with the emphasis the Bank Group assigns to small MICs and takes account o f the special characteristics o f Gabon, which shares many of the same challenges as a low income country, including poverty.

No major changes in instruments are deemed necessary for the remainder of this CAS

3 1. operations has been expanded by US$75 million. This additional ceiling w i l l be applied to scaling up the roads project and a second infrastructure investment in response to the Government’s request. Given the delays in implementation o f the Natural Resource Management DPL and the time needed to move to a Diversification Operation, i t i s not expected that the high case for adjustment operations will take place during the timeframe o f this CAS.

I n addition, responding to the Government’s request, the lending limit for investment

32. The Bank will also strengthen its cooperation with other donors around the GPRSP. There are few donors involved in Gabon-France, WBG, China, UNDP, EU, and AFDB. The positive experience o f cooperation with donors including France, the EU, AfDB, US, GEF and the IMF in the multi-donor forest and environment sector program, the preparation o f the transport investment, and in the production o f the PEMFAR in 2006 suggest that the same cooperation can succeed in the future. The World Bank Group will therefore approach partners to work together on operations and AAA, beginning with the analysis on competitiveness.

5.2 Strengthening management of natural andfinancial public resources will continue to be a cornerstone of the Bank’s program in Gabon

33. The Bank will continue to focus on the governance agenda. The CAS will continue to support the governance agenda as part o f an effort to find a path o f shared growth that benefits all the population o f Gabon. The priority i s to consolidate the gains that have been made in the governance o f natural resources and extractive industries. Key activities include the natural

9

resources DPL, the EIT I initiative and GEF project for national parks'. This i s expected to be one o f the main accomplishments o f the CAS.

34. for Natural Resource Management will allow implementation of DPL2. Experience in other countries shows that improving the natural resources governance i s a long-term process that requires continued, long-term involvement by the Bank. The DPL2 will continue to work on firming up the disclosure framework o f the mining and fisheries sectors, on continuing improvements in EIT I implementation, and on addressing the findings o f the sector reviews in the mining and the fisheries sectors. I t will help Gabon combine the needs for economic development with social and environmental sustainability. The DPL2 will pay special attention to policy and governance reforms that improve the contribution o f the natural resource sectors to poverty alleviation and reducing their impact on the environment. In the forestry and biodiversity sectors, the DPL2 will consolidate the policy reforms supported by the D P L l and focus on community forestry and revenue-sharing mechanisms.

The fact that the country has met the conditions to move to a high case CAS Scenario

3 5. It i s expected that by the end o f the CAS budget programming will be a more effective instrument to improve service delivery and contribute to poverty reduction. Key activities include the continued development o f the MTEF and further gains in procurement. Given the high incidence o f HIV/AIDS, the Bank will carry out the intended HIV/AIDS IDF grant o f US$500,000 in FY09.

Improving further public expenditure practices will be the second governance priority.

5.3 The World Bank Group agenda will place greater emphasis on diversification and competitiveness during the second half of the CAS implementation.

3 6. revival of the IFC agenda and the infrastructure operation under preparation will support moving towards greater diversification and competitiveness of the national economy. In addition to the Bank, two other donors, the AfDB and the French development agency (AFD) are placing greater emphasis on competitiveness, beginning with their participation in the rehabilitation o f the road linking Libreville and the rest o f the country.

The Local Infrastructure Development Project that is just starting implementation, the

37. a competitiveness agenda. The Bank will undertake analytical work supporting a competitiveness agenda during the second half o f the CAS in cooperation with the authorities and other donors, building on the diversification study recently undertaken by the AfDB. This analytical work wi l l shed light on the options for diversification-through further use o f natural resources versus the development o f alternative sources o f growth to profit from the coastal position o f the country. This analytical work wi l l help determine, at the time o f f i rs t Annual Review, whether the diversification operation foreseen for the high case should be an adjustment operation or added to an infrastructure operation.

The Infrastructure Framework diagnostic and targeted analytical work will help chart

The IMF and World Bank wil l closely coordinate on governance in Natural Resource Management. 8

10

38. would become unsustainable; (iii) departure from sound fiscal management practices; (iv) backtracking on structural reforms; and (v) a change in Government could slow the pace o f reform. While none o f these r isks materialized to date, they remain valid. In particular, a sharp drop in world o i l prices from their current level would necessitate readjustments o f the country’s economy. There i s also a risk that unconventional borrowers, such as bilateral lenders from the Middle East and the Far East and European commercial banks, attracted by the reduced debt ratio o f the country post the Paris Club transaction, will entice the authorities to borrow too heavily on hard and short terms. This risk, however, i s mitigated by the current Three-Year Stand-By Agreement with the IMF which provides oversight o f the debt burden o f the country. There i s also a risk that entrenched interests in the Natural Resources sectors will succeed in slowing down the pace o f reform, and that mining investments conflict with the environmental agenda.

The FY05-09 CAS identifiedfive risks: (i) a sharp drop in o i l prices; (ii) debt burden

39. implementation need attention. First i s Bank relevance. As in all MICs, the Bank’s added value rests on i ts capacity to bring cutting-edge knowledge and competitive financing. By CAS mid-term, Bank’s AAA and projects have been broadly on track. But real-time responsiveness has to improve. The proposed changes in the relationship to the client seek to curtail this risk and prepare the ground for the next CAS to focus on selective high quality interventions. Second is‘the quality o f the Bank’s portfolio, which i s risky. The strategy tries to address these risks by proposing joint Government-Bank Annual Business Plans and reviews so that necessary adjustments can be made and the Bank can continue to be relevant to Gabon’s needs. The Bank also will work with the cl ient on project design to mitigate the r isks that projects are approved but not made effective, thus affecting quality o f the portfolio.

I n addition to these country risks, two additional risks to successful CAS

11

s 8 U

M n

F

rc

Annex 2. World Bank CAS Program FY05-09

Portfolio (Base Case Scenario 4 projects, US$75 mn; H igh Case Scenario 6 projects, US$103 mn) Base Case

GEF grant (2006), US$lOmn 0

Local Infrastructure Development (2006), US$25 mn D P L l on Natural Resource Management (2006), US$15 mn

Infrastructure Project (Transport) (2008), US$25 mn

High Case 0

0

DPL2 on Natural Resource Management (2008), US$lO mn Diversification Project (2009), US$18 mn

. Analytical and Advisory Assistance Base Case 0 Support for E IT I

Investment Climate Assessment (2005)

Infrastructure Framework Report (2007) 0 Poverty Assessment (2009)

PEMFAR (public finance management) (2006)

High Case 0 Mining sector report (2007)

Institutional Development Grants (US$500,000 each) 0 HIV/AIDS

GPRSP Development o f parliament and civil society capacity

17

Annex 3. High Case Triggers Natural Resources Management DPL 2 (US%lO million) (FY08): Sustain and further deepen transparency and accountability in natural resources management Input: Mining Sector Report (FY07) CAS High Case Benchmark

Base Case performance satisfactory and significant progress on reforms in the natural resources sector

Full and effective abolition of SNBG export monopoly by January 2006, following the decision that was taken by Government to this effect in December 2004

Full implementation o f EITI as evidenced by publication of the reconciled reports o f payments and revenues reviewed by an independent administrator, as well as establishment o f an EITI compliant mechanism for civil society oversight (see Box 4)

Implementation

Accomplished

Reforms in natural resource sector enabled the DPL to become effective in May 2007.

Accomplished

The monopoly was abolished in May 2007 SNBG i s being restructured.

Substantially accomplished

Unexplained differences remain between the payments declared by oil companies and the receipts declared by the Government, and not a l l data submitted by oil companies were certified by independent auditors. However, Gabon i s one o f the very few countries in the world that has published two EITI reports.

Diversification operation (USS18 million) (FY09): This operation would act as an umbrella to promote diversification natural-resource-based and others) Inputs: Second and third phase o f the FIAS report, as v Base Case performance satisfactory and conditions to accelerate improvement in the business climate are met

Completion of the privatization o f Gabon Telecom as evidenced by the conclusion of a transfer agreement

Implementation o f FIAS first-phase main recommendations (see Box 1) on procurement and property rights:

(i) Regular publication of public procurement opportunities and contract awards, or implementing an equivalent measure to improve transparency in procurement proposed by the joint PEWCFAAICPAR; and

(ii) Clarifying procedures and reducing delays to secure definitive real estate titles, and informing the public of the revised procedures.

and job creation in non-oil sectors (both

11 as the Infrastructure Framework Report Not accomplished

Fully accomplished

Not accomplished

Some progress has been made. Subject to confirmation from the Cours Constitutionnelle, privatization of Gabon telecom i s completed. Also, there i s some progress on access to finance for SMEs through IFC and other donors, and the reduction of sole sourcing for government contracts, with the mid-term objective of limiting such contracts to less than 20% of total procurement. However, there are problems with the implementation o f the recommendations of the FIAS study, as the authorities found the report too generic for their needs.

18

Annex 4: Gabon and the Millennium Development Goals

MDG Goals Eradicate extreme poverty and hunger

Achieve universal primary education Promote gender equality and empower women

Reduce child mortality

Improve maternal health Combat HI V/AIDS, malaria and other diseases

Ensure environmental stability

Targets 1. By 20 15 Reduce the poverty level to less than the 1990 level

2. Halve the proportion o f people who suffer from hunger between 1990 and 2015

3. Ensure that by 2015, every child w i l l be able to complete a full course o f primary education

4. Increase by 2015 women’s participation in political decision- making

5. Reduce by 213 between 1990 and 20 15 the under-5 mortality ratio.

6. Reduce by 213 between 1990 and 20 15 the maternal mortality ratio.

7. Have halted by 20 15 and begun to reverse the spread o f HIVIAIDS

8. Have halted by 20 15 and begun to reverse the incidence o f malaria and other major urban diseases.

9. Integrate the principles o f sustainable development into country policies and programs and reverse the loss o f environmental resources

10. Increase access to safe drinking water

1 1. Improvement o f housing conditions by 20 15

Current situation Poverty has increased from 23 percent in 1993 to 33 percent ir 2005 and inequity remains high. The economic growth observed recent years i s not reflected on l iving standards o f populations. Recognizing these challenges, the Government completed a Growth and Poverty Reduction Strategy (GPRSP: which represents the government’s commitment to an integrated agenda o f structural reforms and poverty alleviation and has launched the implementation o f a MTEF consistent wi th the GPRSP to improve public expenditure allocations towards social sectors and infrastructure. Implementation o f th GPRSP should reverse the poverty rate trend. Literacy i s 94% due to broad access to primary education. N e t enrollment i s 92% (girls 93% and boys 92%). The repetition rate has reduced from 37% (1990) to 30 % (2005).

Overall, gender equity has improved. The girliboy ratio in primary education increased from 71% in 2000 to 83% in 2005. Women are obtaining greater access to assets and health services and institutions protect equal constitutional and legal rights for women. Women hold 12 o f 49 positions in the Government. The recent legislative elections have increased the number o f women parliamentarians. Infant mortality decreased: 155/1000 (1990); 60/1000 (2005) However immunization remains a matter o f concern. Only 63% o f children were immunized in 2005. The realignment o f health sector budget allocations toward prevention should allow the country to reach the target rate (22 per 1000) mortality by 20 1 5 . Reducing maternal mortality from 600/100,000 in 1990 to 150/100,000, means an annual average reduction o f 3%. It decreased on average only by 1,4% between 1990 and 2002. The HIV/AIDS prevalence remained at in 2004. The prevalence o f infection V IWSIDA therefore increased on average by 20%. The situation i s alarming since cities like Libreville and Port-Gentil crossed the fateful bar o f 8%. The malaria incidence rate decreased significantly between 2000 and 2005, from 16 to 5 . The tuberculosis prevalence rate has increased from 153/10,000 (200x) to 150/10,000 (1990) Gabon has undertaken significant efforts to protect i t s environmental resources: 10% o f the territory was gazetted as national parks in 2002; forest management plans are in preparation in about ha l f o f the production forest estate; the Government has committed to carry out environmental impact assessment before any new mining project; and to protect overharvested fishing zones (in the context o f the DPL). These efforts are s t i l l insufficient and need to be stepped up.

Access to safe water i s high (82.5%) in 2005 compared to 58 percent in 1990. 16% s t i l l use unsafe water for consumption.

8% o f Gabonese households s t i l l live in mecarious housinn.

19

Annex 5: Governance Indicators Country Snapshot (GRICS)

GABON Comparison w i th regional average (SubSaharan Afr ica)

Governnent Effectiveness

Regulatory Quality

Rule o f Lau

Control o f Corruption

0 25 58 Country's Percenti le Rank 18-188)

5 I 88

Source: Kaufmann 0.. A . Kraay, and 11. nas t ru r r i 2007: Governance Matters V I : Governance Ind icators f o r 1996-2006 Note: The governance ind icators presented here aggregate the vieus on the qua l i t y o f governance provided by a large number o f enterprisc. c i t i z e n and expert Survey respondents i n i ndus t r i a l and developing countr ies. These data are gathered from a number OF survey Ins t i t u tes , t h ink tanks, nun-governmental organizations, and in ternat ional organizations. The agereeate ind icators do nut r e f l e c t the o f f i c i a l views o f the World Bank, i t s Executive Directors, o r the countr ies they represent. Countries' r e l a t i v e pos i t ions on these ind icators are Subject t o indicated margins o f e r ro r t h a t should be taken i n t o consideration when making comparisons across countr ies and over time.

GABON Conparison With income category average (Upper f l iddle Ir

Voice and Accountability

P o l i t i c a l s t a b i l i t y

Governnent Effectiveness

Regulatory Quality

Rule of Lau

Control o f Corruption

I I 8 25 58

Country's Percenti le Rank (8-180)

ome > -

Source: Kaufmann 0.. R. Kraay, and M . nastruzzi 2007: Governance Flatters V I : Governance Indicators for 1996-2006 Note: The governance indicators presented here aggregate the views on the qual i ty o f governance provided by a large number o f enterprise, c i t i z e n and expert survey respondents i n i ndus t r i a l and developing countries. These data are gathered from a number o f survey inst i tu tes. th ink tanks, non-governmental organizations, and in ternat ional organizations. The aggregate indicators do not re f l ec t the o f f i c i a l view8 OF the World Bank, i t s Executive Directors, o r the countr ies they represent. Countries' r e l a t i v e pos i t ions on these indicators are subject t o indicated margins o f e r ro r t ha t should be taken i n t o consideration when making comparisons across countr ies and over t i ne .

20

Key Development I n d i c a t o r s

(2006)

Population, mid-year (millions) Surface area (thousand sq. km) Population growth (Oh) Urban population (% of total population)

GNI (Atlas method, US$ billions) GNI per capita (Atlas method, US$) GNI per capita (PPP, international $)

GDP growth (Oh) GDP per capita growth (%)

(most recent estimate, 2000-2006)

Poverty headcount ratio at $1 a day (PPP, %) Poverty headcount ratio at $2 a day(PPP. 56) Life expectancy at birth (years) Infant mortality (per 1,000 live births) Child malnutrition (% of children under 5)

Adult literacy, male (% of ages 15 and older) Adult literacy, female (Oh of ages 15 and older) Gross primary enrollment, male (Oh of age group) Gross primary enrollment, female (% of age group)

Access to an improved water source (% of population) Access to improved sanitation facilities (Oh of population)

Gabon

1.4 268 1.6 84

7.0 5,000 5,310

1.2 0 . 4

54 60 12

88 80

130 129

88 36

Sub- Saharan

Africa

770 24,265

2 3 36

648 642

2,032

5 6 3 2

41 72 47 96 29

69 50 98 86

56 37

Upper middle income

810 41,460

0 7 75

4,790 5,913

10,817

5 6 4 9

70 26

94 92

106 104

93 81

N e t A i d Flows

(US$ millions) Net ODA and official aid Top 3 donors (in 2005):

France Japan Canada

Aid (Oh of GNI) . Aid per capita (US$)

Long-Term Economic T r e n d s

Consumer prices (annual % change) GDP implicit deflator (annual % change)

Exchange rate (annual average, local per US$) Terms of trade index (2000 = 100)

Population, mid-year (millions) GDP (US$ millions)

Agriculture Industry

Services

Household final consumption expenditure General gov't final consumDtion 9xDenditure Gross capital formation

Exports of goods and services Imports of goods and services Gross savings

Manufacturing

1980

56

41 0 0

1 4 80

12 3 36 8

211 3

0 7 4,279

6 8 60 4 4 6

32 8

26 1 13 2 27 5

647 31 6

1990 2000

131 12

113 -1 5 0 -2 7 1

2.5 0.3 137 9

7 7 0 5 15 4 28 1

2723 7120 92 100

1 0 1 3 5952 5,068

(W of GDP) 7 3 6 2

43 0 563 5 6 3 7

49 7 37 5

49 7 32 2 134 9 6 21 7 21 9

460 69 0 30 9 32 7 24 2 41 7

2006

54

17 6 3

0 8 39

3 9 7 9

522 9 150

1 4 9,546

4 9 61 2 4 1

33 9

26 9 8 4

23 1

65 4 23 7 41 5

Age distribution, 2006 . Female

70-74 6 M 4

50-54 4 w

30-34

20-24

10-14

0.4

20 10 0 10 2c

percent

Under-5 mortality rate (per 1,000)

200 ~

180

140 120 100 80 60 40 20

0

i e o

1990 1995 2000 2005

I 3Gabon oSubSaharan Africa

Growth of GDP and GDP per capita (%) I 10

95 00 05

+GDP - GDP per capita

1980-90 1980-2000 200046 (average annual growth 96) 3 2 2 8 1 7 0 9 2 3 1 7

1 2 2 0 0 8 1 5 1 6 1 3 1 8 3 0 3 5 0 1 3 1 2 1

1 5 -0 3 2 4 -0 6 3 7 2 4 -5 7 3 0 2 5

3 0 2 1 -1 5 -2 4 0 1 -1 1

Note Figures in italics are for years other than those specified 2006 data are preliminary a Aid data are for 2005

Development Economics, Development Data Group (DECDG)

indicates data are not available

21

Gabon

Balance of Payments and Trade

(US0 millions) Total merchandise exports (fob) Total merchandise imports (cif) Net trade in goods and services

Current account balance

W o r k e k remittances and

as a % of GDP

compensation of employees (receipts)

Reserves, including gold

Central Government Flnance

(% of GDP) Current revenue (including grants)

Current expenditure

Overaii surplusldeficit

Highest marginal tax rate (%)

Tax revenue

Individual Corporate

External Debt and Resource Flows

(US% millions) Total debt outstanding and disbursed Total debt service Debt relief (HiPC, MDRi)

Total debt (% of GDP) Total debt service (56 of exports)

Foreign direct investment (net inflows) Portfolio equity (net inflows)

2000

3,188 960

1,043

1,001 19.8

6

192

33.5 10.4 18.7

11.7

50 35

3,920 352 -

77.4 9.9

-43 0

2006

6,054 1,878 3,234

1,718 18.0

6

1,068

31.7 10.3 16.8

9.2

50

3,045 714 -

31.9 11.3

323 0

Composition of total external debt, 2005

% B e8 Sh her muit

P""Bt* 22 era1 377

I \

Bilateral. 2 949

Private Sector Development

Time required to start a business (days) Cost to start a business (% of GNI per capita) Time required to register property (days)

Ranked as a major constraint to business (% of managers Surveyed who agreed)

n.a. n.a.

Stock market capitalization (% of GDP) Bank capital to asset ratio (36)

2000 2006

- 60 - 162.8 - 60

Governance indicators, 2000 and 2006

Voice and accountability

Political stability I Regulatory quality

Rule of law

Control of corruption

0 25 50 75 100

B2006 Countrys percentile rank (0-100) 02000 hfgher YSIUBS imply belterretmgs

Source K B U f m B n n - K r ~ B V - M B ~ ~ ~ , World Bank

Technology and Infrastructure 2000 2006

Paved roads (% of total) Fixed line and mobile phone

High technology exports subsuibers (per 1,000 people)

(% of manufactured exports)

9.9 10.2

125 498

6.5 14.5

Environment

Agricultural land (%of land area) 20 20 Forest area (% of land area) 84.7 84.5 Nationally protected areas (% of land area) .. 3.4

Freshwater withdrawal (% of internal resources)

CO2 emissions per capita (rnt)

Freshwater resources per capita (cu. meters) .. 118.511 0.1

1.2 0.91

GDP per unit of energy use (2000 PPP $ per kg of oil equivalent) 4.8 4.6

Energy use per capita (kg of oil equivalent) 1,212 7,243

(US% millions)

IBRD Total debt outstanding and disbursed Disbursements Principal repayments Interest payments

IDA Total debt outstanding and disbursed Disbursements Total debt service

64 22 9 1

13 8 5 1

IFC (fiscal year) Total disbursed and outstanding portfolio 0 5

of which IFC own account 0 5 Disbursements for IFC own account 0 5 Portfolio sales, prepayments and

repayments for IFC own account 0 3

MiGA Gross exposure New guarantees - -

Note: Figures in italics are for years other than those specified. 2008 data are preliminary. 11/27/07 .. indicates data are not available. -indicates observation is not applicable.

Development Economics, Development Data Group (DECDG).

22

Annex 7 Selected Indicators of Bank Portfolio Performance and Management

indicator 2006 2007 2008 Portfolio Assessment

Number of Projects Under Implementation a 2 2 2 Average Implementation Period (years) 0.6 2.1 2.3 Percent of Problem Projects by Number 50.0 50.0 50.0 Percent of Problem Projects by Amount a, 36.1 50.0 50.0

Percent of Projects at Risk by Amount 36.1 80.0 80.0

Portfolio Management CPPR during the year (yedno) No No No Supervision Resources (total US$) 68.9 143.36 21 5 Average Supervision (US$/project) 34.4 71.68 71.66 indicator 2006 2007 2008 Portfolio Assessment

Average Implementation Period (years) 0.6 2.1 2.3 Last Five

Memorandum item Since FY 80 FYs

Proj Eva1 by OED by Amt (US$ millions) 157.8 13.2 % of OED Projects Rated U or HU by Number 55.6 50.0 % of OED Projects Rated U or HU by Amt 60.3 60.1

Percent of Projects at Risk by Number a, 50.0 100.0 100.0

Disbursement Ratio (%) e 0.0 0.2 0.0

Number of Projects Under Implementation a 2 2 2

Proj Eva1 by OED by Number 9 2

a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. Average age of projects in the Bank's country portfolio. d. As defined under the Portfolio Improvement Program.

heginning of the year: Investment projects only.

23

Annex 8 CAS Annex B3 - lBRD1lDA Program Summary Gabon

As Of Date 0813012007

Proposed lBRD1lDA Base-Case Lending Program a

Strategic Implementation US$(M) Rewards b b Risks

(H/M/L) (H/M/L) Fiscal proj ID year

2009 GA-Road Infrastructure SIL (FYO9) 75

25 GA-Transport and Port Infrastructure 2009 . SIL2(FYO9) Total

H

H

M

M

24

U C m

rn S U S m

.-

3 z t U

a n 6 tn

U a, s E E 0 0

.-

Annex 10

CAS Annex 84 - Summary of Nonlending Services - As Of Date 08/30/2007

cost Product Completion FY (US$OOO) A udience' Objectiveb

Recent completions FlAS Investment Climate Assessment

PEMFAR

Underway Infrastructure Framework Report

Planned Country Economic Memorandum

2005 40 Government Knowledge Generating, Public Debate, Problem Solving

2006 161 Bank& Knowledge Government Generating

2007 20 Bank& Knowledge Government Generating

Problem Solving

2009 165 Bank& Knowledge Government Generating

a. Government, donor, Bank, public dissemination. b. Knowledge generation, public debate, problem-solving.

26

Gabon - Key Economic Indicators

Actual Estimate Projected Indicator 2003 2004 2005 2006 2007 2008 2009 2010 2011

National accounts (as YO of GDP) Gross domestic producta

Agriculture Industry Services

100 100 6 6

52 55 42 39

Total Consumption 52 46 Gross domestic fixed investment 24 24

Government investment 4 4 Private investment 20 20

~ x p o r t s (GNFS)~ Imports (GNFS)

55 61 31 32

Gross domestic savings 48 54 Gross national savings' 33 35

Memorandum items Gross domestic product 6055 7178 (US$ million at current prices) GNI per capita (US$, Atlas method) 3500 3920

Real annual growth rates (%, calculated from 91 prices) Gross domestic product at market prices 2.5 1.3 Gross Domestic Income 4.3 5.4

Real annual per capita growth rates (%, calculated from 91 prices) Gross domestic product at market prices 0.8 -0.2 Total consumption -2.7 -2.5 Private consumption -1.9 -2.3

Balance of Payments (US% millions) EXPUI~S (GNFS)~ 3350 4465

Merchandise FOB 3178 4234 Imports (GNFS)~ 1882 2299

Merchandise FOB 1042 1229 Resource balance 1468 2166

Current account balance 574 800

Net private foreign direct investment 269 328 Long-term loans (net) 530 585

Official -124 I O Private 654 575

Net current transfers -181 -175

100 5

61 34

33 23

4 18

67 23

67 42

8666

4370

3.0 14.8

1.4 -4.9 -8.4

5866 5648 2544 1417 3322

1714

-285 659

-146

Other capital (net, mcl enom & ommissions) - 133 8 - 152 1 - 1762 Change in reservesd -36 -192 -327

Memorandum items Resource balance (% o f GDP) 24.3 30.2 38.3 Real annual growth rates ( YR91 prices)

. Merchandise exports (FOB) 2.5 2.6 2.7 Primary Manufactures

Merchandise imports (CIF) 3.0 3 5 4.0

100 5

61 34

35 23

5 18

65 24

65 41

9546

5000

1.2 4.7

-0.4 6.6 5.2

6301 6033 3067 1703 3234

1718 -165

-16 509

96 1 -1847

-452

-364

33.9

-5.8

1.8

100 5

57 37

45 25

5 20

61 31

55 41

10126

6060

5.6 1.6

3.9 14.8 15.7

6362 6028 3744 2086 2619

-97 1202

88 -435 -468

33 -524 -333

25.9

-8.0

0.2

100 5

58 37

43 25

5 21

62 31

57 41

I1085

6400

4.2 10.2

2.6 7.4 8.7

7077 6704 4092 2287 2984

1380

41

-96

-466 -476

I O -802 -152

26.9

-7.3

0.6

100 5

57 38

44 26

5 22

61 3 1

56 41

11718

6700

4.3 6.9

2.7 7.4 8.3

7330 6934 4295 2406 3035

-94 1350

49 -478 -473

-5 -703 -218

25.9

-8.8

0.9

100 100 6

55 39

45 28

5 24

59 32

55 38

12128

6860

3.5 -100.0 3.1

1.9 6.5 1.3

7213 6792 4501 2526 2712

-93 1046

62 546

-268 814

-184 -1470

22.4

27

Gabon - Key Economic Indicators (Continued)

Actual Estimate Projected Indicator 2003 2004 2005 2006 2007 2008 2009 2010 2011

Public finance (as % of GDP at market prices)e Current revenues 30.2 Current expenditures 17.8 Current account surplus (+)or deficit (-) 12.4 Capital expenditure 3.7 Foreign financing -3.7

Monetary indicators M2iGDP Growth o f M2 (%) Private sector credit growth / total credit growth (%)

Price indices( YR91 =loo) Merchandise export price index Merchandise import price index Merchandise terms o f trade index Real exchange rate (US$/LCU)f

Real interest rates Consumer price index (% change) GDP deflator (% change)

16.8 -1.2

146.0

94.8 123.4 76.9

105.7

2.1 -0.1

30.1 31.4 17.3 17.3 12.8 14.1 4.2 4.3 2.4 -2.0

17.4 18.2 11.6 26.0 30.8 581.7

120.0 158.3 141.5 147.5 84.8 107.3

104.6 99.5

0.4 0.0 6.3 17.0

31.7 16.6 15.1 4.8

-3.4

19.6 17.4 0.0

119.7 165.0 108.9 103.5

3.9 7.9

31.2 31.0 30.6 30.4 15.1 13.9 13.4 13.2 16.1 17.1 17.2 17.2 4.7 4.4 4.4 4.5

-3.9 -3.9 -4.2

21.9 21.7 22.2 23.1 14.1 8.3 7.7 7.0 0.0 0.0 0.0 0.0

198.4 235.9 268.1 192.6 193.3 234.0 103.0 122.0 114.6

a. GDP at market prices b. "GNFS" denotes "goods and nonfactor services." c. Includes net unrequited transfers excluding official capital grants. d. Includes use o f I M F resources. e. Consolidated central government. f. "LCU" denotes "local currency units." An increase in US$/LCU denotes appreciation

28

Gabon - Key Exposure Indicators

Actual Estimate Projected Indicator 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total debt outstanding and 3792 4150 3902 3045 2520 1996 1510 1234 989 disbursed (TDO) (US$m)a

Net disbursements (US$m)a

Total debt service (TDS) (US$m)a

Debt and debt service indicators

TDO/XGS~ TDO/GDP TDS/XGS Concessional/TDO

IBRD exposure indicators (%) IBRD DS/public DS Preferred creditor DS/public DS (%)' IBRD DS/XGS IBRD TDO (US$mld

Of which present value of guarantees (US$m)

Share of IBRD portfolio (YO) IDA TDO (us$mld

112.7 92.3 66.1 48.0 39.4 28.1 20.5 17.0 62.6 57.8 45.0 31.9 24.9 18.0 12.9 10.2

25.7 20.1 17.7 15.2 13.5 11.2 7.3 6.2

2.1 8.0 1.4 1.3 0.9 33.6 53.7 .. 13.8 15.9 14.5

0.2 0.4 0.1 0.2 0.1 0.1 0.1 0.0 49 38 30 22 14 9 5 4

0 0 0 0 0 0 0 0

5.1

2

0

IFC (US$m) Loans Equity and quasi-equity /c

MIGA MIGA guarantees (US$m)

a. Includes public and publicly guaranteed debt, private nonguaranteed, use of IMF credits and net short-

b. "XGS" denotes exports of goods and services, including workers' remittances. c. Preferred creditors are defined as IBRD, IDA, the regional multilateral development banks, the IMF, and the

Bank for International Settlements. d. Includes present value of guarantees. e. Includes equity and quasi-equity types of both loan and equity instruments.

term capital.

29

0 M

CCrr

yyss

ttaa

llMM

oouu

nntt

aaii

nnss

Chai l lu Chai l luMassi fMassi f

Mt. BirougouMt. Birougou(1190 m)(1190 m)

N YN YA N G AA N G A

NGOUNINGOUNIÉÉ

O G O O UO G O O U ÉÉ - L O L O- L O L O

O G O O UO G O O U ÉÉ --M A R I T I M EM A R I T I M E

MOYEN-MOYEN-OGOOUOGOOUÉÉ

O G O O UO G O O U ÉÉ - I V I N D O- I V I N D O

W O L E U - N T E MW O L E U - N T E M

HAUTHAUT-OGOOU-OGOOUÉÉ

E S T U A I R EE S T U A I R E

OvendoOvendo

NdendNdendéé

MbigouMbigou

NdjolNdjoléé BoouBoouéé

MitzicMitzic

MMéékambokambo

EkataEkata

OkondjaOkondja

LLéékonikoni

MinvoulMinvoulBitamBitam

KangoKango

OyemOyem

MouilaMouila

MasukuMasuku

MakokouMakokou

TTchibangachibanga

LambareneLambarene

KaulomoutouKaulomoutou

N YA N G A

NGOUNIÉ

O G O O U É - L O L O

O G O O U É -M A R I T I M E

MOYEN-OGOOUÉ

O G O O U É - I V I N D O

W O L E U - N T E M

HAUT-OGOOUÉ

E S T U A I R E

Ovendo

Omboué

Iguéla

Mayumba

Ndendé

Mbigou

Ndjolé Booué

Mitzic

Mékambo

Ekata

Okondja

Lékoni

MinvoulBitam

Kango

Oyem

Mouila

Masuku

Makokou

Tchibanga

Lambarene

Kaulomoutou

Port Gentil

LIBREVILLE

CABINDA

(ANGOLA

)

CONGO

CONGO

CAMEROON

EQUATORIAL

GUINEA

Ivindo

Ogooué

Nyanga

Ngounié

Aba

nga

Mvo

ung

Okano

Djoua

Ivin

do

Sébé

Ogooué

Offo

ué

ATLANTICOCEAN

Lac Onangué

LaguneNkomi

LaguneNdogo

To Makoua

To Zanaga

To Kayes

To Loubomo

Cr

ys

ta

lM

ou

nt

ai

ns

Chai l luMassi f

Mt. Birougou(1190 m)

10°E 12°E 14°E

10°E 12°E 14°E

2°N

0°

2°S

4°S

2°N

0°

2°S

4°S

GABON

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 40 80

0 20 40 60 80 100 Miles

120 Kilometers

IBRD 33408

SEPTEMBER 2004

GABONSELECTED CITIES AND TOWNS

PROVINCE CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

PROVINCE BOUNDARIES

INTERNATIONAL BOUNDARIES