The structure of the Gabonese economy in2014 reveals a strong dominance of services which accountfor 57.8 percent of real gross domestic product (GDP),followed by oil industry (20.6 per cent), other industries(15.4 per cent), and agriculture (6.3 per cent). Followinglower oil revenues, from reduced prices and production, andlower non-oil revenue, the government reduced publicexpenditure from 26.7 percent of GDP in 2013 to 23.6 percentin 2014. Despite this, both government wages and salariesand goods and salaries increased leaving public investmentto bear much of the brunt of the expenditure cuts resultingin only half of planned public investment being realized. Inresponse to declining oil prices, the government adjustedthe initial 2015 budget and revised the revenue assumptions.To cope with the financing gap, the government successfullyissued a Eurobond of United States (U.S.) 500 milliondollars in June 2015 with a maturity of ten years at a rateof 6.95 percent. Gabon has stated its intention to introducea modern social protection system, however it has not yetreached the objectives set by the government. It still facesfive major challenges to be addressed: (i) a lack of data;(ii) coordination of the system; (iii) ensuring fiscalsustainability; (iv) effective targeting of beneficiaries;and (v) building lesson-learning into policy. To meet thesechallenges the authors recommend focusing on the following:(a) deepen the analysis of poverty and vulnerability; (b)conduct an institutional audit; (c) formulate a deploymentplan; and (d) simulate roll-out options.
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