Bloomberg | 15 August 2010
By Paul Richardson and Antoine Lawson
Gabon signed accords with three Asian companies to build infrastructure and develop palm-oil and lumber projects that are expected to generate at least $4.5 billion of investment in the country, officials said.
The programs, which may create 50,000 jobs, are part of President Ali Bongo Ondimba’s plans to diversify the nation’s economy, the presidency said in an e-mailed statement today from the capital, Libreville.
“Our objective is to diversify the economy to prepare for the post-oil era using sustainable projects,” Christian Nkero Capito, an adviser to Economy Minister Magloire Ngambia, said in a phone interview today.
Bongo came to power in Gabon in September in elections that followed the death of his father, Omar Bongo, who had ruled the nation for 42 years. The 51-year-old leader wants to diversify the country’s economy amid declining oil production. The agreements were signed yesterday, three days before the country celebrates its 50th anniversary of independence from France.
The accords include a plan to develop a special economic zone at Nkok, 27 kilometers (17 miles) east of Libreville, with Olam, the Singapore-based commodity trader. The so-called SEZ will have the capacity to process 1 million cubic meters (35.3 million cubic feet) of timber annually. The SEZ is being developed at a cost of at least $100 million and is expected to draw in $1 billion of investment, the presidency said.
Olam will also help develop a palm-oil plantation covering as much as 300,000 hectares (741,316 acres) in the southeast of the country, the presidency said. The project will include the construction of a palm-oil refinery and the possible development of a port at Mayumba, giving the project a total cost of $1.8 billion, Capito said.
Gabon plans to become Africa’s biggest producer of the edible oil, according to the statement. It didn’t say where Gabon currently ranks.
“The development of the palm oil industry will eventually bring in $800 million of export revenue per year,” the presidency said.
An agreement was also signed with M3M India Ltd., a real- estate developer, to build 5,000 low-cost housing units over the next two years, it said. Other infrastructure may include the development of Gabon’s seafront on the Atlantic coast and the construction of a resort city near Libreville, Capito said. The total cost of these projects will be $1.1 billion, he said.
Ramky Infrastructure Ltd., an Indian construction company, will build 1,000 kilometers of tarred road over the next three years in a $1.5 billion project that will be jointly financed by the Gabonese government, Capito said.
Gabon, with a population of 1.5 million people, is sub- Saharan Africa’s fifth-biggest oil producer and the world’s fourth-largest producer of manganese, which is used to strengthen steel, according to the U.S. Geological Survey. In 2007, the country sold $1 billion of Eurobonds in 2007.
Oil production in Gabon declined to an estimated 229,000 barrels a day last year from 340,000 barrels a day a decade earlier, according to the BP Statistical Review of World Energy.To contact the reporters on this story: Antoine Lawson in Libreville via Johannesburg at [email protected]; Paul Richardson in Johannesburg at [email protected]