BMI View: The government's ambitious investment plans are likely to be undermined by growing fiscal pressure. A combination of falling oil revenues, from lower production and prices, and higher social spending has pushed the government's fiscal balance into deficit, with infrastructure investment likely to be hit. As such, we hold a tempered outlook for growth, although r emaining positive over the five- year horizon.
Gabon's small construction industry size, combined with a number of large projects should sustain growth in positive territory over the five-year horizon, with annual average growth of 5.1% anticipated. However, given the small size of the sector, combined with a substantial project pipeline, this growth rate is far below potential. Numerous problems that need to be overcome to secure investment, including improving flows of capital from the government into projects, addressing deep-rooted corruption and attracting private capital, and as such we believe growth will be far lower than potential over the medium term. This is exacerbated by the country's fiscal position - we anticipate capital spending will fall 20% in 2014 and the country will enter a fiscal deficit. In June, the government cut 2014 spending plans from XAF3,335bn (USD683mn) to XAF2,954bn, indicating capital investment is at risk of further cuts if the fiscal position deteriorates.
This development is concerning given that the main driving force behind construction sector growth in Gabon had expected to be the government's USD25bn infrastructure masterplan, including USD14.1bn for transport infrastructure. The plan was formulated in cooperation with Bechtel, which was hired in 2010 to manage and advise the National Infrastructure Agency - l'Agence Nationale des Grands Travaux (ANGT). Bechtel is contracted to work on the programme through to 2016, with the potential to extend the contract. The plan includes 114 projects across the social and economic infrastructure sphere.
The Gabon Infrastructure Report features Business Monitor International (BMI)'s market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Gabon Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Gabonese infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Gabon to test other views - a key input for successful budgetary and planning in the Gabonese infrastructure market.
- Target business opportunities and risks in the Gabonese infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Gabon.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant multinational and national company developments.
These are broken down into Construction (social, commercial and residential), Transport (roads, railways, ports, airports etc), and Energy & Utilities (powerplants, renewable projects, pipelines and so on).
Analysis of latest projects across the infrastructure sector (covering the transport, utilities and commercial construction sub-sectors) - including:
Market Overview:Analysis of the key elements driving developments, including evaluations of current capacity and future requirements.
Building Materials Overview
The building materials overview provides industry trend analysis on the global and regional demands for building materials and the impact of this on the emerging and developed markets.
Business Environment Rankings
BMI's Infrastructure Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (construction companies, suppliers and partners) in the regional infrastructure market.
The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data point.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry & Economic Forecasts
Historic data series (2008-2012) and forecasts to end-2018 for all key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecast. Indicators include:
Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%).
Infrastructure: Value (US$bn); contribution to construction industry (%); real growth (%) of transport infrastructure (broken down by railways, airports, roads and bridges, ports and harbours) and energy and utilities (broken down by power plants and transmission grids, oil and gas pipelines, and water infrastructure).
Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$).
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.