AfDB NEWS & EVENTS
Woman trader of SOTRADER Agriculture Products
1. The African Development Bank has just approved a EUR 100.5 million loan as budget support to help tackle COVID-19. What does it mean to the government and people of Gabon?
A friend in need is a friend indeed: Gabon is faced with a double crisis of COVID-19 and fall in oil prices, the main source of income of the country. For the Bank to deliver this loan now means a lot, as the country’s battered public finances will immediately receive much needed budget support to mitigate the impact of the pandemic. The loan will boost the health sector, help to sustain livelihoods and shore up domestic business and industry to maintain the production system and pave the way for rapid recovery.
It also sends a message that the Bank is confident in the medium term prospects of the country. With a total loan portfolio approaching USD 1 billion, Gabon has consistently been amongst the top five clients of the Bank, with projects in port infrastructure, agriculture, water, education to name a few.
2. What priority areas is this loan package targeting?
COVID-19 is exerting strong pressure on Gabon’s national health system as well as its oil-dependent economy. The Bank financing will go towards the three pillars of Gabon’s “Kill COVID-19” program, namely 1) the medical response – the acquisition of much needed medical equipment and the scaling up of testing and contact tracing, 2) the social response – food bank, payment of electricity and water bills for the poor, and 3) the economic response – Small and Medium-sized Enterprise (SME) guarantees and financing.
3. Looking ahead, what possible additional areas of support may be required? How will this affect Gabon’s relationship with the Bank?
In addition to the budget support, the Bank is working on an $20 million agriculture emergency program, focused on shoring up the production of bananas and cassava, the country’s staple food. Currently, Gabon imports much of what its population eats. With the closing of the borders due to COVID-19, self-sufficiency has become an imperative. In addition, the Bank is accelerating the execution of its existing projects, notably its EUR 120 million water project that will ensure access to water for 70% of the population and improve sanitation – a critical component of the fight against COVID-19.
Gabon has historically been one of the Bank’s largest customers. The interventions of the Bank have ranged from infrastructure, public finance management, education, water & sanitation, agriculture and environment.
Since 1976, the Bank has approved a total of 57 operations in Gabon for a cumulative amount of more than more than 1.365 billion CFA francs. The total outstanding commitments amount to approximately 536 billion CFA francs, and includes 15 operations distributed in the sectors of governance (57%), agriculture (14%), water and sanitation (14%), social (10%), and transport (5%).
4. Can you tell us about the Bank's relationship with Gabon and how its response to COVID-19 is helping to strengthen ties, and will impact the Bank's future engagement
The African Development Bank is the first amongst the regional development banks and bilateral partners to have responded positively to Gabon’s call for support, providing 100 million euros in financing. In view of the urgency, the Bank simplified its procedures, allowing the financing to be made available in less than two months.
The Bank’s response has underlined its determination to enhance its close collaboration with Regional Member Countries in difficult times. The level of collaboration and cooperation that has led to this package has been remarkable, helping to ensure that the gains of the last 5 years, such as the NKOK – the special economic zone that has been a game changer in the wood forestry transformation and diversification of the Gabon economy - are not lost.
Gabon has historically been one of the Bank’s largest customers. The interventions of the Bank have ranged from infrastructure, public finance management, education, water & sanitation, agriculture and environment.
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