The Republic of Gabon delayed in the settlement of its international debt, both on trade and bilateral, we learn from information published on 31 July by the credit-rating agency Standard & Poor’s. The amount in question for this delay was of FCfa 18 billion (about USD 29 million) and represents less than 1% of the total debt of the country.

The question was finally sorted out in a period of 30 days. “The arrears came about due to a problem of coordination between the administration in charge of managing the debt and the ministry of Finance and not from the inability of the country to settle its debt”, reported S&P, quoting the Gabonese leaders. The credit-rating agency nevertheless fears the possibility of recurrence of this type of situation, which would lead Gabon to be in default.

It has, consequently, downgraded the perspectives of the country from stable to negative. The agency indicated having noted the fact that Gabon has taken measures in order to avoid a situation of arrears, but also taking into account that the country is severely touched by the drop in the oil price which accounts for 44% of its public revenues, 80% of its exports and 25% of its GDP.

Notwithstanding this, S&P maintained the ratings of B+ and B respectively on the long term and short term, explaining that the country has made significant effort to diversify its economy. But the macro-economic indicators are in the red and the GDP growth in dollars should decrease to USD 14.3 billion, from USD 18.4 billion in 2014. At the same time, the public deficit is forecast at 10% of GDP and, to finance it, the government might have to contract another debt, bringing the global indebtedness volume to 38% of GDP in 2015, against 28% in 2014.

The government, as part of the corrective finances law, adopted the principle of raising salaries. A decision met with diverse reactions in Gabon, where some think that it will only affect civil servants, with the risk of seeing those who will not benefit from the raise to suffer from the inflation on prices in the market. Incidentally, S&P fears this will create another wave of demonstrations in the country.