Gabon: success of the international fundraising, failure in the regional market

The Gabonese authorities present this fundraising as a sign of renewed investor confidence in the country. Analyst Cédrick Jiongo, a specialist on Gabon, believes that this success is mainly due to an international context that favors African sovereign issuances.

“There has been an opportunity window in the markets since the beginning of the year,” he explained. Geopolitical tensions and ongoing questions about the independence of the U.S. Federal Reserve have led some investors to redirect part of their investments towards African sovereign funds.

Several countries on the continent, including Benin, Cameroon, Ivory Coast, Congo, the Democratic Republic of Congo, and Kenya, have recently succeeded in bond issuances. Gabon has thus benefited from a dynamic that has facilitated access for African economies to international markets.

A Regional Market on the Brink

The situation has been markedly different in the regional market. Among the six categories of securities and bonds offered by Gabon, only one attracted investors, for an amount less than 90,000 dollars.

According to Cédrick Jiongo, this failure does not directly reflect the economic situation in Libreville. It rather indicates the current difficulties of the public securities market of the Central African Economic and Monetary Community, managed by the Bank of Central African States.

This market has reached a saturation level, according to the analyst. More than 70% of the securities are held by banks, whose capacity to intervene in new borrowing operations is now highly limited.

Banking institutions in the region also face liquidity constraints and an accumulation of public securities. Under these conditions, international issuances offer Gabon a greater depth of market than the regional segment.

The financial partners of Gabon are now awaiting the conclusions of the general debt audit. A mission from the International Monetary Fund is scheduled for September to assess the country’s situation and examine the conditions for a possible future program.