Gabon obtains support for additional finance and local debt reprofiling

Gabon’s public accounts ministry announced on Monday that the Central African oil producer has the support of about ten financial institutions to prolong the maturities of regional market debt and obtain new funding.

In a vote earlier this month, Brice Oligui Nguema was elected president of Gabon, ending a year and a half of political unrest after leading a coup against former president Ali Bongo.

A severe liquidity shortage has made Gabon more dependent on regional capital markets to cover its funding needs. In January, the World Bank suspended its payments to Gabon due to growing arrears.

According to the public accounts ministry, the scheme would increase the average maturities of treasury bills worth 592 billion CFA francs ($1 billion) from 2.3 to 6 years through “voluntary exchanges with banks.”

Additionally, it will open up access to 338 billion CFA francs in new funding and convert 473 billion CFA francs of short-term government loans into government securities.

“The Republic of Gabon wanted to significantly improve the profile of its public debt, reduce the refinancing risk of its outstanding debt, and thus increase its room for manoeuvre in the medium term,” the ministry stated in a press release.

According to the ministry, the entire amount of Gabon’s outstanding domestic debt in February was 2.196 billion CFA francs, of which 1.741 billion were issued on the regional Central African market with short-term maturities.