VZCZCXRO7626
RR RUEHBZ RUEHGI RUEHMA
DE RUEHLC #0023/01 0140538
ZNR UUUUU ZZH
R 140538Z JAN 10
FM AMEMBASSY LIBREVILLE
TO RUEHC/SECSTATE WASHDC 1627
INFO RUEHBZ/AMEMBASSY BRAZZAVILLE 0917
RUEHYD/AMEMBASSY YAOUNDE 1032
RUEHMA/AMEMBASSY MALABO
RUEHGI/AMEMBASSY BANGUI 0046

UNCLAS SECTION 01 OF 02 LIBREVILLE 000023 
 
SENSITIVE 
 
SIPDIS 
 
DEPARTMENT FOR AF/EPS AND EEB/OMA 
 
E.O. 12958: N/A 
TAGS: ECON GB
SUBJECT:  GABON: ECONOMIC TRANSPARENCY UPDATE 
 
REF: STATE 1923 
 
¶1.  (SBU) Summary: Gabon's new President, Ali Bongo Ondimba, 
announced bold economic reforms upon taking office in October 2009. 
His ambitious agenda is aimed at jump-starting the country's 
deteriorating economy and changing the way business is done in Gabon 
to attract investors.  Anti-corruption is a centerpiece of his 
program to help Gabon emerge from decades of political and economic 
malaise.  This change in political will is significant and has 
created opposition from entrenched interests.  Bongo continues to 
move forward with efforts for Gabon's inclusion in the Extractive 
Industries Transparency Initiative (EITI).  Bongo's reforms are a 
sharp departure from the first half of 2009 and we expect that there 
will be more to come.  End Summary. 
 
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WHERE THERE'S A WILL, THERE'S A WAY 
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¶2.  (U) President Ali Bongo Ondimba's emphasis on transparency has 
taken many by surprise.  His activism ends a long period of malaise 
that set in following the death of the former First Lady in March, 
followed by President Omar Bongo's death in June.  The government 
respected the Constitution, put an interim government in power, and 
held a presidential election on August 30.  The Constitutional Court 
heard challenges to the results, which were not confirmed until 
mid-October.  In his inaugural speech on October 16, President Ali 
Bongo Ondimba characterized his economic plan for Gabon as that of 
an "emerging" country in need of aggressive "green" development, 
industrialization, and services.  Bongo is determined to upgrade to 
the country's industries, consolidate public finances, and establish 
a climate of justice, merit, and excellence.  To begin the process, 
Bongo started a complete reorganization and restructuring of Gabon's 
public administration and private sector.  The weekly Council of 
Ministers meeting notes, published in the newspaper, became "must 
read" articles as Bongo's agenda was laid out, new officials were 
put in place, requirements for the declaration of assets by public 
officials were put in place, and corruption probes and arrests of 
corrupt officials were announced. 
 
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AMBITIOUS ANTI-CORRUPTION AGENDA 
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¶3.  (U) One of Bongo's top priorities is to reverse the fact that 
Gabon has not historically been attractive to American investors. 
Corruption, complicated and disadvantageous fiscal regulation and 
administration, inefficiency, and punitive tax laws have made the 
country a hard sell to would-be suitors.  President Bongo announced 
and is implementing several immediate reforms, including: 
 
--Reducing the number of ministers and advisers of the cabinet, and 
requiring a complete evaluation of their work every three months. 
 
--Reducing salaries of all state-owned company directors. 
 
--Requiring all administration workers to declare their assets. 
Government officials will report their wealth to the National 
Commission to Fight Illicit Enrichment. 
 
--Mandating 40 percent of each Gabonese ministry budget to be 
"invested." 
 
--Redefining the 2009 budget and drafting the 2010 budget. 
 
--Launching a complete audit of the government's human resources on 
November 26.  The main objective of the census is to enhance 
government efficiency and eliminate corruption within the 
bureaucracy.  The last government review was done in 2000.  In 2006, 
the number of Gabonese civil servants was 58,813 with a total wage 
bill of $850 million.  Bongo also has undertaken the census to 
redeploy civil servants to underserved ministries. 
 
--Public Review of the Budget.  During a government-wide retreat in 
early November, Bongo re-opened the 2010 budget for debate and 
discussion.  The budget has been scrubbed and priorities changed 
with a focus on encouraging investment and the development of 
value-added industries.  Legislative debate on the budget is open to 
the public and receives wide press coverage.  The budget is publicly 
available on the internet. 
 
--Actions Against Corrupt Officials.  Bongo announced the recall of 
the Gabonese Governor of the Central Bank of Central African States 
(BEAC) and arrests of Gabonese officials in his first Council of 
Ministers meeting.  Bongo recalled Governor Phillip Azembe in the 
wake of revelations about an $82 million financial scandal.  Two 
 
LIBREVILLE 00000023  002 OF 002 
 
 
other Gabonese officials implicated in the scandal and closely tied 
to former President Omar Bongo, were arrested in Libreville on 
October 20.  Other Central African heads of state postponed Azembe's 
replacement until the next BEAC meeting in January.  Bongo pledged 
full cooperation with French investigators.  Bongo also forced his 
Chief of Staff Jean Pierre Oyimba, and former BEAC officials, to 
resign in the wake of corruption allegations.  Bongo's swift action 
against the corrupt officials sent a clear signal that he intends to 
implement changes at home and maintain Gabon's stature in the 
region. 
 
¶4. (U) In addition, President Bongo recognizes the importance of the 
Extractive Industries Transparency Initiative (EITI) report.  In 
October, the Government put out an international open bid for 
consulting firms to assist it in finalizing Gabon's 2009 report. 
The Norway International Cabinet was selected for its expertise on 
the issue.  A consultant arrived in December to complete the process 
and work with the Government on its final report for publication in 
early 2010.  A critical reason why Gabon chose an international 
consultant to help to finalize the EITI report is to prove to the 
international community its willingness to meet all the criteria 
through a public and transparent process.  Gabonese authorities also 
provided an update about the report's publication date via the 
internet on its page dedicated to the budget. 
 
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CHANGING BUDGET PRIORITIES 
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¶5. (U) President Bongo sent the revamped 2010 budget to the Gabonese 
National Assembly on December 14, 2009.  It included a 26% increase 
from the 2009 budget.  The budget total for 2010 is $4.6 billion. 
The public budget debate began in the National Assembly on December 
30, 2009.  The budget is available on the internet.  Government 
revenues are: $2 billion coming from oil revenues, $1.7 billion from 
non-oil revenues and $8.7 million from international grants/loans. 
 
¶6. (U) The majority of the 2010 budget will be spent on paying 
salaries, servicing debts and paying for planned investments to 
boost and diversify the economy.  The cost to fund the 50,000 
Gabonese civil servants will rise to $836 million.  Reducing wage 
costs in the bloated administration is the primary reason behind the 
audit.  Debts will cost the government $967 million in 2010, with 
$267 million set aside for servicing debts and $696 million spent on 
capital repayments. 
 
¶7. (U) President Bongo's investment plan includes improving road, 
housing, and communications infrastructure.  As a result, capital 
spending in 2010 will be $1.95 billion, with $435 million ear-marked 
for current projects and the remaining $1.52 billion due to be 
invested in new projects. 
 
¶8.  (U) Bongo's reforms continue to be announced.  The World Bank, 
International Monetary Fund, and other economists say it is too 
early to pass judgment on their effectiveness. 
 
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COMMENT 
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¶9. (SBU) It is critical that Gabon be considered for a transparency 
waiver for 2010 to demonstrate our support for the unprecedented 
political and economic changes the new President set in motion after 
the death of Africa's longest serving head of state.  President Ali 
Bongo Ondimba's reforms represent a significant departure from the 
way business had been conducted for decades.  Gabon plays an 
important role as a regional mediator and has peacekeeping troops in 
Central African Republic.  Gabon is a key player in maritime 
security efforts in the Gulf of Guinea and the Economic Community of 
Central African States (CEEAC), which is headquartered in 
Libreville.  In September, a Presidential Determination found it was 
in our national interest to support CEEAC's regional efforts.  We 
will be looking at Gabon to play a moderating role on the U.N. 
Security Council, which it joins this month for a two-year term. 
REDDICK