Gabon, one of Africa’s few international borrowers, has been rocked by a coup that ended the 56-year-long rule of the Bongo family. The coup, which took place on August 30, shortly after President Ali Bongo was declared the winner of the general election, was led by a group of senior military officers who called themselves the Committee for the Transition and Restoration of Institutions. They announced the annulment of the election results, the dissolution of state institutions, and the closure of all borders for three days. They also appointed General Brice Clotaire Oligui Nguema as the transitional president and promised to hold new elections in 2025.
The coup surprised many observers and investors, as Gabon had been seen as a stable and reliable ally of France in the region. Gabon is a member of OPEC and one of Africa’s major oil producers, accounting for 60% of its national revenue. It also has one of the highest per-capita GDPs on the continent but faces serious socioeconomic challenges, such as poverty, unemployment, and corruption. Bongo, who had been in power since 2009 following the death of his father, Omar Bongo, had faced accusations of electoral fraud and nepotism, as well as health problems that raised questions about his ability to govern.
The coup triggered a brief sell-off in Gabon’s dollar debt, which plunged to record lows, sending the yield on notes due in 2025 to as high as 20%. It also sparked fears of contagion in neighboring countries, such as Cameroon and the Republic of Congo, where aging rulers preside over oil-exporting economies bound by a currency union. However, the market reaction proved short-lived, as higher oil prices provided a firewall to contagion, and the threat of regional sanctions against Gabon receded. The yield on Gabon’s bonds has since come down to 14%, approaching this year’s average of around 11%.
The new leadership in Gabon has vowed to honor the nation’s debt commitments and boost investment in its economy. In a speech delivered on September 28, General Oligui Nguema said that he would implement economic reforms to diversify the economy away from oil dependence, improve public services, and fight corruption. He also said to seek dialogue with all political parties and civil society groups to ensure a peaceful and democratic transition. He thanked France and other international partners for their support and cooperation.
The coup in Gabon is the eighth successful coup to occur in West and Central Africa since 2020, reflecting the growing political instability and social discontent in the region. However, some analysts argue that coups can also be an opportunity for positive change and reform, especially when they are backed by popular demand and followed by credible elections. For example, Sudan and Mali have seen some progress in their democratic transitions after ousting their authoritarian leaders through military interventions. Whether Gabon will follow a similar path remains to be seen.
Source: Bloomberg
