Fitch Downgrades Gabon’s Issuer Default Ratings
Fitch Ratings has downgraded Gabon’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to ‘CCC-‘ from ‘CCC’ and Long-Term Local-Currency (LTLC) IDR to ‘CC’ from ‘CCC’.
The downgrade of Gabon’s IDRs reflects the country’s heightened liquidity strains, tight local debt market, and wide fiscal deficit among others.
Ratings analysts said widening fiscal deficits, increasingly limited regional debt market access, a dearth of official creditor financing and high amortisations have resulted in severe strains on domestic and external government liquidity and rising arrears.
Fitch highlighted that the significantly higher local-currency funding needs and greater strains in local-currency financing conditions explain the differential between the Local- and Foreign-Currency IDRs.
Due weak macroeconomic condition and uncertainties, appetite for government debt on the CEMAC regional debt market has weakened substantially, particularly since 2H24.
Fitch said most of Gabon’s financing in the regional market this year took place in 1Q25, benefiting from a 0% risk weighting granted by the bank regulator, COBAC.
Since preferential treatment ended, analysts noted that demand for Gabonese bonds has been declining. Several auctions in 2025 had bid/cover ratios below 50%.
The government is facing local-currency amortisations of 8.0% of GDP in 2026 and 7.2% in 2027, compared with external amortisations of 2.8% of GDP and 2.6% of GDP, respectively.
The significant increase in Gabon’s stock of regional debt in 2025, which was 61.0% between January and August, points to a substantial widening of the fiscal deficit in the absence of official data.
Ratings analysts forecast a deficit of 6.1% of GDP (on a commitment basis) for the year, compared with 3.7% in 2024.
Fitch said this is in line with the loosening of Gabon’s fiscal stance since the regime change in August 2023, driven by the new leadership’s focus on greater government spending to meet social pressures.
“We expect the government to accumulate arrears of 2.0% of GDP as a source of financing, translating into a cash deficit of 4.1% of GDP in 2025”.
Fitch expects fiscal deficits on commitment basis of 4.1% in 2026 and 4.4% in 2027.
This will reflect lower expenditure capped by more challenging financing conditions in the regional market, offsetting an oil-driven decline in government revenue.
Fitch expects the government to accumulate arrears of 2.2% of GDP in 2026 and 2.1% in 2027, translating into cash deficits of 1.9% of GDP and 2.3%, respectively.
The country’s liquidity pressures are apparent in the recent accumulation of external arrears. Between December 2024 and September 2025, arrears to official creditors increased by 0.7% of GDP, and bilateral borrowing jumped to 0.5% of GDP and 0.2% for multilaterals.
“These external arrears undermine access to significant new official sector financing. We expect domestic arrears to suppliers, which were 13.2% of GDP at end-2024, to have increased in 2025”.
Fitch’s base case assumes there will not be a new IMF programme. The continuous accumulation of external arrears to the official sector, the government’s expansionary fiscal policy, and the likely requirement of drastic and unpopular policy changes in a still volatile political environment will be obstacles to a programme.
Gabon’s ratings reflect higher GDP per capita than peers, balanced by high reliance on volatile hydrocarbon revenue and persistent public finance management deficiencies. These weaknesses are exacerbated by tightness in the regional debt market and limited access to external funding.
Fitch forecasts Gabon’s government debt will substantially increase in 2025, to 80.4% of GDP from 72.9% in 2024, driven by the significant fiscal expansion.
Analysts expect further increases in government debt/GDP to 85.5% in 2026 and 86.7% in 2027 due to the fiscal deficits. The lack of visibility on the government’s financial operations in 2025 mean debt may be higher than our current projections.
The regional CEMAC pooled foreign-exchange (FX) reserves fell to CFA6,667 billion or USD11.5 billion in August 2025, from CFA7,294 billion or USD12.6 billion at end-2024.
This translates into a decline of the coverage of imports of goods and services to 4.3 months in August 2025 from 4.8 months at end-2024.
As a CEMAC member, Gabon has access to these reserves, but the regional central bank (BEAC) cautiously manages the use of its reserves to protect the peg to the euro, which remains critical to macro-financial stability.
Fitch expects Gabon’s real GDP growth to accelerate to 3.5% in 2025, partly driven by the government’s expansionary fiscal position. “We then expect a deceleration to 2.7% over 2026-2027, as government spending declines amid funding pressures”.
Fitch said improving growth would require the attraction of investment in long-discussed key infrastructure projects needed to unlock mining production. This would likely require a significant improvement in access to external funding, analysts said. Access Holdings Cleared for N40bn Private Placement
