Payments arrears build up.Gabon has won backing from the IMF IMF
See: International Monetary Fund
See International Monetary Fund (IMF). for its economic and financial programme for 1994. Owing to owing to
Because of; on account of: I couldn't attend, owing to illness.
owing to prep → debido a, por causa de the continuing slump in oil revenues and a heavy debt burden, Gabon's economic and financial situation has become increasingly difficult.
Access to external financing In the theory of capital structure, External financing is the phrase used to describe funds that firms obtain from outside of the firm. It is contrasted to internal financing which consists mainly of profits retained by the firm for investment. has been sharply curtailed in the past two years, with a build-up of large domestic and external payments arrears. Progress has been slow in containing public spending, in strengthening non-oil receipts and in reforming public enterprises.
Financial strains and a lack of competitiveness have deterred non-oil private investment and have held back the country's growth.
Faced with this situation, the Gabonese government has formulated a programme to turn the economy around and to restore adequate and balanced growth. The key element of the programme is the realignment re·a·lign
tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns
1. To put back into proper order or alignment.
2. To make new groupings of or working arrangements between. of the exchange rate of the CFA franc against the French franc, shifting the ratio from CFA (Computer Fraud and Abuse Act of 1986) Signed into law in 1986, the CFA was a significant step forward in criminalizing unauthorized access to computer systems and networks. The Act applies to "federal interest computers" that include any system used by the U.S. 50=FF1 to CFA100=FF1 in January.
Together with a package of supporting measures in the programme, this realignment should enhance competitiveness and should provide an opportunity to improve Gabon's growth prospects and to diversify the economic base of the country away from the predominant hydrocarbons sector.
Within this context, the medium-term objective is for real non-oil GDP GDP (guanosine diphosphate): see guanine. growth of about 3.5%, or about 1% per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. . After an initial surge in 1994, inflation is expected to subside and to return to its previously low levels.
Control of spending
Fiscal policy in 1994 is focusing on a strict control of expenditure, thus achieving a significant increase in the primary surplus in 1994 and 1995.
To strengthen competition, Gabon's trade-liberalisation policy is being continued. In this context, the government has sharply reduced customs duties Tariffs or taxes payable on merchandise imported or exported from one country to another.
Customs laws seek to equalize the charges imposed by other countries, furnish income for the federal government, and preserve the financial stability of domestic industries. as part of a comprehensive reform of the tariff structure.
Non-tariff restrictions as well as tax and trade privileges granted to enterprises are to be reviewed this year. The management of public enterprises is to be strengthened, and their financial relations with the government are to be "clarified". In addition, the functioning of the labour market is to be improved.
To protect the poorest population groups, the government has introduced measures to limit the price increases for energy products and necessities and to improve the availability of basic social services in the areas of health, housing and education.
The 1994 budget allows for a temporary subsidisation of necessities such as bread, and improved distribution networks are also to contribute toward mitigating the adverse effects of price increases. Over the long term, Gabon needs to sustain a large and efficient investment effort in both the public and the private sectors. The authorities' strategy of successful fiscal adjustment should enable them to increase investment significantly and to improve the investment climate.
In the short term, however, financing difficulties remain, given the heavy external debt burden at a time of low world oil prices.
In view of these difficulties and the country's adjustment effort, the support of external donors and creditors over the medium term is crucial to the success of Gabon's economic strategy.
The latest increment of IMF backing amounts to SDR See software defined radio. 60.1m (about $85m), of which SDR38.6m is being made available under a one-year standby arrangement and the other SDR21.5m was disbursed in April under the Fund's compensatory and contingency financing facility (CCFF CCFF Canadian Cystic Fibrosis Foundation
CCFF California Custom Fruits and Flavors
CCFF Compensatory and Contingency Financing Facility
CCFF Cheshire Current Facts and Figures (UK)
CCFF Child Care Facilities Fund ), in respect of reduced export earnings.