Debt interest surge strains Gabon's finances

Gabon's public finances are under growing strain due to a 28 percent increase in debt interest payments in 2025. This rise has forced the government to allocate a significant portion of its revenue to servicing its debt, reducing its ability to fund other priorities.

Debt payments take a big chunk of revenue

In 2025, the Gabonese government spent 530 billion CFA francs (about 900 million USD) on interest payments, which accounted for roughly one fifth of its total public revenue. This amount is equivalent to the combined budget for health and education, according to the 2026 Economic Outlook note.

High debt service costs and rating downgrade

The report highlights that Gabon’s interest payments in 2025 reached 4.1 percent of GDP, matching the combined budget for health and education. This increase is partly due to higher borrowing costs, rising interest rates, and a drop in the country’s credit rating. Fitch Ratings downgraded Gabon’s rating from B- to CCC- during 2025.

Public debt reaches 80 percent of GDP

Gabon’s public debt, including arrears, reached 80 percent of GDP in 2025, surpassing the 70 percent threshold set by the Economic and Monetary Community of Central Africa (CEMAC). About a third of this debt is owed to external creditors, including multilateral institutions and international investors.

Arrears to local suppliers and employees grow

The government has also accumulated arrears to local suppliers, employees, and taxpayers waiting for VAT refunds. These arrears reached 3.3 percent of GDP in June 2026, up from 1.9 percent in December 2024, reflecting ongoing cash flow challenges.

Public spending outpaces budget

Public expenditures in 2025 exceeded the approved budget by nearly 150 percent, driven by public investments, electoral spending, and unexpected commitments. Meanwhile, public revenues fell to less than 21 percent of GDP in 2025, down from 23.3 percent in 2024, largely due to declining oil revenues.

Recommendations to stabilize debt

The outlook note suggests that stabilizing Gabon’s debt requires improving revenue collection, tightening control over public spending, and carefully selecting public investments. Reducing reliance on borrowing and avoiding new arrears is crucial to maintaining relationships with creditors and suppliers.