(Reuters) – Gabon’s cabinet has cut its 2017 budget by over 5 percent as persistently low crude prices and falling output pressure the oil-producing Central African economy, it said in a statement on Thursday.
Next year’s budget will drop to 2.478 trillion CFA francs ($4.23 billion) in 2017 from 2.626 trillion CFA francs this year, the statement said, citing a drop in oil prices and production in the OPEC member.
It comes after a small budget drop in 2016 and a 14 percent drop in 2015, both due to a steep drop in crude prices since 2014 and depleting oil fields.
Gabon is Africa’s fourth largest oil producer with an output of around 220,000 barrels per day, dominated by international oil majors Total and Royal Dutch Shell.
President Ali Bongo has said that he plans to diversify the Gabon economy away from oil, but a falling budget will likely apply further political pressure after his razor thin victory in a presidential election in August that the opposition said was rigged. Violent protests ensued in which at least 6 were killed.
Bongo’s victory by less than 6,000 votes over opposition leader Jean Ping has drawn unwelcome scrutiny of the president, whose family has ruled the oil-producing state in Central Africa for 49 years. Many in Gabon complain that the oil wealth is not distributed, leaving most poor and out of work.
Bongo’s international reputation has taken a hit since the election and just a handful of African leaders attended his inauguration.
($1 = 585.6200 CFA francs)
(Reporting by Edward McAllister; Editing by Sandra Maler)