Régis Immogault has outlined some possible solutions to help the Gabonese state master the economic shock caused by the Covid-19. Noting that the crisis will cause budget losses of around 600 billion CFA francs, destroy jobs and weaken households, the former minister suggests devoting the state budget to essential needs, accelerating the diversification of the economy to limit the weight of oil, not without giving lessons to be learned after the crisis.
Former Minister of Economy and Finance, Régis Immogault has proposed some possible solutions to enable the government to face the economic shock caused by the Covid-19. Drawing a general overview of the crisis, the former member of the government noted that the effects of the Covid-19 on the Gabonese economy were indisputable.
According to him, Covid 19 will result in “a brutal shock on supply and demand, characterized by the fall in exports of natural resources due to the deterioration in the terms of trade for raw materials, notably oil and the decline in manufacturing production, ”Régis Immogault explained.
Predicting the deterioration of the main economic aggregates in 2020, the former minister noted that the “Covid-19 will cause the destruction of jobs, weaken the situation of many citizens on the social level due to the closure of certain activities. ”
To cope with this shock, Régis Immogault suggests that the government “reviews the state budget by limiting it exclusively to basic needs. Expenses relating to missions, the organization of seminars, sporting events … must be canceled in favor of social spending and support for the economy. ” Admitting that this adjustment of expenditure will certainly be insufficient, he suggests “resorting to that, in addition to financial support from the Multilaterals in the form of emergency aid. It is in this perspective that the IMF authorized the disbursement of about 88 billion CFA francs for the benefit of Gabon, “he recalled, calling on other partners to follow in the footsteps of the IMF.
He has also called on the Central Bank to practice an accommodative policy in this difficult context, by playing a more important role in the financing of governments and the economy. “The momentary return of statutory advances must be studied, as well as the revision of prudential regulations to allow banks to finance the economy. This will translate into lower reserves, but it is to deal with such circumstances that reserves are built up. “
Stressing that the fight against Covid-19 is everyone’s business, the former member of the government suggested that the banks play a more important role in continuing to provide credit to the economy and thus keep our economy alive. “It is important for this purpose that COBAC reviews certain prudential ratios in order to take advantage of the measures of the Central Bank. It is urgent that the system be able to provide free flat-rate aid to very small businesses, as has been done, for example, in certain countries ”.
Claiming to be based on government estimates, the Member of Parliament for Mulundu reveals that revenue losses “could reach CFAF 600 billion FCFA. At the same time, the implementation of the support is evaluated at the moment at around 250 billion FCFA, even if a good part of this windfall is expected from the banks in the form of loans to companies, we can therefore estimate that in case of advanced deterioration the financing needs could reach 700 billion FCFA ”.
Régis Immogault, has not hidden Gabon’s relationship with international financial institutions. For him, it is necessary “to review the veil of the expenditure, to solicit the support of BEAC and the development partners and to show a real national support, each one according to his means should contribute to the financing of the solidarity fund”.
On the country’s debt, he said he was in favor of canceling or postponing it, “Provided that it participates in the revival of the economy and in the fight against the spread of the Covid-19. Any other use of related resources should be prohibited, ”he insisted. Coming out of this crisis, Gabon should, like all other countries, learn from this health crisis. One of the lessons, he said, is to “accelerate the diversification of the economy to further reduce the weight of oil.” Our economy must also be less dependent on the outside for food, because with the closure of factories around the world and borders, we are not immune to the food crisis, ” Régis Immogault warned. On the social front, “great efforts are expected in the construction of social housing. If many Gabonese benefited from social housing, the measures of free rents, water and electricity would be easy to implement for example. Just like, it would be easier to distribute food, “Ali Bongo’s Minister concluded.
