By: ThinkBusiness Africa
Global credit ratings agency Fitch Ratings adjusted Gabon’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from CCC to CCC- on Friday. Even more concerning for local investors, the agency slashed the Local-Currency IDR to CC from CCC, signaling that a default on domestic, and foreign obligations now appears probable.
The move comes as the government of President Brice Oligui Nguema—who secured a definitive victory in the April 2025 elections—struggles to balance ambitious post-coup social spending with a tightening liquidity noose.
Fitch forecasts Gabon’s fiscal deficit to balloon to 6.1% of GDP in 2025, a sharp rise from 3.7% in 2024. This is largely attributed to the transitional government’s massive public investment plans and social subsidies aimed at maintaining stability following the August 2023 regime change.
Total government debt is projected to hit 80.4% of GDP by the end of this year, eventually climbing to 86.7% by 2027. This far exceeds the 70% limit mandated by the Central African Economic and Monetary Community (CEMAC).
Since the second half of 2024, Gabon has seen a “substantial weakening” in appetite for its debt. Recent bond auctions have seen bid-to-cover ratios fall below 50%, meaning the government is failing to raise even half of the funds it seeks from regional markets.
While traditional financing dried up, Gabon turned to a dangerous alternative: unpaid bills. By the end of October 2025, Gabon’s debt arrears reached a staggering $792 million (CFA 443.6 billion). These are payments owed to local suppliers and international creditors that the state simply cannot cover.
“The government is essentially using arrears as a source of financing,” Fitch noted in its report. This strategy has already triggered repercussions; earlier this year, The World Bank suspended disbursements after Gabon failed to pay $26.7 million ( 17 billion CFA francs) in debt arrears, further choking the country’s development pipeline.
While the government remains optimistic, targeting a return to primary budget balance by 2026, Fitch remains skeptical. The agency noted that a new IMF funded program—vital for restoring investor confidence—remains unlikely due to the government’s “expansionary fiscal policy” and the mounting pile of external arrears.
Fitch’s latest downgrade has sent the Central African nation’s credit status deeper into non-investment territory, further constraining Gabon economic recovery efforts.
Real GDP growth is expected to slow to 2.7% in the coming years as the government is forced to pull back on the very spending that has supported the economy since the transition began.
