27 June 2018

Gabon Embarks On Drastic Cost-Cutting Measures

The goal is to save at least 70 billion FCFA annually and allocate more resources to investments.

The coming days and months will be unusually tough for Gabonese Public Service workers after the cabinet on June 21, 2018 agreed on a number of draconian measures to curb expenses and save money in the face of dwindling oil revenues.

Making the announcement on June 25, 2018, Ike Ngouoni, Spokesman for the Presidency, said the measures were meant to check the bloated Civil Service whose wage bill is 59 per cent of State revenue as against 35 per cent recommended by the regional economic bloc, CEMAC.

Citing President Ali Bongo Ondimba, Ngouoni described the draconian measures that have been under consideration for years as "historic." Public servants earning more than 650,000 FCFA a month will have their pay cut by 5 per cent as against 15 per cent for those earning more than 2 million FCFA, Radio France International, RFI reported.

Low income earners are not affected. Recurrent expenditure by public institutions will be reduced by between 5 per cent and 15 per cent. The number of workers in the Head of State's Cabinet will be slashed, likewise for the Prime Minister and cabinet ministers.

Civil Service recruitments, promotions and upgrades after acquisition of new certificates, are suspended for three years. On the other hand, the size of the cabinet will be reduced and civil servants on prolonged sick leave immediately placed on retirement. Workers aged 60 years will also be asked to proceed on retirement.

A new Public Service census to fish out ghost workers and those earning several salaries will be launched next month, the Spokesman announced. Similarly, workers due retirement will be obliged to do so. Reacting to the announcement, Jean- Rémi Yama, the leader of "Dynamique unitaire," Gabon's largest public workers' trade union, expressed regret that union officials were not consulted.

Gabon last year concluded a three-year budget support programme with the International Monetary Fund, IMF. The institution has been pressing the government to curb State expenses and reallocate more resources to investments in order to boost the economy.

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