Gabon's Soaring Debt Forces Turn to Regional Markets

Gabon's outstanding public debt surged by 23% year-on-year, reaching 8,780.3 billion FCFA by the end of December 2025. This significant increase, totaling 1,647 billion FCFA from the end of 2024, was primarily driven by a sharp shift in the government's financing strategy, moving away from traditional external sources towards increased domestic borrowing. While external debt saw a slight decline of 40.9 billion FCFA, or 0.98%, to stand at 4,127.6 billion FCFA, domestic debt experienced a substantial surge of 1,687.9 billion FCFA, marking a 57% increase from the previous year, reaching 4,652.7 billion FCFA.

The regional financial market has emerged as the principal source of this heightened domestic debt. Outstanding securities within this market climbed to 3,449.9 billion FCFA, accounting for approximately 39% of Gabon's total public debt. This strategic reorientation is further solidified by the 2026 supplementary budget, which significantly increases treasury and financing resources to 2,251.8 billion FCFA. A key factor in this shift was the sharp rise in government securities issuance, which escalated to 1,282.8 billion FCFA from just 480.3 billion FCFA a year earlier. Concurrently, disbursements from program loans saw a drastic reduction, falling to 36.1 billion FCFA from 830.5 billion FCFA.

Furthermore, the increase in domestic debt also reflects the formal recognition of previously unpaid obligations. A government task force validated 758.7 billion FCFA of these defaulted liabilities. This means a substantial portion of the recorded domestic debt growth represents the acknowledgement of existing financial responsibilities rather than solely new borrowing, making the headline debt increase appear larger than fresh financing alone would suggest.

The government's growing reliance on debt has naturally led to rising debt servicing costs. The 2026 supplementary budget projects an increase in debt service to 487.6 billion FCFA, with debt amortization estimated at 1,309.2 billion FCFA. These figures collectively represent the majority of the country's treasury and financing expenditure, underscoring the significant financial burden of debt management.

Gabon's evolving debt profile signifies a clear strategic pivot towards regional capital markets as opposed to external lenders. This approach, involving the issuance of treasury bills and bonds within the CEMAC region, offers authorities quicker access to financing and reduces dependency on multilateral and bilateral loans. However, it also intensifies competition for liquidity within the regional market. With nearly 40% of its total debt now raised through regional securities, Gabon has established itself as one of the largest borrowers in the CEMAC zone. This concentration could potentially limit financing availability for other sovereign entities and private companies seeking funds in the same market.

In light of these developments, restoring investor confidence and securing access to affordable funding are paramount for Gabon. Ongoing discussions with the International Monetary Fund and the eagerly awaited results of the country's public debt audit are expected to be instrumental in shaping Gabon's future financing strategy and influencing its borrowing costs in the years to come.