Gabon’s carbon credit sale: silver bullet for economic revival?

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Gabon has been exploring innovative ways to exchange debt and raise loans through carbon credits. During the 2022 Commonwealth Heads of Government Meeting (CHOGM) in Rwanda, Gabon’s Minister of Water, Forests, Sea, and Environment Lee White, noted that the country intended to exploit its forests in a sustainable manner to generate income.

The economy of Gabon has in the recent past been heavily dented, by both the Covid-19 pandemic and the Russian-Ukraine crisis. The latter resulted in the widening of the budget deficit from 2.1 per cent in 2020 to 3.4 per cent, whilst the former has caused inflationary pressures leading to a fiscal deficit marked by sharp drops in domestic revenue mobilization, exports and Foreign Direct Investment (FDI).

Despite ranking as the seventh-largest oil producer in the continent and a member of the Organization of the Petroleum Exporting Countries and allies (OPEC+), the West Coast country ranks as one of the African countries with the largest debt-to-GDP ratio, currently standing at 72.1 per cent.

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