Gabon under financial pressure after Moody’s downgrades its outlook

Moody’s rating agency lowered Gabon’s sovereign rating outlook from “stable” to “negative” on Thursday, June 26, while maintaining its rating at Caa2, highlighting the worsening risks related to state financing and the increasing likelihood of a new debt restructuring.

The agency believes that the country’s financing needs, estimated at between 15% and 20% of gross domestic product (GDP) annually, far exceed current resource mobilization capacities. This situation arises as Libreville seeks to finance an ambitious infrastructure program while conducting a comprehensive audit of its public debt.

According to Moody’s, the combination of limited access to international markets, high borrowing costs, and persistent budget deficits increases the risk of the government resorting to new debt exchanges that could be considered distressed restructurings, an event akin to default by rating agencies.

Gabon’s budget deficit is estimated at 8.5% of GDP in 2025 before gradually decreasing to 6.5% in 2026 and 4.5% in 2027. Despite this expected improvement, the public debt/GDP ratio could reach nearly 88% by 2027, while interest payments would continue to weigh heavily on public finances.

The ongoing debt audit is another risk factor. Moody’s warns that the exercise could uncover previously unrecorded financial commitments, further worsening the country’s debt indicators.

High financing needs remain

To meet its cash needs, Gabon has carried out multiple financing operations in recent months. After a private placement of $570 million in 2025, the country concluded a $1 billion oil-backed loan with Trafigura in April 2026.

Support from multilateral institutions remains a supportive factor. In April, the World Bank approved an additional $150 million financing for Gabon, bringing its total commitment to $600 million. Moody’s also believes that a potential program with the International Monetary Fund could boost investor confidence and facilitate medium-term financing access.