Gabon yet to request IMF financing program ahead of fund visit next week

By Colleen Goko

JOHANNESBURG, Feb 18 (Reuters) - Gabon has not yet submitted a formal request for a financing program, an IMF spokesperson told Reuters on Wednesday, adding that a 10-day staff visit to the country will begin next week.

Market optimism about a potential International Monetary Fund program has bolstered Gabon's dollar-denominated bonds maturing in February 2031, which rose from 76.75 cents on the dollar on January 20 to 86 cents on Wednesday.

IMF engagement with Gabonese authorities remains close, the spokesperson said, adding that its staff will evaluate recent economic developments and discuss policy and reform priorities during their visit from February 25 to March 6.

"The (Gabonese) authorities have announced their intention to work towards an IMF-supported program. Technical discussions are ongoing, but we have not yet received a formal request," the spokesperson said.

DEBT PRESSURES

After a number of false starts and ongoing concern about the debt pressures, uncertainty persists.

"It would be nice to see them actually moving ahead with some more tangible sort of IMF agreement in principle or more tangible talks. And so we're eagerly awaiting the result of this mission," said Giulia Pellegrini, lead portfolio manager for emerging markets debt at Allianz Global Investors.

Fitch downgraded Gabon's long-term foreign-currency issuer default rating to "CCC-" from "CCC" in December and its analyst Jose Mantero said the debt issues remain significant.

"Gabon does not have external market access. Domestic financing is also becoming increasingly difficult due to the country's unsustainable expansionary fiscal policy," he said.

An IMF program would enhance Gabon's credit profile by providing identifiable foreign currency financing sources, unlocking additional official sector support and establishing a fiscal anchor for the country, Mantero added.