Title:
Gabon's Public Debt: Crowding-out Effect or Complementarity?

Authors:
Pierre Gaëtant ANGO NGUEMA, Louis Bernard AVELE OBAME, Gabon

Abstract:

This study examines the differentiated impact of Gabon's public debt on private investment over the period 1995-2024. Using an advanced methodological approach combining the NARDL model, structural SVAR, dynamic IV-GMM, and threshold models, the research reveals an asymmetric and non-linear relationship between these variables. The results demonstrate that positive shocks generate a pronounced immediate crowding-out effect from positive external public debt, but become complementary in the long term. In contrast, negative shocks (negative external public debt) negatively impact investment across all time horizons. The asymmetry is more pronounced for domestic public debt, with a strong crowding-out effect from positive increases and a significant stimulating effect from negative decreases. The analysis identifies differentiated critical thresholds, 34.6% of GDP for positive external debt and 29.9% for positive domestic debt, beyond which the crowding-out effect intensifies considerably. It validates the robustness of the results through several econometric approaches, thereby offering important policy implications for the optimal management of public debt in Gabon.

DOI: https://doi.org/10.51505/IJEBMR.2025.91203