Overview

  • Country Overview

    Benin is bordered by Togo to the west, Nigeria to the east, and Burkina Faso and Niger to the north. It has an estimated population of at least 10.9 million (2016). Benin has enacted important economic and structural reforms.

    Political Context

    Benin has a stable and democratic government. Since the end of a Marxist-Leninist regime in 1989, it has organized six presidential elections, seven legislative elections, and three local elections peacefully. Presidential elections held in March 2016 were won by the multi-millionaire and cotton sector tycoon, Patrice Talon. In December 2016, the new government adopted a  Programme d’Actions du Gouvernement (PAG) structured around 45 flagship projects aimed at improving productivity and living conditions. President Talon’s proposals to reform Benin’s political model, however, were rejected by parliament in April 2017. These included the introduction of an independent Auditor General’s Office; a new method of appointing members to the Constitutional Court; the simplification of procedures in the High Court of Justice; and revamping political party funding. Although the socio-political atmosphere remains largely favorable and conducive for reform, economic expectations are high, and there is pressure to reduce high youth unemployment, address poor living standards, accelerate economic growth, and improve the quality of public services.

    Economic Overview

    Benin’s economy relies heavily on its informal re-export and transit trade to Nigeria, which makes up roughly 20 percent of GDP, and on agriculture. The tertiary sector as a whole accounts for 50 percent of GDP, while agriculture accounts for about 25 percent of GDP and 45 to 55 percent of employment. The economy is characterized by informality, representing an estimated 65 percent of the total economy and over 90 percent of the labor force.

    Real GDP growth accelerated from 2.1 percent in 2015 to 4 percent in 2016 and 5.6 percent in 2017, and is expected to reach 6.0 percent in 2018, overcoming the low-growth that resulted from a drop in demand in Nigeria. Cotton production, 5 to 7 percent of GDP and about 27 percent of exports, hit about 451,000 tons in 2016—a 73 percent increase from 2015. The government expected an increase of 11 percent for 2017. Industrial production accelerated at 7.2 percent in 2017, up from 4.5 percent in 2016. The sector will benefit from cotton ginning and dynamism in the construction sub-sector linked to the implementation of a government investment plan. Inflation is estimated at 0.6 percent for 2017 and projected to remain under the West Africa Economic Market Union’s target of 3 percent for 2018. With the partial implementation of the PAG, Benin’s overall fiscal deficit (including grants) was 6.1 percent of GDP in 2017 against a projected 7.9 percent, thanks to the strong performance of domestic revenue. It may shrink to 4.1 percent and 1.9 percent of GDP in 2018 and 2019 respectively.

    Social Context

    Despite moderate GDP growth of 4 to 5 percent annually over the past two decades, poverty is often on the rise. National poverty rates were 37.5 percent in 2006, 35.2 percent in 2009, 36.2 percent in 2011, and 40.1 percent in 2015. Female-headed households experience lower levels of poverty (28 percent compared to 38 percent for male-headed households), but women suffer from a lack of economic opportunities and are underrepresented in high-level decision-making positions. The education and health sectors take a significant share of public expenditure (on average 23 percent is allocated to education and 7 percent to health). More equity is needed in their geographical distribution, as well as greater effectiveness and efficiency in the management of these two sectors.

    Development Challenges

    Benin is vulnerable to exogenous shocks, primarily: adverse weather conditions, terms of trade (cotton and oil prices), and developments in Nigeria, its main trading partner and source of its economic activity, as 80 percent of Benin’s imports are typically destined for Nigeria. Nigeria technically exited recession in September 2017, and growth in its economic activities might also drive growth in Benin. Despite some progress, a weak business environment continues to deter domestic and international investors. In Doing Business indicators, Benin ranked 153 in 2016 and 155 in 2017, but made progress in “starting a business” and “getting electricity.” More needs to be done to improve access to credit and tax payments, and Benin continues to face major corruption, ranking 95 out of 175 countries in the Transparency International’s 2016 Corruption Perceptions Index (it was ranked 83 in 2015). 

    Last Updated: Apr 24, 2018

  • World Bank Group Engagement in Benin

    The World Bank Group’s Country Partnership Strategy (CPS) 2013–2017 for Benin is organized around three main pillars: (i) governance and public sector capacity; (ii) sustainable growth, competitiveness and employment; and (iii) access to basic social services and social inclusion. The portfolio comprises 15 national, active operations for a total commitment of $715.54 million, and is supplemented by four trust funds totaling $50 million. It covers the following sectors: budget support, urban development, community development, environment, telecommunications, youth employment, health, nutrition, capacity building, energy, and regional transport. 

    International Finance Corporation (IFC)

    The IFC’s strategy for Benin focuses on: (i) partnering with financial intermediaries to improve access to finance for enterprises; (ii) providing capacity-building to financial institutions to strengthen the sector and promote business growth; (iii) supporting the development of infrastructure to attract investments (port, electricity, telecom); (iv) strengthening the investment climate (in collaboration with the World Bank); and (v) scaling up rural access to water under a Public Private Partnership (PPP) and building up local capacity to advise it.

    Multilateral Investment Guarantee Agency (MIGA):

    MIGA’s portfolio consists of three investments in tourism, telecommunications, and services, for a gross exposure of $8.5 million.

    Last Updated: Apr 24, 2018

  • Cash Transfers are Positively Transforming Poor Communities  

    A Bank-financed social safety net pilot brought about positive change in beneficiary households in communities with a reputation for serving as support base for child trafficking to Nigeria. Monthly allocations of CFAF 3,500 (about US$6) helped families send their children to school, eliminating the need for parents to send their children to work in Nigeria. These allocations also helped them with income generating activities. The program has provided a total of $4 million in regular cash transfers to over 13,000 poor households in 125 villages.

    With a total amount of $76 million, the first phase of this program covered all 77 communes in Benin. On closing in December 2017, it had implemented nearly 1,300 community and 240 commune-level sub-projects (classrooms, potable water points, health centers, market infrastructure), directly benefiting more than 300,000 beneficiaries, of whom 48.18 percent were women.

    Agriculture

    The Benin Agricultural Productivity and Diversification Project (PADA) funded by the World Bank ($31 million) and the Global Food Crisis Response Program ($15 million) was launched in 2012 to help restore and improve productivity and value addition for selected value chains (rice, aquaculture, pineapples, and cashews). Additional financing of $45 million was allocated in 2017. As of March 2018, the total number of direct beneficiaries reached 180,200 against a target of 250,000 beneficiaries by the end of the project in February 2021.  About 37 percent are women, against an end target of 40 percent. Competitive funds and matching grants have supported 124 micro projects (of which 22 are led by women); these are showing interesting results across the targeted value chains. A total area of 11,728 hectares has been provided with small-scale irrigation and drainage, against an end target of 12,678. This is having a positive impact on yields. In addition, 119 warehouses are under construction, with 90 completed and delivered. The project has supported inter-professional bodies for cashew and pineapple value chains. Thanks to this, producers, processors and other stakeholders are in a better position to influence policy decisions at higher levels.

    Last Updated: Apr 24, 2018

  • The European Union, African Development Bank, United Nations agencies, bilateral donors, World Bank Group, and IMF are among Benin’s key partners. Non-traditional creditors, such as China and the Islamic Bank, are also increasingly active. Since 2004, annual joint missions of the main donors have taken place, and together they monitor the implementation of structural and sector. At sector level, government–donor reviews are regularly carried out. 

    Last Updated: Apr 24, 2018

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LENDING

Benin: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

MULTIMEDIA



PHOTO GALLERY

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Additional Resources

Country Office Contacts

Main Office Contact
Banque Mondiale
B.P. 03-2112
Cotonou, Bénin
+229-21-30-5857
For general information and inquiries
Sylvie Nenonene
Senior Communications Officer
+229-21-30-5857
snenonene@worldbank.org
For project-related issues and complaints
beninalert@worldbank.org