Bordered by Togo, Nigeria, Burkina Faso, and Niger, Benin has a 121-kilometer-long coastline on the Gulf of Guinea.
Benin is a stable democracy. Patrice Talon was reelected for a second five-year presidential term in April 2021, and the government currently enjoys an absolute majority in Parliament with 83 deputies. Political parties and movements were merged under the September 2018 party system reform and Benin now has only 12 parties compared to the previous 200. The next legislative elections will be held on January 8, 2023.
Benin’s economy is still reliant on agriculture and on formal and informal reexport and transit trade with Nigeria. The economy rebounded strongly in 2021, growing at an estimated 6.6%. The services and construction sectors were the main drivers of this growth. Inflation averaged 1.7% during the year and was driven by higher food prices. This situation has been compounded by the effects of the Russia-Ukraine crisis since end-February 2022, which is affecting sectors such as oil products and agricultural inputs.
The fiscal deficit (grants included) widened from 4.7% of GDP in 2020 to 5.8% in 2021, while fiscal policies have remained expansionary. Although overall revenues remained fairly resilient, response plans significantly increased government expenditure during the 2020-2021 period.
In 2021, Benin had 12.45 million inhabitants, with a fertility rate of 5.7 children per woman (2017-18 Benin Demographic and Health Survey, BDHS) and a life expectancy of 61.2 years. The national poverty rate stood at 38.5%, while the unemployment rate was 2.4%, underemployment, 72%, and the informal employment rate, 90.1%..
In the 2018-2019 school year, only 54.8% of learners completed primary education. Some 32.2% of children were chronically malnourished while 11% were severely malnourished (2017-18 BDHS).
A survey conducted among 1,500 households in May 2021 revealed that approximately 58% of individuals had experienced a decline in income, while 5% had no income.
The State’s firm commitment to macroeconomic stability since 2016 provided it with fiscal space to support economic activities during the pandemic. Sustaining the recent economic recovery will be contingent on its ability to address the vulnerabilities of its growth model. The economy is dependent on the export of unprocessed agricultural products (cotton and cashew nuts) and the reexport of imported commodities (e.g., secondhand cars and rice) to Nigeria. With almost 85% of the labor force working in the informal economy, domestic resource mobilization is among the lowest in WAEMU, despite the remarkable resilience shown during the 2020/2021 period, the result of tax policy and administrative reforms since 2016.
In terms of risks, mounting security threats from the Sahel region could widen geographic inequalities between the rural north and the rest of the country. The short-term outlook depends on the uncertainties related to the geopolitical context and vulnerability to the effects of climate change. The conflict in Ukraine has accelerated inflationary pressures, particularly on food, and could trigger shortages. Benin is also vulnerable to coastal erosion and extreme climate events that could affect agricultural productivity.
Last Updated: May 05, 2022