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Overview

Bordered by Togo, Nigeria, Burkina Faso, and Niger, Benin has a 121-kilometer-long coastline on the Gulf of Guinea.

Political Context

Benin is a stable democracy. Patrice Talon was reelected for a second five-year term in April 2021, and the government currently enjoys an absolute majority in Parliament (83 deputies). Political parties and movements were merged under the September 2018 party system reform and Benin now has only about 15 parties compared to the previous 200. The next legislative elections will be held on January 8, 2023.

Economic Overview 

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 7.2%. The services and construction sectors were the main drivers of this growth. While inflation averaged 1.7% during the year, inflationary pressures have increased significantly since the end of 2021. Inflation has been driven by higher food and petroleum product prices and has accelerated since the start of the conflict in Ukraine.

Expansionary fiscal policies were pursued, and the fiscal deficit (grants included) widened from 4.7% of GDP in 2020 to 5.7% in 2021. Although overall revenues remained fairly resilient, response plans significantly increased government expenditure during the 2020-2021 period. Fiscal measures adopted to support the purchasing power of households will put a strain on public accounts and the deficit is expected to remain high in 2022.

Social Context

In 2021, Benin had 12.45 million inhabitants, with a fertility rate of 5.7 children per woman 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%. The international poverty rate (proportion of persons living on less than $1.90 per day) was estimated at 19.2% in 2019.

In the 2018-2019 school year, only 54.8% of students completed primary education. Some 32.2% of children were chronically malnourished while 11% were severely malnourished.

A high-frequency survey conducted among 1,500 households in May 2021 revealed that 58% of individuals had experienced a decline in income, while 5% had no income.  Despite lower impacts, the survey also confirmed that access to food products remains a concern as a result of the rise in prices.

Development Challenges

The State’s firm commitment to macroeconomic stability since 2016 provided it with fiscal space to support economic activities during the pandemic. Sustaining the 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 goods and commodities (e.g., secondhand cars and rice) to Nigeria. Almost 85% of the labor force works in the informal economy. Domestic resource mobilization is among the lowest in WAEMU, despite the remarkable resilience shown during the 2020-2021 period.  The short-term outlook depends on the uncertainties related to the geopolitical context, particularly in the Sahel, and to the effects of climate change. The conflict in Ukraine has accelerated inflationary pressures, particularly on food, and could trigger shortages.

Last Updated: Sep 30, 2022

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LENDING

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

*Amounts include IBRD and IDA commitments
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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
Yao Gnona Afangbedji
Consultant
+229-21-30-5857
For project-related issues and complaints