Benin economic growth has risen over the past decade, averaging 5.1% per year and positioning the country as one of the region’s rising economies. But the country's positive economic growth remains volatile, due to limited economic diversity and structural change.
Most of the GDP per capita growth difference between Benin and its peers is explained by its significantly lower rate of labor productivity growth. Between 2001 and 2018, the output of an average Beninese worker increased 16.2% compared with 50.4% for a worker in Rwanda, and 56.5% in Sri Lanka.
To move up the ladder to a strong middle-income economy, Benin needs to accelerate the structural transformation of its economy through new growth engines that can sustain economic acceleration, increase labor productivity, and create quality jobs, especially for youth and women.
The Benin Country Economic Memorandum proposes three ways for accelerating growth and creating better jobs: Enhancing human capital and the quality of the labor market for greater productivity; improving infrastructure and transportation services; diversifying exports, and strengthening regional trade.