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Economy of Benin

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Economy of Benin
Cotonou is the largest city and economic capital of Benin
CurrencyWest African CFA franc (XOF)
Calendar year
Trade organisations
AU, AfCFTA (signed), ECOWAS, WTO
Statistics
GDP
  • Increase $14.269 billion (nominal, 2018)[1]
  • Increase $37.545 billion (PPP, 2018)[1]
GDP rank
GDP growth
  • 4.0% (2016) 5.8% (2017)
  • 6.5% (2018e) 6.5% (2019f)[2]
GDP per capita
  • Increase $1,242 (nominal, 2018 est.)[1]
  • Increase $3,267 (PPP, 2018 est.)[1]
GDP per capita rank
GDP by sector
Agriculture: 26.1%;
industry: 22.8%; services: 51.1% (2017 est.)[3]
0.849% (2018)[1]
Population below poverty line
36.2% (2011 est.)[3]
47.8 high (2015, World Bank est.)[4]
Labour force
3.662 million (2007 est.)[3]
Unemployment1% (2014 est.)[3]
Main industries
textiles, food processing, construction materials, cement
External
Exports$1.974 billion (2017 est.)[3]
Export goods
Cotton, cashews, shea butter, textiles, palm products, seafood
Main export partners
 Bangladesh 18.1%
 India 10.7%
 Ukraine 9%
 Niger 8.1
 China 7.7%
 Nigeria 7.2%
 Turkey 4% (2017)[3]
Imports$2.787 billion (2017 est.)[3]
Import goods
Foodstuffs, capital goods, petroleum products
Main import partners
 Thailand 18.1%
 India 15.9%
 France 8.5%
 China 7.5%
 Togo 5.9%
 Netherlands 4.3%
 Belgium 4.3% (2017)[3]
Decrease −$1.024 billion (2017 est.)[3]
Negative increase $2.804 billion (31 December 2017 est.)[3]
Public finances
Negative increase 54.6% of GDP (2017 est.)[3]
−6.2% (of GDP) (2017 est.)[3]
Revenues1.578 billion (2017 est.)[3]
Expenses2.152 billion (2017 est.)[3]
B (Domestic)
B (Foreign)
BBB- (T&C Assessment)
(Standard & Poor's)[7]
Increase $698.9 million (31 December 2017 est.)[3]
All values, unless otherwise stated, are in US dollars.

The economy of Benin remains underdeveloped and dependent on subsistence agriculture and cotton. Cotton accounts for 40% of Benin's GDP and roughly 80% of official export receipts. There is also production of textiles, palm products, and cocoa beans. Maize (corn), beans, rice, peanuts, cashews, pineapples, cassava, yams, and other various tubers are grown for local subsistence. Benin began producing a modest quantity of offshore oil in October 1982. Production ceased in recent years but exploration of new sites is ongoing.

A modest fishing fleet provides fish and shrimp for local subsistence and export to Europe. Formerly government-owned commercial activities are now privatized. A French brewer acquired the former state-run brewery. Smaller businesses are privately owned by Beninese citizens, but some firms are foreign owned, primarily French and Lebanese. The private commercial and agricultural sectors remain the principal contributors to growth.

Economic development

Since the transition to a democratic government in 1990, Benin has undergone an economic recovery. A large injection of external investment from both private and public sources has alleviated the economic difficulties of the early 1990s caused by global recession and persistently low commodity prices (although the latter continues to affect the economy). The manufacturing sector is confined to some light industry, which is mainly involved in processing primary products and the cow production of consumer goods. A planned joint hydroelectric project with neighboring Togo is intended to reduce Benin's dependence on imported energy mostly from Ghana, which currently accounts for a significant proportion of the country's imports.

The service sector has grown quickly, stimulated by economic liberalization and fiscal reform, and the use of modern technology such as automobiles and computers has grown considerably as a result. Membership of the CFA Franc Zone offers reasonable currency stability as well as access to French economic support. Benin sells its products mainly to France and, in smaller quantities, to the Netherlands, Korea, Japan, and India. France is Benin's leading source for imports. Benin is also a member of the Economic Community of West African States (ECOWAS).

Despite its rapid growth, the economy of Benin still remains underdeveloped and dependent on subsistence agriculture, cotton production, and regional trade. Growth in real output averaged a sound 5% since 1996, but a rapid population rise offset much of this growth on a per capita basis. Inflation has subsided over the past several years. Commercial and transport activities, which make up a large part of GDP, are vulnerable to developments in Nigeria, particularly fuel shortages.

Although trade unions in Benin represent up to 75% of the formal workforce, the large informal economy has been noted by the International Trade Union Confederation (ITCU) to contain ongoing problems, including a lack of women's wage equality, the use of child labour, and the continuing issue of forced labour.[8]

In December 2014, the Bureau of International Labor Affairs issued a List of Goods Produced by Child Labor or Forced Labor[9] in which the Republic of Benin was mentioned among 74 other countries where significant instances of child labor were observed. Two major products involved such working conditions in Benin: cotton and crushed granite.

Financial Sector

Benin’s financial sector is dominated by banks, and in general remains shallow. However, a series of reforms were undertaken in the 1990s, which resulted in the consolidation of the banking sector and in the privatization of all state banks.

A legal framework regarding licensing, bank activities, organizational and capital requirements, inspections and sanctions (all applicable to all countries of the Union) is in place and underwent significant reforms in 1999. There is no customer deposit insurance system.

Benin has a lively and diversified microfinance sector. Data from 2003 by the Central Bank stated a penetration rate of microfinance services of almost 60 percent. In 2006 the Ministry of Microfinance and Employment of Youth and Women counted 762 organizations with 1308 branches, including Cooperatives, NGOs, Savings/Credit Associations and government projects. Programmes for strengthening the sector are carried out on national and regional levels, such as the PRAFIDE (Programme Régional d’Appui à la finance Décentralisée). The microfinance sector is also subject to supervision through the Central Bank as well as the responsible Ministry for Microfinance and Employment of Youth and Women.

Benin is member of the Bourse Regionale des Valeures Mobilières (BRVM) located in Abidjan, Côte d'Ivoire. Stocks were issued by a number of companies in the region. Listed bonds were partly issued by companies and partly by governments of the West African Monetary and Economic Union (UEMOA).

The payment and settlement system and clearing mechanisms were reformed in 2004 through the BCEAO and offer RTGS and SWIFT access to banks, financial institutions, the stock exchange as well as the Central bank and special banks.[10]

Data

The following table shows the main economic indicators in 1980–2017.[11]

Year 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
(PPP) 		2.69 bil. 3.70 bil. 4.75 bil. 6.59 bil. 9.06 bil. 12.33 bil. 13.22 bil. 14.38 bil. 15.38 bil. 15.86 bil. 16.39 bil. 17.23 bil. 18.39 bil. 20.03 bil. 21.69 bil. 22.38 bil. 23.57 bil. 25.33 bil.
GDP per capita in $
(PPP) 		740 866 954 1,115 1,321 1,545 1,608 1,701 1,768 1,773 1,782 1,821 1,890 2,003 2,111 2,121 2,175 2,277
GDP growth
(real) 		9.3 % 4.3 % 9.0 % 6.0 % 4.9 % 1.7 % 3.9 % 6.0 % 4.9 % 2.3 % 2.1 % 3.0 % 4.8 % 7.2 % 6.4 % 2.1 % 4.0 % 5.6 %
Inflation
(in Percent) 		9.6 % 1.2 % 1.1 % 14.5 % 4.2 % 5.4 % 3.8 % 1.3 % 7.9 % 0.4 % 2.2 % 2.7 % 6.7 % 1.0 % −1.1 % 0.3 % −0.8 % 0.1 %
Government debt
(Percentage of GDP) 		... ... ... ... 54 % 39 % 11 % 20 % 25 % 26 % 29 % 30 % 27 % 25 % 30 % 42 % 50 % 55 %

See also

References

  1. ^ a b c d e "World Economic Outlook Database, October 2019". IMF.org. International Monetary Fund. Retrieved 17 November 2019.
  2. ^ "Global Economic Prospects, June 2019: Heightened Tensions, Subdued Investment. p. 127" (PDF). openknowledge.worldbank.org. World Bank. Retrieved 17 November 2019.
  3. ^ a b c d e f g h i j k l m n o "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 1 February 2019.
  4. ^ "GINI index (World Bank estimate)". data.worldbank.org. World Bank. Retrieved 28 May 2019.
  5. ^ "Human Development Indices and Indicators: 2018 Statistical update". hdr.undp.org. United Nations Development Programme. Retrieved 17 November 2019.
  6. ^ "Inequality-adjusted Human Development Index". hdr.undp.org. United Nations Development Programme. Retrieved 17 November 2019.
  7. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  8. ^ "Serious violations of core labour standards in Benin, Burkina Faso and Mali". ICFTU Online. Retrieved 30 July 2007.
  9. ^ List of Goods Produced by Child Labor or Forced Labor
  10. ^ "MFW4A Benin: Financial Sector Profile". Archived from the original on 13 May 2011. Retrieved 30 November 2010.
  11. ^ "Report for Selected Countries and Subjects". Retrieved 9 September 2018.
  • Mulindabigwi, Valens (2006). Influence des systemes agraires sur l'utilisation des terroirs, la sequestration du carbone et la sécurité alimentaire dans le bassin versant de l'Oueme superieur au Bénin. Göttingen: Cuvillier. ISBN 978-3-86537-871-2.

Public Domain This article incorporates public domain material from The World Factbook. CIA.

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