Economy of Benin

The economy of Benin remains underdeveloped and dependent on subsistence agriculture and cotton. Cotton accounts for 40% of 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.

Economy of Benin
Cotonouskyline
Cotonou is the largest city and economic capital of Benin
CurrencyWest African CFA franc (XOF)
Calendar year
Trade organisations
AU, ECOWAS, WTO
Statistics
GDPIncrease $10.456 billion (nominal, 2018 est.)[1]
Increase $27.718 billion (PPP, 2018 est.)[1]
GDP rank141st (nominal, 2018)
132nd (PPP, 2018)
GDP growth
2.1% (2015), 4.0% (2016),
5.6% (2017e), 6.0% (2018f) [2]
GDP per capita
Increase $915 (nominal, 2018 est.)[1]
Increase $2,426 (PPP, 2018 est.)[1]
GDP per capita rank
162nd (nominal, 2018)
160th (PPP, 2018)
GDP by sector
Agriculture: 26.1%;
industry: 22.8%; services: 51.1% (2017 est.)[3]
1.040% (2018 est.)[1]
0.1% (2017 est.)[3]
Population below poverty line
36.2% (2011 est.)[3]
47.8 high (2015, World Bank est.)[4]
Increase 0.515 low (2017) (163rd)
Labour force
3.662 million (2007 est.)[3]
Unemployment1% (2014 est.)[3]
Main industries
textiles, food processing, construction materials, cement
155th (2017)[5]
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)[6]
Foreign reserves
Increase $698.9 million (31 December 2017 est.)[3]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

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.[7]

In December 2014, the Bureau of International Labor Affairs issued a List of Goods Produced by Child Labor or Forced Labor[8] 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.

Banks and finance

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.[9]

Data

The following table shows the main economic indicators in 1980–2017.[10]

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, April 2019". IMF.org. International Monetary Fund. Retrieved 28 May 2019.
  2. ^ "World Bank forecasts for Benin, June 2018 (p. 153)" (PDF). World Bank. Retrieved 11 September 2018.
  3. ^ a b c d e f g h i j k l m n o p "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. ^ "Ease of Doing Business in Benin". Doingbusiness.org. Retrieved 24 January 2017.
  6. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  7. ^ "Serious violations of core labour standards in Benin, Burkina Faso and Mali". ICFTU Online. Retrieved 30 July 2007.
  8. ^ List of Goods Produced by Child Labor or Forced Labor
  9. ^ MFW4A Benin: Financial Sector Profile
  10. ^ "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.

 This article incorporates public domain material from the CIA World Factbook website https://www.cia.gov/library/publications/the-world-factbook/index.html.

External links

BRVM

The Bourse Régionale des Valeurs Mobilières SA ("Regional Securities Exchange SA"), or BRVM, is a regional stock exchange serving the following west African countries:

Benin

Burkina Faso

Guinea Bissau

Côte d'Ivoire

Mali

Niger

Senegal

Togo.The exchange is located in Abidjan, Cote d'Ivoire. Market offices are maintained in each country.

BRVM is a private corporation with 2,904,300,000 CFA francs in capital.

The BRVM Composite Index climbed 18 percent in 2015.

Bank of West Africa (BAO)

Banque d'Afrique Occidentale (also B.A.O. or BAO or Banque de l'AOF): (French for Bank of West Africa) was a bank French colonial authorities established in 1901 in Dakar, Sénégal, as the central bank of the colonies of French West Africa.

Benin

Benin ( (listen) beh-NEEN, bih-NEEN; French: Bénin [benɛ̃]), officially the Republic of Benin (French: République du Bénin) and formerly Dahomey, is a country in West Africa. It is bordered by Togo to the west, Nigeria to the east, and Burkina Faso and Niger to the north. The majority of its population lives on the small southern coastline of the Bight of Benin, part of the Gulf of Guinea in the northernmost tropical portion of the Atlantic Ocean. The capital of Benin is Porto-Novo, but the seat of government is in Cotonou, the country's largest city and economic capital. Benin covers an area of 114,763 square kilometres (44,310 sq mi) and its population in 2016 was estimated to be approximately 10.87 million. Benin is a tropical nation, highly dependent on agriculture, and is a large exporter of cotton and palm oil. Substantial employment and income arise from subsistence farming.The official language of Benin is French. However, indigenous languages such as Fon and Yoruba are commonly spoken. The largest religious group in Benin is Roman Catholicism, followed closely by Islam, Vodun and Protestantism. Benin is a member of the United Nations, the African Union, the Economic Community of West African States, the Organisation of Islamic Cooperation, the South Atlantic Peace and Cooperation Zone, La Francophonie, the Community of Sahel-Saharan States, the African Petroleum Producers Association and the Niger Basin Authority.From the 17th to the 19th century, the main political entities in the area were the Kingdom of Dahomey, along with the city-state of Porto-Novo, and a large area with many different nations to the north. This region was referred to as the Slave Coast from as early as the 17th century due to the large number of enslaved people who were shipped to the New World during the Trans-Atlantic slave trade. After enslavement was abolished, France took over the country and renamed it French Dahomey. In 1960, Dahomey gained full independence from France. The sovereign state has had a tumultuous history since then, with many different democratic governments, military coups, and military governments.

A Marxist–Leninist state called the People's Republic of Benin existed between 1975 and 1990. In 1991, it was replaced by the current multi-party Republic of Benin.

CFA franc

The CFA franc (in French: franc CFA [fʁɑ̃ seɛfɑ], or colloquially franc) is the name of two currencies, the West African CFA franc, used in eight West African countries, and the Central African CFA franc, used in six Central African countries. Both currencies are guaranteed by the French treasury. Although separate, the two CFA franc currencies have always been at parity and are effectively interchangeable. The ISO currency codes are XAF for the Central African CFA franc and XOF for the West African CFA franc.

Both CFA francs have a fixed exchange rate to the euro: 100 CFA francs = 1 former French (nouveau) franc = 0.152449 euro; or 1 € = 6.55957 FRF = 655.957 CFA francs exactly.

Central Bank of West African States

The Central Bank of West African States (French: Banque Centrale des États de l'Afrique de l'Ouest, BCEAO) is a central bank serving the eight west African countries which share the common West African CFA franc currency and comprise the West African Economic and Monetary Union (UEMOA):

Benin

Burkina Faso

Guinea-Bissau

Ivory Coast (Côte d'Ivoire)

Mali

Niger

Senegal

TogoThe Bank is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.

Fishing in Benin

Fishing in Benin, which had been carried on largely by Ghanaian fishermen, is gaining importance at Cotonou (where a fishing port was opened in 1971) and other coastal centers. Under an agreement with the Senegal government, Senegalese fishermen introduced deep-sea-fishing methods to the Beninese, and a national fishing company was established as a joint venture with Libya.

Exports of fish commodities amounted to nearly $1.9 million in 2003. Lagoon and river fishing remain of primary importance; of an estimated catch of 41,900 tons in 2003, 30,000 tons were from inland waters. The production of fish steadily declined during the 1980s due to over fishing and ecological degradation, but started increasing by the mid-1990s. In 2003, fishery products accounted for 2.8% of agricultural exports.

Mineral industry of Benin

The mineral industry, which is limited to the production of cement, clay, gold, sand, and gravel, does not play a significant role in the Benin's economy.Cement was produced by Ciments du Benin S.A., Société des Ciments d’Onigbolo, and Société des Ciments du Benin. These companies had a combined cement production capacity of 1.43 million metric tons per year (Mt/yr). Gold was produced by artisanal miners from gold veins near the villages of Kwatena and Tchantangou, in the Atakora Mountains in northwestern Benin, and from alluvial sediments along the Perma River and its tributaries.Benin ceased petroleum production from its Seme oilfield in 1998; however, at least one company, Kosmos Energy LLC of the United States, explored for petroleum in 2006. Kosmos, through its subsidiary Kosmos Energy Benin HC, had a 40% working interest in an exploration license for Block 4, which is located about 30 kilometers (km) offshore Benin. Kosmos’ venture partners were Kerr-McGee Benin Consortium S.A. (an affiliate of Kerr-McGee Corporation of the United States) (40%) and Petronas Carigali Overseas Sdn Bhd of Malaysia (20%). In 2006, the partners conducted a 1,472-square-kilometer (km2) three-dimensional (3D) seismic survey of the Block’s most prospective areas and were in the process of interpreting and reprocessing existing 3D seismic data.

Ministry of Economy and Finance (Benin)

The Ministry of Economy and Finance (‹See Tfd›(in French) Ministère de l’Economie et des Finances) is the government ministry responsible for governing and managing the economy and the financial activity of Benin.

The current Minister of Economy and Finance is Dr. Mohamed Ahmed.

Outline of Benin

The following outline is provided as an overview of and topical guide to Benin:

Benin – country in West Africa. Benin borders Togo to the west, Nigeria to the east and Burkina Faso and Niger to the north; its short coastline to the south leads to the Bight of Benin. Its capital is Porto Novo, but the seat of government is Cotonou. Benin was known as Dahomey until 1975.

West African CFA franc

The West African CFA franc (French: franc CFA; Portuguese: franco CFA or simply franc, ISO 4217 code: XOF) is the currency of eight independent states in West Africa: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo. These eight countries had a combined population of 105.7 million people in 2014, and a combined GDP of US$128.6 billion (as of 2018).The acronym CFA stands for Communauté Financière d'Afrique ("Financial Community of Africa") or Communauté Financière Africaine ("African Financial Community"). The currency is issued by the BCEAO (Banque Centrale des États de l'Afrique de l'Ouest, "Central Bank of the West African States"), located in Dakar, Senegal, for the members of the UEMOA (Union Économique et Monétaire Ouest Africaine, "West African Economic and Monetary Union"). The franc is nominally subdivided into 100 centimes but no centime denominations have been issued.

The Central African CFA franc is of equal value to the West African CFA franc, and is in circulation in several central African states. They are both called the CFA franc.

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