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Sub Saharan Africa
Benin |
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Country information
ECONOMY
Basic Economic Facts
GDP: US$4.7bn (2006 est)
Annual growth: 3.8% (2006 est)
Inflation: 3.8% (2006 est)
Major industries: cotton, other agricultural and services
Major trading partners: for exports - India, China, South East Asian countries, Ghana and Niger; for imports, France, China
Exchange rate: Euro 1 = 655.957 FCFA (pegged)
Benin's economy is based on agriculture and services. Cotton is the main commercial crop. It accounts for around a seventh of exports by value. Its value however fluctuates with world prices which are volatile, and it faces competition from subsidised cotton growers in the USA and elsewhere. The other mainstay of the economy is re-export trade with neighbouring countries, particularly Nigeria. Much of this is unrecorded and some estimate that this trade represents over 30% of GDP. It is estimated that 75% of imports into Cotonou port are destined for Nigeria. Benin has suffered at various times when Nigeria has tightened its import rules partly to stop the thriving smuggling of goods from Benin. The government relies on customs receipts for about half of its income. Nigerian trade policy is critical to the health of the economy. A plan for the privatisation programme for the cotton parastatal, the telecoms and public utility sectors and the port of Cotonou was presented by the government in July 2007. The privatisation of the cotton parastatal has become mired in problems leading the government to halt the process in late 2007.
Offshore oil exploration has started in a field near the border with Nigeria but it is not yet known if it contains exploitable reserves. As in other West African countries, the relatively fast growth of recent years is being held back by problems of power supply. However, Benin will benefit from the completion of the West Africa Gas Pipeline, which was scheduled to begin actual operation at the end of December 2007 and will bring gas from Nigeria to Benin (and to Ghana and Togo). At present about 70% of petrol consumed in Benin is smuggled from Nigeria, making supply irregular with frequent fuel shortages. Benin reached completion point under the Heavily Indebted Poor Countries (HIPC) initiative in March 2003, benefiting from around US$460 million in debt relief. A new Poverty Reduction and Growth Facility (PRGF) was approved in August 2005.
IMF Country Reports - Benin
