Benin is a stable democracy in Sub-Saharan Africa with regular, peaceful elections. Presidential elections in March 2016 witnessed a transfer of power to a new government led by former businessman Patrice Talon, a bitter rival of former President Yayi. The country’s 2018 budget estimated at USD 3.15 billion prioritizes investment. The Government of Benin (GOB) has pinned significant hopes on mobilizing private sector funding for major infrastructure development projects over the next three years through public-private partnerships (PPPs). A new law to facilitate PPPs has been enacted and is expected to attract additional Foreign Direct Investment (FDI) and increase the country’s economic growth under the government’s five-year action plan. The government is also working to update the country’s investment and public procurement codes in compliance with the PPP law.
President Talon launched his signature initiative in December 2016, a very ambitious USD 15 billion five-year Government Action Plan (“Programme d’Actions du Gouvernement” or PAG). The PAG lays out a development plan from 2016 to 2021 structured around 45 major projects, 95 sector-based projects, and 19 institutional reforms. With the goals of strengthening the administration of justice, fostering a structural transformation of the economy, and improving living conditions, the projects are concentrated in infrastructure, agriculture and agribusiness, tourism, health, and education. The government claims the PAG will create 500,000 jobs, though the president’s critics see plenty of room in the PAG for sole-source contracts profiting administration insiders. The Talon administration’s revocations of certain high-dollar contracts signed under the previous administration in favor of new ones with Talon-allied companies have fed this latter perception.
Benin continues its efforts to attract private investment in support of economic growth – a link the government sees as central to boosting Benin’s development prospects. In 2015, it set up an Investment and Exports Promotion Agency (APIEX) as a one-stop business startup, investment promotion, and foreign trade promotion center. Benin’s overall macroeconomic conditions were positive in 2016 and 2017, despite GDP growth slowing in 2016 due to economic recession in neighboring Nigeria on which Benin’s economy heavily depends. The cotton industry, the Port of Cotonou, telecommunications, agriculture, energy, the cement industry, and housing are the main economic drivers and prospects for investment. The country’s GDP is roughly 71 percent services, 21 percent agriculture, and 8 percent manufacturing.
On June 22, 2017, a) five-year, USD 375 million Millennium Challenge Corporation (MCC) compact with Benin entered into force. This follows Benin’s 2006-2011 compact, which modernized the country’s port – the principal source of government revenue – and improved land administration, the justice sector, and access to credit. The Benin Power Compact is advancing policy reforms to bolster financing for the electricity sector, attract private capital into power generation, and strengthen regulation and utility management. Infrastructure funded by the compact includes 46 megawatts of power generation capacity, modernization of the Cotonou and regional distribution grid, and expansion of minigrids. As two thirds of Benin’s population does not have access to electricity, the compact also includes a significant off-grid electrification project via its clean energy grant facility.
|TI Corruption Perceptions Index||2017||85 of 180||http://www.transparency.org/
|World Bank’s Doing Business Report “Ease of Doing Business”||2017||151 of 190||http://www.doing
|Global Innovation Index||2017||116 of 127||www.globalinnovationindex.org/
|U.S. FDI in partner country (M USD, stock positions)||2015||USD 18||http://www.bea.gov/
|World Bank GNI per capita||2015||USD 840||http://data.worldbank.org/