Cotonou, Benin, March 30, 2023 — Benin can create quality jobs, grow its economy, and reduce poverty by enabling private sector–led expansion in its agribusiness and tourism sectors and by better leveraging its strategic location as a transit point into West Africa, according to a report published today by IFC and the World Bank.
The Benin Country Private Sector Diagnostic (CPSD) explores the challenges and opportunities for Benin's private sector, suggests areas for reform, and highlights sectors with the greatest potential to drive sustainable, inclusive growth in line with Benin's Government Action Program (Programme d'Actions du Gouvernement, 2021-2026).
In agribusiness, the CPSD outlines how increased private sector participation in crop production, including pineapples and soybeans, improving access to markets, and enabling solutions to channel more financing to agribusiness firms and farmers, would support growth in the sector, which accounts for 40 percent of employment in Benin.
The CPSD specifically highlights Benin's Glo-Djigbé Special Economic Zone, which was established in 2021, as a positive platform to support increased agro-processing and exports.
Regarding tourism, the report points to neighboring Nigeria—Africa's largest economy and most populous country—as a huge but largely untapped source of visitors. Benin is home to international heritage sites, including the historic city of Ouidah and spectacular scenery, yet tourist visits have stagnated because of inadequate market development.
"The CPSD recognizes Benin's progress in developing a business-friendly environment and recommends further reforms to exploit Benin's competitive advantages in agribusiness, tourism, and regional integration," said Kyle Kelhofer, IFC Senior Country Manager for Benin, Ghana, Guinea, and Togo. "IFC has ramped up its presence in Benin to provide support to improve the investment climate and help Benin attract more investment."
"The CPSD advances Benin's Government Action Program by identifying specific sectors with the highest potential for growth, job-creation, and poverty reduction," said Atou Seck, World Bank Country Manager for Benin. "Additionally, the CPSD informs the framework for the World Bank Group's partnership with Benin in achieving higher rates of economic and social well-being in 2023 and beyond."
The CPSD also highlights Benin's strategic location at the crossing of the Abidjan-Lagos and Cotonou-Niamey regional corridors, giving it an advantage as a transit point for regional trade. Benin could seek to turn its transit corridors into economic corridors.
To unlock the opportunities in tourism and regional trade, and in other sectors, Benin could accelerate its digitization agenda, including by outlining clearer regulations and allowing for more competition in its telecoms sector, according to the report. Other urgent reforms include promoting sustainable supply of energy and increasing the resilience of the electricity network to climatic shocks.
The private sector would also benefit from greater access to finance, including through digital finance solutions and strengthening the credit infrastructure.
While Benin enjoyed growth rates in the 2010s of about 5 percent annually, well above the average across sub-Saharan Africa, poverty rates remained high, measured at almost 40 percent in 2019. The CPSD is geared towards maximizing the job-creation potential of the private sector and making Benin's economy more resilient to external shocks such as the recent COVID-19 crisis and new headwinds, including inflation.
In line with the CPSD's findings, the World Bank Group's strategy for Benin focuses on transformative sectors such as agribusiness, financial markets, and tourism, leveraging digitization and public private partnerships.
The Benin CPSD can be downloaded here in French and English.
About the Country Private Sector Diagnostic
Launched in 2017 as a corporate priority, the World Bank Group's Country Private Sector Diagnostics support the institution's strategic focus on expanding private investment and leveraging private solutions to address development challenges in client countries. The diagnostics assess critical constraints to private sector engagement and identify policy and regulatory reforms needed to unleash private sector growth. They are jointly delivered by IFC and the World Bank. For more information, visit www.ifc.org/cpsd.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
About the World Bank Group
The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Working together in more than 100 countries, these institutions provide financing, advice, and other solutions that enable countries to address the most urgent challenges of development. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.
Stay Connected
Contacts
Stay Informed
Sign up to have customizable news & updates sent to you.