Stimulating Entrepreneurship in Benin

Benin has staked ground as a pioneer among members of the Organization for the Harmonization of Business Law in Africa, through rules to spur business growth.

A new simplified legal regime was adopted by OHADA and is designed to encourage micro and small entrepreneurs to join the formal sector. Benin is the first of 17 member states to implement the new status, which was adopted in December 2010.

"By simplifying the business registration process and making it free, the government is encouraging micro and small enterprises to formalize and benefit from various advantages. This will enable these businesses to create jobs, increase profits, contribute to economic growth and thereby reduce poverty in Benin,” said Minister of Public Policy, Antonin Dossou, at the official launch of the enterprising status, which took place in May 2015.

Following a pilot conducted since 2014, the national process of registering a business will become easier, cheaper and faster for entrepreneurs in Benin. The project targeted over 3,600 informal micro enterprises located in Cotonou. Since the pilot began, over 400 small entrepreneurs have formalized their business.

Sébastien Gnonhoussou, a tailor in Cotonou, was offered the opportunity to formalize his small business by registering as an entreprenant. He received support to register his business within 24 hours, at no cost, to obtain a professional “entreprenant” card, and to open a bank account. Sébastien has also benefitted from training in accounting, inventory management and finance. Consequently, his management skills have improved, and his profits are increasing. “Now that I have a checkbook, I have become un grand Monsieur, a Big Boss” says Gnonhoussou, who dreams of exporting his outfits to other African countries and beyond, “even to Europe!”

Since 2012, the World Bank Group has been supporting the government of Benin to implement investment climate reforms that promote trade and competitiveness in the private sector.

The Benin Investment Climate Program specifically aims to build a strong business enabling environment by simplifying business entry and operation procedures, while the Competitiveness and Integrated Growth Opportunity Project aims to foster entrepreneurship.

Both projects jointly support the implementation of the enterprising legal status, including access to credit and incentives such as: lighter tax regime, assistance in the formalization process, and support with bank, tax mediation and counseling services. 

The project is expected to attract hundreds of small businesses to formalize, generate thousands of jobs and contribute to sustainable economic growth in the country. The expectation is that the status will be rolled out across all 17 OHADA member states (most francophone countries in Sub-Saharan Africa) in the near future.