Benin is a stable democracy in Sub-Saharan Africa with strong institutions and 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 2017 budget estimated at $3.35 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 five years through public-private partnerships (PPPs). A new law to facilitate PPPs is in the works, which is expected to attract additional Foreign Direct Investment (FDI) and increase the country’s economic growth working toward the fulfillment of a 5-year Government Action Plan. The GOB is also working on updates to the country’s investment and public procurement code 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’Action 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 development, agriculture and agribusiness, tourism, health, and education. The government claims that the PAG will create 500,000 jobs. Critics of the president have charged that Talon and his allies will use the PPP law and the PAG to sign sole source contracts for their own profit. 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 perception.
Benin continues its efforts to attract private investment in support of economic growth – a link the Government of Benin (GOB) emphasizes is 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, despite GDP growth slowing in 2016 to 4.6 percent, largely due to economic recession in neighboring Nigeria on which Benin’s economy heavily depends. The cotton industry, the Port of Cotonou, telecommunications, energy, the cement industry, housing, and agribusiness 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.
In September 2015, the United States Government and the Government of Benin signed a $403 million Millennium Challenge Corporation (MCC) compact focused on reforming the supply of electricity in Benin. It is Benin’s second MCC compact and will advance policy reforms to bolster financing for the energy sector, attract private capital into power generation, and strengthen regulation and utility management. Infrastructure to be funded by the compact includes 78 megawatts of power generation capacity and modernization of the distribution grid. The compact, which also includes a significant off-grid electrification project, is expected to enter into force in mid-2017. Benin’s 2006-2011 MCC compact modernized the country’s port and improved land administration, the justice sector, and access to credit.
|TI Corruption Perceptions Index||2016||95 of 176||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report “Ease of Doing Business”||2016||155 of 190||doingbusiness.org/rankings|
|Global Innovation Index||2016||121 of 128||globalinnovationindex.org/content/page/data-analysis|
|U.S. FDI in partner country ($M USD, stock positions)||2015||USD 18 million||http://www.bea.gov/international/factsheet/|
|World Bank GNI per capita||2015||USD 840||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|