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Located at the crossroads of two major regional corridors ¡ª the Abidjan-Lagos and the Cotonou-Niamey corridors ¡ª Benin¡¯s geographic position makes it a key commercial and tourist hub in West Africa. The country has 121 kilometers of coastline along the Gulf of Guinea and shares borders with Nigeria, Burkina Faso, Niger, and Togo.

Political situation

Benin enjoys a stable political environment, characterized by successive democratic transitions. On January 8, 2023, parties supporting the incumbent President Patrice Talon won the legislative elections, securing 81 out of 109 seats in the National Assembly. The main opposition party, Les D¨¦mocrates, won 28 seats, marking the return of the Beninese opposition to Parliament after a four-year absence. The next general elections are scheduled for 2026 and will be governed by a new electoral code adopted by Parliament on March 5, 2024.

Social situation

The population stood at 13.35 million in 2022, with a fertility rate of 5.7 children per woman and a life expectancy of 61.2 years. Between 2021 and 2022, the national poverty rate was 36.2%, down 2.3 percentage points compared to 2018¨C2019. The unemployment rate was 2.4%, while underemployment affected 72% of the labor force, and 90.1% of workers were employed in the informal sector.

The country¡¯s ranking in the United Nations Human Development Index (HDI) remains low, although it has improved over time. In 2020, Benin ranked 166th out of 191 countries with an HDI of 0.525, due to a low life expectancy at birth (59.8 years), and a low expected and average number of years of schooling (10.8 and 4.4 years, respectively). Despite progress in education and health, Benin¡¯s 2020 Human Capital Index remains low at 0.40.

Several international and regional socio-economic shocks may slow the current poverty reduction trend. These include the impact of WAEMU sanctions against neighboring Niger, the consequences of the war in Ukraine, political instability in neighboring Sahel countries, rising insecurity, and social tensions in northern Benin. These shocks could result in continued volatility in the prices of food, energy, and fertilizer, negatively affecting poor and vulnerable households, and pushing more people into poverty.

Economic situation

Despite persistent regional security challenges, particularly in northern Benin, and trade-related uncertainties, GDP growth reached 6.7% in 2024 (4.1% per capita), up from 6.4% in 2023. Growth was driven primarily by strong performance in industry and agriculture, as well as the resilience of the services sector. Inflation, which had doubled in 2023 to reach 2.8%, fell sharply in 2024 to an average of 1.2% year-on-year, due to lower energy and transport prices.

The continued increase in revenue, combined with restrained investment spending, led to a significant reduction in the fiscal deficit ¡ª from 4.1% of GDP in 2023 to 3.0% in 2024 ¡ª reaching the WAEMU convergence criterion for the first time in five years. With the implementation of the Medium-Term Revenue Mobilization Strategy, revenue-led fiscal consolidation is expected to keep the fiscal deficit within the 3% of GDP threshold over the medium term. Public debt declined to 53.4% of GDP in 2024 and is expected to remain contained. The continued reduction in the fiscal deficit, along with active debt management, has helped preserve debt sustainability. Benin remains at moderate risk of debt distress.

Development challenges

Thanks to strong macroeconomic stability since 2016, the government was able to rely on fiscal space to support economic activity during the COVID-19 pandemic. Sustained recovery will depend on addressing structural vulnerabilities in the growth model. The economy remains highly dependent on the export of unprocessed agricultural products (cotton, cashew nuts), and on the re-export of basic imported goods (used vehicles, rice, etc.) to Nigeria. About 85% of the labor force is engaged in the informal economy. Domestic revenue mobilization, while steadily improving since 2020, remains among the lowest in the WAEMU region. Short-term prospects are subject to geopolitical uncertainties, especially in the North, and instability in neighboring countries.

Last Updated: Apr 07, 2025

A National Development Plan (PND) was launched in January 2019 for the 2018¨C2025 period, with the objective of achieving priority Sustainable Development Goals (SDGs). The Government Action Plan 2021¨C2026 covers all ongoing investments, projects, and programs in the country.

World Bank Group engagement in Benin

Aligned with the government¡¯s development plan, the World Bank Group¡¯s Country Partnership Framework (CPF) for Benin covering 2018¨C2023 focused on three areas:

• structural transformation to boost competitiveness and productivity;
• investments in human capital;
• resilience-building and climate vulnerability reduction.

Preparation of the new CPF for 2025¨C2034 is underway. The upcoming CPF will include a focus on climate adaptation and fragility issues.

Current World Bank commitments total $2.44 billion across 13 national projects. An additional seven regional projects amounting to $371.98 million complement the portfolio.

International Finance Corporation ()

IFC aims to expand its engagement and impact as a key player in private sector development in Benin.

Following the 2023 Country Private Sector Diagnostic, IFC launched a 2024 study on value chain integration between Benin and Nigeria to assess investment opportunities and leverage the economic potential of the Nigerian market. Financially, IFC continues to support local SMEs through financial intermediaries. IFC also provides advisory support in creative industries, affordable housing, and logistics and digital infrastructure.

Finally, in partnership with the Investment and Export Promotion Agency (APIEX), IFC supports the textile and apparel industry through awareness-raising events aimed at improving Benin¡¯s attractiveness and encouraging the establishment of new industrial firms.

Last Updated: Apr 07, 2025

Social protection

With support from the World Bank, the government finalized a Program-for-Results (PforR) operation aligned with the national Productive Safety Net Program (PFPSP 2022¨C2026). Launched in September 2023, this new operation follows the ACCESS project (Support to Communes and Communities for Expanded Social Services), which ended in June 2022. The PFPSP aims to: (i) expand the national productive safety net program known as ³Ò²ú¨¨²õ²õ´Ç°ì¨¦, which includes productive grants and a training program to support income-generating activities ¡ª with a focus on women as direct beneficiaries; and (ii) strengthen the capacity of the social protection system to respond to shocks affecting poor households. At least 150,000 individuals ¡ª representing 61% of the extremely poor households listed in the national social registry ¡ª will benefit from the program, which runs until end-2027.

The government is also implementing the Youth Inclusion Project (PRODIJ) with World Bank support. In effect since March 2021, the operation supports the National Employment Agency (ANPE) in rolling out the Az?li program, which promotes the economic and social inclusion of low-skilled or out-of-school youth aged 15 to 30, with a focus on girls and youth from disadvantaged backgrounds. As of February 2025, Az?li is active in all 77 communes of Benin and has become ANPE¡¯s flagship program for vulnerable youth. Under the wage employment component, 20,012 vulnerable youth (including 7,467 young women) have been placed in internships leading to employment. Under the self-employment component, 21,024 beneficiaries ¡ª including 11,732 young women ¡ª have received start-up grants to launch microenterprises. In terms of apprenticeships, around 3,600 candidates pre-selected for the Vocational Qualification Certificate (CQP) began training in December 2023 and will sit for the CQP exam in March and December 2025.

Benin also participates in Phase 2 of the West Africa Unique Identification for Regional Integration and Inclusion (WURI) program, which aims to increase the number of people with government-recognized unique identification to improve access to services. Launched in November 2020, WURI has already issued free ID cards (fID certificates) to nearly 6 million people.

Agriculture

The Support Project for Agricultural Value Chains Competitiveness and Export Diversification (PACOFIDE) was launched in October 2020 for a six-year period, with initial funding of $160 million. The project aims to create a conducive policy environment for increased private investment in agriculture, raise productivity in selected value chains, improve market access, and diversify exports.

In response to soaring input prices in 2023 and 2024, the project facilitated access to fertilizers during the 2023¨C2024 and 2024¨C2025 farming seasons, with $80 million in support. In June 2024, the World Bank approved an additional $150 million in financing for the project over four more years. The additional funding aims to (i) enhance food security in northern Benin by developing 3,000 hectares of irrigated land for rice and vegetable production in Malanville and Karimama communes; and (ii) scale up support to export value chains, particularly cashew and pineapple.

As of March 15, 2025, the project had reached 351,851 beneficiaries. It supported the creation of 17,818 hectares of new cashew plantations and the rehabilitation of 119,266 hectares of existing ones. To boost and diversify agricultural exports, the project is also financing the construction of a cold storage terminal for perishable goods at Cotonou airport. In addition, 190 matching grants have already been awarded to sub-projects along the pineapple and cashew value chains.

Last Updated: Apr 07, 2025

Benin¡¯s main development partners include the European Union, the African Development Bank, United Nations agencies, bilateral donors, the World Bank Group, and the International Monetary Fund. Less traditional lenders ¡ª such as China and the Islamic Development Bank ¡ª are also becoming more active. Since 2004, joint annual missions by major development partners have been organized to monitor implementation of structural and sectoral reforms. Regular joint sectoral reviews are conducted by the government and its partners.

Last Updated: Apr 07, 2025