Authors

Overview

Recent Developments & Prospects

Macroeconomic Policy

Fiscal Policy

Monetary Policy

Economic Cooperation, Regional Integration & Trade

Debt Policy

Economic & Political Governance

Private Sector

Financial Sector

Public Sector Management, Institutions & Reform

Natural Resource Management & Environment

Political Context

Social Context & Human Development

Building Human Resources

Poverty Reduction, Social Protection & Labour

Gender Equality

Thematic analysis: Structural transformation and natural resources

Authors: Daniel Ndoye, El Hadji Mamadou Fall

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  • Growth in 2014, estimated at 5.5%, was driven by the agricultural and services sectors and by the country’s dynamic construction industry.
  • Based on the implementation of the structural-investments programme, growth is projected at 5.6% in 2015 and 6.0% in 2016, but will depend on how the political and social environment evolves.
  • Reducing regional disparities remains a challenge in Benin and will require implementing a spatial-inclusion policy and promoting regional business clusters.

Economic growth in 2014 was an estimated 5.5%, versus 5.6% in 2013. It was driven by
agriculture and services, which together accounted for more than 85% of GDP. Construction was stimulated by investment in transport and tourism. Inflation was negative, owing in particular to greater food crops in the 2013/14 season and to the decline in the price of oil since June 2014. In a context of high population growth, economic growth has not been sufficient to reduce poverty and inequalities.

The economic outlook for 2015 and 2016 will be shaped by the government’s determination to achieve the Millennium Development Goals and its implementation of a structural-investments programme (Programme d’investissements structurants – PIS). Growth, projected at 5.6% in 2015 and 6.0% in 2016, will require stepping up the reforms designed to improve the business climate and public-expenditure channels, public procurement in particular. The reforms aim to mobilise the resources announced when the PIS was presented at the round table held in Paris in June 2014, then to execute the investment plans. Political and social developments will also be key factors, as elections will be held in 2015 and 2016. It will therefore be important to strengthen dialogue amongst the country’s political figures to reach a consensus and to hold elections in compliance with the country’s constitutional provisions.

Reducing regional disparities is a challenge for Benin. Balanced and sustainable development of the national space is one of the five priority areas of the ongoing strategy for growth and poverty reduction (Stratégie de croissance pour la réduction de la pauvreté – SCRP). A key PIS objective is to reduce the isolation of production areas, agricultural ones in particular. To achieve their spatial-inclusion policy, the authorities must do more to promote regional business clusters in the rural areas, improve how the pace of urbanisation is managed and curb population growth.

Table 1: Macroeconomic indicators

 20132014(e)2015(p)2016(p)
Real GDP growth5.65.55.66
Real GDP per capita growth32.933.4
CPI inflation1-0.51.71.7
Budget balance % GDP-1.9-1.1-1.5-1.8
Current account balance % GDP-14.5-15.2-15.1-15.2

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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