Economy of Benin
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Overview:
The economy of Benin remains underdeveloped and dependent on subsistence agriculture, cotton Cotton accounts for 40% of GDP and roughly 80% of official export receipts. There is also production of textiles, palm products, and cocoa. Maize (corn), beans, rice, peanuts, cashews, pineapples, cassava, yams, and other various tubers are grown for local subsistence. Benin began producing a modest quantity of offshore oil in October 1982. Production ceased in recent years but exploration of new sites is ongoing. A modest fishing fleet provides fish and shrimp for local subsistence and export to Europe. Formerly government-owned commercial activities are now privatized. A French brewer acquired the former state-run brewery. Smaller businesses are privately owned by Beninese citizens, but some firms are foreign owned, primarily French and Lebanese. The private commercial and agricultural sectors remain the principal contributors to growth.
Economic Development
Since the transition to a democratic government in 1990, Benin has undergone an economic recovery. A large injection of external investment from both private and public sources has alleviated the economic difficulties of the early 1990s caused by global recession and persistently low commodity prices (although the latter continues to affect the economy). The manufacturing sector is confined to some light industry, which is mainly involved in processing primary products and the production of consumer goods. A planned joint hydroelectric project with neighboring Togo is intended to reduce Benin's dependence on imported energy mostly from Ghana, which currently accounts for a significant proportion of the country's imports. The service sector has grown quickly, stimulated by economic liberalization and fiscal reform. Membership of the CFA Franc Zone offers reasonable currency stability as well as access to French economic support. Benin sells its products mainly to France and, in smaller quantities, to the Netherlands, Korea, Japan, and India. France is Benin's leading source for imports. Benin is also a member of the West African economic community ECOWAS.
Despite its rapid growth, the economy of Benin still remains underdeveloped and dependent on subsistence agriculture, cotton production, and regional trade. Growth in real output averaged a sound 5% since 1996, but a rapid population rise offset much of this growth on a per capita basis. Inflation has subsided over the past several years. Commercial and transport activities, which make up a large part of GDP, are vulnerable to developments in Nigeria, particularly fuel shortages.
GDP: purchasing power parity - $8.1 billion (1999 est.)
GDP - real growth rate: 5% (1999 est.)
GDP - per capita: purchasing power parity - $1,300 (1999 est.)
GDP - composition by sector:
agriculture:
34%
industry:
14%
services:
52% (1997)
Population below poverty line: 33% (1995 est.)
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices): 3% (1999 est.)
Labor force: NA
Unemployment rate: NA%
Budget:
revenues:
$299 million
expenditures:
$445 million, including capital expenditures of $14 million (1995 est.)
Industries: textiles, cigarettes; beverages, food; construction materials, petroleum
Industrial production growth rate: NA%
Electricity - production: 6 GWh (1998)
Electricity - production by source:
fossil fuel:
100%
hydro:
0%
nuclear:
0%
other:
0% (1998)
Electricity - consumption: 276 GWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 270 GWh (1998)
Agriculture - products: maize, sorghum, cassava (tapioca), yams, beans, rice, cotton, palm oil, peanuts; poultry, livestock
Exports: $396 million (f.o.b., 1999)
Exports - commodities: cotton, crude oil, palm products, cocoa
Exports - partners: Brazil 32%, Libya, Indonesia, Spain (1998)
Imports: $566 million (f.o.b., 1999)
Imports - commodities: foodstuffs, tobacco, petroleum products, capital goods
Imports - partners: France 22%, People's Republic of China 16%, United Kingdom, Netherlands (1998)
Debt - external: $1.6 billion (1997 est.)
Economic aid - recipient: $281.2 million (1995)
Currency: 1 Communaute Financiere Africaine franc (CFAF) = 100 centimes
Exchange rates:
CFA francs (CFAF) per US$1 - 647.25 (January 2000), 615.70 (1999), 589.95 (1998), 583.67 (1997), 511.55 (1996), 499.15 (1995)
note:
from 1 January 1999, the CFAF is pegged to the euro at a rate of 655.957 CFA francs per euro
Fiscal year: calendar year
Reference
Much of the material in this article comes from the CIA World Factbook 2000 and the 2003 U.S. Department of State website.