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Economic and political overview

Economic Overview

Benin’s strong macroeconomic fundamentals and successful reforms have helped the country achieve robust economic growth despite recent external shocks such as the COVID-19 pandemic and the latest geopolitical tensions in Europe and the Middle East. Growth was estimated at 6.3% in 2024, with a forecast of 6.4% in 2025-2026 (data World Bank). The expansion of the construction and agro-food sectors, fueled by increased agricultural output and the development of the export-oriented GDIZ (Glo-Djigbé Industrial Zone), is expected to drive growth. The possible reopening of the border with Niger, improved customs relations with Nigeria, and the modernization of the Port of Cotonou will further support the services sector. On the demand side, strong investment from infrastructure projects and foreign capital in the GDIZ expansion will offset the end of the Niger-Benin pipeline investment and sustain growth. Increased export crop value-added and strong consumption, supported by lower inflation, will also contribute to growth.

Concerning public finances, Fitch Ratings estimated that the fiscal deficit narrowed to 3% of GDP in 2024, down from 5.5% in 2022 and 4.1% in 2023, reflecting higher revenue and lower current expenditure than budgeted, partly due to increased spending efficiency, underscoring the government's commitment to fiscal consolidation. Looking ahead, the fiscal deficit is expected to converge toward the 3% WAEMU target, as further increases in revenue will finance social expenditure. Deficit reduction and strong medium-term growth are expected to drive public debt down from 53.6% of GDP in 2024 to 51% in 2026. Benin’s proactive financing strategy includes a USD 500 million, 16-year Eurobond issued in January 2025, with USD 250 million used to buy back part of its 2032 Eurobond, reducing debt service costs and extending the average maturity of its external debt. Combined with similar measures in 2021 and 2024, this has helped reduce short- to medium-term amortizations, lowering Benin’s financial needs to 6.3% of GDP by 2026. According to the World Bank, inflation in Benin is expected to average 1.3%, supported by improved staple supply and a reduction in global food prices.

Sustained growth in Benin has not led to rapid poverty reduction. The elasticity between GDP per capita growth and poverty reduction is 0.26, compared to an average of 1.1 for Sub-Saharan Africa from 2018-2021. While growth has been driven by physical capital accumulation, largely due to ambitious public investment plans, human capital development remains low and below that of peer countries. The informal sector, which accounted for 86% of companies in 2023, contributes to low total factor productivity, hindering structural transformation.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 19.6821.3223.0724.9627.00
GDP (Constant Prices, Annual % Change) 6.46.56.56.26.2
GDP per Capita (USD) 1,4331,5101,5871,6681,752
General Government Gross Debt (in % of GDP) 54.554.052.651.450.3
Inflation Rate (%) 2.82.02.02.02.0
Current Account (billions USD) -1.16-1.29-1.39-1.17-1.24
Current Account (in % of GDP) -5.9-6.0-6.0-4.7-4.6

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Benin’s economy is heavily reliant on agriculture. This sector accounts for 25.4% of Benin’s GDP and employs an estimated 28% of the workforce (World Bank, latest data available). The country has fertile land, and a third of its territory is suitable for agriculture. Around half of the population relies on subsistence farming for their livelihood, whereas cotton is the main crop and the key export commodity, accounting for a significant share of total exports. Other cultivations include cashew nuts, corn, cassava, yams, beans, palm oil, and peanuts. According to figures from INStaD, the 2023-2024 agricultural season saw a significant increase in cereal production, reaching 2,737,481 tonnes, compared to a five-year average of 2,219,312 tonnes and 2,297,373 tonnes in 2022. This growth was driven by expanded cultivated areas, although yields declined across all cereal crops. Maize production played a key role, rising 27.1% to 2,059,254 tonnes from 1,619,605 tonnes in 2022, accounting for over 75% of total cereal output. Rice, the second most important cereal (18% of total production), declined by 6.2%, reaching 492,626 tonnes, down from 525,014 tonnes in 2022. However, this remained above the five-year average of 454,946 tonnes.

The industrial sector in Benin is characterized by a range of activities, with key sectors including agro-processing, textile manufacturing, and construction. Agro-processing represents a significant portion of the industrial landscape, with Benin's agricultural resources supporting industries such as palm oil refining, cotton ginning, and food processing. Textile manufacturing, although relatively small-scale, plays a vital role in the economy, leveraging the country's cotton production for fabric and garment production. Construction is another prominent sector, driven by infrastructure development projects and urbanization trends. Emerging sectors include renewable energy and light manufacturing, as the government seeks to diversify the industrial base and attract foreign investment. Overall, the industrial sector is estimated to account for 17.3% of GDP and 22% of employment, with manufacturing accounting for 10% of GDP (World Bank).

Services (dominated by trade and transport) account for 47.7% of Benin’s GDP and half of total employment. Benin's services sector encompasses various industries that contribute to the country's economic development. Key sectors include telecommunications, banking and finance, transportation, and tourism. Tourism, though still emerging, holds promise due to Benin's cultural heritage, historical sites, and natural attractions. As the government invests in infrastructure and promotes private sector participation, the services sector is expected to increase its share of GDP in the upcoming future.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 28.0 22.0 50.0
Value Added (in % of GDP) 25.4 17.3 47.7
Value Added (Annual % Change) 5.1 7.3 6.6

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
CFA Franc BCEAO (XOF) - Average Annual Exchange Rate For 1 USD 593.01582.09555.45586.00575.59

Source: World Bank - Latest available data.

 

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Foreign Trade

Benin is open to foreign trade, which represents 51% of its GDP (World Bank). The country is a member of various trade organizations, including the World Trade Organization and the West African Economic and Monetary Union (WAEMU). The vast majority of its trade passes through the port of Cotonou. Benin mainly exports cotton (48% of the total in 2023), coconuts, brazil nuts and cashew nuts (10.7%), soya beans (8.7%), petroleum oils (3.8%), and other oil seeds and oleaginous fruits (3.6%); whereas imports are led by rice (16.7%), petroleum oils (12.6%), palm oil (3.8%), medicaments (3.3%), and meat and edible offal of fowls (3.2% - data Comtrade).

The country’s main export partners are Bangladesh (37.2%), India (15.4%), Pakistan (7.2%), Togo (5.4%), China (5.3%), and the United Arab Emirates (4.3%), while imports come chiefly from India (17.1%), China (12.8%), France (8.6%), the United States (5.2%), and Nigeria (5.2% - data Comtrade 2023). Benin's export per capita has nearly doubled over the past 20 years but remains below the expected trend. Efforts to diversify exports are ongoing and driven by infrastructure investments and the strategic advantages of the Port of Cotonou. Cotton, the country’s traditional export product, remains vulnerable to weather-related shocks, the same as cashews.

Benin has a structurally negative trade balance, estimated at 9% of GDP in 2023 (from 7.6% one year earlier – World Bank). This is mainly due to low exports, which are largely made up of low-cost agricultural products, and the country’s heavy reliance on foreign countries for its oil and energy supply. According to WTO data, in 2023, Benin exported goods with a total value of USD 4 billion while it imported goods worth USD 4.2 billion. According to the national statistics bureau, during the second quarter of 2024, Benin's goods exports decreased by 12.9% compared to the previous quarter, while goods imports dropped by 13.2% during the same period.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 3,9323,5554,3704,7844,234
Exports of Goods (million USD) 3,0522,9963,6423,5684,071
Imports of Services (million USD) 806790931982n/a
Exports of Services (million USD) 528510512540n/a

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 63.744.848.150.951.4
Trade Balance (million USD) -444-156-352-637n/a
Trade Balance (Including Service) (million USD) -722-436-772-1,024n/a
Imports of Goods and Services (Annual % Change) 3.4-19.816.818.58.7
Exports of Goods and Services (Annual % Change) 8.6-25.012.619.16.2
Imports of Goods and Services (in % of GDP) 34.125.027.129.330.2
Exports of Goods and Services (in % of GDP) 29.619.920.921.721.2

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 16.012.011.710.610.1
Volume of imports of goods and services (Annual % change) 18.011.77.611.011.4

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Benin is a member of the WTO, the Economic Community Of West African States (ECOWAS), and the West African Economic and Monetary Union (UEMOA).
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
Bangladesh 37.2%
India 15.4%
Pakistan 7.2%
Togo 5.4%
China 5.3%
See More Countries 29.5%
Main Suppliers
(% of Imports)		 2023
India 17.1%
China 12.8%
France 8.6%
United States 5.2%
Belgium 3.8%
See More Countries 52.4%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Patrice TALON (since 6 April 2016) - the president is both chief of state and head of government 
Next Election Dates
Presidential: 12 April 2026
National Assembly: January 2026
Main Political Parties
Benin is formally a multy-party country, however opposition parties have no real chance of gaining power. The main parties reresented in the parliament include:

- Progressive Union for Renewal (UPR): centre-left, formerly called Progressive Union, in August 2022, the party merged with the Democratic Renewal Party and changed to its present name
- Republican Bloc (BR): centre, supports the current government
- Democrats (LD): centre-left to left-wing, social democracy, it is the main opposition party.
Executive Power
The President of the Republic is elected for a five-year term by universal suffrage using an uninominal majority ballot in two rounds, for a maximum of two terms, whether consecutive or not. He is the head of state, the holder of executive power, and the head of the Government. In this capacity, he determines and conducts national policy (Art. 54). The President appoints the members of the Government without requiring an advisory opinion from the National Assembly, as the Constitution grants him full authority over ministerial appointments.
Legislative Power
The legislative power in Benin is vested in the National Assembly, a unicameral body also known as the Assemblée Nationale, which comprises 109 seats, including 24 specifically designated for women. Members are elected directly in multi-member constituencies through a closed-list proportional representation system, with a 10% national threshold. They serve five-year terms, with the current members set to conclude their terms in 2026, aligning with the next general elections.
 

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