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GDP (2001 est.): $2.4 billion.
Real GDP growth rate (2002): 5.8%.
Per capita GDP: $380.
Inflation rate: 2.4% (2002). 3% (2003).
Natural resources: Small offshore oil deposits, unexploited deposits of high quality marble limestone, and timber.
Agricultural: Products--corn, sorghum, cassava, tapioca, yams, beans, rice, cotton, palm oil, cocoa, peanuts, poultry, and livestock. Arable land--13%. Permanent crops 4%, permanent pastures 4%, forests and woodland 31%. Business and industry: Textiles, cigarettes, food and beverages, construction materials, petroleum.
Trade: Exports--$396 million: cotton, crude oil, palm products, cocoa. Imports--$807 million: foodstuffs, tobacco, petroleum products, energy, and capital goods. Major trade partners--Nigeria, France, China, Italy, Brazil, Libya, Indonesia, U.K., Ivory Coast.
Benin's economy is chiefly based on agriculture. Cotton accounts for 40% of GDP and roughly 80% of official export receipts. There also is production of textiles, palm products, and cocoa. 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. A number of formerly government-owned commercial activities are now privatized, and the government, consistent with its commitments to the IMF and World Bank, has plans to continue on this path. 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.
Since the transition to a democratic government in 1990, Benin has undergone a remarkable 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. Benin is dependent on imported electricity, mostly from Ghana, which currently accounts for a significant proportion of the country's imports. Benin has several initiatives to attract foreign capital to build electricity generation facilities in Benin in order to break this dependency. The service sector has grown quickly, stimulated by economic liberalization and fiscal reform. Membership of the CFA Franc Zone offers reasonable currency stability. 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 also is a member of the West African economic community ECOWAS.
In March 2003, the World Bank and International Monetary Fund (IMF) agreed to support a comprehensive debt reduction package for Benin under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Debt relief under HIPC amounts to approximately $460 million. Benin received $27.1 million in 2002 and is slated to receive $32.9 million in 2003. HIPC will reduce Benin's debt-to-export ratio, freeing up considerable resources for education, health, and other anti-poverty programs.
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.