The Economy of Benin

Benin’s economy is still underdeveloped and mainly dependent on livelihood agriculture, cotton production, and regional trade. The production of cotton accounts for about 40% of GDP and approximately 80% of all export income. The GDP in 2007 is estimated at $12.18 billion with per capita (PPP) of $1,500. The $307-million Millennium Challenge Account initiated in 2006 aims to develop the business practice in Benin through improvement in land tenure system, financial sector, and commercial justice system. The country is an affiliate of the West African economic group ECOWAS and CFA Franc Zone.

The service sector remains the biggest contributor to Benin’s GDP at 52.3% in 2007, followed by agriculture at 33.2% and industry with 14.5%. The country’s main trading partners include China, Indonesia, India, France, Netherlands, and Niger. Main exporting products are cotton, cashews, shea butter, textiles, palm products and seafood.

In the 1990’s, Benin undergone a shift to democratic government resulting to significant increase of private and public investments. The service sector has also experienced major growth because of the government’s economic reform and fiscal liberalization. Benin benefited considerably after the announcement of the G8 debt reduction in July 2005; the Paris Club and some bilateral creditors helped eased the country’s external debt condition. Some of the continuing problems in the country are the inequality on women’s wage, employment of child labour, and forced labour related issues.