Over the period 2017-2019, cotton production increased by 13.4%, i.e. a record production of 678,000.3 tonnes achieved during the 2018-2019 crop year compared to 597,573.2 tonnes during the 2017-2018 crop year. This performance has enabled Benin to become the leading cotton producer in Africa. Production forecasts for the 2019-2020 crop year are 732,273 tonnes.
Solid economic performance
Agriculture remains the backbone of the Beninese economy, which has improved remarkably in recent years. The growth rate of the Beninese economy was 6.9% in 2019, compared to 6.7% in 2018. The economic performance in 2019 is attributable to:
- the good performance of agricultural production, particularly cotton and food crops
- the vitality of activity in the construction sector
- favourable developments in the agro-industry sector
- the increase in the supply of electrical energy;
- the dynamism of the Port of Cotonou and its effects on transport activity;
- the strengthening of the efficiency of the financial authorities in the mobilisation of public revenue.
The diversification of export channels and the dynamism of the services sector play a key role in the health of Benin’s economy.
Economic reforms have been successful
The GDP growth rate is expected to be 3.5% in 2020, compared with an estimated 6.9% in 2019. This slowdown in growth is attributable to the impact of the coronavirus pandemic on the Beninese economy. The primary sector recorded growth of 5.2% in 2019, in connection with the increase in food production (cereals and tubers), the notable performance recorded by cotton production and the appreciable contribution of ginning activities. Activity in the secondary sector grew by 13.6% in 2019, after 4.8% in 2018, supported by the good performance of all branches. This dynamism is encouraged by the strengthening of construction activity, the dynamism observed in the agrifood industries and the strengthening of the supply of electrical energy.
The energy sector is in full expansion with the launch in August 2019 of the Maria-Gléta 2 power plant as part of the Government Action Program (PAG) 2016-2021. With a capacity of 127 MW, this power plant is a key lever for the Beninese economy. The PAG, which has been implemented since 2016, considerably encourages regulation as well as the technical and functional capacities of institutions. As a result, the creation of companies has increased considerably between January and August 2019. That is, more than 19,200 national and foreign companies registered according to the statistics of the Investment and Export Promotion Agency (APIEX).
Tertiary sector activity grew by 5.2% in 2019 due to the good performance of the telecommunications, hotels and restaurants and other services sub-sectors.
In 2020, the budget deficit is expected to widen to 3.5% of GDP after 0.5% in 2019 due to lower revenues, higher health expenditure and economic support measures induced by the COVID-19 pandemic. As for public debt, the debt ratio would be 42.6% of GDP in 2020.
Benin’s economic performance over the past three years has been remarkable and the outlook for the country’s economy remains positive, as evidenced by Bloomfield’s long-term investment grade rating of A-. The ten-year development plans launched in 2019 continue, including the strategic plan for the development of the agricultural sector 2017-2025 and the national agricultural, food security and nutrition investment plan 2017-2021. These programs are supported by seven (7) agricultural development poles with the implementation and extension of the promotion of the cotton, rice, cassava, pineapple, maize and cashew sub-sectors.
Thanks to the economic reforms adopted over the past four years, Benin has become the leading cotton-producing country on the African continent. The actions taken to implement these reforms have also enabled the country to be ranked 149th out of 190 countries in the Doing Business 2020 ranking, an improvement of four ranks (4) compared to the previous period.
For a more complete picture of Benin’s economy and investment prospects, download the Benin information note here.
SOURCE
- La Tribune Afrique : https://afrique.latribune.fr/afrique-de-l-ouest/benin/2018-06-10/benin-contribution-record-de-la-filiere-cotonniere-au-budget-de-l-etat-781308.html
- Banque mondiale : https://www.banquemondiale.org/fr/country/benin/overview
- 24aubénin : – https://www.24haubenin.info/?Benin-1er-producteur-du-coton-grace-aux-reformes-du-gouvernement
- Doing business : https://francais.doingbusiness.org/
- Benin Information note – UMOA-Titres, 2020 edition
