Benin 

Benin country policy

Policy established 15 August 2000

• Off cover
• DSA/DSF: Public buyers at least 35% concessional
• Public buyers: ORIO facility
• Private buyers: SIF facility

Country class: 6

Restrictions

• Special conditions, consult your accountmanager

Benin country facts

Atradius DSB  Economic Research
Country Report last updated :  15 October 2008
Country :  BENIN 

Political Situation
Stable

Head of state
President Yayi Boni (since April 2006).

Form of government
Government of Presidential Movement.

Internal Economic Situation
High Growth, Low Inflation

General situation
Economic growth is expected to reach 5% this year and will reach 5.5% in 2009. A normalization of the trade relation with Nigeria and an improvement at the Cotonou port will boost the export sector. The West African Gas Pipeline, which transports gas from Nigeria to Benin and other countries, comes on steam and will improve power supply and cheaper gas. This will boost economic growth in Benin. Reforms in the cotton sector support growth in the cotton production. The construction sector benefits from large infrastructure projects and social housing projects. Public spending will also rise. The problems in the cotton sector, an import ban by main trading partner Nigeria and the inefficient management of the port of Cotonou caused a slowdown years ago. Inflation is expected to increase from 5.0% in 2008 from 1.0% last year mainly due to a sharp increase in food and fuel prices. 
 
External Economic Situation
Strong Liquidity, Improving Solvency

Main sources of foreign exchange
Cotton and textiles (30% exports), re-exports account for most part of exports.

Main foreign markets  China (33%), Indonesia (12%), India (11%), Netherlands (10%) (Nigeria is actually a key export market, but most bilateral trade with this country is not recorded (i.e. illegal).)

Main expenses of foreign exchange
Food, petroleum products.

Balance of payments 
Structural high CA deficits, financed by donor support.