With a gross national per capita income estimated at almost US$ 510 in 2006, Benin has made significant progress, reflected at the macro-economic level in a real gross domestic product (GDP) growth rate of almost 4%, control of inflation and a sustainable budget deficit. Benin has established a system to monitor and evaluate its poverty reduction programmes through the Social Change Observatory. With regard to governance, the country is marked by outstanding stability and progress towards the entrenchment of democracy.  Benin has significant assets with which to accelerate its growth and reduce poverty by 50% by 2015. These lie mainly in its agricultural potential and the development of services related to its position as a transit country in the sub-region.

Development Policy

The government's programme focuses on:

• strengthening the medium-term economic framework
• human capital development and environmental management
• enhancing governance and building institutional capacities
• fostering sustainable employment and building the capacities of the poor to participate in the decision-making and production processes.

The resulting government programme forecasts that, over the 2005-2009 period, economic growth will gradually rise to 7% with a view to significantly reducing the impact of poverty.

Bank Group Strategy 

The AfDB strategy for Benin focuses on two key pillars:

• diversification of production
• broader access to basic social services.

This strategy supports the government in its efforts to achieve the Millennium Development Goals (MDGs). Support for reforms and good governance will also be pursued.  With regard to issues relating  to the macro-economic and structural context, Benin has, since the early 90s, posted an annual growth rate of about 5% and inflation has been below 3%. This growth is driven essentially by the agricultural and tertiary sectors which, respectively, account for almost 36% and 50% of GDP. Due to its potential, the rural development sector (agriculture, livestock, fisheries and water supply) is one of the economy’s main sources of economic growth.  This sector employs 70% of the work force and accounts for about 33% of GDP and over 80% of the country’s export earnings. The livestock, fisheries and forestry sub-sectors account for almost 11% of GDP.  The diagnostic review of the water supply sub-sector shows a low connection rate of around 38%. With respect to agriculture, apart from the overall production which ensures the country’s food security, cash crops remain dominated by cotton which represents  about 81% of exports, far ahead of palm oil, cashew and pineapples which account for about 10% of foreign sales. Agriculture remains highly dependent on rainfall and not very competitive owing to input costs which remain high, and is highly under-mechanized. Industry accounts for almost 14% of GDP.

With regard to priority cross-cutting issues, the promotion of Good Governance is one of the strategic thrusts of the PRSP. It is the principal benchmark for the definition and implementation of good governance and capacity building–related actions. Benin has significant assets for private sector development: political stability, the existence of a viable commercial banking sector, as well as the availability of port and airport infrastructure. Its geographical position enables it to play a special transit role as the gateway to landlocked countries (Niger, Burkina) and Nigeria.