Benin Economic Outlook
- The slight improvement in the country’s economy in 2011 should continue in 2012 and 2013.
- The modernisation and diversification of the agricultural sector and development of the country’s infrastructure are essential if there is to be strong and sustainable growth.
- Improving basic social services and finding jobs for the young are major challenges.
Economic activity in Benin got progressively back on track in 2011 after the presidential and legislative elections held between March and April. The recovery of agriculture after the floods and the repair of infrastructure helped restore economic growth, which should accelerate in 2012. The nation’s economy is, however, still characterised by severe vulnerability to shocks, arising from the low level of diversification of sources of growth. Modernisation and diversification of the agricultural sector and infrastructure development will prove to have a decisive role in making possible strong and sustainable growth. Monetary policy will need to seek to lessen the inflationary pressures arising from the partial removal of subsidies to petrol prices in Nigeria while ensuring that there is enough liquidity to sustain economic activity.
In the social context, with 35% of the population living below the poverty level it is hard to see the Millennium Development Goals (MDGs) being achieved by 2015. The 2011-15 poverty reduction strategy programme (PRSP) places emphasis on achieving the education and health targets. Unemployment and underemployment are twice as high among young people as among adults, chiefly because of the insufficient amount of jobs, reluctance by employers to take on those seeking their first jobs and the mismatch between training and employment. Several programmes have been established but the results have been mixed because, in particular, of the scant resources allocated to structures responsible for employment and of the lack of reliable information about the situation of youth employment.
