Benin Economic Outlook
- Growth, estimated at 5.2% in 2015 against 6.5% in 2014, dipped slightly due to a decline in cotton production and disruptions in the electricity supply.
- Projected growth rates of 5.5% in 2016 and 5.7% in 2017 will depend on political and social developments, marked by the March 2016 presidential election.
- With Benin’s cities expanding, sustainable urbanisation through regional development hubs will require new funding, notably from private sources.
Growth, estimated at 5.2 % in 2015, down from 6.5 % in 2014, slowed for three main reasons: disruptions in electricity supply, less favourable rainfall and the slowdown in economic activity in neighbouring Nigeria. Inflation remained low due to the drop in oil and food prices. The government deficit widened, however, with an increase in public investment and current expenditure, leading to greater recourse to government securities.
Growth is forecast to reach 5.5% in 2016 and 5.7% in 2017 thanks to support for the agriculture sector and investment in infrastructure. Economic policy in 2016 and 2017 should work towards the Sustainable Development Goals for 2030. The political and social environment will be decisive in a context marked by the presidential election of March 2016. The vote threatened to raise tensions among political parties, although the risk of a political crisis or instability remained low.
The challenge of urbanisation must be addressed in order to ensure balanced development and reduce poverty. Urban growth, which has accelerated in recent years, creates challenges in terms of transit and pollution, as well as housing and land management. The authorities intend to promote sustainable urbanisation through the emergence of several regional development hubs that will require greater private-sector investment. Mechanisms to support public-private partnerships (PPPs) and access to banking for local communities therefore need to be promoted.