The World Bank supports Benin’s poverty reduction strategy to increase growth, improve basic services access, governance and institutional capacity building.
Strategically positioned at the intersection of two major West African trade corridors — Abidjan-Lagos and Cotonou-Niamey — Benin is emerging as a key hub for commerce and tourism in the region. Its 121-kilometer coastline along the Gulf of Guinea, and shared borders with Nigeria, Togo, Burkina Faso, and Niger, further enhance its strategic importance.
Political Landscape
Benin maintains a stable political climate, marked by peaceful democratic transitions. In the January 8, 2023 legislative elections, parties allied with President Patrice Talon secured 81 of the 109 seats in the National Assembly. The main opposition party, Les Démocrates, returned to Parliament with 28 seats, ending a four-year absence. The next general elections are slated for 2026 and will be conducted under a revised electoral code adopted by Parliament on March 5, 2024.
Social Overview
As of 2022, Benin’s population reached 13.35 million, with a high fertility rate of 5.7 children per woman and a life expectancy of 61.2 years. The national poverty rate stood at 36.2% in 2021–2022, down from previous years. Although the unemployment rate was relatively low at 2.4%, underemployment remains widespread, affecting 72% of the workforce. Additionally, 90.1% of jobs are in the informal sector.
Benin ranks low on the UN Human Development Index, placing 166th out of 191 countries in 2020 with a score of 0.525. Contributing factors include limited life expectancy, and low average and expected years of schooling (4.4 and 10.8 years, respectively). The Human Capital Index in 2020 was also low at 0.40, reflecting persistent gaps in education and health outcomes.
Poverty reduction efforts face risks from external shocks, such as:
- Economic fallout from sanctions on Niger (WAEMU)
- Global effects of the war in Ukraine
- Instability in neighboring Sahel countries
- Rising insecurity and social tensions in northern Benin
These factors contribute to price volatility in food, fuel, and fertilizers, which disproportionately affect vulnerable households.
Economic Performance
Despite regional security and trade uncertainties, Benin’s economy grew by 6.7% in 2024 (4.1% per capita), up from 6.4% in 2023. Growth was led by strong performance in agriculture and industry, with services showing resilience. Inflation, which had risen to 2.8% in 2023, dropped to 1.2% in 2024, aided by falling energy and transport costs.
Improved revenue collection and restrained investment spending helped reduce the fiscal deficit from 4.1% of GDP in 2023 to 3.0% in 2024 — meeting the WAEMU fiscal convergence target for the first time in five years. A Medium-Term Revenue Mobilization Strategy supports continued fiscal discipline, expected to keep the deficit within the 3% threshold.
Public debt decreased to 53.4% of GDP in 2024 and remains sustainable, with Benin assessed as being at moderate risk of debt distress. Active debt management and fiscal consolidation have reinforced debt sustainability.
Development Challenges
Benin’s strong macroeconomic foundation since 2016 has allowed it to respond effectively to crises like COVID-19. However, structural challenges remain:
- Heavy dependence on unprocessed agricultural exports (cotton, cashew)
- Reliance on re-export trade with Nigeria
- Dominance of the informal economy, employing 85% of the labor force
- Low domestic revenue mobilization, among the weakest in WAEMU
Short-term growth prospects are vulnerable to regional instability, particularly in the north, and external geopolitical tensions.
