Overview

The country’s ranking on the United Nations Human Development Index (HDI) remains low, although it has improved over time. In 2020, Benin was ranked 166th out of 191 countries with an HDI of 0.525, as a result of its low life expectancy at birth (59.8 years) and low expected and average years of schooling (10.8 years and 4.4 years, respectively).

The effects of the COVID-19 pandemic, the impact of WAEMU sanctions against neighboring Niger, the fallout from the Russian invasion of Ukraine, political instability in neighbouring Sahel countries, growing insecurity, and social tensions in the North could lead to continued volatility in the price of food, energy, and fertilizers, which would in turn adversely affect poor and vulnerable households, thereby slowing poverty reduction and pushing more households into situations of fragility.

Development Challenges

Thanks to its solid commitments in terms of macroeconomic stability since 2016, the State has been able to count on fiscal space to support economic activities during the pandemic. Continued economic recovery will hinge on its ability to address the fragilities associated with its growth model. Indeed, the economy is dependent on exports of unprocessed agricultural products (cotton, cashew nuts) and the re-exportation of imported goods and commodities (used cars, rice, etc.) to Nigeria. Nearly 85% of the workforce works in the informal economy. Domestic revenue mobilisation remains among the lowest in WAEMU despite steady progress since 2020. The short-term outlook is dependent on the uncertainties of the geopolitical context, particularly in the northern regions, as well as the turmoil in neighboring countries.

Source: World Bank