Resource information
Benin has made substantial progress over
the past decade in reinforcing macroeconomic stability,
which has laid the foundation for modest but accelerating
growth. After averaging less than 3.7 percent from
2007-2011, GDP growth rose to 5.4 percent in 2012 and
reached 5.6 percent in 2013. Growth is expected to remain
strong at 5.5 percent in 2014. Benin s enhanced growth
performance has been supported by ongoing efficiency
improvements at the Port of Cotonou, a vital regional trade
hub, which have boosted traffic and cut marginal shipping
costs. These developments have been complemented by stronger
cotton and non-cotton agricultural production, which have
been bolstered by favorable weather conditions and
relatively effective management of recent cotton campaigns.
The weak connectivity between macroeconomic growth and
poverty reduction arises largely from the very modest growth
of per capita income. In addition, the highly informal
nature of the economy, low and declining productivity,
particularly in agriculture, and a lack of economic
diversification all contribute to the persistence of poverty
in Benin. Agricultural growth has been driven by the
expansion of cultivated land rather than by increased
productivity. Similarly, the increasing size of the national
labor force has made a far larger contribution to GDP than
have increases in labor productivity. Growth in the formal,
salaried labor market remains constrained, and few high
productivity/high wage jobs are being created.
Strengthening the links between growth and poverty reduction
will require boosting productivity, enhancing the business
and investment climate, and promoting formalization. In this
context, the Benin Economic Update is designed to provide
timely analysis of recent developments and contribute to the
ongoing dialogue on sound macroeconomic management and
effective poverty reduction.
