IFC, World Bank Charge Benin to Drive Growth with Agribusiness, Tourism

March 31, 2023
Nigeria-Benin Border

By Adedapo Adesanya

The Republic of Benin can create quality jobs, grow its economy, and reduce poverty by enabling private sector–led expansion in its agribusiness and tourism sectors and by better leveraging its strategic location as a transit point into West Africa, according to a report published by the International Finance Corporation (IFC) and the World Bank.

The Benin Country Private Sector Diagnostic (CPSD) explores the challenges and opportunities for Benin’s private sector, suggests areas for reform, and highlights sectors with the greatest potential to drive sustainable, inclusive growth in line with Benin’s Government Action Program (Programme d’Actions du Gouvernement, 2021-2026).

Benin enjoyed growth rates in the 2010s of about 5 per cent annually, well above the average across sub-Saharan Africa, where poverty rates remained high, measured at almost 40 per cent in 2019.

The CPSD is geared towards maximizing the job-creation potential of the private sector and making Benin’s economy more resilient to external shocks such as the recent COVID-19 crisis and new headwinds, including inflation.

In agribusiness, increased private sector participation in crop production, including pineapples and soybeans, improving access to markets, and enabling solutions to channel more financing to agribusiness firms and farmers, would support growth in the sector, which accounts for 40 per cent of employment in Benin.

The CPSD specifically highlights Benin’s Glo-Djigbé Special Economic Zone, which was established in 2021, as a positive platform to support increased agro-processing and exports.

Regarding tourism, the report points to neighbouring Nigeria—Africa’s largest economy and most populous country—as a huge but largely untapped source of visitors. Benin is home to international heritage sites, including the historic city of Ouidah and spectacular scenery, yet tourist visits have stagnated because of inadequate market development.

Speaking on this, Mr Kyle Kelhofer, IFC Senior Country Manager for Benin, Ghana, Guinea, and Togo, said, “The CPSD recognizes Benin’s progress in developing a business-friendly environment and recommends further reforms to exploit Benin’s competitive advantages in agribusiness, tourism, and regional integration.

“IFC has ramped up its presence in Benin to provide support to improve the investment climate and help Benin attract more investment.”

“The CPSD advances Benin’s Government Action Program by identifying specific sectors with the highest potential for growth, job creation, and poverty reduction,” said Mr Atou Seck, World Bank Country Manager for Benin. “Additionally, the CPSD informs the framework for the World Bank Group’s partnership with Benin in achieving higher rates of economic and social well-being in 2023 and beyond.”

The CPSD also highlights Benin’s strategic location at the crossing of the Abidjan-Lagos and Cotonou-Niamey regional corridors, giving it an advantage as a transit point for regional trade. Benin could seek to turn its transit corridors into economic corridors.

To unlock the opportunities in tourism and regional trade, and in other sectors, Benin could accelerate its digitization agenda, including by outlining clearer regulations and allowing for more competition in its telecoms sector, according to the report. Other urgent reforms include promoting a sustainable supply of energy and increasing the resilience of the electricity network to climatic shocks.

The private sector would also benefit from greater access to finance, including through digital finance solutions and strengthening the credit infrastructure.

In line with the CPSD’s findings, the World Bank Group’s strategy for Benin focuses on transformative sectors such as agribusiness, financial markets, and tourism, leveraging digitization and public-private partnerships.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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