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Benin: 2005 Country Commercial Guide
INTRODUCTION:
This Country Commercial Guide presents a comprehensive look at Benin’s commercial environment using economic, political and market analysis, including a stand-alone section (Chapter 7) with an Investment Climate Statement. Country Commercial Guides can be ordered in hard copy or on diskette from National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information and assistance or country-specific commercial information should consult with their nearest export assistance center or the U.S. Department of Commerce’s Trade Information Center at (800) USA-TRADE, or go to one of the following web sites: www.buyusa.com, www.export.gov, or www.tradeinfo.doc.gov.
Political and Economic Officer Ms. Shelly J. Dittmar heads U.S. Embassy Cotonou’s Commercial Section and is assisted by commercial assistant Marius Lotsu. Business travelers arriving in Benin seeking appointments with U.S. Embassy Cotonou should contact Ms. Dittmar or Mr. Lotsu in advance via email Dittmarsj@state.gov or LotsuMC@state.gov, telephone (229) 30-06-50, or fax (229) 30-06-70. Internet access is available cyber cafes throughout the city or at the commercial library of the Embassy’s American Cultural Center, which is near the Novotel Hotel in Cotonou along the ocean. The library’s Director, Bienvenu Akodignan, can be reached via e-mail AkodignanB@state.gov or telephone at (229) 30-03-12.
U.S. Embassy Dakar and Abidjan’s Foreign Commercial Service (FCS) regional office supports U.S. Embassy Cotonou’s commercial promotion efforts. They are available by email at abidjan.office.box@N0SPAM.mail.doc.gov or by telephone at (221) 823-4296 and (225) 22-41-12-50/52. For further information about commercial officers in West Africa, we encourage U.S. business travelers to obtain a copy of the "Key Officers Of Foreign Service Posts: Guide For Business Representatives" available for purchase by the superintendent of documents, U.S. Government Printing Office, Washington, D.C. 20402; tel. (202) 512-1800; fax: (202) 512-2250. However, you may reach the Regional Foreign Commercial Service officer, Cynthia A. Griffin-Greene at cynthia.griffin.greene@mail.doc.gov for any commercial concerns.
Table of Contents:
Chapter 1 - Executive Summary *
Chapter 2 - Economic Trends and Outlook *Chapter 3 - Political Environment *Chapter 4 - Marketing U.S. Products and Services *Chapter 5 - Best Prospects for U.S. Exports and Investment *Chapter 6 - Trade Regulations, Customs and Standards *Chapter 7 - Investment Climate Statement *Chapter 8 - Trade and Project Financing *Chapter 9 - Business Travel *Chapter 10 - Economic and Trade Statistics *Chapter 11 - U.S. and Country Contacts *Chapter 12 - Market Research *Chapter 13 - Trade Event Schedule *Chapter 1 - Executive Summary
Benin has a small domestic market (population 7.3 million; 2003 per capita GNP of USD 1100), but can be profitable for U.S. businesses exporting selected products including used clothing, cosmetics, agricultural and processed foods, used cars, medical equipment, building materials, and computer and telecommunication products. Benin is also a potential transshipment or production base for fellow member-countries of the Economic Community of West African States (ECOWAS; population: over 180 million), most notably Nigeria (population: 130 million). Benin could potentially benefit greatly from the U.S. Africa Growth and Opportunity Act (AGOA) by exporting duty-free to the United States a broad range of agricultural goods, artisan crafts, and selected textile products. Benin’s GDP is roughly 80 percent agriculture, 12 percent services, and eight percent manufacturing. Cotton production and processing alone account for about one third of GDP.
Benin has undertaken significant economic reforms since 1990, when the then-bankrupt regime allowed free elections, resulting in President Mathieu Kerekou’s peaceful loss of power. These economic reforms, combined with democratic reform and political stability, have enabled Benin to achieve nearly 4 percent average annual economic growth in the years since. Kerekou returned to power after running successfully for President in 1996 and was elected again in 2001. Besides being a key element of Benin’s emerging democracy, Benin’s free press is a useful vehicle for marketing U.S. products and services.
Although the Government of Benin (GOB) has stated publicly its goal of seven percent GDP growth over the longer term, a recent economic downturn has lead the Government to lower its goal to four percent. In 2004 the country recorded 3 percent economic growth, in part due to recent application of rigorous customs measures by Nigerian authorities which considerably reduced trade with Benin. Other factors include decreased revenues from Benin's Port and decreased productivity of the cotton sector. To achieve higher levels of economic growth, the Government of Benin must pursue further economic liberalization -- including privatization of the electricity, water, telecommunication, and cotton parastatal enterprises. Unfortunately, the GOB has undertaken few new economic reform measures over the last two years, though it has taken the first steps to privatize the state-owned water and electricity company. Though a Free Trade Zone of Cotonou is under development, it has not officially opened and has no current clients.
The port of Cotonou serves as a gateway for the sub-region with many goods –- including almost 350,000 used cars per year -- arriving destined for Nigeria, Burkina Faso, Niger and other countries in West Africa. Formerly among the best ports in the region in terms of the speed at which cargo is unloaded and clears customs, it has faced increasing delays, blamed in large part on corruption. Average processing time to clear a shipment from the port is two weeks. Cotonou's Port has therefore lost market to more efficient regional facilities such as the port in neighboring Lomé, Togo. Port authorities, under the leadership of a new director, have recently made efforts to improve the level of service through opening of a guichet unique, a one-stop processing facility to clear goods through the port. A large-scale port security upgrade is also underway. But these measures did not prevent the car dealers’ sales from decreasing from 3 billions CFA to 1 billion.
The biggest challenge facing many U.S. exporters to the Benin market is not quality, price, or product standards, but rather the difficulty in finding consolidators who can ship smaller orders in ocean-bound freight containers at a competitive price and frequency. There are currently two shipping companies that run direct lines from the East Coast of the U.S. and the West Coast of Africa on a monthly basis: Getma Lines, and Maersk. Both are willing to consolidate parcels for a fee in order to fill containers and plan to continue their service for the time being, despite worries that the International Port Security Code could mean that containers shipped from Benin to the U.S. could be subject to new stringent security measures.
In terms of investment opportunities, there is potential for agricultural and food processing projects for domestic sale and export to ECOWAS, the United States, and Europe. Over the longer run, tourism shows considerable promise because of Benin’s beautiful coastline, national parks, wildlife, and historical sites. The potential for mineral and petroleum exploration has benefited from an improvement in the investment code. Three major U.S. companies have a significant physical presence in Benin: Texaco, oil company Kerr-McGee, and UPS. U.S. businesses should be particularly cautious about unknown Beninese "companies" promising them big business deals. Unfortunately, a number of Nigerian criminals, increasingly in collusion with Beninese, use Benin as a base to defraud U.S. companies and citizens with "419" scams (e.g. advance fees), so named for the relevant section of Nigerian law. Potential U.S. investors should contact the Economic Section in Cotonou or the Commercial Section in Abidjan before sending any money or products to potential "partners" in Benin or sending "registration" fees to any purported Benin governmental agency.
Chapter 2 - Economic Trends and Outlook
Benin has a small domestic market (population 7.3 million; 2003 per capita GNP of USD 1100), but can be profitable for U.S. businesses as a niche market for trade and investment in selective, "best prospects" products and sectors (provided in Chapter 5).
Benin’s economy is based heavily on agricultural production, with raw cotton accounting for about one third of Benin’s gross domestic product (GDP) and 80 percent of official exports. Other major agricultural exports are raw cashews, groundnuts, shea butter (used in cosmetics), pineapple, cassava (used for flour, starch, and animal feed), teak wood, and palm oil products. About 80 percent of Benin's economy is in the informal sector. Of the total economy, however, 38% of GDP comes from agriculture, 15% from industry, and 47% from services. Industrial production is concentrated in four sectors: textiles; food, beverages, and tobacco; chemicals; and cement.
Growth Rates Slowing Due to Economic Downturn
Benin has undertaken significant economic reforms since 1990. The government signed on to Structural Adjustment Programs (SAPs) with the World Bank and the International Monetary Fund (IMF), the latter of which has a three-year Poverty Reduction and Growth Facility (PRGF) with Benin. These economic reforms, political stability, and the fact that the country started from such a low base in 1990 have enabled Benin to achieve an average annual economic growth rate of approximately four percent in the years since their implementation. However, despite a decade of positive GDP growth, poverty has not been reduced significantly due to sustained, rapid population growth of approximately three percent annually. Approximately 37% of the population still lives under the poverty threshold. Future prospects for growth are less promising. The Beninese government has forecast growth of four percent but some international financial institutions believe this is optimistic and expect rates to be lower or flat. Reduced capital investment and government revenue shortfalls stemming from decreased commerce with Nigeria (blamed on unfavorable exchange rates and increased customs enforcement) are cited as the principle reasons for the lower estimate.
With the recent economic downturn, for the GOB to achieve even its stated goal of four percent economic growth, it will require further economic liberalization -- including privatization of the electricity, water, and telecommunication industries.. Recent privatization efforts include: the separation of water and electricity utilities in preparation for their individual privatization, and a prospective agreement with a Chinese firm about the possible privatization of the telecommunications sector. Despite these reforms, Benin is moving too slowly in liberalizing key sectors of its economy. How the privatizations are carried out will be as important as when they are carried out. The 1999 privatization of the state-owned oil company, SONACOP, for example, was handled in a non-transparent fashion and allegedly resulted in this state asset being purchased at a bargain price by an associate of President Kerekou.
The Benin Government will need to improve dramatically the efficiency of government services through a reduction in the country’s serious corruption, further public expenditure reform, and decentralization. The former Finance Minister Gregoire Laourou and his predecessor Abdoulaye Bio Tchane initiated some anti-corruption actions upon taking office. Mr. Laourou was renamed to the post in June 2003 and implemented broader, more decisive action to address Benin’s serious corruption problem. Despite the Finance Ministry's efforts under the current and former ministers to steer clear of political interference, corruption remains a serious problem here and is the single biggest impediment to attracting potential investors.
Even when overt corruption is not a factor, the convolutions of Beninese government bureaucracies make it extremely difficult for foreign businesses to conduct operations here. Despite progress in reforming the economy, static attitudes stemming from French colonial rule (1890’s-1960) and a decade and a half of "dirigiste" Marxist-Leninist dictatorship (1975-1990) have left a legacy of misunderstanding and distrust toward free enterprise among many in society and government. Labor laws that severely constrict an employer’s freedom of movement also hamper foreign investment.
The Port of Cotonou: Great Potential, and Serious Problems
The Autonomous Port of Cotonou –- a key gateway to the Benin market for any U.S. businessperson – is a good example of how corruption and static attitudes dampen Benin’s longer-term growth potential. The port serves as a gateway for the sub-region with many goods arriving in Cotonou destined for Nigeria, Burkina Faso, Niger and other countries in West Africa. It is a transshipment point for about 350,000 used cars annually –- 90% of which are re-exported. The GOB owns and manages the port, which is one of its largest revenue earners (along with the cotton sector). Though formerly among the best in the region in terms of the speed at which cargo is unloaded and cleared, improvements at other ports (notably Lome, Togo) have caused Cotonou to lose considerable market share in the region. It is also hampered by corruption and shippers complain of pilferage and inadequate port security, although the Port Director has undertaken improvements in these areas. Even so, key sectors such as customs collections and enforcement are outside his direct authority. Because of persistent difficulties, Cotonou has lost part of the Nigerian transshipment business to Lome. Further more, due to the Ivorian civil war, ninety per cent of vessels transporting cargo for the inland countries that originally stopped at Abidjan prefer the port of Lome to that of Cotonou, according to a World Bank Official. This loss of business means less revenue for the Port to use towards the necessary security upgrades required by the International Port Security Code. Without these upgrades, shippers may not be able to export goods to Europe or the United States without enduring extra security procedures at those ports of call and therefore may no longer find it profitable to include Cotonou among their stops in West Africa.
The GOB has taken measures to improve service at the Port by opening the "guichet unique" to speed up the customs clearing process. This provides "one-stop shopping" for traders and transporters to clear their goods through the port. Port authorities have also made efforts to combat corruption and other crimes through computerization of clearance procedures, establishment of a police force at the port, and taking advantage of training opportunities offered by U.S. customs officials, but the dimensions of the problems continue to dwarf these efforts. The World Bank and African Development Bank have encountered serious resistance within the Benin Government, particularly at the Ministry of Transport and the Customs Administration, to reform projects at the Port of Cotonou. Both financial institutions have recommended privatization of certain port functions, but port officials and unions – and some politicians who benefit from the status quo or fear its control by foreigners – have fiercely resisted privatization. The dock operations sector, however, has been privatized. As a result, apart from the state owned SOBEMAP, COMAN S.A. (Danish) and SMTC of the Bollore Group (French), are now playing active roles to improve port services.
The Benin Government has transferred the used car business from land adjacent to the port to an area east of Cotonou in an effort to relieve traffic congestion. The GOB hopes to construct a new port to the east at Seme to expand capacity further. This new port is a critically important initiative, but will require huge new capital outlays that will likely only be forthcoming from the international development banks if Benin continues to implement economic reforms. Unfortunately, the port unions oppose the opening of a second port, fearing what it will mean for their jobs, and have gone on strike on more than one occasion, resulting in huge backlogs while shutting down various sectors of the economy.
Two Pillars of Benin’s Economy: Trade with Nigeria and Cotton
Benin’s growth is heavily dependent on the "two pillars" of the country’s economy: trade with Nigeria, and cotton. Lagos’ population of 15 million –- more than double the total population of Benin –- is only 100 kilometers away from Cotonou. Beninese entrepreneurs profit from smuggling and re-exporting products on which Nigeria has imposed import duties or restrictions. The most profitable business in Nigeria for Beninese is in used cars. Other good bet items for Beninese traders are frozen foods, rice, used cars, textiles, and vegetable oil but a recent Nigerian crackdown on illegal smuggling has severely hurt the livelihoods of the large section of the Beninese population that benefit either directly or indirectly from this activity. Moreover, an overvalued CFA relative to the Naira has meant that re-exported Beninese goods are too expensive for Nigerians to buy, further lessening the incentive for smugglers to try and get their goods across. Negotiations are underway to allow goods produced in Benin to be exported to Nigeria while still restricting products coming from Asia or Europe.
This being said, Benin realizes now that it has been overly focused on transshipment services through the port of Cotonou. It is now starting to try to capitalize on its relatively stable political climate and low crime rate to attract investment in manufacturing facilities here that could serve the large Nigerian market just across the border. A developed manufacturing sector could enable Benin to take advantage of ECOWAS policies that call for free trade among ECOWAS member states for all goods produced within those states.
Two examples of where Benin hopes to increase its value added manufacturing is the textile industry and agribusiness. Benin, the second largest producer of cotton in West Africa, was negatively impacted by low world cotton prices in 2001-2002 because it is so dependent on this single crop and exports most of it in a raw form without adding any value in country. Efforts are underway to promote diversification of the economy away from cotton and add value through the transformation of the fiber to textiles before it gets exported. Recently Benin and Nigeria Commerce authorities met and determined a list of goods that can be exported to Nigeria. Poultry, agricultural products and some beverages locally processed or manufactured occupy a priority position on the list.
In addition to chronic mismanagement of local cotton gins and government interference in the industry, tariff peaks make it harder for Benin to move into value-added processing of cotton thread, cloth and/or garments. Benin exports of processed cotton face an average tariff of eight percent in foreign markets, but the average tariff on cotton thread, for example, is 25-30 percent. The Beninese focus has to be on diversification and value added textiles if it ever hopes to be competitive on the world market.
Benin received the AGOA textile visa in January 2004 enabling it to export garments to the U.S. market under the terms of AGOA but the Beninese up until now have done nothing to take advantage of it. Garment producers in Benin have a strong potential for quality work but lack the knowledge of U.S. norms for their products and lack the capacity to produce the quantities requested by U.S. buyers.
Infrastructure: Uneven in Quality
Benin’s infrastructure is uneven in quality. Good paved roads running east to west and north to south link Benin to its neighbors. Outside this basic grid, however, road conditions range from mediocre to poor. Telephone service outside the capital via landline remains poor, although portable telephones can be used over a wider geographical area in Benin. Cyber cafes are readily available throughout the city of Cotonou.
By contrast, water and electrical services are generally unreliable nationwide. Only 22% of the country receives any sort of electrical power and potable water is not available in many rural villages in the north. Benin still relies on hydroelectricity from Ghana, Nagbeto, a common dam between Togo and Benin, and Nigeria, which means that a drought in the rivers of those countries could cause an electricity shortage in Benin, which occurred in 1998. A West African regional pipeline project managed by Chevron-Texaco that would transport Nigerian natural gas to Ghana via Benin and Togo could make available significant quantities of gas that could be used for electricity generation or other power purposes. In April 2005 Ministers of the beneficiary countries stated that the implementation phase of the project would begin soon. U.S. Firms: Limited Physical Presence So Far
Most U.S. companies either export to Beninese wholesalers or retailers, or rely on licensed distributors to sell their products (i.e., cosmetics). Only four U.S. companies have a significant physical presence in Benin. UPS deals with accelerated mail. Chevron-Texaco continues to provide aviation fuel for the international airport in Cotonou, and has several service stations in the Cotonou area. Oil independent Kerr-McGee acquired exploration rights to two of four blocks of ocean off the Benin coast and has recently drilled two test holes. Titan Wireless, a medium-sized U.S. telecom firm, accelerated the “transfer” portion of the build, operate and transfer (BOT) agreement it signed in 2000 with the Benin Government’s Office of Post and Telecommunication (OPT) and wrapped up its operations in 2003. This telecom firm, whose investment here is about USD 46 million, faced challenges in the Benin market because of mismanagement and malfeasance at partner OPT and OPT’s mobile phone subsidiary, Libercom. While Titan has wrapped up its operating presence in the country, the GOB has yet to execute its commitments under a reformed settlement agreement signed in 2003. Embassy Cotonou continues to follow developments closely between this U.S. firm and senior Benin Government officials and remains hopeful that the Beninese side will execute its commitments in the very near future.
Chapter 3 - Political Environment
Benin is slightly larger than Virginia, and is bordered by Nigeria to the east, Togo to the west, and Burkina Faso and Niger to the north. It has a 120-kilometer coastline and extends inland about 800 kilometers north to the Niger River. The majority of Benin’s 7.3 million people live in the south, of which over one million live in the Cotonou/Porto Novo area. About 42 African ethnic groups live in Benin. Animists account for about 50 percent of the population, and Christians and Moslems for about 30 percent and 20 percent respectively. This mix of ethnic groups and religions has fostered a strong tradition of tolerance that has provided an element of stability for Benin’s young democracy. The official language is French and principal local languages are Fon, Goun, Yoruba, Mina, Bariba and Dendi. Most businessmen speak French. A working knowledge of French, or a French translator, is indispensable for doing business.
Historically, Benin was the seat of one of the great medieval African kingdoms called Dahomey, which established good relations and an extensive slave trade with the Portuguese and Dutch who arrived from the 15th century onwards. A series of internal power struggles began which lasted into the 19th century, paving the way for the French colonization in 1872.
In 1960, the Republic of Benin gained full independence from France. Between 1960 and 1972, a succession of military coups brought about many changes of government. The last of these brought to power Major Mathieu Kerekou, who converted his government to a Marxist-Leninist regime in 1975. Faced with a bankrupt economy in 1990, Kerekou convened a National Conference that introduced a new constitution and held democratic elections in which he was voted out of office. In 1996, however, Kerekou won the presidential election and returned to office for a five-year term. He was reelected in 2001, though alleged polling irregularities somewhat tarnished this victory. After a series of local and legislative elections in 2002 and 2003, the Beninese are experiencing a break from the polling stations until the next presidential elections in March 2006.
Benin's emerging democracy, though imperfect, is an encouraging and hopeful institution in the troubled West African sub-region. The opposition has generally played an influential role in the National Assembly, but its power declined significantly when its parliamentary numbers were thinned in the legislative elections of March 2003. Benin has over 150 political parties but only about thirty parties and coalitions command any significant electoral support, and only one – the opposition party of Former President Soglo – is really serving of the name. Virtually all the other “parties”, which tend to be grouped around personalities or regional interests, together form the largely amorphous and often undisciplined “majority” that purports to support President Kerekou. The current administration and the leading opposition party support increased trade and investment ties with the United States. Benin and the United States enjoy excellent diplomatic relations.
Benin's independent judiciary, although plagued by various degrees of corruption present in all levels of Benin’s government, has issued several decisions against the GOB and the administration has abided by those rulings. Many magistrates were accused, tried, and convicted of absconding prosecutorial funds in a recent corruption scandal. Their sentences showed a will to fight judicial corruption but left some members of the public thinking that justice was not served. The government respects the existence of dissenting opinion and the robust and outspoken (if sometimes irresponsible) press operates free of most government restrictions.
Chapter 4 - Marketing U.S. Products and Services
Besides being a key element of Benin’s emerging democracy, Benin’s free press is a useful vehicle for marketing U.S. products and services. In addition to the GOB’s daily newspaper, "La Nation," there are more than twenty privately owned newspapers in Cotonou. Along with the national TV station, ORTB, there are four private TV stations, LC2, Golfe TV, Canal 3, and Tele Carrefour; a fifth one is about to begin operations. There are over twenty private radio stations in Benin including Golfe FM, which broadcasts via satellite to several African countries.
The Chamber of Commerce and Industry of Benin (CCIB) publishes a journal with information about business opportunities (L’Operateur Economique). Its membership directory, "Guide des Operateurs Economique," is a must-buy for companies interested in the Benin market and is available at CCIB for a nominal cost. Its website address is www.ccib.bj.
Caveat Emptor: Nigerian 419 Scams Moving Into Benin
Although the Chamber of Commerce and Industry and the Ministry of Commerce can provide some information on companies doing business in Benin, no formal system exists to verify the bona fides of companies. Unfortunately, Benin's proximity to Nigeria means that a number of mala fide Nigerian operators, increasingly in collusion with Beninese, have established companies which are little more than a cell phone, fax machine and post office box whose sole purpose is to defraud potential foreign exporters and investors.
The Embassy’s commercial section spends a significant portion of its time warning U.S. businesses and individuals about specific "Nigerian 419" cases, so named for the section of Nigeria’s Criminal Code dealing with advanced fee fraud. "Boiler room" operators try to defraud unsuspecting victims using a variety of scams, such as one in which a U.S. entity is offered a large "purchase order" or "reward" if they send e.g. USD 1,000 or share their bank account information. Examples of these scams have included orders, ostensibly from the Benin Government, non-governmental organizations (NGOs), or charitable organizations, for 6,000 computers, 10,000 cellular phones, and 25,000 tons of frozen poultry. Requests for such large quantities of goods should be met with skepticism and verified through the Commercial Section. Furthermore, any requests for an upfront "registration fee" required by the Beninese government in order to do business should be considered carefully because exaggerated sums have been used to extort money from importers of products to Benin. As the presidential election to be held in March 2006 gets closer, individuals may attempt to defraud overseas business people by asking them to provide them with various kinds of gratuities supposedly for the election.
Further verification as to the legitimacy of business claims can be made through the Benin Chamber of Commerce and Industry and DANA, the Food Security Office of the Ministry of Agriculture. A word to the wise: if a proposed business deal or inheritance windfall looks too good to be true, it almost certainly is.
Chapter 5 - Best Prospects for U.S. Exports and Investment
The biggest challenge facing many U.S. exporters to the Benin market is not quality, price, or product standards. Rather, it is the difficulty in finding consolidators who can ship smaller orders in ocean-bound freight containers at a competitive price and frequency. The frequency of shipper service from U.S. ports to Cotonou is less frequent and more costly than similar service from Europe. Consequently, European (and especially French) food products dominate the local market. This being said, a U.S. exporter who offers a competitive price and finds a reliable consolidator and shipper could reap significant rewards in the Benin market. There are currently two shipping lines working directly between the East Coast of the United States and the West Coast of Africa: Maersk and Getma. While these two vessels per month bound for the trans-Atlantic route are fewer than the dozens bound for Europe, they represent new opportunities for efficient and reliable transportation without the need to transit Europe. These lines will continue to be operational for the time being despite concerns about possible security repercussions the U.S. will impose on containers originating from Benin due to the Port's non-compliance of the International Port Security Code.
For non-agricultural sectors, best prospects are:
Telecommunications
Electronics
Computer software and hardware
Cosmetics and hair care products
Costume jewelry
Cotton processing equipment
New and used clothing, including shoes
Tourism
Printing press supplies, equipment & materials
Financial services (including money transfer)
Used cars
Used tires
Building Materials
Medical Productions and Equipment
Used and new motor vehicle parts
Used appliances
Generic pharmaceuticals
For agricultural sectors, best prospects for U.S. investment are:
Beef
Poultry
Wheat
Processed foods, e.g. cashews and dried fruit
Potential Growth Sectors with AGOA: Textiles, Food Processing, Tourism, and Extractable Resources
Textiles
Although Benin depends on cotton for up to 80 percent of its annual official foreign currency earnings, it processes only five percent of its cotton crop into thread and cloth. This means that little value is added in Benin, and few new jobs and skills are created locally.
Beyond exporting its thread and cloth to qualified apparel factories in the region for sewing and re-export to the U.S., Benin could benefit from the Africa Growth and Opportunity Act (AGOA) if it convinces foreign and domestic business to invest in apparel factories here. Several existing companies, including COTEB, could benefit from equipment upgrades, therefore streamlining their textile production process. They also need expertise in quality standards and norms if they ever hope to be competitive on the U.S. market. The price of electricity is currently a disadvantage in mass textile production as well.
Agriculture and Food Processing
There is some potential for agricultural and food-processing projects that could produce locally made goods – particularly daily consumables –, which are currently imported. For example, Benin imports CFA 35 billion chickens (worth about $65 million) every year, many of which could have been raised locally and created local employment. Benin also exports virtually its entire crop of raw top-grade cashews to India rather than processing and packaging them here. Processing and packaging of tropical fruits presents another area for potential investment.
Tourism
Tourism investment has considerable potential, inter alia, because of the natural beauty of Benin’s coastline, its National Parks with rich animal life in the north, and its towns rich in history including Abomey, Ouidah, Porto Novo and Ganvie – a unique fishing village on stilts in the middle of Lake Nokoue. The GOB launched an invitation for a feasibility study for a tourism investment zone between the coastal cities of Cotonou and Ouidah, the latter a UNESCO World Heritage site that was an important departure point for the slave trade with the Americas.
Extractable Resources, Including Oil and Gas
Finally, the GOB is actively encouraging foreign investment in mineral resources such as iron, phosphate, chalk, kaolin, clay and marble. To this end, the National Assembly approved in 1998 a new Mineral Code, whose provisions include reducing taxes, simplifying procedures for obtaining production licenses, and delimiting geographic areas for mineral exploration and production. As discussed in Chapter 4 and again below, the GOB is encouraging foreign investment in oil and gas exploration. While these sectors can be the most profitable, they are also those most plagued by would-be scam artists. Many of the American businesspersons who lost substantially due to a Nigerian 419 scam here in Benin thought that they were coming to trade in extractable resources. Embassy Cotonou strongly encourages any potential investor to allow the Commercial Section to verify the bone fides of the Beninese company in question.
Four Privatization Targets of Potential Interest to Investors
There are four major GOB assets that may be of potential interest to U.S. investors. The four should be subject to tenders in the coming future:
A) Offshore Drilling Rights (Ministry of Mines, Energy and Water Resources). The GOB has initiated legal proceedings against a firm to annul its rights to drill for oil and gas in "Block 1," which runs east-to-west along Benin’s coastline at depths up to about 300 ft. (The firm, which is owned by a Beninese, has not made the investments it promised to develop the block.) Once the rights are annulled, the GOB plans to hold a public tender for Block 1, which is also adjacent to Nigeria’s Aje gas fields.
Point of contact:
M. Guy F. Dagba
Chief, Exploration and Geological Research Service
Ministry of Mines, Energy and Water Resources
06 BP 2049 Cotonou, Benin
Tel: 33-05-14/Fax 33-69-87/Mobile: 92-68-08
E-mail: dagbaguy@yahoo.comB) OPT (Office of Post and Telecommunications). The GOB plans to privatize its telephone system operator, one of whose most valuable assets is Libercom, a GSM cell phone operator that has had a troubled "Build Cooperate and Transfer (BCT)" contract with a U.S. company. President Mathieu Kerekou invoked article 68 of the constitution in February 2002 to remove a deadlock with the National Assembly over OPT’s privatization, which is strongly opposed by labor unions. France Telecom may be the front-runner in bidding for OPT – but U.S. firms should be encouraged to as well. The privatization phase has started this year with the split of OPT into two different entities namely Benin-Telecoms S.A. and La Poste du Benin S. A. Their managing directors and Board of Directors have been appointed by the GOB in order to pave the way progressively for private investors in both sectors.
Point of Contact:
1) Mr. Sourou Goudohessi
Managing Director
Benin-Telecoms S.A.
01 BP 5959
Cotonou, Benin
Tel: +229-31-55-66/312045
Fax:+229- 31-07-27
E-mail: mahougbe@intnet.bj2) Mr. Zacharie Bourahima
Managing Director
La Poste du Benin S.A.
01 BP 5959
Cotonou, Benin
Tel: +229-31-55-66/31-20-45
Fax: +229-31-07-27
E-mail:
C) SBEE (Benin Electricity and Water Company). Benin plans to divide this parastatal into separate electricity and water companies prior to privatization.
Point of Contact:
Societe Beninoise d’Energie Electrique (SBEE)
Point Contact:
Mrs. Celestine Adjanohoun
Directrice Generale
01 BP 123 RP
Cotonou, Benin
Tel. +229-312145
Fax. +229-315028
E-mail: sbeedg@yahoo.fr
Societe Nationale des Eaux du Benin (SONEB)
Mr. Alhassane Baba-Moussa
Directeur General01 BP 13 RPCotonou, Benin
Tel. +229-311852
Fax. +229-311108
E-mail: albamoussa@hotmail.com
D) SONAPRA (Societe Nationale Pour la Promotion Agricole). SONAPRA owns 10 of Benin’s 18 cotton gin factories. Privatization was almost completed in July 2004 with the debtors of the company buying it back. Trade unions, however, are protesting this development and are asking the government to reconsider the sale. Their claim is that the company is being sold below its market value. Purchasers face the challenge of profitability in a sector where ginning capacity has always been far greater than the local cotton crop. The cotton market has also been mismanaged and extremely regulated by the Beninese Government. The actual outcome remains to be seen.
Point of Contact:
Mrs. Raimatou Laleye-Abdou
Managing Director
SONAPRA
01 BP 933
Cotonou, Benin
Tel: +229-33-53-86
Fax: +229-33-19-48
E-mail:
Chapter 6 - Trade Regulations, Customs and Standards
Benin implemented a common external tariff (CET) at the beginning of 2000, together with other countries belonging to the West African Economic And Monetary Union (WAEMU) and the CFA Zone: Burkina Faso, Cote d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal, Togo. WAEMU has over 50 million consumers. The CET establishes four categories of products on which tariffs are zero, five, 10, and 20 percent. For all products there is a one percent statistics tax and a 0.5 percent Community Solidarity Levy. There are also so-called TDP, TCI, and other specific protective taxes that are levied on products such as cigarettes and "strategic products" such as rice and sugar in order to "guard against international price fluctuations."
Benin's enactment of the common external tariff has eliminated many tariff barriers. However, an inefficient, corrupt customs process still makes the importation of goods by sea, air or land costly and time consuming. The "guichet unique" was created to speed up this process but or all intensive purposes, is not yet fully operational. Although the possibility of obtaining a bonded warehouse for onward shipment exists in theory, in practice it is very difficult to obtain such a status.
The Benin Center for Standardization and Quality Management (CEBENOR) opened in July 2000 and promotes the quality of locally made goods. In this context, it also grants approval for and disseminates GOB standards on all products and services. CEBENOR participates in certifying enterprises’ product quality, and assists in obtaining certificates of conformity to standards. Its address is:
Boulevard du Canada (Vons de la pharmacie Vodje)
01 BP 363, Cotonou, Benin
Tel: (229) 30-74-45/46/47
Fax: (229) 30-30-24/30-13-85
Chapter 7 - Investment Climate Statement
Introduction:
This section provides an overview of Benin’s investment climate that supplements information provided in the "Economic Trends and Outlook" section above.
A.1. Openness to Foreign Investment
Beninese law guarantees the right to own and transfer private property. The government of Benin officially favors and encourages foreign investment.
Many opportunities for foreign investment have historically been linked to the privatization of state-owned enterprises, whose numbers have been reduced from 130 in 1980 to only four: the offshore Drilling Rights, SONAPRA (cotton), SBEE (electricity and water), and OPT (post and telecommunications). Privatization of these other parastatals is slow-moving. The government requires that Beninese nationals partly own privatized companies. Privatization of the debt-ridden Sonapra (begun in 2003) has stalled several times prompting unions and the media to allege that corruption has taken root in the process. The cotton firm’s 40 gin plants were sold off in four equal lots. The low sales price of the gins aroused protests from trade unionists and the public opinion, and the President called for his Minister of Planning to oversee the negotiations with the bidders to increase their bids to prices that reflected the market value. The parliamentarians condemned the GOB for initiating such a negotiation with the successful bidders who technically owed the company. They have had the Government to declare unfruitful the bidding process due irregularities and lack of transparency that surround it. (I'm not sure what this sentence means.) They (who) have invited the GOB to postpone the privatization process until the increase in cotton production and the Cotton Inter-profession Organization becomes real. ? Most of the bidding companies are very close to members of the GOB, and constitute a very strong financial lobby during electoral campaigns. There has been no more public debate or information on this privatization since last September.
The electricity and water corporation, SBEE has been separated into two different companies, the Electric Energy of Benin (SBEE) and the National Water Corporation (SONEB) but not privatized. At this stage the GOB seems unwilling to privatize this sector of the national economy.
OPT (postal service and telecommunications) has been split into two different companies- la Poste du Benin S.A. and Benin Telecom S.A. but has not yet been privatized.
The World Bank and other international development banks fund many infrastructure renovation contracts with grants or loans. Some major contracts have been signed already while several more are still on the horizon. The current investment code establishes the conditions to obtain benefits under different investment regimes and grants extensive discretionary power to the Investment Control Commission at the Ministry of Commerce and Industry.
The tax reforms introduced in recent years largely removed the need for special incentives to potential investors. The 1990 investment code was promulgated in order to establish a simplified system readily accessible to all investors. In recent years, the government established a "guichet unique" or one-stop shop at the Trade Ministry to help dispense with unnecessary and time-consuming formalities facing investors. Many investors complain that the investment code is difficult to implement in practice, however, because of an inefficient and corrupt bureaucracy.
The GOB set up the Business Registration Center in the Cotonou headquarters of the Benin Chamber of Commerce and Industry (CCIB) to facilitate the registration of new businesses. Thanks to this Center, it is possible to register a new company within 2 weeks depending on the type of company. To ease the company start up process, investors are strongly encouraged to hire a local notary for the required assistance. Any American firm establishing an office in Benin should work with an established local partner of solid reputation and retain a competent Beninese attorney. A list of English-speaking lawyers and Notaries public is available from the Embassy’s Commercial section.
A.2. Conversion and Transfer Policies
Benin is a member of the West African Economic and Monetary Union (WAEMU). Its currency is the CFA franc, which is issued by the Central Bank of West African states (BCEAO). In order to stimulate economic recovery, an adjustment of the exchange rate was implemented and the CFA franc was devalued by 50 percent on January 11, 1994. One USD dollar presently equals about CFA 520 (June 2005). The conversion system does not set restrictions on international transfers. However, for a certain amount of transfer out the investor needs to get authorization from the Ministry of Finance and Economy by filling out the form named “Formulaire d’Autorisation de Change”. Although for the moment the CFA is pegged to the Euro, the long-term effect on the CFA of the introduction of the Euro remains unclear. The war in Cote d'Ivoire may have a potential impact on the stability of the CFA but there are no current plans to devalue.
As a member of WAEMU any company established in Benin can export goods to the other member states under the External Common tariff (TEC or Tariff Exterieur Commun) regime if the goods are locally produced. TEC promotes sub regional trade by eliminating trade barriers and combats unnecessary competition between the member states.
A.3. Expropriation and Compensation
The state guarantees under law that it will make no attempt to nationalize enterprises operating in Benin. The government at this time is focused on continuing to privatize its state-owned industries and has shown no indication of returning to the policy of expropriation carried out prior to the establishment of democracy in 1990. The president has spoken publicly and often about the importance of attracting foreign investment. Though there are no laws that force local ownership of most businesses, the Government of Benin requires that investors buying state companies being privatized have some Beninese participation.
A.4. Dispute Settlement
The settlement of disputes pertaining to breach of contract, contract enforcement, claims, land titles, and related issues must be adjudicated in the civil courts. There is no separate commercial court system. The backlog of civil cases often results in a wait of two or more years before matters proceed to trial. In recent years, judges have shown increasing independence in ruling against government interests. Corruption, however, remains a serious impediment to the administration of justice. Businesses and other litigants routinely complain that corruption is particularly widespread at the trial court level, as well as at administrative hearings. Eighty magistrates and other civil servants were recently put on trial for theft of prosecutorial funds. All of the magistrates had a fair trail and several were found guilty and sentenced.
A.5. Performance Requirements and Incentives
Benin’s government maintains a welcoming posture to foreign investors but Embassy Cotonou is unaware of performance incentives targeting foreign investors. Foreign investors and workers are not subjected to onerous visa or residency permit requirements. Foreign investors have generally not complained of discriminatory or preferential export or import policies, although foreign businesses complain that they are held to higher standards than Beninese businesses. For example, foreign companies are required to adhere to social security and labor regulations, which are routinely ignored or minimally followed by Beninese companies. One long established American company has complained, for example, of discriminatory treatment in being refused permission to establish a bonded warehouse for goods in transit.
A.6. Right to Private Ownership and Investment
The right to private ownership and investment exists in both theory and practice. Beninese law guarantees freedom of trade; choice of customers and suppliers; the right to move freely throughout the country; the right of foreign employees and their family members to leave the country; and freedom from government interference in the management of private enterprises.
A.7. Protection of Property Rights
Secured interests in real and personal property are recognized and enforced. Benin’s legal system protects and facilitates acquisition and disposition of all property rights, including land, buildings and mortgages. In theory, the government respects intellectual property rights. In practice, however, bootlegged musical cassettes and CDs are widely available, despite government interdiction efforts. However, in the last quarter of last year thousands of these counterfeit items seized were burnt by the officials of Benin Ministry of Culture and Tourism. Land tenure remains a complicated question in many areas and it is often difficult to transfer clear title to real property. The Benin proposal for the MCA program includes land title reform
A.8. Transparency of the Regulatory System
Although the government has adopted a transparent policy to foster free enterprise, bureaucratic red tape is often a problem. Bureaucratic procedures are insufficiently streamlined and are rarely transparent in practice. However the new business law named OHADA, Organization for the Harmonization of Business Law in Africa signed by the member states, including Benin, has solved a number of snags that a foreigner may encounter in trying to establish a business in this country. OHADA is a common law that rules trade or business in the member states including Benin, Cameroon, Congo, Gabon, Bissau Guinea, Niger, Chad, Burkina-Faso, the Central Africa Republic, Guinea, Mali, Senegal, and Togo. In the early 1990’s the government enacted a series of reforms aimed at modernizing trade regulations. Many labor laws, however, remain holdovers from the Marxist era and serve as impediments to private enterprise, despite revamping of the labor code in 1998.
A.9. Efficient Capital Markets and Portfolio Investment
Benin government policy supports free financial markets in Benin, subject to regulatory oversight by the Ministry of Finance and the Benin office of the Central Bank of West African States (BCEAO). Credit is allocated on market terms and foreign investors can get credit on the local market. However, legal, regulatory and accounting systems are often unwieldy. Some observers claim the banking industry is not subject to effective mandatory regulation and some banks are not managed in a transparent fashion.
A.10. Political Violence
Benin is a democracy that functions reasonably well, particularly in comparison to other countries in Sub-Saharan Africa. Its third presidential elections were conducted peacefully in March 2001 with widespread voter participation. Political violence is rare. There are no nascent insurrections or other politically motivated violent activities. Beninese in all regions feels free to express political views without fear of reprisal from the government. Benin enjoys friendly relations with its neighbors. It has a tradition of religious tolerance. Ordinary crime is low, even in urban areas, although rising crime is a national preoccupation.
The next presidential election will be held in March 2006 and the "pre-campaign" has already begun. Election activity will probably eclipse all other endeavors from now until the election.
A.11. Corruption
Benin has laws, regulations and penalties aimed at combating corruption, but the problem is endemic. Actual prosecution and punishment for corruption is rare but, encouragingly, the GOB arrested 25 magistrates in December 2002 after a Finance Ministry audit suggested an abuse of travel funds. Efforts to battle corruption by civil society, notably the Catholic Church; have had some positive effects in influencing public attitudes. The GOB has also set up an anti-corruption commission to combat all forms of corruption and bribery in the private and public sectors. Anti-corruption commissions’ delegations from Chad, Mali, Gabon, and Burkina-Faso visited the country in the past months to learn about how Benin handles this issue.
The anti-corruption commission oversees government procurement and carries out investigations if there are allegations of bribery.
The High Court of Justice prosecutes high-ranking GOB officials involved in corruption or bribery
Foreign businessmen who want to establish a business may encounter numerous attempts to solicit bribes if they don’t hire a notary public who understands the country’s business law. Examples include civil servants at the state-owned telecommunications parastatal (OPT) who demand a bribe before granting a phone line. Labor ministry inspectors reportedly demand bribes to monitor union elections.
Bribery of foreign officials is forbidden under the Foreign Corrupt Practices Act. Titan Wireless recently paid the largest fine in U.S. history under the FCPA for moneys given by their agent in Benin to an individual they believed to be acting on behalf of the president.
B. Bilateral Investment Agreements
Benin has a bilateral investment agreement with France but none with the United States. With respect to investment protection, Benin has concluded agreements with several European countries including:
- Germany: October 10, 1993 Agreement Pertaining to the Mutual Encouragement and Protection of Investment Capital.
- Great Britain: November 27, 1987 Agreement for the Protection of British Investments in Benin. Benin is also a signatory of various multilateral agreements for investment protection, including the Multilateral Security Agency Agreement and Convention for the International Settlement of Investment Disputes.
C. OPIC and Other Investment Insurance Programs:
The Overseas Private Investment Corporation (OPIC) offers financing programs to assist companies wishing to invest in developing countries, including Benin. OPIC insurance could be available to companies wishing to invest in Benin depending on the nature and extent of the investment. Potential investors should contact OPIC directly for further information at info@opic.gov.
D. Labor
The government adheres to international labor standards and fully recognizes the right to form unions and engage in collective bargaining. The government adopted a new labor code in 1998 aimed at increasing flexibility in hiring decisions, eliminating the need for prior authorization from the labor directorate for employee dismissal, and consolidating labor regulations currently dispersed among various texts. As a practical matter, however, Benin’s labor practices contain many inefficient features reminiscent of the Marxist era. Foreign companies who dismiss employees for unsatisfactory performance are routinely sued. Child labor is widespread and, although it is making efforts, the GOB still needs to do more to suppress it.
The Constitution provides workers with the freedom to organize, join unions, meet, and strike, and the Government usually respects these rights in practice. The labor force of approximately 2 million is engaged primarily in subsistence agriculture and other primary sector activities, with less than two percent of the population engaged in the modern (wage) sector. Although approximately 75 percent of the wage earners belong to labor unions, a much smaller percentage of workers in the private sector are union members. There are several union confederations, and unions generally are independent of government and political parties.
Strikes are permitted; however, the authorities can declare strikes illegal for stated causes (for example, threatening to disrupt social peace and order), and can require strikers to maintain minimum services. In August 2001, the Government declared illegal a strike by customs officers protesting a surprise, anti-corruption inspection by the Finance Ministry.
E. Foreign Trade Zones/Free Ports
There is a free trade zone in the port of Cotonou for Benin’s landlocked neighbors (Burkina Faso and Niger). Foreign importers have complained, however, that port corruption makes it difficult to benefit from this entity.
The GOB hopes to construct one industrial zone in each of Benin’s 12 Departments in order to attract investment. None of them are yet operational. Work has begun on zones in Seme, Bohicon and Ouidah. The GOB plans to provide tax breaks and construct hook-ups for water, electricity and telephones for prospective investors. The most promising zone in Seme, on the coast, would also be a new free trade zone. Initially, it will be 200 hectares in size, but will be doubled during its second phase.
F. Foreign Direct Investment Statistics
Much of the foreign investment that has entered Benin since 1990 has been through acquisition of interests in privatized companies. The principal foreign investors in Benin are from Lebanon, India, Germany, France and other European countries. Following are examples of companies sold in part to foreign investors, listed by name, activity, price and buyer:
- SOBETEX (textile) – 282 million CFA – by Schaeffer (French Group);
- British/American Tobacco Company– 1.3 billion CFA – by Rothmans International;
- SIMBENIN (cement company) – 4.2 billion CFA – by ScanCem (Scandinavian group with minority investors; large share later purchased by German company); and
- La Beninoise (brewery) 7.8 billion CFA – by Castel-BGI (French Group).
Three U.S. companies in Benin – Titan Wireless, Texaco/Chevron, and Kerr-McGee – have a substantial investment presence. Titan's investment of 46 million US dollars in a "Build, Operate, and Transfer (BOT)" deal with the Benin Government’s Office of Post and Telecommunications (OPT) has given Benin one of the most modern mobile telephone networks in Sub-Saharan Africa. Texaco/Chevron provides aviation fuel for the International Airport in Cotonou, has completed its fourth service station in Benin, and has plans to open more service stations throughout the country. Houston-based oil independent Kerr-McGee has acquired rights to a deep-water block off Benin’s coast and drilled two exploratory wells in March 2003
Chapter 8 - Trade and Project Financing
While Benin’s banks are relatively unsophisticated and weak in service delivery, some U.S. banks are willing to extend lines of credit to selected banks in Benin, which has relatively more financial stability than neighboring countries and a good recent track record of repayment. U.S. Exim Bank has signed a Master Guaranty Agreement with Bank of Africa and ECOBANK to encourage medium- and long-term loans for businesses, the first agreement of this type within francophone Africa. The French banking group Societe General also opened up offices in Cotonou in 2003. At present, the U.S. Embassy uses ECOBANK for cashiering services. French national Remy Baysset founded Financial Bank and remains its CEO-equivalent. Continental Bank and Banque Internationale du Benin are under Finance Ministry and West African Central Bank supervision because of past management and financial problems. Diamond Bank is based in Nigeria and, since opening an office in Cotonou in 2002, has experienced rapid growth. Finally, the Banque Sahelo-Sahélienne pour le Commerce et l'Investissement (BCIS) (Sahelian Bank for Commerce and Investment) is a sub-regional Islamic Bank and just opened in April 2004.
A new bank called “Banque Africaine pour le Commerce et le Development” is about to open up.
Contact information for these banks as well as for the BCEAO and a regional development bank follows:
ECOBANK:
Attn: Mr. Christophe Jocktane-Lawson (Gabonese)
Directeur General
Rue du gouverneur bayol
Tel: 229 31 40 23
Fax: 229 31 33 85
B.P. 1280
Cotonou, Benin.
Email: cjocktane@ecobank.comFinancial Bank:
Jean-Luc Labonte (French)
General Manager
Tel: 229 31 31 00 / 03 / 04
Fax: 229 31 31 02
01 B.P. 2700
Cotonou, Benin.
Email: jean-lucl.anbonte@financial-bank.comBank Of Africa (BOA):
Attn: Mr. André Froissant (French)
Directeur General
Tel: 229 31 32 28
Fax: 229 31 31 17
B.P. 08-0879
Cotonou, Benin.
Email: afroissant@boabenin.comBanque Internationale Du Benin (B.I.B.E.):
Attn: Mr. Jean-Paul K. Aidoo
Tel: 229 31 55 49/ 31 56 21/ 31 04 62
Fax: 229 31 23 65
B.P. 03-2098
Cotonou, Benin.
Email: bibedi@leland.bjContinental Bank:
Attn: Mr. Joseph Ayeh
Carrefour des trois banques
Tel: 229 31 24 24/ 31 33 93
Fax: 229 31 51 77
Cotonou, Benin.
Email: contibk@intnet.bjDiamond Bank:
Attn: Mr. Clifton Best (U.S. Citizen)
Directeur General
01 BP 955
Tel: 229 31-79-27, 31-79-28
Fax: 229 31 21 42
Cotonou, Benin.
Email: bao@diamondbank.com
Societe Generale des Banques du Benin
Attn: Bernard Gounlaouen
Directeur General
01 B.P. 585
Avenue Clozel
Tel: 229 31-83-00
Fax: 229 31-82-91
Email: Bernard.Gourlaouen@socgen.comBanque Sahelo-Sahélienne pour le Commerce et l'Investissement (BCIS)
Attn: Mr. Ali Almokctar
Directeur General
131 Rue Dakodonou,
Lot 26-F Guinkomey
08 BP 485
Cotonou, Benin
Tel. +229-318707
Fax. +229-318704
E-mail: bsic@intnet.bjBanque Africaine pour le Development et le Commerce
08 BP 485
Cotonou Benin
Tel: +229-318705
Fax: +229-318706
Banque Centrale Des Etats De L’Afrique De L’Ouest (BCEAO):
Attn: Mr. Idriss Daouda
B.P. 325
Tel: 229 31 49 67/ 31 36 66
Fax: 229 31 24 65
Cotonou, Benin
Email: idaouda@cotonou.bceao.int
Banque Ouest Africaine de Developpement (BOAD):
Attn: Mr. Cheick Omar Haidara
Chef de Mission Residente
01 B.P. 325
Agence Principale
Av. Jean Paul II
Tel: 229 31-59-35
Fax: 229 31-59-38
Cotonou, Benin
Email: chaidara@firstnet.bj
Some officials of Bank Of Africa and members of its board of directors have been arrested and kept in custody for their alleged involvement in the embezzlement of four billions CFA Francs deposited in that bank.
Chapter 9 - Business Travel
Business travelers are encouraged to consult http://travel.state.gov for the latest consular information sheet for Benin.
Entry Requirements:
Visas are required for Americans. Please obtain visas from the nearest Benin Embassy prior to arrival. The Benin Embassy in the U.S. is located at 2124 Kalorama Road, N.W., Washington, D.C. 20008, telephone (202) 232-6656.
Medical Information:
Visitors should consult with a physician expert in tropical diseases regarding the advisability of a malaria suppressant. Although the U.S. Embassy cannot offer medical advice to the public, some medical professionals here recommend that visitors begin taking malaria suppressants (e.g. mefloquine) at least two weeks prior to arrival, and to observe all health practices appropriate for West Africa. All visitors must have a valid international health certificate ("WHO" Yellow Card/Carte Jaune De L’OMS) with proof that they have been vaccinated for yellow fever within the past 10 years. New vaccinations must be at least 10 days old to take effect; visitors who are vaccinated less than 10 days prior to arrival in Benin may be denied entry into the country.
Business Hours:
The official workweek in Benin is Monday to Friday. Most offices close for two to three hours at midday but remain open until 1830 or later.
Safety and Security:
Travelers should avoid driving outside urban areas after dusk as there have been recent carjackings of foreigners. There is little anti-U.S. sentiment among the Beninese. However, many residents perceive all foreigners as affluent and may target them for theft. The Embassy recommends the following:
-- Do not use credit cards. Some visitors have experienced problems with credit card transactions, including fraudulent charges being made within minutes of use of a card. We recommend instead that visitors arrive in Benin with an adequate supply of traveler's checks or plan on paying for everything in cash.
-- Do not reveal social security numbers, birth dates or bank account numbers.
-- Use "common sense" personal security practices that you would use in any large U.S. city.
-- Do not take photographs of individuals or official government facilities without receiving prior approval.
Chapter 10 - Economic and Trade Statistics
The two World Bank tables below, "Benin at a Glance" and "Benin Basic Statistics," provide useful background on several key socioeconomic indicators.
Table 1: Benin at a Glance (2002 Statistics)
| Benin
| Sub-Saharan Africa
| Low-income
| Population, mid-year (millions)
| 7.46
| 688
| 2,495
| GNI per capita (Atlas method, US$)
| 380
| 450
| 430
| GNI (Atlas method, US$ billions)
| 2.6
| 306
| 1072
|
|
|
|
| Average annual growth, 1994-05
|
|
|
| Population (%)
| 2.82
| 2.4
| 1.9
| Labor force (%)
| 2.9
| 2.5
| 2.3
|
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
|
| 1992
| 2004
| GDP (US$ billions)
| 1.6
| 4.32
| Gross domestic investment/GDP
| 13.8
| 19.2
| Exports of goods and services/GDP
| 14.8
| 0.71
| Gross domestic savings/GDP
| 0
| 6.8
| Gross national savings/GDP
| 2.6
| 10.7
| Current account balance/GDP
| -4.5
| -3.1(2001)
| Interest payments/GDP
| 0.7
| 0.8
| Total debt/GDP
| 84.5
| 68.6
| Total debt service/exports
| 4.3
| 16.8
| Present value of debt/GDP (2001)
| 35.4
|
| Present value of debt/exports (2001)
| 227.1
|
|
Average Annual Growth
| 1992-02
| 2002
| GDP
| 5.0
| 5.0
| GDP per capita
| 2.2
| 2.3
| Exports of goods and services
| 3.1
| 7.8
|
STRUCTURE of the ECONOMY
| % of GDP
| 1992
| 2002
| Agriculture
| 36.0
| 35.5
| Industry
| 13.3
| 14.4
| Manufacturing
| 8.3
| 9.1
| Services
| 50.7
| 50.1
| Private consumption
| 89.2
| 80.5
| General government consumption
| 10.7
| 12.7
| Imports of goods and services
| 28.6
| 26.7
|
Average Annual Growth
| 1992-02
| 2002
| Agriculture
| 5.7
| 5.6
| Industry
| 4.5
| 6.5
| Manufacturing
| 5.7
| 6.4
| Services
| 4.6
| 4.6
| Private consumption
| 4.7
| 5.5
| General government consumption
| 4.3
| 3.1
| Gross domestic investment
| 7.0
| 8.0
| Imports of goods and services
| 3.7
| 7.0
|
PRICES and GOVERNMENT FINANCE
| Domestic prices (% change)
| 1992
| 2002
| Consumer prices
| 5.9
| 3.3
| Implicit GDP deflator
| 3.4
| 2.4
|
|
|
| Government finance (% of GDP, includes current grants)
| 1992
| 2002
| Current revenue
| 11.9
| 16.8
| Current budget balance
| -4.5
| 3.3
| Overall surplus/deficit
| -8.9
| -4.9
|
TRADE
| US$ Millions
| 1992
| 2002
| Total exports (FOB)
| 132
| 518
| Ginned Cotton
| 104
| 201
| Crude Oil
| 16
| ..
| Manufactures
| ..
| ..
| Total imports (CIF)
| 384
| 710
| Food
| 117
| 217
| Fuel and energy
| 40
| 129
| Capital goods
| 215
| 398
|
BALANCE of PAYMENTS
| US$ Millions
| 1992
| 2002
| Exports of goods and services
| 514
| 368
| Imports of goods and services
| 719
| 688
| Resource balance
| -205
| -320
| Net income
| -60
| -24
| Net current transfers
| 115
| 131
| Current account balance
| -73
| -74(2001)
| Financing items (net)
| 165
| 94(2001)
| Changes in net reserves
| -92
| -20
|
|
|
| Memo:
|
|
| Reserves including gold (US$ millions)
| ..
| ..
| Conversion rate (DEC, local/US$)
| 350.6
| 697.0
|
EXTERNAL DEBT and RESOURCE FLOWS
| US$ Millions
| 1992
| 2002
| Total debt outstanding and disbursed
| 1373
| 1845
| IBRD
| 0
| 0
| IDA
| 389
| 654
| Total debt service
| 28
| 63
| IBRD
| 0
| 0
| IDA
| 5
| 7
|
Composition of net resource flows
| 1992
| 2002
| Official grants
| 116
| 132(2001)
| Official creditors
| 65
| 41
| Private creditors
| 0
| 0
| Foreign direct investment
| 78
| 131(2001)
| Portfolio equity
| 0
| 0
|
The World Bank Group: http://www.worldbank.org/data/ 08/20/03
Table 2: Benin Basic Statistics (2002 Statistics unless otherwise noted)
People
| Population, total
| 6.6 million
| Population growth (annual %)
| 2.6
| Life expectancy at birth (years)
| 52.7
| Fertility rate, total (births per woman)
| 5.3
| Mortality rate, infant (per 1,000 live birth)
| 93.0
| Mortality rate, under-5 (per 1,000 children)
| 151.0
| Urban population (% of total)
| 42.3(2000)
| Illiteracy rate, total (% of population,15+)
| 61.2
| Illiteracy rate, adult female (% of females,15+)
| 74.5
|
Environment (2000 Statistics)
| Surface area (sq. km)
| 112,620
| Forest area (sq. km)
| 26,500(2000)
| Annual deforestation (% of change)
| 2.3(2000)
| Improved water source (% of pop. w access)
| 63.0(2000)
| Improved sanitation facilities, urban (% of pop. w access)
| 46.0(2000)
| Energy use per cap. (kg of oil-equiv) (1999)
| 317.6(2001)
| Electricity use per capita (kwh) (1999)
| 65.6(2001)
|
Economy
| GNI, Atlas method (current US$)
| 2.5 billion
| GNI per capita, Atlas method (current US$)
| 380.0
| GDP (current $)
| 2.7 billion
| GDP growth (annual %)
| 6.0
| Inflation, GDP deflator (annual %)
| 1.9
| Agriculture, value added (% of GDP)
| 36.0
| Industry, value added (% of GDP)
| 14.3
| Services, etc., value added (% of GDP)
| 49.7
| Exports of goods and services (% of GDP)
| 14.3
| Imports of goods and services (% of GDP)
| 26.1
| Gross capital formation (% of GDP)
| 17.8
|
Technology and Infrastructure
| Fixed lines and mobile telephones (per 1,000 people)
| 28.6
| Telephone cost ($ per 3-minute local call)
| 0.1
| Personal computers (per 1,000 people)
| 1.7
| Internet users
| 25,000
| Paved roads (% of total) (1999)
| 20.0
| Aircraft departures (annual)
| 1,500.0
|
Trade and Finance
| Trade in goods as a share of GDP (%)
| 37.8
| Trade in goods as a share of goods GDP (%)
| 65.1
| Net barter terms of trade (1995=100)
| 82.0(2001)
| Foreign direct investment, net inflows in reporting country (current US$)
| 41.0 million
| Present value of debt (current US$)
| 873.3 million
| Total debt service (% of exports of goods/services)
| 9.6
| Short-term debt outstanding (current US$)
| 80.4 million
| Aid per capita (current US$)
| 33.6
|
Source: World Development Indicators database, April 2004
Chapter 11 - U.S. and Country Contacts
Centre Beninois du Commerce Exterieur (CBCE)
Attn: Directeur General
B.P. 1254
Cotonou, Benin
Tel: 229 30 13 20/ 30 13 97
Fax: 229 30 04 36
E-mail: cbce@bow.intnet.bjChambre de Commerce et d’Industrie du Benin (CCIB)
Attn: Secretaire General
B.P. 31
Cotonou, Benin
Tel: 229 31 20 81/ 31 43 86
Fax: 229 31 32 99
E-mail: ccib@bow.intnet.bj
http://www.ccib.bj
Observatoire Des Opportunite D’Affaires Du Benin (OBOPAF)
Attn: Directeur
06 B.P. 2247
Pk3, route de Porto Novo
Cotonou, Benin
Tel: 229 33 69 84
Fax: 229 30 70 31
E-mail: obopaf@Beninonline.net
http://www.Beninonline/obopaf
American Beninese Business Council (ABBC)
Attn: President Mohamed Paraiso
08 B.P. 582
Cotonou, Benin
Tel: 229 33-07-85
Fax: 33-12-82
E-mail: yakens@intnet.bj
http://www.americaBenin.org
Direction de l’Alimentation et de la Nutrition Appliquée (Food Safety Control Office) This office is under the Benin Ministry of Agriculture.
Attn: Dr/Col. Denis Mikode Ahoukpo BP 295
Porto-Novo, Benin
Tel. +229-212670
Fax. +229-213963
E-mail: danamdr@leland.bj
Direction des Pharmacies (Pharmaceutical Products Control Office) This office is under the Benin Ministry of Health.
Attn: Dr. Idrissou Abdoulaye
Tel. +229-332178Fax. + 229-330464
Chapter 12 - Market Research
For specific industry sector analyses, interested parties should go to www.usatrade.gov, or contact the U.S. Embassy in Cotonou. Locally, several business consulting firms can be engaged to conduct feasibility and market studies. They include:
Afrique Conseil
01 BP 919
Cotonou, Benin
Tel. (229) 31-75-69, 31-39-75, 31-65-29, 31-71-00
Afrique Consult
01 BP 505
Cotonou, Benin
Tel. (229) 31-60-56
Chapter 13 - Trade Event Schedule
U.S. Embassy Cotonou prepared the Country Commercial Guide for Benin. International Copyright, U.S. & Foreign Commercial Service and the U.S. Department of State, 2004. All rights reserved outside the United States.
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