2014 Index of Economic Freedom

Benin

overall score57.1
world rank113
Rule of Law

Property Rights30.0

Freedom From Corruption29.5

Limited Government

Government Spending86.1

Fiscal Freedom68.3

Regulatory Efficiency

Business Freedom51.0

Labor Freedom50.5

Monetary Freedom75.4

Open Markets

Trade Freedom60.0

Investment Freedom70.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 9.4 million
  • GDP (PPP):
    • $15.6 billion
    • 3.8% growth
    • 3.5% 5-year compound annual growth
    • $1,667 per capita
  • Unemployment:
  • Inflation (CPI):
    • 6.7%
  • FDI Inflow:
    • $158.6 million
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Benin’s economic freedom score is 57.1, making its economy the 113th freest in the 2014 Index. Its overall score is 0.5 point worse than last year due to score declines in monetary freedom and fiscal freedom that outweigh a combined gain from business freedom, trade freedom, and labor freedom. Benin is ranked 18th out of 46 countries in the Sub-Saharan Africa region, and its overall score is higher than the regional average.

Over the 20-year history of the Index, Benin’s progress toward greater economic freedom has been patchy and modest. The overall score improvement has been merely 2.6 points, with hard-won gains in trade freedom, investment freedom, and monetary freedom offset by deteriorations in seven of the 10 economic freedoms including property rights, freedom from corruption, and business freedom. Benin had advanced to the status of “moderately free” during the late 1990s but since 2001 has fallen back to the ranks of the “mostly unfree.”

The lack of progress in advancing economic freedom weakens Benin’s prospects for lasting economic development. In the absence of a dynamic private sector, economic expansion remains fragile, and the poor quality of physical and legal infrastructure, impaired by the government’s inefficiency in delivering public goods, exacerbates the problems.

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Background

President Mathieu Kérékou, who ruled for almost 20 years after a military coup, stepped down following a democratic transition in the early 1990s and later served two five-year elected terms. Current President Thomas Boni Yayi was elected in 2006 and re-elected for another five-year term in 2011. Police foiled a coup against Yayi in March 2013, arresting a cabinet member involved in the plot. In January 2012, Yayi was elected chairman of the African Union. Benin remains underdeveloped and dependent on subsistence agriculture. Cotton accounts for over 40 percent of foreign exchange earnings, 17 percent of exports, and about 7 percent of GDP. Piracy has increased off the coast, with reports of 20 incidents of oil tanker hijacking in 2011.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 29.5 Create a Graph using this measurement

The government passed an anti-corruption law in 2011, but corruption remains a problem in the customs service, government procurement, and the judicial system. There is extensive smuggling of subsidized and adulterated gasoline from neighboring Nigeria. There are no separate commercial courts, and backlogs of civil cases cause long delays. In 2013, a law was passed to facilitate land investment for development.

Limited GovernmentView Methodology

Benin’s top individual income tax rate has risen to 45 percent. The top corporate tax rate is 30 percent (up to 45 percent for oil companies). The overall tax burden has fallen to 15.5 percent. A narrow tax base and large public wages continue to put pressure on public finances. Public expenditures are 21.5 percent of domestic output, and public debt hovers around 32 percent of GDP.

Regulatory EfficiencyView Methodology

Launching a business still costs more than the level of average annual income, and the minimum capital required exceeds twice the income level. Getting all of the necessary permits takes more than 200 days. Despite flexible employment regulations, a formal labor market has not fully developed. The government subsidizes the production of cotton, and subsidized gasoline and diesel fuel are smuggled illegally from Nigeria.

Open MarketsView Methodology

Benin has a 15 percent average tariff rate. The legal and regulatory systems can hinder international trade and investment. The financial system remains underdeveloped. Banks have continued to increase their domestic assets, and there are many microfinance institutions. Nonetheless, overall access to credit remains limited.

Country's Score Over Time

Bar Graph of Benin Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Benin to other economic country groups

Regional Ranking

rank country overall change
1Mauritius76.5-0.4
2Botswana721.4
3Cape Verde66.12.4
4Rwanda64.70.6
5Ghana64.22.9
6South Africa62.50.7
7Madagascar61.7-0.3
8Swaziland61.24.0
9Zambia60.41.7
10Uganda59.9-1.2
11The Gambia59.50.7
12Namibia59.4-0.9
13Burkina Faso58.9-1.0
14Gabon57.80.0
15Tanzania57.8-0.1
16Côte d'Ivoire 57.73.6
17Kenya57.11.2
18Benin57.1-0.5
19Seychelles56.21.3
20Djibouti55.92.0
21Mali55.5-0.9
22Malawi55.40.1
23Senegal55.4-0.1
24Niger55.11.2
25Mozambique 550.0
26Nigeria54.3-0.8
27Guinea53.52.3
28Mauritania53.20.9
29Cameroon52.60.3
30Liberia52.43.1
31Burundi51.42.4
32Comoros51.43.9
33Guinea-Bissau51.30.2
34Sierra Leone50.52.2
35Ethiopia500.6
36Togo49.91.1
37Lesotho49.51.6
38São Tomé and Príncipe 48.80.8
39Angola47.70.4
40Central African Republic46.7-3.7
41Chad44.5-0.7
42Equatorial Guinea44.42.1
43Republic of Congo 43.70.2
44Democratic Republic of Congo40.61.0
45Eritrea38.52.2
46Zimbabwe35.56.9
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