2015 Index of Economic Freedom

Benin

overall score58.8
world rank99
Rule of Law

Property Rights30.0

Freedom From Corruption36.0

Limited Government

Government Spending86.7

Fiscal Freedom68.3

Regulatory Efficiency

Business Freedom55.2

Labor Freedom53.2

Monetary Freedom79.9

Open Markets

Trade Freedom58.4

Investment Freedom70.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 10.3 million
  • GDP (PPP):
    • $16.7 billion
    • 5.6% growth
    • 3.9% 5-year compound annual growth
    • $1,623 per capita
  • Unemployment:
    • 1.0%
  • Inflation (CPI):
    • 1.0%
  • FDI Inflow:
    • $320.1 million
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Benin’s economic freedom score is 58.8, making its economy the 99th freest in the 2015 Index. Its overall score is 1.7 points better than last year, with notable improvements in freedom from corruption and in the area of regulatory efficiency consisting of business freedom, labor freedom, and monetary freedom. Benin is ranked 11th out of 46 countries in the Sub-Saharan Africa region, and its overall score is higher than the regional average.

Over the past five years, economic freedom in Benin has advanced by 2.8 points. Six of the 10 economic freedoms, notably investment freedom, business freedom, and freedom from corruption, have improved by close to 10 points or more.

Nonetheless, as a “mostly unfree” economy in which the foundations of economic freedom remain fragile and uneven across the country, Benin continues to lack the broad-based economic dynamism that is necessary to ensure long-term economic development. Though some previously government-owned enterprises have been privatized, lingering government interference and inefficiency continue to crowd out private-sector development. Further reforms in the rule of law and financial freedom are urgently needed to improve productivity and raise incomes.

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Background

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. His former associate, Patrice Talon, was linked to the alleged assassination plot. Talon was arrested in Paris; however, a Paris court blocked his extradition on the grounds that he would be denied a fair trial in Benin. Although it is one of Africa’s largest cotton producers, Benin remains underdeveloped and dependent on subsistence agriculture and regional trade.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 36.0 Create a Graph using this measurement

The business environment is undermined by the government’s failure to meet contractual obligations, ensure an independent judiciary, and accept adverse court decisions. Corruption persists in customs administration, government procurement, and the judicial system. There are no separate commercial courts, and backlogs of civil cases cause long delays. There is extensive smuggling of food and fuel across the border with Nigeria.

Limited GovernmentView Methodology

The top individual income tax rate is 45 percent, and the top corporate tax rate is 30 percent. Companies engaged in hydrocarbon exploration, extraction, and sales pay between 35 percent and 45 percent. Other taxes include a value-added tax. The overall tax burden equals 15.5 percent of gross domestic income. Government spending accounts for 21 percent of the domestic economy, and government debt equals 30 percent of GDP.

Regulatory EfficiencyView Methodology

The entrepreneurial environment remains burdensome. Bureaucratic procedures are not streamlined and lack transparency. Despite some progress, obtaining business licenses is time-consuming and costly. Outmoded employment regulations hinder job creation and productivity growth. The government subsidizes the production of cotton, and the country relies on subsidized gasoline and diesel fuel smuggled from Nigeria.

Open MarketsView Methodology

Benin has a 15.8 percent average tariff rate. It has implemented a one-stop shop for customs documents to facilitate trade. The slow-moving court system can impede international trade and investment. The banking sector is predominantly private, and foreign ownership is allowed, but despite the noticeable development of microfinance institutions, overall access to credit remains low.

Country's Score Over Time

Bar Graph of Benin Economic Freedom Scores Over a Time Period

Country Comparisons

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Regional Ranking

rank country overall change
1Mauritius76.4-0.1
2Botswana69.8-2.2
3Cabo Verde66.40.3
4Rwanda64.80.1
5Ghana63-1.2
6South Africa62.60.1
7Madagascar61.70.0
8Swaziland59.9-1.3
9Uganda59.7-0.2
10Namibia59.60.2
11Benin58.81.7
12Zambia58.7-1.7
13Burkina Faso58.6-0.3
14Côte d'Ivoire 58.50.8
15Gabon58.30.5
16Senegal57.82.4
17Tanzania57.5-0.3
18Djibouti57.51.6
19The Gambia57.5-2.0
20Seychelles57.51.3
21Mali56.40.9
22Nigeria55.61.3
23Kenya55.6-1.5
24Mozambique 54.8-0.2
25Malawi54.8-0.6
26Niger54.6-0.5
27Burundi53.72.3
28Mauritania53.30.1
29São Tomé and Príncipe 53.34.5
30Togo533.1
31Liberia52.70.3
32Comoros52.10.7
33Guinea52.1-1.4
34Guinea-Bissau520.7
35Cameroon51.9-0.7
36Sierra Leone51.71.2
37Ethiopia51.51.5
38Lesotho49.60.1
39Angola47.90.2
40Chad45.91.4
41Central African Republic45.9-0.8
42Democratic Republic of Congo454.4
43Republic of Congo 42.7-1.0
44Equatorial Guinea40.4-4.0
45Eritrea38.90.4
46Zimbabwe37.62.1
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