2016 Index of Economic Freedom

Benin

overall score59.3
world rank101
Rule of Law

Property Rights30.0

Freedom From Corruption39.0

Limited Government

Government Spending84.9

Fiscal Freedom68.1

Regulatory Efficiency

Business Freedom51.3

Labor Freedom53.8

Monetary Freedom82.2

Open Markets

Trade Freedom58.8

Investment Freedom75.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 10.6 million
  • GDP (PPP):
    • $19.8 billion
    • 5.5% growth
    • 4.5% 5-year compound annual growth
    • $1,870 per capita
  • Unemployment:
    • 1.0%
  • Inflation (CPI):
    • -1.0%
  • FDI Inflow:
    • $377.4 million
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Benin’s entrepreneurial environment has gradually benefited from a relatively stable political and macroeconomic situation. Continuing its efforts to promote economic diversification and modernization, the government has introduced structural reforms to revitalize the economy. Some government-owned enterprises have been privatized, but direct government involvement in economic activity continues to crowd out private-sector development.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 59.3 (up 0.5 point)
  • Economic Freedom Status: Mostly Unfree
  • Global Ranking: 101st
  • Regional Ranking: 12th in Sub-Saharan Africa
  • Notable Successes: Investment Freedom and Control of Government Spending
  • Concerns: Rule of Law, Business Freedom, and Labor Freedom
  • Overall Score Change Since 2012: +3.6

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Background

President Thomas Boni Yayi was elected in 2006 and again in 2011 in elections that, despite being deemed free and fair by monitors, sparked opposition protests. Yayi survived an assassination attempt in 2007 and an alleged plot by close associates to poison him in March 2013. One of Africa’s largest cotton producers, Benin nevertheless remains underdeveloped and dependent on subsistence agriculture and regional trade, particularly with Nigeria. The economy has grown over the past few years, but there have been border conflicts with Burkina Faso. In September 2015, the government signed its second Millennium Challenge Corporation compact for $375 million to increase power generation in a country where two-thirds of the population lacks access to electricity.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 39.0 Create a Graph using this measurement

A 2015 outside audit found that public funds have been misappropriated in recent years, but few officials facing corruption charges are subject to thorough investigations or disciplinary action. The government’s failure to meet contractual obligations, ensure an independent judiciary, and accept adverse court decisions undermines the business environment. There are no separate commercial courts, and backlogs of civil cases cause long delays.

Limited GovernmentView Methodology

The top income tax rate is 45 percent, and the top corporate tax rate is 30 percent, with oil companies subject to a 45 percent rate. Other taxes include a value-added tax. The overall tax burden equals 16.3 percent of GDP. Government expenditures amount to 22.4 percent of GDP, and public debt equals approximately 30 percent of GDP. Fiscal health remains vulnerable due to heavy dependence on commodity exports.

Regulatory EfficiencyView Methodology

Bureaucratic procedures are not streamlined and lack transparency. Obtaining necessary business licenses is time-consuming and costly. Outmoded employment regulations hinder overall job creation and productivity growth. The government subsidizes cotton production, and low-priced gasoline and diesel fuel are smuggled in from Nigeria and subsidized by the Nigerian government.

Open MarketsView Methodology

Benin has a 15.6 percent average tariff rate. The government has worked to establish a one-stop shop to facilitate trade. There are some limits on foreign ownership of land, and the country’s slow-moving legal system may deter investment. Banking is largely private, but access to credit remains low despite the expansion of microfinance institutions.

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 Download Charts

Regional Ranking

rank country overall change
1Mauritius74.7-1.7
2Botswana71.11.3
3Cabo Verde66.50.1
4Rwanda63.1-1.7
5Ghana630.0
6Seychelles62.24.7
7South Africa61.9-0.7
8Namibia61.92.3
9Madagascar61.1-0.6
10Côte d'Ivoire 601.5
11Swaziland59.7-0.2
12Benin59.30.5
13Uganda59.3-0.4
14Burkina Faso59.10.5
15Gabon590.7
16Zambia58.80.1
17Tanzania58.51.0
18Senegal58.10.3
19Kenya57.51.9
20Nigeria57.51.9
21The Gambia57.1-0.4
22São Tomé and Príncipe 56.73.4
23Mali56.50.1
24Djibouti56-1.5
25Mauritania54.81.5
26Niger54.3-0.3
27Cameroon54.22.3
28Burundi53.90.2
29Togo53.60.6
30Guinea53.31.2
31Mozambique 53.2-1.6
32Comoros52.40.3
33Sierra Leone52.30.6
34Liberia52.2-0.5
35Guinea-Bissau51.8-0.2
36Malawi51.8-3.0
37Ethiopia51.50.0
38Lesotho50.61.0
39Angola48.91.0
40Democratic Republic of Congo46.41.4
41Chad46.30.4
42Central African Republic45.2-0.7
43Equatorial Guinea43.73.3
44Republic of Congo 42.80.1
45Eritrea42.73.8
46Zimbabwe38.20.6
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