2021 Index of Economic Freedom

Benin

OVERALL SCORE59.6
WORLD RANK100
Rule of Law

Property Rights42.5

Judicial Effectiveness37.0

Government Integrity32.2

Government Size

Tax Burden68.4

Government Spending92.0

Fiscal Health86.3

Regulatory Efficiency

Business Freedom54.6

Labor Freedom58.5

Monetary Freedom83.7

Open Markets

Trade Freedom60.4

Investment Freedom50.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 11.8 million
  • GDP (PPP):
    • $40.6 billion
    • 6.4% growth
    • 4.8% 5-year compound annual growth
    • $3,424 per capita
  • Unemployment:
    • 2.2%
  • Inflation (CPI):
    • -0.9%
  • FDI Inflow:
    • $230.2 million

Benin’s economic freedom score is 59.6, making its economy the 100th freest in the 2021 Index. Its overall score has increased by 4.4 points, primarily because of a dramatic improvement in fiscal health. Benin is ranked 10th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

In the 2021 Index, Benin has reversed a downward slide in economic freedom, achieving its highest score in two decades. The economy is poised to enter the ranks of the moderately free, a distinction the country has not enjoyed since 2001. The biggest threat to achievement of that goal is weak rule-of-law institutions, which will not be helped by the increasing drift toward autocratic government.

IMPACT OF COVID-19: As of December 1, 2020, 43 deaths had been attributed to the pandemic in Benin, and economic growth was forecast to decline to 2.0 percent for the year.

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Background

One of Africa’s largest cotton producers, the former French colony of Benin nevertheless remains underdeveloped and dependent on subsistence agriculture and regional trade. Wealthy businessman Patrice Talon was elected to a five-year presidential term in 2016 on a clean-government platform, but critics have accused him of various power grabs since taking office. Under a new electoral code, only the two political parties that support Talon were permitted to contest the 2019 parliamentary elections, which were marked by low turnout. Government efforts to increase power generation capacity should stimulate economic growth. Expansion of the privately managed port of Cotonou, which accounts for approximately 60 percent of GDP, will further encourage growth by increasing port services to regional neighbors.

Rule of LawView Methodology

Property Rights 42.5 Create a Graph using this measurement

Judicial Effectiveness 37.0 Create a Graph using this measurement

Government Integrity 32.2 Create a Graph using this measurement

Property rights are recognized and enforced, but property registration remains difficult, and enforcement of contracts is uneven. Disputes over land ownership account for roughly 80 percent of the cases seen by Beninese tribunals. The judiciary has demonstrated some independence, but the courts are inefficient and susceptible to corruption. The fact that corrupt officials rarely face prosecution contributes to a culture of impunity.

Government SizeView Methodology

The top individual income tax rate is 45 percent, and the top corporate tax rate is 30 percent (45 percent for oil companies). Other taxes include a value-added tax. The overall tax burden equals 15.4 percent of total domestic income. Government spending has amounted to 16.4 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.6 percent of GDP. Public debt is equivalent to 39.4 percent of GDP.

Regulatory EfficiencyView Methodology

A new procedure has been added when dealing with construction permits, and the process is now more expensive. Benin has abolished limits on the length of fixed-term contracts. In addition to the distorting economic effect of subsidized fuels from Nigeria, subsidies to weak and inefficient state-owned enterprises continue to be a burden on the government budget.

Open MarketsView Methodology

Benin has three preferential trade agreements in force. The trade-weighted average tariff rate is 12.3 percent, and one nontariff measure is in effect. Dynamic flows of foreign investment are constrained by persistent policy and institutional weaknesses. Despite the development of microfinance institutions, overall access to credit remains low. Less than half of adult Beninese have access to an account with a formal banking institution.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius772.1
2Rwanda68.3-2.6
3Botswana67.6-2.0
4Seychelles66.32.0
5Cabo Verde63.80.2
6Namibia62.61.7
7Côte d'Ivoire61.72.0
8Tanzania61.3-0.4
9South Africa59.70.9
10Benin59.64.4
11Ghana59.2-0.2
12The Gambia58.82.5
13Nigeria58.71.5
14Uganda58.6-0.9
15Gabon58.11.4
16Senegal580.0
17Madagascar57.7-2.8
18Togo57.53.4
19Niger57.32.6
20Guinea56.50.0
21Burkina Faso56.5-0.2
22Djibouti56.23.3
23Mauritania56.10.8
24São Tomé and Príncipe55.9-0.3
25Comoros55.72.0
26Mali55.6-0.3
27Eswatini55.1-0.2
28Kenya54.9-0.4
29Guinea-Bissau54.91.6
30Angola54.22.0
31Lesotho53.5-1.0
32Cameroon53.4-0.2
33Malawi530.2
34Sierra Leone51.73.7
35Ethiopia51.7-1.9
36Mozambique51.61.1
37Republic of Congo50.78.9
38Chad50.40.2
39Zambia50.4-3.1
40Burundi49.90.9
41Equatorial Guinea49.20.9
42Liberia49.20.2
43Democratic Republic of Congo49-0.5
44Central African Republic48.8-1.9
45Eritrea42.33.8
46Zimbabwe39.5-3.6
47Sudan39.1-5.9
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