Benin

Politics:

• Analysis

  Benin politics: Quick View - Five former ministers to be tried for corrupti

  Event

  The National Assembly on February 22nd and 25th authorised the High Court of Justice to pursue corruption proceedings against five former ministers.

  Analysis

  Despite waning support for the president, Boni Yayi, the government managed to secure the two-thirds majority needed to commence proceedings against former ministers who would otherwise have enjoyed immunity.

  Two of those individuals served under Mr Yayi's predecessor, Mathieu Kérékou. Rogatien Biaou is accused of fraud regarding the purchase of property in New York for the country's mission to the UN while foreign minister. Kamarou Fassassi, a former energy minister, is being prosecuted for bad governance at the Société béninoise d'energie électrique, including the acquisition for a power plant of second-hand generators that were passed off as new.

  The other three former ministers all served under the current president. Armand Zinzindohoué, a former interior minister, is suspected of having received bribes totaling CFAfr52m (US$105,000) from the promoters of Investment Consultancy and Computer Services, a Ponzi scheme worth some US$130m that defrauded an estimated 130,000 people and nearly brought down the president in 2010. François Noudégbessi (formerly planning minister ) and Soulé Mana Lawani (formerly finance minister), are being prosecuted for various offences related to the construction of the new headquarters of the National Assembly in Porto-Novo, which was halted in January. Mr Mana Lawani denies any involvement, claiming merely to have followed ministerial procedures when he authorised transactions and denouncing the authorities for pursuing a personal campaign against him.

  The government is presenting the impending prosecutions as Mr Yayi's commitment to addressing corruption in the country. It is certainly a major problem; Benin may not necessarily be the worst offender in Sub-Saharan Africa, but does sit low down in the annual Corruption Perceptions Index run by Transparency International (94th out of 176 countries surveyed in 2012). Members of the opposition, however, have accused the government of manipulating the National Assembly to pursue personal vendettas.

  One lone dissenter within the presidential majority, Candide Azannaï, has denounced the impending prosecutions as "theatre", predicting that the cases will ultimately come to nothing, as they could implicate Mr Yayi and others within the government. Indeed, authorising prosecutions is no guarantee of conviction, while proceedings could be delayed by shortcomings in judicial procedure. The Trial Chamber of the Court of Appeal of Cotonou, which has jurisdiction over the National Assembly, now has to produce a report. This could take several months and could still require a supermajority in the legislature to impeach the accused. Inadequate procedures are a concern raised by Isaac Fayomi , director of legislative services of the National Assembly.

  March 08, 2013

• Background

  Benin: Key figures

  Boni Yayi

  Boni Yayi was economic and financial adviser to a former president, Nicephore Soglo, from 1992 to 1994. He then became president of the regional development bank, Banque ouest-africaine de developpement (BOAD). During his time at the BOAD, Mr Yayi built up strong links with various economic bodies and heads of state in the region. He resigned from the BOAD presidency in January 2006 to run in the presidential election. He was sworn in as president on April 6th 2006 after securing 74.6% of the vote in the second round of the presidential election. His support base is from the north. (He is from Tchaourou in Borgou.) In the run-up to the March 2007 legislative election, he endorsed the Force cauris pour un Benin emergent coalition.

  Lehady Soglo

  The eldest son of Nicephore Soglo, he is currently honing his political skills as deputy mayor of Cotonou alongside his father. He was Renaissance du Benin's official presidential candidate in the March 2006 poll, but secured only 8.4% of the vote in the first round. He supported Mr Yayi in the second round of the election, but went on to win a parliamentary seat in the 2007 legislative election under the Alliance pour une dynamique democratique (ADD) coalition.

  Bruno Amoussou

  The leader of the Parti social-democrate (PSD), he masterminded the creation of the Union pour le Benin du futur (UBF), the pro-Kerekou coalition. However, he failed to prevent the divisions within the UBF or to ensure that the PSD was the leading party in the coalition. In the first round of the 2006 presidential election, he came third with 16.3% of the vote. He supported Mr Yayi in the second round of the poll and won a parliamentary seat in the 2007 legislative election for the ADD coalition.

  Adrien Houngbedji

  The leader of the Parti du renouveau democratique (PRD), Adrien Houngbedji has changed allegiance several times. He lost the second round run-off of the March 2006 presidential election to Mr Yayi, securing only 25.4% of the vote. In September 2006 he eventually ruled out the possibility of his party declaring itself as part of the official opposition. He won a parliamentary seat in the 2007 legislative election.

  The judiciary

  Benin has an Economic and Social Council, a Higher Audiovisual and Communications Authority (regulatory bodies that deal with complaints and cases in their respective sectors), and a seven-member Constitutional Court. The Constitutional Court has played a major role in mediating in the frequent clashes between the president and parliament. It has demonstrated impartiality in its rulings, and its decisions have been respected by both sides. An important early ruling by the Court was that the president could use emergency powers, including rule by decree, enabling both Mr Soglo and Mr Kerekou to implement the annual budget by decree on those occasions when it was rejected by parliament. A High Court of Justice, set up in February 2001, has the power to impeach the head of state and cabinet ministers on charges of high treason, conspiracy against state security or offences committed while holding office.

  The legislature

  The powers of the president—who is elected by direct national suffrage for five years, renewable once—are counterbalanced by the 83-seat National Assembly, elected every four years. The president cannot dissolve parliament. The president appoints the cabinet, which is answerable only to him. Some steps were taken in 2003 towards giving greater authority to the regions, with the government undertaking a programme of decentralisation. Some financial powers have been devolved to municipal councils headed by mayors.

  Media services

  Benin has a lively and varied press. Reporters sans frontieres, a French non-governmental organisation, ranked Benin 23rd out of 168 countries in 2006 in terms of press freedom. The fact that Benin was the highest-placed African country on the list highlights the high degree of press freedom that it currently enjoys. A government daily newspaper, La Nation, is published, as well as 11 independents, including Le Matin, Le Citoyen, Les Echos, Le Point au quotidien and Le Matinal, and many periodicals. There are five private television channels in addition to the state-owned station, Office de la radiodiffusion et television du Benin (ORTB). Radio coverage has expanded rapidly in recent years, and there are now 34 stations.

  Democracy index (for methodology, see Appendix)

  The Economist Intelligence Unit's 2008 democracy index ranks Benin 80th out of 167 countries, putting it among the 54 countries considered as flawed democracies. This designation includes other African states such as South Africa, Namibia and Lesotho, as well as two of the so-called BRIC emerging-market giants: Brazil and India. However, Benin is not well placed within this categorisation, ranking near the bottom. Benin's relatively good position in the overall index is a result of its healthy scores in the electoral process and civil liberties categories. The most recent national elections, in March 2006 (presidential) and March 2007 (legislative), were regarded as mostly free and fair, the process being clear and accepted, although because earlier elections were not as well run the process is not yet regarded as well established. Freedom of association and of the press have long been respected in the country, and Benin is ranked as having the most open media in Africa. Benin's poorest scores come in the political participation and political culture categories, as at present there is no functioning official opposition in the country and no credible challenge to the pro-presidential grouping, the Force cauris pour un Benin emergent (FCBE). The government continues to suffer from corruption and lack of capacity, resulting in a lower score in the government functioning category.

  Democracy index
  	Overall score	Overall rank	Electoral process	Government functioning	Political participation	Political culture	Civil liberties	Regime type
  Benin	6.06	80	7.33	6.43	4.44	5.63	6.47	Flawed democracy
  Overall and component scores are on a scale of 0 to 10; overall rank is out of 167 countries.

  Download text file (csv format)

  June 30, 2008

• Structure

  Benin: Political structure

  Official name

  République du Bénin

  Form of state

  Unitary republic

  Legal system

  Based on December 1990 constitution

  National legislature

  National Assembly with 83 seats, elected by universal suffrage for a four-year term

  National elections

  March 2011 (presidential); April 2011 (legislative); next legislative and presidential elections due in 2016

  Head of state

  President, elected by universal suffrage for a five-year term, for a maximum of two terms

  National government

  The president and his appointed government; a new cabinet was appointed in May 2011

  Main political parties

  Forces cauris pour un Bénin emergent (FCBE), created in January 2007 to support the president, Boni Yayi, holds 41 seats in the National Assembly; the president is supported by the Renaissance du Bénin (RB) and two other smaller parties, Alliance cauris 2 and Alliance force dans l'unité (AFU); other smaller parties are likely to support the presidential majority; the main opposition alliance is Union fait la Nation (UN), now dominated by Parti du renouveau démocratique (PRD) after the defection of the RB, but also including Parti social démocrate (PSD) and Mouvement africain pour la démocratie et le progrès (MADEP)

  President: Boni Yayi

  Prime minister: Pascal Irénée Koupaki

  Ministers of state

  Defence: Issifou Kogui N'Douro

  Key ministers

  Administrative & institutional reforms: Martial Souton

  Agriculture, livestock & fisheries: Kater Sadaï

  Communications & ICT: Max Ahoueke

  Culture, tourism & literacy: Jean-Michel Abimbola

  Decentralisation & local government: Raphaël Edou

  Development & economic analysis: Marcel de Souza

  Economy & finance: Jonas Gbian

  Energy, oil exploration, mines & water: Barthélémy Kassa

  Environment, housing & urbanisation: Blaise Ahanhanzo-Glèlè

  Foreign affairs: Nassirou Arifari Bako

  Health: Akoko Kindé Gazard

  Higher education & research: François Abiola

  Industry, commerce and SMEs: Sofiatou Onifade Babamoussa

  Institutional relations: Safiatou Bassabi

  Interior & security: Benoît Dègla

  Justice, legislation & human rights: Marie-Elise Gbèdo

  Microfinance & youth & female employment: Réckya Madougou

  Public service & labour: Maïmouna Kora Zaki

  Public works & transport: Lambert Koty

  Secondary education & professional training: Alassane Simanou

  Youth & sports: Didier Aplogan-Djibodé

  Delegate ministers

  Maritime economy & government spokesman: Valentin Djènontin

  Governor of regional central bank (BCEAO)

  Koné Tiémoko Meyliet

  January 14, 2013

Economy:

• Background

  Benin: Education

  Benin suffers from an inadequate education system owing to years of underinvestment. Most funds allocated to education are provided by donors. Indicators have nevertheless improved over the past decade, compared with most countries in Sub-Saharan Africa. In addition, education spending is expected to increase with the implementation of an IMF-supported poverty reduction strategy paper and the extra funds obtained through debt relief under the IMF-World Bank's heavily indebted poor countries (HIPC) initiative and the multilateral debt relief initiative (MDRI). In 2007 Benin was ranked 163rd out of 177 countries in the UN Development Programme's Human Development Index.

  Most people have limited access to education. Although Benin has a well-educated elite, most of the education indicators are low even by African standards, reflecting the poor access to schooling for the majority. The World Bank estimates adult literacy at 48% for men and 23% for women in 2006. Gross primary and secondary enrolment rates stood at 96% and 33%, respectively, in 2005. Frequent strikes by teachers because of poor working conditions and salaries have seriously disrupted the school timetable since 1998.

  June 30, 2008

• Structure

  Benin: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011b	2012b
  GDP at market prices (CFAfr bn)	2,976	3,174	3,302b	3,451	3,740
  GDP (US$ bn)	6.6	6.7	6.7b	7.3	7.3
  Real GDP growth (%)	5.1	3.8	2.6b	3.2	3.4
  Consumer price inflation (av; %)	7.9	2.2	2.3	2.7a	6.5
  Population (m)	8.4	8.6	8.9b	9.1	9.4
  Exports of goods fob (US$ m)	1,282	1,225	1,282	1,593	1,556
  Imports of goods fob (US$ m)	-1,890	-1,738	-1,775	-2,188	-2,143
  Current-account balance (US$ m)	-619	-756	-618	-700	-654
  Foreign-exchange reserves excl gold (US$ m)	1,263	1,230	1,200	887a	860
  Total external debt (US$ bn)	0.9	1.1	1.2	1.4	1.5
  Exchange rate (av) CFAfr:US$	447.8	472.2	495.3	471.9a	511.0a
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Origins of gross domestic product 2009	% of total	Components of gross domestic product 2009	% of total
  Agriculture	32.2	Total consumption	74.8
  Industry	13.1	Gross domestic investment	21.1
  Services	54.7	Exports of goods & services	18.0
  		Imports of goods & services	26.7
  Principal exports 2009	% of total	Principal imports 2009	% of total
  Cotton	12.4	Food	32.4
  Re-exports	46.3	Petroleum products	14.9
  Main destinations of exports 2011a	% of total	Main origins of imports 2011a	% of total
  India	15.9	China	31.3
  China	10.4	France	12.3
  Indonesia	3.6	UK	7.6
  Niger	2.5	US	6.8
  a Based on partners' trade returns; subject to a wide margin of error.

  Download the numbers in Excel

  Download text file (csv format)

  January 14, 2013

• Outlook

  Benin: Country outlook

  Benin: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: With a strong legislative majority, the president, Boni Yayi, will slowly continue to implement his political and economic reform programme. The fiscal deficit will gradually narrow from an estimated 3.8% of GDP in 2012 to 3% of GDP in 2014 as the government responds to calls from the IMF for continued expenditure restraint. Monetary policy will continue to be determined by the regional central bank, Banque centrale des Etats de l'Afrique de l'ouest, which is expected to maintain the CFA franc:euro peg. Stronger cotton exports and a recovery in port activity will help to boost real GDP from an estimated 3.4% in 2012 to an average of 4.7% in the 2013-14 forecast period, although high fuel prices will act as a constraint. After spiking in 2012, annual inflation will moderate in 2013-14 to average 3.7%. The current-account deficit will continue to narrow, from an estimated 8.9% of GDP in 2012 to 6% in 2014, as global commodity prices fall (or at least stabilise), cotton output increases and food import demand falls.

  DOMESTIC POLITICS: Nearly two years into his second and-under the present constitution-final five-year presidential term, Mr Yayi is trying, with moderate success, to use his strong majority in the National Assembly to implement his long-promised programme of reform. After the presidential election, the outcome of which was disputed and led to some unrest, Mr Yayi promised radical economic and constitutional reform. His party, Forces cauris pour un Bénin emergent, and other supporters, won an initial legislative majority of seven, but the subsequent defection to the government by the opposition Renaissance du Bénin (RB) and several minor parties boosted his majority considerably. Routed in the election, the Union fait la Nation (UN) coalition has all but disintegrated; it has suspended the RB, while the defeated presidential candidate and leader of the Parti du renouveau démocratique (PRD), Adrien Houngbédji, has seen a number of his staff defect to Mr Yayi's camp. While bolstering Mr Yayi, this on its own has done little to reinvigorate policy development. However, the creation of a government of national unity in July 2012 including Mr Houngbédji and the PRD, and the remnants of the UN, has improved things slightly. Despite disillusionment over the limited achievements of Mr Yayi's first term-he was originally elected on a platform of improving governance and fighting corruption-he now has total control of parliament. This is a major boost to his legitimacy and to a more stable political environment, given that much of the former wrangling in the Assembly was less about policy differences than about the old political elites trying to reassert their dominance. In the longer term, however, allegiances could change, given Benin's history of volatile patronage-based politics. Mr Yayi is likely to lose some support during the course of his presidency as allies threaten to withdraw their backing in order to increase their bargaining power, as happened during his first mandate. Indeed, with Mr Yayi expected to step down at the end of his second term in 2016, as the constitution demands, prospective successors may assert themselves more strongly if they believe that public opinion is turning against the incumbent. Political and public support for the president spiked following an attempt to murder the head of state. The subsequent goodwill is unlikely to last very long, especially if Mr Yayi is seen to be exploiting this and cracking down on his enemies. If Mr Yayi implements his programme of radical economic reform, popular discontent will continue to well up sporadically in 2013-14 in the form of demonstrations or riots. Anger is still widespread over frequent power cuts, continued allegations of official corruption, political interference in the judicial system, patchy welfare provision and a lack of jobs. Furthermore, some of the reforms urged by the Fund will continue to encounter entrenched opposition. These include the privatisation of the few remaining state-owned utilities and greater fiscal discipline over public-sector pay, which threatens the livelihoods of civil servants and the patronage networks on which many households rely.

  INTERNATIONAL RELATIONS: Mr Yayi will continue to strengthen relations with Benin's neighbours and will seek increased economic co-operation with other countries, notably China and India. Encouraged by Benin's commitment to the political and economic reform programme drawn up in co-operation with the Fund and the World Bank, donors-especially the EU countries-will maintain bilateral and multilateral aid. The national unity government should improve governance and the development agenda, but donors will remain wary of the slow pace of implementing reform and investment projects. The government will seek to improve relations with Niger, with which it is planning to construct a crossborder railway line.

  POLICY TRENDS: Economic policy in 2013-14 will be guided by the need to re-establish a sound fiscal and economic position following the devastating floods of late 2010. The government will also need to meet calls from the Fund for greater progress on a range of reforms previously hampered by Mr Yayi's lack of parliamentary support. Satisfied with the country's progress, in November 2012 the Fund released a further US$16.2m of Benin's three-year, US$118m Extended Credit Facility, following the fourth review. Despite an increase in the budget deficit in 2011 in response to severe flooding, and fiscal overruns in 2009-10, underlying fiscal management has since improved. Nonetheless, the Fund is concerned that rapid wage growth could undermine fiscal sustainability over the medium term. It also urges the government to accelerate structural reforms, with a particular emphasis on expanding the revenue base, bolstering tax compliance, modernising the civil service and improving the efficiency of public enterprises. Governance issues remain a concern, with an import-verification programme being suspended, and the government seizing fertiliser for the cotton sector. Despite Mr Yayi's strong legislative support, reform and controversial restructuring has been sluggish, despite donor demands, owing to labour and public opposition. Employees of the failing power utility, Société béninoise d'énergie électrique (SBEE), will continue to resist reforms, and private investors will remain wary of the company's large debts. The long-mooted privatisation of the national telephone utility, Bénin télécoms, also remains on the cards. There is a new emphasis on security in the light of the rise in piracy against ships in port and in Beninese waters. However, ambitious large infrastructure projects, including construction of new ports and airports, will be delayed and scaled back in 2013-14 in order to reduce capital spending. Several incidents of government interference with private companies could affect investor perceptions, and the country continues to underperform in international comparisons of competitiveness. Mr Yayi has promised to make progress on tax collection, fiscal management and civil service reform, although the last of these will meet stiff opposition from public-sector unions. Revenue generation will remain a policy priority, aided by faster economic growth in 2013-14. Despite the government's commitment to improving fiscal discipline, expenditure may continue to be revised upwards to meet public expectations. After widening to an estimated 4.3% of GDP in 2011 in the wake of serious flood damage, the fiscal gap is forecast to narrow over 2013-14, even if the government's revenue projections are usually overoptimistic. Under its programme with the Fund, the government has promised to take further steps to improve fiscal management and to press ahead with privatisation; also beneficial will be structural reforms such as the introduction of new trade-monitoring procedures at Cotonou port, a key source of customs receipts and services income, which will reduce levels of customs evasion and fraud. Customs revenue was boosted in 2012 with the opening of the one-stop shop at Cotonou, which is intended to improve speed, transparency and security during cargo unloading operations, as well as a recovery in port operations following disruptions, a trend that should continue with the recovery of Nigerian growth and thus of transit traffic. Expenditure growth will slow in 2013-14, but actual expenditure is usually lower than budgeted. The government's limited capacity to collect revenue and monitor spending will continue to present negative risks to the deficit forecast. High pay settlements in the public sector represent a key risk to fiscal sustainability. However, on the assumption that the government manages to prevent a further sharp escalation in wage costs, the Economist Intelligence Unit expects the deficit to shrink to 3.5% of GDP in 2013 and 3% in 2014, on the back of ongoing reforms and faster economic growth.

  ECONOMIC GROWTH: Boosted by stronger cotton exports and a recovery in port activity, growth is expected to accelerate in 2013 to 4.6% after meagre improvement in 2012 owing in part to a delayed start to the cotton season caused by government mismanagement. Furthermore, fuel prices may be more stable in 2013 after rising in 2012 owing to the reduction in subsidies in Nigeria, which lowered disposable household income. Benin provides important port services to Nigeria, Niger and Burkina Faso-together they make up the equivalent of Benin's third-largest export market-and growth in these countries (excluding Niger) is expected to accelerate in 2013-14, helping Benin's growth to firm in 2014 to 4.8%. The government will continue with its efforts to improve the unreliable power supply, which is a major drag on economic growth, through the privatisation of the SBEE and steep rises in electricity prices (although the latter will themselves act as an obstacle to growth). However, even if global credit conditions and risk appetite improve, the authorities will struggle to find a private firm willing to acquire the troubled utility, given the uncertain regulatory environment in Benin and fierce opposition from SBEE employees to a sell-off. The expansion and upgrade of Cotonou port under the private management of Bolloré, with extra aid from the EU, should provide a fillip to growth, as it will increase capacity to handle regional trade. A recovery in cotton production is now under way as a result of post-flood replanting and lower input costs, including a new subsidy on insecticide, and this, as well as higher prices in 2014-even if not back to 2011 levels-should support household incomes. However, production is unlikely to return to historical levels, given continuing underinvestment and inability to match the subsidies enjoyed by foreign cotton growers, and the government will continue to support efforts to reduce the country's dependence on cotton. As aid accounts for the majority of investment in public infrastructure projects, growth in construction will continue in 2013-14, albeit at a slow pace. Private foreign direct investment will remain depressed, deterred by the sluggish pace of business reform and policy instability. Nevertheless, given the government's ostensible commitment to its reform agenda, and humanitarian and reconstruction needs, Benin may escape cuts in the aid budgets of its donors.

  EXTERNAL ACCOUNT: Despite significantly higher cotton volumes in the October-September 2011/12 season, export earnings were weighed down in 2012 as global prices fell by an even greater degree. Higher volumes-if not recovering as strongly as the government regularly predicts-and only slightly easing prices in 2013 will boost exports. Prices are expected to improve again, albeit moderately, in 2014. Subdued-if moderately rising-prices over the medium term will force many farmers into other crops. Re-exports to neighbouring Nigeria will grow in 2013-14 as GDP growth there accelerates, while global and smuggled energy prices will fall in 2013-14. Together with a sharp decline in demand for imported food (which had spiked in 2011 as a result of the crop losses caused by the flooding), this should mean that the trade deficit shrinks from an estimated US$587m in 2012 to US$501m by 2014. The porous nature of Benin's long land borders and the high level of corruption will make cracking down on crossborder smuggling difficult, and the informal trading sector is expected to remain significant. The historical structural services deficit will narrow to average 1.2% of GDP in 2013-14 and remain in this region over the longer term on the back of growing trade services for Nigeria and Niger, helped by new rail infrastructure. The income deficit will average just 0.3% of GDP in 2013-14 because of low interest rates and Benin's heavy dependence on concessional financing. Overall, we forecast that the current-account deficit will continue narrowing, from an estimated 8.9% of GDP in 2012 to 6% in 2014.

  January 15, 2013

View detailed map

Country Briefing

Land area

112,622 sq km

Population

8.97m (mid-year 2012 World Gazetteer estimate)

Main towns

Population in '000 (2012 estimates from World Gazetteer):

Cotonou: 779.3

Abomey-Calavi: 452.8

Porto Novo (capital): 267.2

Climate

Tropical, drier in the north

Weather in Cotonou (altitude 7 metres)

Hottest month, March, 26-28°C; coldest month, August, 23-25°C; driest month, December, 13 mm average rainfall; wettest month, June, 366 mm average rainfall

Languages

French, Fon, Yoruba and others

Measures

Metric system

Time

1 hour ahead of GMT

Public holidays

Fixed: January 1st, January 10th (Vodoun Day), May 1st (Labour Day), August 1st (Independence Day), August 15th (Assumption), November 1st (All Saints' Day), December 25th

Variable (according to Christian and Muslim calendars): Eid al-Adha (Tabaski), Prophet's Birthday, Eid al-Fitr, Easter Monday, Ascension Day, Whit Monday

January 14, 2013