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U.S. Department of State
Benin Country Commercial Guide
Office of the Coordinator for Business Affairs
Country Commercial Guide for the Republic of Benin
TABLE OF CONTENTS
I. Executive Summary
II. Economic Trends and Outlook
III. Political Environment
IV. Marketing U.S. Products and Services
V. Leading Sectors for U.S. Exports and Investment
VI. Trade Regulations and Standards
VII. Investment Climate
VIII. Trade and Project Financing
IX. Business Travel
A. Country Data
B. Domestic Economy
D. Investment Statistics
E. U.S. and Country Contacts
G. Trade Event Schedule
I. Executive Summary.
The Republic of Benin, previously known as the People's Republic of
Benin (1975-1989) and the Republic of Dahomey (1960-1975), is a small
West African country of 112,622 square kilometers. Benin shares
borders with Nigeria to the east, Togo to the west and Burkina Faso and
Niger to the north.
Its population is estimated at five million, with a per annum growth
rate of 3 percent. The age group diagram shows that 48 percent of the
population is less than fifteen years of age. The country is classified
by the United Nations as one of the least developed. The GDP per capita
was approximately US$418 for 1993.
From 1975 to 1990, the country was governed by a Marxist-Leninist
military regime headed by Mathieu Kerekou and organized around a
centrally planned economy.
The Conference of the Active Forces of the Nation, or National
Conference, held in February 1990, rejected Marxist leadership and
called for a democratic government.
The 1989-1994 period was marked by important reforms and by the adoption
of World Bank and IMF structural adjustment measures aimed at
establishing a free market economy. The new development strategy
focuses on improving external competitiveness. Benin is about to begin
its third Structural Adjustment Program which it recently signed with
the World Bank and the IMF.
The economic reform program adheres to the following broad directives:
- Stabilize public finances
- Fight inflation
- Increase the volume of savings (which was 4.7 percent in 1992 and has
been reported at 9.5 for 1994)
- Increase the volume of investments
Political and commercial links between the United States and Benin were
established in the 1960s and remained cordial until the 1980s. In the
mid 1980s, under the former revolutionary regime, relations became tense
as Benin forged closer ties with socialist countries and officially
criticized U.S. policies. Since the democratic and econonmic reforms
begun in 1989, however, the situation has improved considerably.
Cooperation between the governments of Benin and the United States are
excellent as exemplified by President Nicephore Soglo's official visit
to Washington in July, 1995.
The best prospects for trade and investment lie in agriculture and agro-
industry (more particularly in food processing).
There are also opportunities for U.S. firms more specifically in
offshore oil exploration and possibilities in natural gas powered
turbines to produce electricity. Benin is heavily reliant on imports of
electricity. U.S. firms involved in the energy field could find a
market in Benin.
U.S. firms could also take advantage of the privatization efforts and
invest in one of the many state-owned companies that are scheduled to be
privatized by end-1996. Even though the infrastructure renovation
efforts are well underway there will be a continuing demand for
investment in the transportation sector (roads, bridges, etc.) in the
Major roadblocks to doing business in Benin include: heavy and lengthy
administration procedures; expectations by some civil servants to
receive remuneration before processing papers (petty corruption);
burdensome firing procedures; competitive informal sector; poor business
infrastructure (e.g., telecommunications, roads).
Nature of local and third country competition:
Several factors should be considered when analyzing competition in
Benin. The informal sector must be taken into account when determining
competition within particular markets. Informal traders do not adhere
to foreign investor guidelines, thereby avoiding both the time loss and
expenses faced by formal sector traders. While no statistics accurately
measure the full range and scale of informal activities, the informal
sector clearly accounts for a large portion of household incomes.
French, Nigerian, Lebanese, British and other European nationals compete
in the Beninese market. Transport costs through the Port of Cotonou are
higher than those through the port of Abidjan and lower than those
through Lagos. Air freight is both expensive and capacity remains
limited. The creation of charter-cargoes could help exporters.
Externally, firms need to be aware of the large volumes of cross-border
trafficking with Nigeria.
The commercial climate in Benin has become more favorable for U.S. firms
in the past five years. Political leaders in place have established a
functioning democratic structure. Furthermore, the leaders and
decision-makers are very much aware of the country's problems and
reiterate on every occasion their commitment to privatization and free-
market principles. Learning from the failures of the Marxist-Leninist
regime that ruled and ruined the country in the seventies and eighties,
the Beninese people are more open to democratic and economic
liberalization. The government is publicly committed to these
principles and is determined to repair the economy. Foreign investment
Note: Reliable current economic statistics are not generally available
on a timely basis in Benin. Also, the official statistics available do
not take into account the large measure played by the informal sector.
This report cites the most recently available statistics for various
Country commercial guides are available on the national trade data bank
on CD-ROM or through the internet. Please contact STAT-USA at 1-800-
STAT-USA for more information. To locate country commercial guides via
the internet, please use the following world wide web address: www.stat-
usa.gov. CCGs can also be ordered in hard copy or on diskette from the
national technical information service (NTIS) at 1-800-553-NTIS.
II. Economic trends and outlook.
Major trends and outlook.
In implementing the structural adjustment program agreed to with the IMF
and World Bank, the Beninese government has renewed its commitment to
the privatization of state-owned industries. The GOB is generally
moving forward with introducing reforms. Political actors agree that
the private sector plays a crucial role in the development process and
that the economy can only gain from increased foreign direct investment
in the private sector. Recent policy has geared many efforts towards
that goal. Non-governmental organizations have sponsored seminars and
workshops to help the Beninese develop basic business skills. An
ongoing challenge for the government is to consolidate the country's
economic gains so that there is no backtracking in its policy of market
liberalization. Following the 1994 CFA devaluation, macroeconomic
indicators have shown that the economy is improving.
Principal growth sectors
The agriculture sector is perceived as the backbone of the Beninese
economy. The sector represents 40 percent of GDP and has an average
growth rate of 4.3 percent per year. It generates approximately 60
percent of export receipts and employs about 70 percent of the working
population. Subsistence food crops dominate the sector: maize, cassava,
beans, yams, sorghum. Output is limited due to the lack of modern
technology and to the small size of the average property. The country
is presently self-sufficient in food production. Recent harvests
recorded high yields. The economy largely depends on cash crop sales
like cotton. Such sales have increased rapidly in recent years. The
cotton industry still offers the best opportunities for trade provided
international market prices remain level.
The agriculture sector is presently being restructured in order to
promote diversification. Surveys show prospects exist for cassava
flour, grain, fruit and vegetable production. The agricultural reform
program makes provisions for widespread privatization, for increases in
credits to farmers, and for improvement in rural living conditions. The
CFA devaluation has strongly encouraged the consumption of local
products and should help stimulate the agricultural sector.
Deforestation remains an alarming problem. The government is concerned
with ecological problems and has taken certain measures to protect the
Fishing activities are conducted on a small scale, and the sector is
dominated by individual fishermen who practice traditional fishing
techniques. Fish represents a large portion of the Beninese diet.
Commercial saltwater fishing generates substantial earnings (mainly
For the past thirty years, industrial development has been limited and
principally geared toward light industry, although important investment
has recently been made in heavy industrial units. The industrial sector
represents only 13.6% (estimate for 1994) of the overall GDP but has
shown slight growth recently. Major manufactured products include
textiles, cement, soap, beverages and food products. Competition from
neighboring Nigeria is strong. The government's industrial strategy
includes: further development of existing industrial capacities;
promotion of handicrafts, small and medium-size enterprises and
industries; the creation of an economic environment favorable to both
private and cooperative initiatives. The government aims to reinforce
the private sector and to withdraw the state's participation in the
industrial sector progressively. A large number of state-enterprises
generating low profit or functioning below their capacity have been
privatized or liquidated. There are several more that are to be
examined by end-1996. Newly adopted measures are expected to stimulate
ENERGY, MINING and HYDRAULICS
Strong market potential and investment opportunities exist in these
sectors, which in the past have not been fully exploited or properly
managed. Crude oil is produced in small quantities for export from
offshore and inland sites. Annual production reaches approximately 1
million barrels. The domestic market for petroleum products is supplied
solely by imports and state-owned SONACOP has a complete monopoly from
importation to distribution. SONACOP is to be partially privatized by
end-1995, however, and distribution will be opened to competition. The
country largely depends on energy imported from Ghana and Togo. The
cost of electricity is high. The domestic electrical network is to be
expanded, with an emphasis on rural electrification programs. Water
supply facilities are still poor in most towns and villages.
TRADE AND SERVICES
Trade and services continue to play a key role in Benin's economy,
employing 21 percent of the population. The service sector represented
12.9 percent of GDP in 1993. Much of the trade conducted, however, is
informal (i.e. outside official channels) and remains difficult to
quantify. The geographical position of the country is a competitive
advantage for Benin's flourishing trade activities. The vicinity of
Nigeria, trade with Togo and with land-locked neighbors (Burkina Faso,
Niger) account for increasing port activity (about 4% in volume increase
from 1989-1993). The volume of informal trade at the Nigerian border is
considerable. Beninese border traders engage mainly in re-exportation.
A substantial portion of that activity has to do with prohibited
importation into Nigeria of rice, sugar, wheat flour, tomatoes, milk,
vegetable oil, cotton fabrics, second hand clothing, electrical
batteries, used cars and various consumer goods. Products imported from
Nigeria to Benin include gasoline and a wide range of manufactured
The informal sector is linked as well to services, such as tailoring,
catering, auto repair, hairdressing, and transportation. The informal
sector, operating outside of official regulation, offers numerous
business opportunities to local entrepreneurs. In recent years, due to
unemployment, liquidations and the civil service departure program the
sector has expanded rapidly. The significant size of the informal
sector represents an untapped source of potential tax revenues for the
government. The government derives approximately 50 percent of its
revenues from taxes. By engaging in informal sector activities
entrepreneurs avoid taxation. A major task for the government is
eventually to tax these informal traders by bringing them into the
formal economy. In order to do so it will need to present them with a
set of incentives to register. Official imports include petroleum
products, construction materials, machine spare parts and consumer
goods. Exports include crude oil, seed cotton and ginned cotton, palm
oil, palm kernel cake and palm kernel oil.
8,000 hotel guests were registered in 1991. Considering the natural
sites and cultural heritage of the country, tourism is yet another
resource with room to grow. The sector generates approximately FCFA 700
million and employs close to 6,000 people. Beninese tourism went
through an unstable period between 1972 and 1989, due to the dictatorial
image of the country and to the lack of investment in that sector. New
contracts, however, have been signed with large hotel chains and action
has been taken to promote Beninese tourism in foreign markets (e.g., the
opening of Beninese tourism office in Berlin). A World Bank project is
also studying possibilities to improve Benin's infrastructure for
tourism. Future prospects appear good, provided transportation
infrastructure is improved. With the summit of French-speaking
countries to be held in Benin in December 1995, the country expects a
boost in the tourism sector.
Benin can be reached by air, land or water. The transport sector
contributed 7.61 percent of GDP in 1992. It had a growth rate of 4
percent during the period 1989-1993. The International Airport of
Cotonou-Cadjehoun receives carriers from Europe and Africa. Connections
with the United States are available in Dakar, as well as Paris and
Brussels. Domestically, most major cities can be reached by air as well
(airports or landing strips in Parakou, Djougou, Natitingou, Banikoara),
but service is infrequent.
Roads: the network totals 8,600 km. The road system has historically
suffered from insufficient investment and poor maintenance. Road
rehabilitation has however received a high priority in the second
structural adjustment program, including a self-financing tax on
gasoline sales. Asphalt roads include the Beninese section of the
Lagos-Lome coastal highway and a north-south artery extending from
Cotonou, through Parakou, to the Niger border at Malanville. The link
to Djougou is about halfway done, and the Djougou-Natitingou highway
project is in progress.
Railways: the network is 438km long and is run by O.C.B.N. (Organization
Benin-Niger). The network cargo capacity is 600,000 tons.
Sea: The Port Autonome de Cotonou (PAC) is a deep water harbor with a
2,000,000 metric ton capacity and adequate equipment. Its facilities
include one 1,320-meter wharf which can handle six ships measuring up to
180 meters each, and a 500-meter wharf built to accommodate oil tankers.
A 300,000 square meter container storage area represents the extent of
the storage facilities. Maritime activities are managed by major public
companies such as PAC, SOBEMAP (Societe Beninoise de Manutention
Portuaire, COBENAM (Compagnie Beninoise de Navigation Maritime), CNB
(Compagnie Nationale des Chargeurs de Benin) as well as private
Port Autonome de Cotonou (PAC): B.P. 927 Cotonou
Tel: 31 52 80/31 28 90/31 43 87/31 37 64/31 28 92
Fax: 31 28 91
Telex: 5004 DIRPORT CTNOU
The PAC manages the port facilities and infrastructure and is
responsible for police and security. The volume of port traffic largely
affected by the political and economic situations in neighboring Togo
and Nigeria. Since 1992 the port's activities have significantly
increased. A private computerization project called "Escale" was
recently initiated to improve port management.
Government role in the economy
With a payroll of approximately 35,000 civil servants, the state still
plays a major role in the economy. Nevertheless, the government has
slashed thousands of jobs from the civil service rolls in the last
several years and has succeeded in increasing government revenues to
cover current expenditures. As practiced, the aim of the government is
to complete the privatization policy it started at the beginning of the
decade. Remaining candidates for privatization include the Societe
Sucriere de Save (sugar refinery), Societe des Ciments d'Onigbolo
(cement company), the vegetable oil refineries of SONICOG, and SONAR
(national insurance company). The country has been politically stable
since 1990. The legislative elections in 1995 were held in an
atmosphere of calm, presidential elections are scheduled in 1996.
Although some price controls were introduced in the wake of the 1994
devaluation, in mid-1995 the government lifted all price controls except
for a handful of products. The continued trend is to reduce the role of
the government in the economy.
Balance of payments situation
The balance of payments for Benin remains in deficit and is largely
financed by grants, loans and credits from multilateral and bilateral
donors. Benin's great dependence on imports accounts for a chronic
deficit in its trade balance. The recent devaluation, however, has
encouraged consumers to turn to domestic products, helping to reduce the
volume of imports.
Balance of trade 1991 1992 1993
(millions of $)
Exports, f.o.b. 328 362 334
Imports, f.o.b. -482 -560 -574
Trade balance -154 -198 -240
(Source: Beninese government and IMF)
Benin is involved in a major effort to improve the infrastructure for
telecommunications, electricity and roads. In the pipeline is a project
to introduce cellular telephony accessible on major east-west and north-
south road links, with a preliminary limited start-up in the coastal
section of the country. Cotonou, nicknamed "Cototrou" for its pot-holed
streets, is undergoing a major overhaul of its major avenues and
boulevards in 1995. There are also substantial road construction
projects and renovations in links throughout the country including:
Cotonou-Hillacondji, Cotonou-Porto Novo highway, Parakou-Djougou-
Natitingou, Parakou-Malanville, Bohicon-Cove-Ketou- Illara, Save-
Okeowo, and Cotonou-Bohicon, which are expected to be completed by end-
1996. In addition, there is ongoing work in rehabilitation of rural
roads, sanitation projects in large cities, water supply projects, and
electrification projects in rural areas.
The AGETUR (Agence d'Execution des Travaux Urbains) is involved in some
of these projects as an agency implementing infrastructure construction
on behalf of the state. These works contribute to the reduction of
urban unemployment and help develop small and medium-sized construction
III. Political Environment
Nature of political relationship with the United States
The United States and Benin enjoy excellent bilateral relations. Vice
President Al Gore and National Security Advisor Anthony Lake visited
Benin in 1994, and President Clinton invited President Soglo to an
official visit in Washington in July 1995. Benin was the first African
country to join in the U.S.-led efforts to restore democracy in Haiti in
October 1994 and contributed 35 gendarmes to serve as international
policy monitors. The United States has supported Benin's efforts in
democratization with several human rights fund grants. At present, the
U.S. official presence in Benin includes the U.S. Embassy, the American
Cultural Center, the USAID mission (which was reopened in 1991, with an
emphasis on primary education), and the Peace Corps (with over 70
Major political issues affecting the business climate
- Internal issues:
The Beninese government is committed to privatization and open trade.
Although unions and some opposition leaders have argued for maintaining
government control over certain "strategic" industries, President Soglo
has continued to move forward with selling state-owned companies to the
private sector. With the devaluation of the CFA franc of January 1994,
the government did introduce certain temporary measures in an attempt to
curb inflation. Although the inflation rate measured 54% in 1994,
prices started to stabilize in 1995. Economic grievances over inflation
and unemployment, as well as the structural adjustment program in
general, could become significant issues in the 1996 presidential
- External issues:
Political events in neighboring Nigeria have repercussions in Benin.
Civil unrest in Nigeria and Togo always has the potential of spilling
over into Benin in the form of refugees. Also, the illegal traffic of
gasoline from Nigeria, where it is cheap, to Benin, where it is
generally more expensive, fluctuates with economic disturbances and
strikes in Lagos. Political turmoil in Togo in 1993 led to an influx of
150,000 Togolese refugees in Benin. Their arrival had an impact on
consumer prices and real estate rates. Trade in general is also
affected to a large extent by events in Togo and Nigeria. Shipments to
Lome (Togo's capital and main port) or Lagos are often diverted to Benin
because of the reliability of the port of Cotonou, as happened in 1993-
Brief synopsis of political system
The National Conference held in February 1990 launched a new democracy
in Benin. The Constitution of December 1990 established a democratic
system of government characterized by a separation of powers, including
an independent judiciary. Nicephore Soglo was elected President of the
Republic in 1991 for a five-year term. The Soglo government has had a
good human rights record. The next presidential election is scheduled
The Constitution establishes other bodies to serve as checks and
balances on executive power, nobably the Constitutional Court, the
National Assembly, the Supreme Court, the High Authority for Audiovisual
and Communications (HAAC), and the Economic and Social Council. Since
its installation in 1993, the Constitutional Court has become a
significant player in interpreting Beninese law, arbitrating disputes
between the President and the National Assembly, and declaring the final
results of elections. In 1995, it also upheld the creation of a
National Independent Electoral Commission (CENA) to supervise all
Candidates from 31 political parties ran for 83 National Assembly seats
in the 1995 legislative elections which were held in a peaceful
environment. While more than seventy political parties are officially
registered, only 18 parties won seats in the National Assembly in 1995.
President Soglo is at the head of the political party "La Renaissance"
which was created in 1992. Besides the Renaissance, the major parties
are the PRD (Parti du Renouveau Democratique) led by Adrien Houngbedji
(ex-president of the National Assembly and a major rival of President
Soglo), the PSD (Parti Social Democrate) led by Bruno Amoussou (new
National Assembly president), and the FARD-Alafia which is particularly
strong in the north and among former Kerekou followers. With the
installation of the new National Assembly, three new parliamentary
groupings of parties formed in June 1995.
IV. Marketing U.S. products and services
Distribution and sales channels
Long established French commercial groups operate in Benin as
distributors of consumer goods. The leading companies are CFAO and John
Walkden who import directly and are wholesalers as well. Other large
distributors such as SOCAR and SONAEC who penetrated the market later
appear to have the biggest share of the market for industrial equipment.
SONAEC distributes consumer goods, as does the ODIFIC group. Foreign
traders of Lebanese and Indian origin are also very active in
distribution activities. In 1995, the government announced steps to
eliminate monopolies on the import and distribution of goods.
Use of agents/distributors; finding a partner
It is advisable to hire an agent to advise on general matters in
conducting business in Benin. Large foreign firms often enter into
exclusive contracts with an agent/distributor for the product they sell
in Benin. Exclusive contracts, however, are often not respected by some
large firms who try to increase their earnings by selling to several
distributors. American companies should beware of business scams which
are on the increase. At a minimum, legitimate Beninese companies
should be able to provide their registration number received from the
Franchising is practiced on a limited basis in Benin although the
government has encouraged any type of partnership with foreign firms.
Dantokpa market is the largest market in Benin for wholesale and retail.
It is also reputed to be the biggest in West Africa. There are numerous
established retailers as trade is a common activity in the country.
More or less organized, they import directly or get their supplies
through wholesalers and central buying groups. Trade operations are
made through traditional channels or through more modern ones. The
main types of outlets are open-air markets, street displays and street
vendors, and European-style supermarkets and convenience stores with a
wide range of local and imported products. Provisions on distribution
are contained in Law No.90-005 of May 15, 1990 Title III.
Possibilities exist for joint ventures between Beninese and foreign
Steps to establishing an office
Foreign companies are free to establish offices in Benin. The rules for
establishing an office are generally the same as those applicable to
Beninese companies (some differences exist regarding bids and tenders).
According to order No.73-11, dated February 7, 1973, industrial and
commercial firms in Benin are requested to establish a head office in
the country and must conduct account operations in the country as
prescribed by the national account plan (Plan Comptable National). The
company must be one of the types legally accepted in Benin. The most
common type encountered in the country is the limited company (Inc.) and
is often selected for reasons of convenience (necessary steps take less
time than other companies and organization is simplified). The
administrative process for establishing a company generally requires
authorization by a ministry, the Ministry of Industry, for example, when
operating an industrial plant. It is recommended that the establishing
company contact the appropriate ministry for more information on
drafting documents. Some industrial firms may benefit from preferential
schemes detailed in the Investment Code, through the Technical
Investment Commission of the Ministry of Planning. In order to engage
legally in commercial activities in Benin, the following requirements
must be met: enrollment in the Trade Register; possession of a
businessman's professional card; registration with the Chamber of
Commerce and Industry.
Although many office equipment stores maintain small inventories, they
will promptly make new orders to respond to customers. Traders
proceed with orders and replenishment of stocks according to their
specific cases. Cash transactions are predominant in the informal
sector. In official establishments, payments made between 30 and 90
days after reception of invoice are possible. Letters of credit are
also used. Credit cards are seldom accepted by retail establishments of
any kind. The use of personal checks, although growing, are not widely
Advertising and trade promotion
Advertising can be done through the many newspapers, the radio stations,
the national TV station and billboards. Two other techniques are very
- In-store promotion of food products or consumer goods
- Sales promotion outside of stores during special events
(cigarette distributors or beverage and spirits distributors often
organize or sponsor parties in clubs, during sporting events and shows
for the promotion of a brand name).
Listing of major newspapers and business journals:
- La Nation (daily)
- Le Matin (daily)
- La Gazette du Golfe (weekly)
- Tam-Tam Express (weekly)
- Le Forum de la Semaine (weekly)
- La Croix (fortnightly)
- Le Journal Officiel (fortnightly)
- CBCE Info (Bulletin d'Information Commerciale)
About sixty newspapers and magazines from all over the world are
available at kiosks and bookstores in Cotonou.
Advertising agencies- marketing and communication:
Tel: 31 48 65/31 55 58
Fax: 30 01 99/31 35 58
Tel: 33 13 21
Fax: 33 18 07
Tel: 33 42 85/33 42 88
Fax: 33 42 88
B.P. 04-1356 Tel: 30 17 81
Fax: 30 02 14
Tel: 30 30 87/30 30 86
Fax: 30 30 87
Service des Relations Publiques ORTB (Public relations of the national
radio and television)
Tel: 31 21 68
Fax: 30 04 48
Prices of imported goods as well as local products increased
dramatically in the period immediately following devaluation. Attempts
were made by the government to keep prices stable and moderate (e.g.
price monitoring committees, import subsidies) but were largely
ineffective. Although there are a few exceptions, in general government
policy is committed to allowing market forces to determine prices.
Inflationary effects were strong in the wake of the devaluation as most
traders simply doubled the prices of their merchandise. The government
did adopt temporary measures to limit price increases in electricity,
medicine, and school supplies. The price of cement previously fixed at
FCFA 31,425 per ton, was officially increased 51 percent to FCFA 47,500
following the devaluation. Inflationary pressures appeared to dampen in
Sales services/customer support
Services available vary according to traders. The more the outlet is
structured, the more its management works on customer support. This is
the case in most of the existing supermarkets and larger retail outlets.
Methods aimed at keeping regular customers satisfied are not developed
much. The most frequent ones are in-store assistance and after-sales
service. Personal relationships established with the manager of a trade
business will help the customer.
Selling to the government
The Beninese government proceeds through bids and tenders in most cases.
Due to administrative irregularities there remains some uncertainty with
respect to the equity of chances of parties tendering, and on the
Protecting your product from IPR infringement
Industrial property is ruled by the Law of July 5, 1844 on patents,
applicable in Benin by an order of October 1948. Benin is a signatory
member of the OAPI Convention of Yaounde (African Organization for
Intellectual Property) and a member of WIPO (World Intellectual Property
The "Code de Commerce" includes regulation of industrial property:
regulation of patents, designs, labels, quality certificates, unfair
competition and misleading representations.
Need for a local attorney
The assistance of an attorney is usually necessary when establishing
trade relations, preparing documents, for providing judicial counseling,
and also in case of further dispute. A fair number of law offices are
established in Cotonou. Benin's legal system is modeled after the
V. Leading sectors for U.S. exports and investment
Best prospects for non-agricultural goods and services
Benin is a developing country and produces locally very little of what
it needs. The industrial sector being underdeveloped, Benin exports
very little. The sectors below were selected because they are the ones
which present the best prospects for U.S. firms. In general, however,
the Beninese are open to American products in all sectors.
1 - Oil --exploration, off-shore drilling, maintenance of existing
The Seme off-shore oil fields east of Cotonou, close to the Nigerian
border, have been producing since the 1960s. One American firm is among
the main bidders to develop existing oil reserves. Many off-shore zones
have not been explored. The oil sector is the one which currently
offers the greatest potential for U.S. exports and investment.
Prospects of new oil fields have encouraged new off-shore and on-shore
exploration. The government is slowly, but not entirely, disengaging
itself from the petroleum sector. It intends to privatize SONACOP, the
state owned oil company which was founded in 1974 when the government
nationalized many of the foreign-owned stations that were operating in
Benin. The state will give up its monopoly on the importation of
hydrocarbons and allow others to import. Concerning the storage of oil,
the Ministry of Energy that now is in charge of these facilities will
negotiate contracts with private companies for rental or co-ownership.
Furthermore, all of the gas stations will be put on the market and
offered to the highest bidder (25% staying in SONACOP's hands, 25%
minimum to stay under Beninese ownership). The GOB also plans to
liberalize gasoline prices and allow them to fluctuate with the market.
All the foregoing provisions are expected to be implemented by end-1995.
According to the most recently published statistics, Benin produced 1.4
million barrels of crude oil in 1991, 933,400 thousand barrels in 1992,
and 1.1 million barrels in 1993. All of the crude oil was exported.
2 - Tourism industry --restaurants, hotels-- (TRA/HTL)
Benin shares many of the same characteristics as other countries in the
sub-region like Cote-d'Ivoire, Togo, and Ghana in terms of fauna,
beaches, and vegetation. The advantage it has over these other
countries, however, lies in its historical and cultural heritage. For
example, Benin is the birthplace of Voodoo. Benin is also site of the
coastal city of Ouidah, a major port for the slave trade in the 17th and
18th centuries and the departure point for thousands of slaves brought
to Brazil, Haiti and the United States. Benin sponsored a Ouidah '92
festival and a slave route exhibition acknowledging its unique culture
and history and has the opportunity to develop this unique market
further for tourists. In 1992, there were 135,400 tourists who visited
Benin. The sector employs about 6,000 people. Revenues from the sector
have steadily increased since the end of Kerekou's Marxist regime in
1990. Although there are a few hotels in Cotonou that are acceptable
for American standards, there remains much work to be done to develop a
more accommodating tourism infrastructure, particularly up country.
Revenues from the hotel, bar, and restaurant sector reached 4.4 billion
CFA in 1991 up from 3.5 billion in 1990. More recent statistics are not
3 - General Industrial Equipment/Supplies (GIE)
Benin is attempting to broaden its industrial base by privatizing many
of the state-owned industries. In this process, many factories may seek
to modernize their equipment in an attempt to become more productive.
This provides prospects for U.S. firms involved in the sale of general
industrial equipment and supplies.
Best prospects for agricultural goods and services
1 - Agro-industry --equipment, canning, storage-- (AGM)
Agriculture remains the backbone of the economy. The sector could gain
much from modernization and diversification. Oil-yielding crops is a
key cash source for the Beninese but to take better advantage of this
resource, the industry seeks to modernize and improve its productivity.
Benin imports all of its agricultural equipment. Most of the
agricultural production is sold on open air markets and rarely go
through any type of processing stage. Given the abundant production of
fruit, vegetbles, and cashew nuts, Benin offers potential rewards to
those who could develop modern techniques for cold storage, canning, and
2 - Fisheries (MFI)
The consumption of fish is a large part of the Beninese diet (30%-50% of
animal protein intake on average) and many Beninese make their
livelihood from fishing. Saltwater fishing is not very developed
however and is characterized by labor intensive and rather inefficient
techniques. Furthermore, Benin's territorial waters are not well
protected and are vulnerable to plundering by unauthorized boats. The
industry could become more productive with a modernized fleet, larger
boats, and better patroled waters. Besides local consumers, fishing
companies could sell their catch to Niger and Burkina Faso.
3 - Machinery for textile industry, cotton (TXM)
Benin produces about 2.5% of the world's cotton. Its existing
processing plants are being modernized. There are also plans to
privatize the state-owned SONAPRA plants and to increase ginning
capacity. American firms involved in the textile industry would find in
Benin a market for their equipment.
Significant investment opportunities
The volume of U.S. investment is limited, although some firms are
presently exploring opportunities. One of the major factors hindering
investments is the high cost of energy. The United States government
recently financed a feasibility study for a power plant to produce
electrical energy from natural gas from the Seme fields. U.S. firms
have also shown interest in oil extraction and a U.S. firm is a major
bidder for production rights. These efforts to increase Benin's crude
oil production and electricity generation offer the most significant
investment opportunities on the horizon.
The Government of the United States acknowledges the contribution that
outward foreign direct investment makes to the U.S. economy. U.S.
foreign direct investment is increasingly viewed as a complement or even
a necessary component of trade. For example, roughly 60 percent of U.S.
exports are sold by American firms that have operations abroad.
Recognizing the benefit that U.S. outward investment brings to the U.S.
economy, the Government of the United States undertakes initiatives such
as Overseas Private Investment Corporation (OPIC) programs, Investment
Treaty negotiations and business facilitation programs, that support
VI. Trade regulations and standards
Trade barriers, including tariffs, non-tariff barriers and import
With respect to import taxation, Parliament approved a new import tariff
schedule in September 1994, which reduces the maximum rate from 63% to
20%, and the number of rates from 16 to 5 (0-5-10-15-20%). Benin has
thus adopted one of the most open trade regimes in Africa. While the
overall reform is consistent with the general recommendations made in
the context of the proposed West African Economic and Monetary Union
(UMEOA) trade reform, Benin has gone further by adopting a lower maximum
tariff than proposed by UEMOA. In addition, the government has
eliminated the use of remaining reference values for customs valuation.
Finally, it has also agreed to eliminate by January 1996 import tariff
and VAT exemptions accorded under "special regimes" outside the
investment code, and to increase to 5% the import tariff applied to all
products now subject to a zero rate, with the exception of rice, cotton
textiles, school books and medicine. Coordination between the customs
administration and the unit in charge of pre-shipment inspection of
imports should improve as a result of tighter control on declared
values, stricter rules on exemptions and better management of the common
database linked to port management operations. Import licenses for
products originating in the European Community, ACP and the Franc Zone
countries and every other country have been suppressed. Export taxes
were removed to a large extent.
The importations of goods from whatever origin with or without foreign
exchange transfer is free in the Republic of Benin. Import licenses are
obtained from the Ministry of Trade and are processed routinely.
Simple authorization by the Foreign Trade Office is required for the
exportation of goods obtained in regions under customs jurisdiction.
However, authorization for the export of gold, diamonds and any other
precious metals must be granted by the Minister of Finance. With these
exceptions, it is noteworthy that in the framework of the first
Structural Adjustment Program, all export prohibitions and quotas have
Exports are free of tariff provided there is an authorization from the
Direction of External Trade and a Certificate of Origin for products
originating in Benin.
Labelling and marking requirements
It is advised to contact the following office for obtaining
Direction de la qualite et des instruments de mesure
Ministeres du Commerce et du Tourisme
Bans or restrictions on imports exist when the following factors have to
- Public morality
- Safeguard of the National Economy
- The health and life of humans and animals, the preservation of plants
- Protection of items of the national heritage, endowed with or having
artistic, historic or archaeologic value
- Protection of patent and business rights
The import of cement is prohibited
Standards (e.g., ISO 9000 usage)
Benin applies the standards of the International Organization for
Standardization and AFNOR, the French standardization organization
(Association Franchise de Normalisation). It is a member country of the
International Organization of Legal Metrology.
Free trade zone/warehouses
A free trade zone exists in the Port Autonome de Cotonou (PAC) for the
landlocked nations of Niger, Mali and Burkina Faso.
Special import provisions
Membership in free trade arrangements
Benin is a Member State of ECOWAS, the Economic Community of West
African States, organization created in 1975 for cooperation and
VII. Investment climate
A1. Openness to foreign investment
Many opportunities for foreign investment are linked to the
privatization process that Benin is engaged in. By 1996 the government
plans to privatize 13 of the 32 enterprises it owned in 1994. The
state-owned companies to be sold to the private sector include insurance
companies (SONAR and IARD), cement companies (SCO), sugar refineries
(SSS) and hotels (La Plage, Croix du Sud). The government generally
requires that Beninese nationals partly own the privatized companies.
Though the percentages are not usually substantial, they could somewhat
deter foreign investors.
Many of the infrastructure renovation contracts are funded by grants or
loans from the World Bank or other International Development Banks.
Some major contracts have been signed already while several projects are
still on the horizon. The current Investment code establishes the
conditions required to obtain benefits under different investment
regimes and grants the Investment Control Commission at the Ministry of
Industry extensive discretionary power.
The tax reforms introduced in recent years and those agreed upon under
the proposed operation in large measure remove the need for special
incentives to potential investors. The Investment Code is being revised
in order to establish a single incentive system assuring automatic
access to such benefits by all investors. The government has agreed to
adopt a revised Investment Code by mid-1995.
The labor movement has been opposed to the privatization programs
because the process results in downsizing and cutbacks in employees.
Proposed labor market reforms aim at increasing business flexibility by
simplifying labor regulations and procedures. The government intends to
adopt a new Labor Code in mid-1995 which will increase flexibility
regarding hiring decisions, eliminate the need for prior authorization
from the Labor directorate for employee dismissal, and consolidate labor
regulations currently dispersed in various texts. The authorities are
committed to simplifying the business law framework in order to help
revise the provisions of the current commercial legal framework which
create a number of disincentives to the establishment and operation of
commercial firms. In this regard, Benin's parliament ratified the
treaty on the regional harmonization of business law in December 1994, a
national commission is reviewing the draft general Commercial Law, and
the authorities expect the first regional texts to be implemented in
A2. Conversion and transfer policies
Benin is a member of the West African Economic and Monetary Union
(UEMOA). Its currency is the CFA franc which is issued by the Central
Bank of West African States (BCEAO). In order to stimulate economic
recovery an adjustment of the exchange rate was implemented and the CFA
franc was devalued by 50 percent on January 11, 1994. As of that date,
100 F CFA equals 1 French franc. 1 USD = FCFA 493 (current exchange
The conversion system does not set restrictions on international
transfers. The existing commissions taken on transfers were eliminated
in 1990. As of August 2, 1993, it is forbidden to buy CFA bank notes
outside of the Franc Zone. This decision was taken by the Central Bank
to stem capital outflows from the West African Monetary Union. The
circular No. 629/Mf/DC/DGTCP/DAMF is related to the delivery of
currencies and customs control of travellers' money. Since the CFA is
pegged to the French Franc at 50 to 1 the CFA/dollar rate will fluctuate
parallel to the FF/dollar ratio. One concern for investors is what
will happen to the CFA franc should monetary union becomes a reality in
the European Union.
A3. Expropriation and compensation
As stipulated by law, any enterprise operating in Benin is guaranteed
that the state will make no attempt to nationalize it. The government
at this time is focused on continuing to privatize its state-owned
industries and has shown no indication to return to the policy of
expropriation carried out under the Kerekou regime. Since the return of
democracy in 1990 privatization has been one of the government's
priorities. Benin is trying hard to make its laws and practices
welcoming to foreign investment and is not likely to revert to any type
of expropriation in the foreseeable future.
A4. Dispute settlement
The settlement of disputes in respect of the validity, the reading or
the enforcement of the acceptance decree and the contingent
determination of fiscal penalties due to ignorance or to the breach of
commitments may be arrived at through different arbitration methods.
For disputes between the Beninese state and a foreign firm, the law
recognizes the president of the Hague permanent arbitration court as an
appropriate arbiter. The law also recognizes the international center
for settlement of investment disputes created by the convention of the
International Bank for Reconstruction and Development (World Bank).
Amicable settlement is often recommended to avoid long and costly
litigation. See also A1 section on government's move to implement a
working business law system.
A5. Performance requirements/incentives
Production and value-added nature
Creation of jobs (employment generated)
A6. Right to private ownership and establishment
The same laws guarantee the freedom of trade (choice of customers,
suppliers, provisions of services) as well as the freedom of entry,
length of stay, residence, movement, departure of foreign employees and
of their families, and the freedom of management.
A7. Protection of property rights (see IPR infringement above)
See Chapter IV.
A8. Regulatory system: laws and procedures
Although the government has adopted a transparent policy to foster
competition, bureaucratic red tape is a problem. The complicated steps
are not streamlined to the extent that they need to be and often
constitute a serious obstacle. Trade regulation is specified in the
French "Code de Commerce." There are some specific rules not included
in the Code that are applicable in Benin. It is important to note that
most of the laws regulating trade are French laws adopted between 1807
and independence. As many of them are now obsolete there are efforts
underway to update them. The most recent texts adopted to regulate
trade are the following:
- Law No. 90-005 dated May 15, 1990, on conditions of trade activities
- Decree No. 90-141 dated June 29, 1990, giving the definition of a
professional importer in Benin
- Decree No. 90-273 dated September 28, 1990, relative to the license
of professional trader
- The Law No. 93-007 dated March 1993, for amendment of Law No. 90-005
of May 15, 1990, on conditions of trade in Benin.
According to the type of commercial activity involved, a prior
authorization from the appropriate ministry is required.
A9. Efficient capital markets and portfolio investment
There are a total of five major commercial banks operating in Benin.
The largest one is the Bank of Africa with assets amounting to 56.625
billion CFA in 1994 and of which 57% of the stock is held by Beninese
nationals. The second largest bank is Ecobank-Benin with total assets
of 29 billion CFA in 1992. Next is the Banque Internationale du Benin
(BIBe, Nigerian owned) with a total of 27 billion CFA in assets.
Financial Bank also owned by Nigerians the Credit Lyonnais, affiliated
with the French Bank of the same name, are the other two private banks.
These banks started there activities in Benin after the bankruptcy of
the old banking system in 1987-89. The banking system is reliable. The
government is intent on attracting foreign investment and has no
interest in introducing measures which would restrict capital inflows.
A10. Political violence
Although there were incidents of political violence in connection with
the 1991 elections, the climate has improved with efforts to educate the
Beninese on the meaning of democracy. With two rounds of peaceful
legislative elections in 1995 and five years of democratization, the
risk of political violence has been reduced. The stability that has
prevailed for several years has been an incentive for more investment.
Benin has a good human rights record.
B. Bilateral investment agreements
There is a bilateral investment agreement signed with France, but none
has been signed with the United States. With respect to investments
protection, Benin has concluded agreements with several European
- Germany; Agreement pertaining to the mutual encouragement and
protection of investment capital on October 10, 1993.
- Great Britain; Agreement for the protection of British investments in
Benin, on November 27, 1987.
Further, Benin is a signatory of various multilateral agreements for
investments protection such as that of the Multilateral Security Agency
and that of the Convention of the International Center for the Settlment
of Investment Disputes on October 14, 1966. In addition, the
repatriation of assets and profits are free in Benin.
C. OPIC and other investment insurance programs
The Overseas Private Investment Corporation (OPIC) offers finance
programs to assist small companies wishing to invest in developing
countries. It operates programs that provide political risk insurance,
loans, investment guarantees, and equity in support of US foreign direct
investment in developing countries. OPIC can loan or guarantee a loan
of $250,000 to $6 million for an international investment provided that
there is at least 25 percent US equity participation in the project.
OPIC also operates programs for political risk insurance for financial
institutions and coverage for specific financial transactions.
Investment guarantees have been used to support the creation of regional
and global investment funds.
1615 M Street NW
Washington, D.C. 20537
Other investment insurance programs
- Africa Growth Fund
The Africa Growth Fund is an investment fund that provides equity
investment capital for start-up, expanding or rehabilitating private
enterprises in any sub-Saharan African countries where OPIC is
authorized to operate. Investments generally range from $500,000 to $3
million. Total projects costs are between $5 million and $50 million.
Africa Growth Fund, L.P.
1850 K Street, N.W. Suite 309
Washington, D.C. 20006
- Two institutions of the World Bank Group, FIAS (Foreign Investments
Advisory Service) and MIGA (Multilateral Investment Guaranty Agency)
stimulate investments in developing countries. Both are active in Benin.
FIAS provides counseling and support to governments through the
preparation of regulation instruments such as investment codes and the
creation of promotion agencies. MIGA acts as an insurance company which
guarantees direct investments in developing countries against such risks
as transfers and expropriation. The institution is also involved in the
organization of workshops and investors meetings.
The Beninese enjoy the rights to collective bargaining and forming
unions. There are four major confederations of unions and unions are
active. Although there are exceptions, in general, the labor force is
not very skilled. Many companies, however, have been pleased with in-
house training efforts. The government has also recently geared its
efforts in the area of education to remedy that problem. Several
technical schools have been opened but it will take time to have a
concrete effect on the labor force. Because of the high rate of
unemployment in the official economy, there is a surplus of workers
available for new industry. There are also skilled laborers who are
unemployed because of the recent liquidation and cutbacks in state
enterprises. Salaries have generally not kept pace with the cost of
living after devaluation. The minimum legal wage,formerly FCFA 13,903
per month, was increased by 46 percent on May 11, 1994, bringing it to
FCFA 20,300 (about USD 40 per month). Labor laws are being redrafted to
simplify hiring and firing. (see A1)
E. Foreign trade zones/free ports (lists)
There is a free trade zone in the port of Cotonou for Benin's landlocked
neighbors (Burkina Faso, Niger)
F. Capital outflow policy
Any enterprise that is engaged in a commercial, industrial,
agricultural, artisan activity or provides services is assured,
irrespective of the scheme under which it carries out its activity, the
freedom to transfer capital and especially profits and dividends duly
accounted for. As noted above, since the liquidity crisis of the 1980s,
Benin's banking system has turned around. The problem now for banks is
a surplus of deposits and the deficit of viable projects to finance.
G. Foreign Direct Investment statistics
-- See paragragh H. below for foreign investments into Benin's economy.
-- Benin's investments abroad are insignificant.
H. Major foreign investors: France, Germany, Canada
When the state decided to privatize its companies in 1990, it proceeded
to sell to the highest bidders. Most of the foreign investment that has
recently entered into Benin's economy so far has been through
acquisition of privatized companies. Following are examples of
companies were sold to foreign investor, listed by names, activity,
price and the buyer:
- SOBETEX (textile)- 282 million CFA - by Schaeffer (French group)
- Manucia (tobacco)- 1.3 billion CFA - by Rothmans International
- Sonaci (cement company)- 4.2 billion CFA - by Scancem
- SCB (cement)- 1.1 billion CFA - by Amida (French group)
- La Beninoise (brewery)- 7.8 billion - by Castel-BGI (French
- Sotraz (public transportation)- 42 million CFA - by SEG (French
Several more state enterprise remain to be privatized and will soon be
made available to foreign investors (SONAR-insurance, SSS-sugar
refinerie, SCO-cement company, PPS-Seme oil project). A major state-
owned industry that remains to be privatized is SONACOP (the oil
company). The exact details of SONACOP's privatization process have not
yet been developed but the state is already encountering complaints from
the labor unions. In general, once SONACOP is privatized, the state
will no longer own the exclusive rights of extraction, stocking,
distribution, and importation of oil. This is supposed to be
accomplished by the end of 1995. It is expected that much of the
foreign direct investment in the near future will target the hydrocarbon
sector and the energy sector in general.
VIII. Trade and project financing
Brief description of banking system
For many years, the economy was centrally controlled and there were few
incentives for the private sector. The banking system (Caisse Nationale
de Credit Agricole, Banque Beninoise de Developpement, Banque
Commerciale du Benin) was state-owned between 1974 and 1989 and finally
failed at the end of that period because of mismanagement and a serious
liquidity crisis. Private deposits were frozen and assets of commercial
banks blocked. There was no commercial bank functioning in the country
at the end of 1988. With foreign assistance and guidance from the World
Bank and IMF, the state undertook appropriate measures to attract
foreign banks back to Benin beginning in 1989. Several commercial banks
are now operating in the country with total reserves of about FCFA 150
billion. While the local business community would like the existing
banks to grant them more credit and financing for the creation of small
and medium-size enterprises, the banks are reluctant to loan to firms
without a proven record. The present financial system also includes the
Credit Promotion Benin (CCB), the postal checking accounts (CCP), the
Savings Bank (CNE) and the Sonar, a state-owned insurance Company.
Foreign exchange controls affecting trade
There is no protection measures against currency fluctuations. Prior
to any payment made with foreign currencies, an authorization from the
Ministry of Finance is required and businessmen must produce several
documents. Authorization is routinely forthcoming for properly
documented transactions. Transactions made in foreign currencies take
more time as connections have to be made with foreign banks, generally
through France, but some banks also have reliable and efficient
connections with U.S. correspondent banks.
General financing availability
The banks locally are able to provide general financing services. Each
offers specific terms. Interest rates are considered high. The
addresses of the banks are available below.
How to finance exports/methods of payment
Letters of credit can be obtained locally from any of the five
Types of available export financing and insurance (including
bilateral - e.g. EXIMBANK availability and existing EXIMBANK bundling
facilities from multilateral, and local sources)
EXIMBANK. The United States Export/Import Bank operates programs that
support U.S. exports of capital goods and services. The bank
contributes indirect loans, loan guarantees, and exporter's insurance.
Some exporter insurance programs are beneficial to foreign commercial
banks. Other "bundling" programs can be of interest to foreign
Export Import Bank
811 Vermont Avenue NW
Washington, D.C. 20571
Project financing available, including lending from multilateral
institutions and types or projects supported
Multilateral institutions: World Bank, Caisse Francaise de
Developpement, international organizations, bilateral donors
Other partners of Benin for development financing include: AFRICAN
DEVELOPMENT BANK (African Development Bank), BOAD (West African Bank for
Development), FED ( European Development Fund), Caisse Centrale de
Cooperation Economique and PROPARCO, FIDA (International Fund for
Economic Development), BADEA (Islamic Bank for African Economic
Types of projects supported:
The program of public investments amounted to FCFA 67.1 billion in 1993.
Public savings contributed 8.7 percent and external resources
contributed 91.3 percent to this program. Investments in rural
development, infrastructure, water and electricity, trade, services,
tourism and handicrafts, amounted to FCFA 51.1 billion in 1993, which
was an increase of 18.3 percent compared to 1992.
The second structural adjustment program gives a large place to road
List of banks with correspondent U.S. banking arrangements
The Central Bank of the WAMU countries is the BCEAO (Banque Centrale des
Etats de l'Afrique de l'Ouest) which issues the CFA franc. The
headquarters are located in Dakar, Senegal.
Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO)
Commercial Banks with correspondent U.S. banking arrangements
BANK OF AFRICA (BOA)
This Bank was opened in January 1990 and is estimated to have
approximately 40% of the market. The majority of shareholders are
Beninese. The bank services are open to small bearers and several
branches operate in the main cities.
Corresponding banking relationship in the U.S.
CITIBANK N. A.
111 Wall Street
16th Floor / Zone 4
New York N Y 10043
Tel: (212) 657 0169
Rue du Gouverneur Bayol
Tel: (229) 31-40-23/31-30-69
Telex: 5394 ECOBNK CTNOU
5395 ECOBNK CTNOU
Fax: (229) 31-33-85
This bank was created in March 1990, on the initiative of businessmen
from the sixteen ECOWAS countries and the Federation of West African
Chambers of Commerce. It is a limited liability company with a capital
of one billion CFA francs.
It offers the full range of traditional banking services and is
committed to play an important part in improving and refining banking
systems and procedures to meet with international standards. Its
activities are focused on the economic development of Benin in
particular and on the promotion of investment opportunities in the sub-
region of West Africa.
Corresponding banking relationship in the US:
CITIBANK New York
11 Wall Street
19th Floor Zone
New York NY 10043
MIDLAND BANK PLC New York Midland Montager
West 56th Street
New York 10019
Financial Bank (Nov. 88)
Corresponding banking arrangements in the U.S.
American Express Bank Limited
New York Agency
New York, N.Y. 10007
Fax: (212) 727 1104
BANQUE INTERNATIONALE DU BENIN (BIBe)
Tel: 31 55 49/31 56 21
Fax: 31 23 65
Telex: 5074 BIBE CTNOU-5075 BIBE CTNOU
The BIBe is a private joint venture created in 1990 by four major
Nigerian banks (Union Bank of Nigeria PLC, First Bank of Nigeria PLC,
Continental Merchant Bank PLC and First Interstate Merchant Bank Ltd.)
in collaboration with private investors of Benin and Nigeria. The Bank
has contributed to the improvement of the Beninese Banking system. It
promotes the financing of trade and investment between Benin and
Nigeria, and between Benin and other countries.
Corresponding banking arrangement in the US
Bankers Trust New York
P.O. Box 318
Church Street Station, NY 10008
Telex: 62922, 620339
Tel: (212) 775-2500
Carrefour des Trois Banques
This international bank was operating in the seventies under the name of
SDB (Societe Dahomeenne de Banque) which was nationalized. The
institution came back to Benin in January 1993.
Correspondent banking relationship in the US
Main office for the United States:
Credit Lyonnais Building
1301 Avenue of the Americas
New York NY 10019
Tel: (212) 586 2440
Fax: (212) 459 3170
Tel: (212) 261 7000
Fax: (212) 459 3170
Other correspondent banks are based in Washington, Atlanta, Chicago, Los
Angeles, Miami, San Francisco, Boston, Dallas and Houston.
IX. Business travel
The Beninese like to spend time getting to know their business partners.
Often business matters will be discussed late in the conversation, once
both parties feel that they have established enough trust. It is
important that introductions cover family, activities, travels, and
interests and will be more pleasant if done over a meal. This protocol
serves to make the other more comfortable and more receptive to ideas.
Travel advisory and visas
The bureau of Consular Affairs of the U.S. Department of State has
published the foreign entry requirements for US citizens. Passport and
visa are required for business trips to Benin.
Entry/transit visa for stays up to 90 days require the payment of a $20
fee (personal checks are not accepted). The following are necessary:
- 2 application forms
- 3 passport-size photos
- vaccination certificates for yellow fever and cholera
- proof of return transportation (guarantee from travel agency
or photocopy of round trip ticket)
- letter of guarantee from employer.
Send prepaid envelope for return of passport by certified or express
Send application to: Embassy of the Republic of Benin, 2737 Cathedral
Ave., N. W. Washington, D.C. 20008 Tel: 202/232-6656
New Year's Day January 1
Ramadan March *
Easter Monday April 4
Labor Day May 1
Ascension Day May 12
Whit Monday May 23
Tabasky May *
Benin Independence Day August 1
Assumption Day August 15
Maouloud August *
All Saints' Day November 1
Christmas Day December 25 (observed on Dec. 26)
* Muslim holidays depend on the appearance of the moon.
Business infrastructure (e.g. transportation, language,
communications, housing, health, food)
Taxis are available but their numbers have declined due to the
competition of motorcycle taxis. Public transportation is not
Significant progress has been made in this field. In July 1993 the old
telephone fittings were replaced by French firms CIT-Alcatel and
Alcatel-cables. The more efficient new network was financed by the
French Development Fund (CFD), the World Bank and the European Community
Investment Bank (BEI). Direct dialing to the U.S. is available, but
international rates are extremely high.
The country offers a wide array of hotels. Only one top quality hotel
is well established in Cotonou (Sheraton) but it is complemented by a
variety of hotels of lesser standing that nevertheless offer good
service. A five star hotel is being built for the Francophone summit in
December of 1995 in Cotonou. The following list is comprised of the
main hotels located in Cotonou. Most of them offer conference rooms
that are regularly rented out for receptions, talks, or seminars.
Benin SHERATON (****)
Boulevard de la Marina
Hotel Croix du Sud
Boulevard de la Marina
Hotel du Port
Hotel PLM Aledjo
Hotel de la Plage
Hotel accommodation is available in other major cities though not to the
extent it is in Cotonou. Game reserves have camping sites with cabins.
Travellers who are more than one year old must be vaccinated against
yellow fever at least ten days before arrival in Benin.
The vaccine is valid for ten years. A cholera shot is also required to
enter Benin. It is highly recommended to start an anti-malarial
treatment by taking suppressants at least two weeks prior to travel.
Treatment should continue for four weeks after leaving the country as
Many restaurants have Beninese, French and international menus (Thai,
Middle-Eastern, Vietnamese, Italian). Prices are reasonable. We
recommend caution and common sense when selecting restaurants serving
A. Country data
Population in 1993
Total: 4.915.555 (male: 2390336, female: 2525219)
Population growth rate: 3.1 percent
Source: INSAE- Institut National de la Statistique et de l'Analyse
Religions: Christian (Catholics and Protestants), Muslims,
Animists. A great number of sects have appeared in recent years.
Jehovah's Witnesses, Celestial Christians)
Government system: Presidential regime. National Assembly.
Democratic multiparty Constitution. President is both head of state and
head of the government (there is no vice-president or prime minister).
French is the official language of the administration and is used for
all business transactions. There are approximately fifteen national
languages spoken throughout the country. The main ones are Fon, Mina,
Yoruba and Goun, which are spoken in the South and Dendi, Bariba,
Batoonou, Haoussa which are spoken in the northern part of the country.
Opening hours of public services
From Monday to Friday Morning: 8:00 a.m. to 12:30 p.m.
Afternoon: 3:00 p.m. to 6:30 p.m.
B. Domestic economy
GDP: FCFA 620.9 billion
GDP growth rate
Growth rate between 1976 and 1981 exceeded 5.5 percent.
Growth rate in 1992: 4.1 percent
Growth rate in 1993: 3.8 percent
Growth rate in 1994: 4.2 percent (estimate)
GDP per capita: US$ 380 (1992 estimate)
Government spending as percent of GDP
Between 1989 and 1992, total Government spending increased by 24
percent, partly due to an increase of salaries and interest expenses.
1991: FCFA 2.7 billion, 0.5 percent of GDP
1992: FCFA 7.2 billions, 1.2 percent of GDP
Global deficit was 7.8 percent of GDP in 1992. Estimates were 6.9
percent in 1993 and 5.0 percent in 1994.
Inflation in Benin is calculated with the GDP deflator.
- inflation (average annual rate)
1980-1992: 11.5 percent
1990-1992: 3.1 percent
1994: 54 percent
(source: Ministry of Planning)
As a result of the voluntary departure program that was put into place
during the first structural adjustment program, thousands of civil
service workers have found themselves out of a job. Unemployment rates
are very difficult to gauge in Benin primarily because of the size of
the informal sector. People that are not officially registered as job
seekers could be working in the informal sector. Reliable statistics
are hard to find.
Foreign exchange reserves: 432.3 million dollars (1993 estimate)
Average exchange rate for US$ 1: FCFA 493 (current, 1995)
Benin's external debt was equivalent to USD 1.4 billion in 1993 and is
projected to reach USD 1.55 billion in 1994 and 1.6 by 1995.
Debt service ratio
1991 1992 1993
14.3 35.4 19.5(est.)
U.S. economic / military assistance (if any)
The United States has a USAID mission in Cotonou with a focus on
education. The Peace Corps is also present in Benin with over 70
volunteers, and includes teachers and foresters. The United States
offers military training to the Beninese armed forces through an IMET
program valued at $100,000 in FY1995.
TOTAL COUNTRY EXPORTS 164.0 124.11
TOTAL COUNTRY IMPORTS 390 296
EXPORTS to US 15.7 10
IMPORTS from US 21.7 25.9
TOTAL IMPORTS of manufactured 237 187
TOTAL IMPORTS of manufactured 13 6.6
goods from US
U.S. SHARE 5.48% 3.51%
TOTAL IMPORTS of agricultural 73 64
TOTAL IMPORTS of agricultural 3.0 0.87
goods from US
U.S. SHARE 4.1% 1.4%
Values in millions of dollars. Exchange rate 1993: 281.5 and 1994:
* 1994: yearly estimate based on first three months. In 1993, Benin
exported crude petrol valued at USD 15,830,000.
(Source: INSAE, National Institute of Economic Statistics)
Best prospects for agriculture and industry sector
- cotton processing equipment or fertilizer
- Oil maintenance and equipment services
- fruit juice
- vegetable and cashew nut processing
- cassava production
- mineral water production
- manufacture of glass bottles
- extraction of sea salt
- health care services
- electrical equipment
- transportation of goods between Benin and
Business possibilities in the future include equity positions in the
state-owned cotton ginning-marketing company, SONAPRA, and SONACOP, the
state oil company.
D. Investment statistics.
(See VII. G and H)
E. US and country contacts.
Trade organizations - Trade associations
Chambre de Commerce et d'Industrie du Benin
This public institution, reorganized in 1993, is in charge of
representing, protecting and promoting the common interests of the
business community in the fields of trade, industry and services.
Contact: Mr. Mouftaou Wassi
Address: Avenue du General de Gaulle
Telex: 5364 CCIBEN
Centre Beninois du Commerce Exterieur ( Center for External Trade)
This public establishment office was created in 1988 for the promotion
of foreign trade. The Center acts as an intermediary between Beninese
traders and their foreign partners. It provides commercial information
on exports along with training and is involved in the organization of
Contact: Mr. Chakirou Tidjani
Address: P.O. Box 1254
Tel: 30 13 20
Fax: 30 04 36
Caisse Autonome d'Amortissement
Address: Carrefour des trois Banques
Tel: 31 42 61/31 47 81
FAGACE (Fonds Africain de Garantie et de Cooperation Economique)
SONAR (Societe Nationale d'Assurances et de Reassurances)
Address: B.P. 2030
Tel: 30 00 40/30 16 49
SONAPRA (Societe Nationale pour la Promotion Agricole)
Tel: 33 08 20/33 08 22
ONAB (Office National du Bois)
Tel: 33 16 32
ONASA (Office National d' Appui a la Securite Alimentaire)
Tel: 32 15 02
F. Market research
Other useful addresses
- Shipping companies
Lemoine et Compagnie
Maersk Line Benin
Commercial Banks (see paragraph VIII)
A complete list of market research is available on the National Trade
Data Bank (NTDB)
G. Trade event schedule.
Trade events and significant events in which Benin's participation is
scheduled to participate.
- International Feminine Pret-a-Porter Exhibition - Paris, France
September 1-4, 1995
- 2nd Afro-Arab fair of Johannesburg, South Africa
- Commercial Mission to Niamey, Niger
Second half of September, 1995
- Munich Handicrafts fair - Germany
November 25-December 3, 1995 (pending funds)
- "Rapport sur l'etat de l' economie nationale. Developpements recents
et perspectives a moyen terme". Realise par la Cellule macroeconomique
de la Presidence de la Republique en collaboration avec les ministeres
- Benin Economic Realities. Centre Beninois du Commerce Exterieur.
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