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Benin Country Risk Report 2017

Benin Country Risk Report 2017

Core Views

Benin's economic growth will accelerate over the next two yearsalongside a recovery in the Nigerian economy (with which Benin hasstrong linkages) and on the back of rising public and private sectorinvestment. However, we do not believe that growth will reach levelsaimed for by the government given that the business environmentreforms will not be sufficient to attract the kind of private investmentthat the government's development plan requires.

Opposition from sections of the electorate and from within the nationalassembly to President Patrice Talon's reform programme will forcehim to water down his agenda or at least delay its implementation.As a result, the business environment will not improve as quickly asthe president hopes and this will lead to lower foreign private sectorinvestment and weaker economic growth than he is targeting.

Inflation in Benin will remain low and stable over the next 10 years dueto the country's membership of the Union Economique et MonétaireOuest Africaine currency bloc. The West African franc's peg to theeuro will ensure broad currency stability and will limit import-pricepressures.

Benin's budget deficit will narrow in the years ahead due to continuedimprovement in the government's expenditure and revenue collectionprocesses. Government debt as a share of GDP will gradually riseover the next decade as persistent fiscal deficits drive public sectorfinancing needs.

Benin's current account deficit will narrow over the next 10 years onthe back of increased output from the country's cotton sector andgreater access to regional markets as tariffs in West Africa becomeincreasingly liberalised. Benin's external position will be furtherbuoyed as external debt remains on a sustainable trajectory andcurrency risks remain limited.

Benin's political landscape will remain one of the most stable andopen in West Africa in the years ahead, benefitting from a free pressand strong opposition. Nevertheless, the country faces challengesin the long term, such as a spillover of violence from piracy andterrorist activity in the region.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Economic Growth To Accelerate But Unlikely To Reach Ambitious Targets
Benin's economic growth will accelerate over the next two years alongside a recovery in the Nigerian economy (with which Benin has
strong linkages) and on the back of rising public and private sector investment. However, we do not believe that growth will reach levels
aimed for by the government given that the business environment reforms will not be sufficient to attract the kind of private investment
that the government's development plan requires.
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: TOP FIVE EXPORTS IN 2015
TABLE: TOP FIVE IMPORTS IN 2015
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES (2014)
Long-Term Economic Outlook
Agricultural Sector To Keep Growth Steady
Benin's real GDP growth will gradually head higher over the next 10 years, driven primarily by the agricultural sector. That said, the
economy will grow at a slower pace compared to the West African Economic and Monetary Union average, as limited economic
diversification hinders the development of higher value-added industries.
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 2: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Opposition To Reforms Will Force Moderation Of President's Agenda
Opposition from sections of the electorate and from within the national assembly to President Patrice Talon's reform programme will
force him to water down his agenda or at least delay its implementation. As a result, the business environment will not improve as
quickly as the president hopes, and this will lead to lower foreign private sector investment and weaker economic growth than he is
targeting.
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Benin Will Remain A Regional Standard-Bearer
Benin's political landscape will remain one of the most stable and open in West Africa in the years ahead, benefitting from a free press
and strong opposition. Nevertheless, the country faces challenges in the long term such as an overspill of violence from piracy and
terrorist activity in the region.
Contents
Chapter 3: Demographic Outlook
Demographic Outlook
TABLE: POPULATION BY AGE GROUP
TABLE: POPULATION BY AGE GROUP %
TABLE: POPULATION HEADLINE INDICATORS
TABLE: KEY POPULATION RATIOS
TABLE: URBAN/RURAL POPULATION & LIFE EXPECTANCY
Chapter 4: BMI Global Macro Outlook
Global Growth Solidifying, But 'Reflation' To Moderate
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: BENIN – MACROECONOMIC DATA & FORECASTS

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