With a GDP estimated in 2023 at 11,680 billion FCFA, or approximately 19.4 billion USD (IMF), Benin has been ranked among the middle-income countries since 2019, with a GDP per capita estimated at 1,411 USD (1).

With an area of ​​13,066 km2 for a population of approximately 13.4 million inhabitants, Benin, this small West African country located on the edge of the Atlantic Ocean, has been in full economic growth for more than thirty years. And we readily remember its historic Conference of the Vital Forces of the Nation in February 1990, which was a trigger in Africa for the organization of the Sovereign National Conferences.

The Beninese economy depends to a large extent on subsistence agriculture, regional trade and the production of cotton, its main cash crop. This latter sector represents approximately 40% of the country’s GDP and 80% of its export revenues, and has greatly raised the standard of living in Benin, a country whose economy is essentially fiscal with above all a remarkable industrial boom, notably thanks to its expanding ports aspiring to become major regional hubs.

In 2021, already, the added value in the industrial sector stood at 929.9 billion FCFA compared to 872.8 billion FCFA in 2020, an increase rate of 6.54% compared to 4.71% a year earlier (2). This transformation is the result of a policy aimed at positioning Benin as a major player in international trade in Africa. The country benefits from an advantageous geographical position, as previously indicated, bordered by the Atlantic Ocean and close to landlocked countries such as Niger, Burkina Faso and Mali.

Innovative initiatives to strengthen an ideal positioning

The recently modernized and expanded Autonomous Port of Cotonou offers advanced logistics facilities and increased processing capacity, which significantly reduces transit times. As a result, it has become a privileged and competitive transit point for goods destined for the interior of the African continent, particularly to landlocked countries. Thanks to massive investments in port infrastructure, Benin has been able to modernize its facilities to meet international standards in terms of trade and logistics. Its strategic maritime and land borders allow the Port of Cotonou to serve as an entry and exit point for intra-African trade.

The country also benefits from relative political stability and economic reforms that foster an attractive business climate for foreign investors. This context offers a unique opportunity for Benin to position itself as a regional logistics centre. In parallel with the development of port activities, Benin has embarked on a process of progressive industrialization by creating modern and attractive industrial zones for national and foreign investors. Recent reforms and investments in the port of Cotonou, the management of which has been entrusted to international operators with proven experience in the field, demonstrate the desire of the Benin government to transform this infrastructure into a leading hub.

This choice has facilitated the introduction into the system of modern and efficient management practices promoting expansion works, including the construction of new quays, the acquisition of latest generation handling equipment and the improvement of road and rail infrastructure linking the port to the interior of the country.

Glo-Djigbé, a modern industrial zone that relies on local production

The locality of Glo-Djigbé located 45 km from Cotonou, is home to an industrial zone dedicated to the local processing of agricultural products such as cotton, cashew nuts, pineapple, shea nuts and soybeans, etc. It is a gigantic “integrated logistics and industrial platform designed to provide industrial plots, warehouses, truck parking and container handling facilities”.

Glo-Djigbé aims to highlight Benin’s many potentials to maximize industrial processing. The leading producer of cotton seed in Africa, and the tenth in the world, with more than 700,000 tonnes of harvest in 2020, Benin plans to increase its production in 2024. This represents an exceptional opportunity for cotton products, with the “Made in Benin” label. There is also cashew, the second export crop after cotton, whose quality is highly appreciated on regional and international markets.

Benin is also the 3rd largest pineapple producer in the world, with a gross value of US$50 million and a potential export value, after processing, of US$200 million. Shea butter, of which Benin is the 6th largest producer in West Africa, with a potential export processing value of US$200 million, is generally used as cooking oil or soap, and is widely exported to Europe, where it is used in chocolate, cosmetics and pharmacology.

The Glo-Djigbé Industrial Zone (GDIZ), whose main objective is to create an environment favorable to industrial investments and administrative and fiscal support for the realization of business projects in Benin, should provide approximately 300,000 direct jobs by 2030, for an investment of at least US$1.4 billion during its first phase of development (3). This initiative, the result of a public-private partnership between the Republic of Benin and ARISE Integrated Industrial Platforms (ARISE IIP), aims to design, finance and operate the Glo-Djigbé industrial zone to make it a model of international development. On the sidelines of a visit to the site at the end of July 2022, French President Emmanuel Macron said he was convinced that the GDIZ “puts Benin on the path to an economy of industry and transformation […] of added value produced in Africa, benefiting Africans. »

Indeed, it offers subsequent advantages to investors, including a permanent exemption of 100% of corporate tax (instead of 5%), professional tax and license tax, a 100% exemption from employer payroll tax (otherwise, up to 33%), a 100% exemption from VAT on raw materials brought into the zone (instead of 18%).

Infrastructure of choice and advantageous entrepreneurial conditions

The modernization also includes the adoption of technologies to improve operational efficiency. The port now uses computerized management systems for cargo tracking, thus reducing waiting times and operational costs. Initiatives such as the electronic single window facilitate customs procedures, reduce the slowness in processing files and above all limit corruption, making the port more credible, competitive and attractive to importers and exporters.

The improvement of port infrastructure has had a ripple effect on local industry. The establishment of industrial zones near the port encourages the installation of companies in various sectors such as agro-food processing, textile manufacturing, and electronics assembly.

These zones benefit from attractive tax incentives, logistical proximity to the port, and a skilled workforce. The reduction in logistics costs and delivery times stimulates Beninese exports. Agricultural products, particularly cotton, pineapple, and shea, find more easily outlets on international markets, thus increasing the country’s export revenues. This positive dynamic contributes to diversifying the Beninese economy and reducing its dependence on imports.

Benin’s long-term vision is to create an integrated logistics network, linking the port of Cotonou to an efficient land transport system that serves neighbouring countries. Partnerships with neighbouring countries and investments in road and rail infrastructure are essential to realize this vision. In parallel, the development of advanced logistics services, such as distribution platforms and storage centres, will strengthen the port’s capacity to meet the growing needs of regional businesses.

Strengthen sub-regional and international cooperation.

Continuous training of professionals in the sector and the adoption of cutting-edge technologies, such as the digitalization of customs procedures, are also essential levers to maintain and increase the competitiveness of the Autonomous Port of Cotonou. Its development as a regional hub cannot be achieved without increased cooperation with neighbouring countries. Benin will have to further engage in strategic partnerships with countries such as Nigeria, Togo and Ghana, etc., to harmonize customs policies and facilitate trade.

Regional initiatives, such as the African Continental Free Trade Area (AfCFTA), also strengthen the potential of the Port of Cotonou and integrate Benin into a larger common market. In addition, international cooperation with organizations such as the World Bank and the African Development Bank makes it possible to finance infrastructure projects.

These partnerships provide not only the necessary funds, but also the technical expertise to carry out the modernization and expansion projects.

Despite the notable progress, several challenges remain. Indeed, the economy is largely dependent on exports of unprocessed agricultural products (cotton, cashew nuts) and the re-export of imported goods and commodities (used cars, rice, etc.) to Nigeria. Nearly 85% of the workforce is in the informal economy. Other sectors, including cashew nuts, shea nuts, coffee, and palm products, pineapple and cocoa, deserve to be boosted.

The need to continuously improve land transport infrastructure to efficiently connect the port to landlocked countries is crucial. Strengthening maritime security to combat maritime piracy and combating corruption are also priorities to ensure a transparent business environment. Benin’s future as a regional hub depends on its ability to overcome these challenges and maintain a long-term vision. Continuous training initiatives for port and logistics personnel, the adoption of green technologies for sustainable development, and commitment to transparent governance practices are essential to ensure the sustainability of this ambition.

(1) Source: Government of Benin (Published on July 18, 2023) [Link]

(2) Source: Key Industry Figures, March 2023 CCIB [Link]

(3) Source: Glo-Djigbé Industrial Zone website [Link]