Benin has been a stable democracy since 1990 and has a small domestic market. The country’s economy is heavily dependent on trade ties to its neighbors, particularly Nigeria. Benin’s overall macroeconomic conditions were positive in 2021. According to IMF estimates, GDP growth rebounded strongly from 3.8% in 2020 to 6.6% in 2021. Main economic drivers include Benin’s cotton industry and other cash crops, the Port of Cotonou, and telecommunications. Cashew and pineapple production and processing have substantial commercial potential. A nascent tourism sector has potential in the longer term. Historical cultural ties to the United States may generate tourism in the south and central parts of Benin; game parks in the north seemed to be a potential growing sector but prospects are now limited by increasing security concerns. A lack of tourism infrastructure restricts development of both markets. The country’s primary source of revenue is the Port of Cotonou, although the government is seeking to expand its revenue base. A large informal sector, estimated at over 48% of GDP, is based primarily on unregulated trade with Nigeria.
In 2020, Benin imported about $4.22 billion in goods such as rice, meat and poultry, alcoholic beverages, fuel, plastic materials, palm oil, electricity, and passenger vehicles. Benin’s total exports were $1.24 billion in 2020, including ginned cotton, cotton cake and cotton seeds, cashew, shea butter, cooking oil, and raw copper. Benin’s chief import partners include India, China, France, Togo, Belgium, Russia, Turkey, United States (https://trendeconomy.com/data/h2/Benin/TOTAL). The informal import of goods from Nigeria and Togo remains constant. In 2020 Benin’s chief export partners were Bangladesh, India, China, Malaysia, Ukraine, Denmark, and the United Arab Emirates (https://trendeconomy.com/data/h2/Benin/TOTAL).
Currently, trade volumes between Benin and the United States are small. The 2021 the bilateral trade balance yielded a U.S. surplus of $284 million, up from $191 million in 2020.
Imports entering Benin through the Port of Cotonou reach over 100 million consumers in neighboring landlocked countries including Burkina Faso, Mali, Niger, and Chad, as well as 155 million in Nigeria. A U.S. Millennium Challenge Corporation (MCC) compact focused on regional integration and transport was signed in December 2022, with $202 million for road infrastructure improvements, accompanied by policy and institutional reforms to strengthen road maintenance, freight traffic, and cross-border trade, particularly with Niger.
Political & Economic Environment: State Department’s website for background on the country’s political environment.