Benin report - Institut Africain de la Gouvernance

CHAPTER FOUR: ECONOMIC GOVERNANCE AND MANAGEMENT__________________________________________________________________________Figure 4.1: Economic performance7Economic Performance1 4006GDP5GrowthRate (%)41 2001 000800GDPperperson(US$)36002400120001998 1999 2000 2001 2002 2003 2004 2005 20060Benin: Real GDP growth rate (%) (left scale)Africa: Real GDP growth rate (%) (left scale)Bénin: per capita GDP (US$) ( right scale)Africa: per capita GDP (US$) ( right scale)Source: AFDB, World Economic Outlook, IMF, April 2007.386. Production remains undiversified and cotton accounts for more than 50% ofexports. The increase in economic activity (4.5%) has remained below theperformance indicators, which projected GDP growth at nearly 7% for 2006.The low economic growth is caused mainly by significant delays inimplementing structural reforms – particularly in the cotton sector, which isthe country‟s main source of foreign exchange – and by the lowcompetitiveness of Benin‟s enterprises, which are handicapped by the poorperformance of the electricity and telecommunications sector and the CotonouPort. With regard to the cotton sector, the reforms that started in 2002 have notyet been fully implemented. Furthermore, the bases for the sustainablemanagement of the sector involving all stakeholders, particularly the CottonInter-professional Association (AIC), have not yet been laid. Also, theindustrial tool of the National Company for Agricultural Promotion(SONAPRA – Société Nationale pour la Promotion Agricole) has not yet beeneffectively privatised. Nevertheless, it must be emphasised that the sector ismoving in a new direction. As part of its policy of privatisation, thegovernment recently decided to cede partial control over SONAPRA 26 to anew organisation, the Société Commune de Participation, which would hold45% of the shares of SONAPRA. The Beninese state would retain 35% of theshares while cotton producers, SONAPRA employees and domestic andforeign investors would together hold 20% of the shares.26 8 October 2007. The Nation (La Nation), Number 4342. „The Cabinet. Creation of a New Society forDeveloping the Cotton Sector‟.141