Benin report - Institut Africain de la Gouvernance

CHAPTER FIVE: CORPORATE GOVERNANCE__________________________________________________________________________5.3 Assessment of APR objectivesObjective 1:Promote an enabling environment and effectiveregulatory framework for economic activityi. Summary of the CSAR543. Main categories of enterprises and their roles in the economy. The Centrefor Company Procedures (CFE) has registered about 50 public enterprises,17,000 private enterprises in the formal sector, and more than 172,000enterprises in the informal sector. The CSAR analyses the contribution byenterprises to wealth creation in Benin. Indeed, it contains useful informationon the sectoral distribution of enterprises, as well as their contribution to jobcreation and the income of the Central Revenue Department. The informalsector also includes many NGOs that implement and manage productiveprojects in partnership with the local population. These enterprises arenumerous and are generally located in the interior of the country. Theirdisappearance often follows the departure of the relevant NGO.544. Cotton sector. The CSAR affirms that cotton remains the country‟s majorexport commodity and outlines the vast reform programme of the sector,which resulted in the transfer of a number of responsibilities from the state tothe private sector 35 . The CSAR acknowledges that there are some managementproblems in each of the associations and that some professional families weredysfunctional. It also notes that operating rules are not respected and deploresthe lack of vision for the sector by partners in the AIC. The CSAR underscoresthe importance of the support that the AIC received from developmentpartners – particularly the World Bank, the AFD, the European Union and theSwiss Cooperation Agency – through the Cotton Sector Reform SupportProject (PARSC).545. Informal sector. The informal sector enterprises comprise farms, cottageindustries, socio-denominational units, petty trade and service enterprises.These include barbers, mechanics, dry-cleaners, welders, tailors, shippingagents and port subcontractors, drivers, etc.546. Tax burden and its impact on enterprises. The CSAR recalls that therevenues of the government of Benin are to a large extent derived from taxes.Commercial taxes account for more than half of the fiscal revenue and abouthalf of the state‟s revenue. The national tax system has been considerablysimplified and streamlined as part of the harmonisation process withinWAEMU. In some respects the tax system constitutes an obstacle to thedevelopment of economic activities. The CSAR acknowledges that this systemis characterised by a relatively heavy tax burden, focused on the collection ofpublic revenue from a narrow taxable base. Enterprises operating in Benin payvarious taxes: (i) BIC; (ii) tax on income from securities (IRVM); (iii)35 Organised mainly into three farmers‟ associations, ginners and input distributors.190