Country Report Benin April 2008

Outlook for 2008-09: Economic growth

In recent years Nigeria's partial lifting of the ban on imports from Benin and improvements at the PAC have given the re-export trade a modest boost, although bureaucratic problems remain. We expect that continued efforts to normalise trade relations with Nigeria and measures to facilitate trade with hinterland countries will boost the export sector further in 2008-09. We also expect a gradual increase in cotton production, as the government implements reforms in the sector. Strong growth will continue in construction, as large infrastructure projects are launched, and in telecommunications. However, continued energy shortages in 2008 will remain a constraint on all sectors. Public spending will rise, as funds from the PRGF and lower debt-servicing costs through write-offs under the multilateral debt relief initiative (MDRI) will help towards the financing of social and infrastructure projects. As a result, we expect real GDP growth to pick up modestly, from an estimated 4.5% in 2007 to 5% in 2008 and 5.5% in 2009.

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