Country Report Benin April 2008

Economic policy: Privatisation programme runs into more problems

The government's much delayed privatisation programme suffered yet another setback with the failed privatisation of Société nationale pour la promotion agricole (Sonapra) and its ginning factories (January 2008, The domestic economy). On January 14th the state reclaimed a 55% stake in the national oil marketing company, Société nationale de commercialisation des produits pétroliers (Sonacop), sold to Continental des pétroles d'investissement (CPI) in 1999. This action was taken in response to a decision by a Cotonou magistrate's court that CPI had not made its legally required payments to the state, as provided for in the privatisation agreement-the government's total stake in Sonacop is now 90%. Control of Sonacop is likely to increase the fiscal burden of the state, owing to the pressure to keep petrol prices down in spite of high world prices. In addition, Sonacop had debts of CFAfr35.2bn (US$78.2m) as of December 31st 2005.

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