Country Report Benin April 2008

The domestic economy: Cement production is to get a boost from new investments

To meet demand from the recent deficit in cement production (January 2008, The domestic economy), final documents for the planned cement factory being built by a Beninese businessman, Mathias de Chacus, and the Société des ciments du Golfe near the Benin-Nigeria border at Djrègbé in the Sèmè-Kpodji commune were signed in early February 2008 (April 2007, The domestic economy: Construction). The project will cost an estimated CFAfr28bn (US$62.2m) and is planned to begin production in 2009. This will bring the number of cement factories in Benin to four. A fifth factory project, Cimenterie nouvelle du Bénin, led by a Lebanese investor and costing CFAfr130bn, is planned to be located in Massé in Plateau department, with a capacity of 1.2m tonnes. Plans envisage the creation of 4,000 direct jobs and 2,500 indirect ones, but possible overproduction for the domestic market may create opportunities for export to neighbouring states such as Togo and Nigeria. Annual domestic demand is estimated at 2.3m tonnes, largely as a result of demand for cement from government road construction projects, the building of new ministerial offices and the construction of hotels and villas, particularly for the hosting of the Communauté des États Sahélo-Sahariens (CEN-SAD) summit to be held in Cotonou in June 2008.

However, until domestic production can be increased, the government has decided to take steps to meet the chronic lack of cement and continually rising prices in the short term. The most immediate action will be the monthly import of 18,000 tonnes of cement from two Togolese cement companies, Cimtogo and Fortia. The government's Council of Ministers has also announced its decision to reduce the amount of cement allowed for export by a Beninese company, SCB-Lafarge, which will add an additional 15,000 tonnes to stocks. The decision has important financial implications for the state, as it has decided to prefinance the purchase of cement and subsidise the differential in cost from importing it, at an estimated cost of CFAfr415.9m (US$920,000) per month for the cement, which will be destined exclusively for government projects in preparation for the CEN-SAD summit.

© 2008 The Economist lntelligence Unit Ltd. All rights reserved
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