HomeReportsBureau of Economic and Business Affairs2022 Investment Climate Statements…Benin

# 					2022 Investment Climate Statements: Benin			

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													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment                    -  Policies Towards Foreign Direct Investment 
                  -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                  -  Other Investment Policy Reviews 
                  -  Business Facilitation 
                  -  Outward Investment 
                -  2. Bilateral Investment and Taxation Treaties   
                -  3. Legal Regime                    -  Transparency of the Regulatory System 
                  -  International Regulatory Considerations 
                  -  Legal System and Judicial Independence 
                  -  Laws and Regulations on Foreign Direct Investment 
                  -  Competition and Antitrust Laws 
                  -  Expropriation and Compensation 
                  -  Dispute Settlement                      -  ICSID Convention and New York Convention 
                    -  Investor-State Dispute Settlement 
                    -  International Commercial Arbitration and Foreign Courts 
                  -  Bankruptcy Regulations 
                -  4. Industrial Policies                    -  Investment Incentives 
                  -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                  -  Performance and Data Localization Requirements 
                -  5. Protection of Property Rights                    -  Real Property 
                  -  Intellectual Property Rights 
                -  6. Financial Sector                    -  Capital Markets and Portfolio Investment 
                  -  Money and Banking System 
                  -  Foreign Exchange and Remittances                      -  Foreign Exchange 
                    -  Remittance Policies 
                  -  Sovereign Wealth Funds 
                -  7. State-Owned Enterprises (SOEs)                    -  Privatization Program 
                -  8. Responsible Business Conduct                    -  Additional Resources 
                  -  Climate Issues 
                -  9. Corruption                    -  Resources to Report Corruption 
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Benin transitioned to a democracy in 1990, enjoying a reputation for regular, peaceful, and, until recently, inclusive elections. In 2019 and 2021, the government held legislative and presidential elections, respectively, which were not fully inclusive nor competitive. Elections-related unrest in 2019 and 2021 resulted in several deaths. In April 2021, President Patrice Talon was re-elected for a second, and pursuant to Benin’s constitution, final five-year term.

Benin’s overall macroeconomic conditions were positive in 2020, though growth declined compared to previous years. According to the World Bank, GDP growth slowed from 6.9 percent in 2019 to 3.8 percent in 2020. Most of the slowdown in 2019 and 2020 was driven by the COVID-19 pandemic and Nigeria’s partial closure of its borders that lasted from August 2019 to December 2020. In December 2021, Benin’s National Assembly unanimously passed the Government of Benin (GOB) 2022 budget, which projects economic growth to accelerate to seven percent in 2022, higher than estimates from multilateral institutions. The IMF projection for growth in 2022 is 6.5 percent, and the African Development Bank projects a growth rate recovery from 4.8 in 2021 to 6.5 percent in 2022 if Covid-19 is brought under control. Port activity and the cotton sector are the largest drivers of economic growth. Telecommunications, agriculture, energy, cement production, and construction are other significant components of the economy. Benin also has a large informal sector. The country’s GDP is roughly 51 percent services, 26 percent agriculture, and 23 percent manufacturing.

In January 2022, the Talon administration released its second government action plan (French acronym-PAG) estimated at $20.6 billion. The PAG lists 342 projects (half of which are carried forward from the Talon administration’s first PAG covering 2016-2021) across 23 sectors. With the goals of strengthening the administration of justice, fostering a structural transformation of the economy, and improving living conditions, the projects are concentrated in infrastructure, agriculture and agribusiness, tourism, health, energy, telecomuncation, and education.  The government estimates that full implementation of the PAG will result in the creation of 500,000 new jobs and a leap in national economic and social conditions. The government intended that 48 percent of the PAG be funded through public funds and the remainder through public-private partnerships (PPPs). Through the end of 2021 a limited number of public-private partnerships had been secured. Government critics allege that the Talon administration is using the PAG in part to channel resources and contracts to administration insiders.

Benin continues efforts to attract private investment in support of economic growth amidst reports of high-level corruption among government insiders and occasional failure to respect foreign investment contracts. The Investment and Exports Promotion Agency (APIEX) is a one-stop-shop for promoting new investments, business startups, and foreign trade. In 2020, APIEX worked with foreign companies to facilitate new investments, though some companies reported that the agency was under-resourced and hamstrung by bureaucratic red tape in other agencies and ministries. APIEX reported that business creation increased to 40,000 in 2020 from 13,000 in 2015. The construction of a Special Economic Zone, located at Glo-Djigbé, is also a major component of the second PAG. Located 30 miles north of Benin’s capital Cotonou, the Glo-Djigbé Industrial Zone (GDIZ) is currently in the works under the direction of Benin’s Industry Promotion and Investment Company (SIPI), a public private partnership. The GDIZ is structured such that the GOB owns a 35 percent stake in it with the the Mauritanian-Singaporean firm Arise Integrated International Platfoms (Arise-IIP) owning 65 percent. Glo-Djigbé seeks to transform numerous locally produced agricultural products and high-tech goods for export. Though no businesses have started operating in GDIZ yet, approximately 25 have signed contracts to begin operations there, including Oryx and JNP (both petroleum services); NKS (cashew processing), Groupe Aigle (cotton processing), and SIDDIH (pharmaceuticals). The GDIZ is expected to increase Benin’s GDP by $7 billion over the next decade and boost export revenues.  The primary target markets will be the United States, the European Union, and other African countries. The GDIZ covers 1,640 hectares with 400 hectares being developed currently.

Benin’s second MCC power compact, valued at $391million entered into force in June 2017. This compact aims to strengthen the national power utility, attract private sector investment into solar power generation, and fund infrastructure investments in electricity distribution as well as off-grid electrification for poor and unserved households. It is also advancing policy reforms to bolster financing for the electricity sector and strengthen regulation and utility management. Through the compact MCC is expanding the capacity and increasing the reliability of Benin’s power grid in southern and northern Benin. As two thirds of Benin’s population does not have access to electricity, the compact also includes a significant off-grid electrification project via a clean energy grant facility that supports private sector investment in off-grid power systems. Benin’s second MCC compact follows its first compact (2006-2011) which modernized the Port of Cotonou and improved land administration, the justice sector, and access to credit.

							1. Openness To, and Restrictions Upon, Foreign Investment					

### Policies Towards Foreign Direct Investment

The Beninese government encourages foreign investment, which it views as critical for economic development and successful implementation of the $20.6 billion PAG. In 2021 alone, the GOB raised €1.5 billion on the international Eurobond market. APIEX is dedicated to increasing Beninese exports and foreign direct investment and reducing administrative barriers to doing business. APIEX serves as the single investment promotion center and conduit of information between foreign investors and the Beninese government. It is the technical body responsible for reviewing applications for approval under the Investment Code and the administrative authority for SEZs. The agency has significantly reduced processing times for registering new companies (from 15 days to one day) and issuing construction permits (from 90 to 30 days). In practice, APIEX faces capacity constraints, processing times can be longer than stated, and its website is often out of date and lacks information on the latest regulations and laws. The Investment Code, amended in 2020, establishes conditions, advantages, and rules applicable to domestic and foreign direct investment. Additional information on business startup is available at https://monentreprise.bj/ .

### Limits on Foreign Control and Right to Private Ownership and Establishment

Beninese law guarantees the right to own and transfer private property. The court system enforces contracts, but the judicial process is inefficient and suffers from corruption. Enforcement of rulings is problematic. Most firms entering the market work with an established local partner and retain a competent Beninese attorney.

### Other Investment Policy Reviews

In 2015, the Beninese government conducted the most recent joint investment policy review (IPR), with the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), and the United Nations Conference on Trade and Development (UNCTAD). Further to a 2016 fact-finding mission, the UNCTAD Report on the Implementation of the IPR of Benin assesses progress in implementing the original recommendations of the IPR and highlights policy issues to be addressed in the investment climate. The full report may be found at: https://investmentpolicy.unctad.org/investment-policy-review/23/benin

### Business Facilitation

In an effort to facilitate business travel and tourism, Benin implements a visa-free system for African nationals and an online e-visa system for other foreign nationals. The country is working to open four new trade offices abroad to enhance Benin’s international business opportunities. One is already underway in Shenzhen, China

Benin’s 2017 Property Code made property registration simpler and less expensive in order to boost the real estate market, improve access to credit, and reduce corruption in the registration process. The measures apply to real personal property, estate and mortgage taxes, and property purchase receipts. In order to register property, individuals and businesses must present a taxpayer identification number (registration for which is free). Land registration and property purchase certifications are free, but there is a fee for obtaining a property title. The GOB has announced that as of 2023 real personal property transactions cannot take place without producing a land title.

Benin Control is charged with expediting customs clearances and minimizing processing barriers to clearing cargo at the Port of Cotonou. Benin Control makes it possible to obtain cargo clearance within as little as 48 hours after its off-loading at the Port, though in practice this can take longer. The reinstitution of the cargo inspection and scanning program known as PVI, first tried in 2012, resumed operations at the Port in 2017. Under the PVI program, Benin Control scans between 30 and 45 randomly selected shipping containers per hour. Benin Control bills all containers exiting the Port– regardless of whether they are selected for scanning – at the rate of $60 (XOF 35,400) for a 20-foot container and $79 (XOF 47,200) for a 40-foot container (https://benincontrol.com/services/scanning).

The government, through the state-owned Benin Water Company (SONEB) and Beninese Electric Energy Company (SBEE), provides service connections to potable water and electricity free of charge to small and medium size enterprises and industries.  Eligible companies are responsible for paying the water and electricity meter installation fees.  Online application is available at https://www.soneb.bj/soneb15/pme-pmi-raccordement-gratuit and https://www.sbee.bj/site/demande-de-raccordement-des-pme-pmi-conditions/.

### Outward Investment

The Beninese government has no policies or incentives in place to encourage Beninese businesspeople to invest abroad. The Beninese government does not restrict domestic investors from investing abroad.

							2. Bilateral Investment and Taxation Treaties					

Benin has bilateral investment treaties signed and in force with the Belgium-Luxembourg Economic Union, Burkina Faso, Canada, Germany, Kuwait, Netherlands, Switzerland, and the United Kingdom. Benin is listed as a member country to International Investment Agreements with the Economic Community of West African States (ECOWAS), the West African Economic and Monetary Union (WAEMU), and the African Union. The United States and WAEMU have an Agreement Concerning the Development of Trade and Investor Relations, which contains investment provisions. Benin does not have a bilateral taxation treaty with the United States, though as of 2022 it remains eligible under the African Growth and Opportunity Act (AGOA) to export certain items duty-free to the United States.

							3. Legal Regime					

### Transparency of the Regulatory System

Benin is a member of UNCTAD’s international network of transparent investment procedures. Foreign and domestic investors can find detailed information on administrative procedures applicable to investment and income generating operations at https://unctad.org/news/how-un-helped-benin-become-worlds-fastest-place-start-business-mobile-phone, including the number of steps, name and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time, and legal bases justifying the procedures. There is no rule to prevent a monopoly over a particular business sector. The Benin Private Investment Council (http://www.cipb.bj/) is the only business-related think-tank or body that advocates for investors. Generally, draft bills are not available for public comment though promulgated laws are available at https://sgg.gouv.bj/documentheque/lois/. Individuals, including non-citizens, have the option to file appeals about or challenge enacted laws with the Constitutional Court.

### International Regulatory Considerations

Benin is a member of WAEMU and the Organization for the Harmonization of African Business Law (OHADA) and has adopted OHADA’s Universal Commercial Code (codified law) to manage commercial disputes and bankruptcies within member countries. Benin is also a member of OHADA’s Common Court of Justice and Arbitration and the International Center for the Settlement of Investment Disputes (ICSID). OHADA provisions govern bankruptcy. Debtors may file for reorganization only, and the creditors may file for liquidation only. Benin is a member of the WTO and notifies all draft technical regulations to the organization’s Committee on Technical Barriers to Trade (TBT).

### Legal System and Judicial Independence

Benin has a civil law system. The legal framework includes various legislative and regulatory texts covering family law, land law, labor law, criminal law, criminal procedure, and civil, commercial, social, and administrative proceedings. The Cotonou commercial court, created in 2017, enforces commercial laws and regulations. In 2018, Benin created an anti-terrorism, drugs, and economic crimes court (CRIET), which until recently lacked a mechanism for substantive appeal. The CRIET has convicted and sentenced numerous government detractors and political opponents, raising concerns about its independence. In February 2020, Benin created an appeals chamber within the CRIET. In general, judicial processes are slow, and challenges to the enforcement of court decisions are common. Magistrates and judges are appointed by the President of the Republic. Benin’s courts enforce rulings of foreign courts and international arbitration.

### Laws and Regulations on Foreign Direct Investment

The Investment Code provides the legal framework for foreign direct investment. The Code establishes conditions, advantages, and rules applicable to domestic and foreign direct investment. The GOB websites https://benindoingbusiness.bj/and https://gdiz-benin.com/ make available online information on foreign direct investment regulations and procedures, though at times these websites may be out of date. Benin is a member of OHADA’s Common Court of Justice and Arbitration (CCJA) and the International Center for the Settlement of Investment Disputes (ICSID). Investors may include arbitration provisions in their contracts in order to avoid prolonged entanglements in the Beninese courts. The United Nations investment guide for Benin (https://www.theiguides.org/public-docs/guides/benin/) provides a general guide for foreign direct investment steps and procedures.

### Competition and Antitrust Laws

Benin’s legal framework does not address anti-trust or competition issues. The government does not have an agency or office that reviews transactions for competition-related concerns.

### Expropriation and Compensation

Local laws forbid the government from nationalizing private enterprises operating in Benin. In July 2020 West African hotel developer Teyliom International filed a request for arbitration with the World Bank International Center for Settlement of Investment Disputes (ICSID) in relation to the Beninese government’s expropriation of a hotel the company had been constructing in Cotonou. This arbitration case is currently pending at ICSID.

### Dispute Settlement

#### ICSID Convention and New York Convention

Benin is a member of ICSID and is also a party to the New York Convention of 1958 on the Recognition and enforcement of Foreign Arbitral Awards.

#### Investor-State Dispute Settlement

Benin does not have a bilateral investment treaty with the United States. There is an ongoing investment dispute between the Beninese government and a U.S. immigration and aviation security company. In 2016, the U.S. company alleged the government canceled a contract for the provision of immigration security systems at Cotonou’s airport. In 2017, the U.S. company filed a request for arbitration with the International Chamber of Commerce (ICC). In 2019, the ICC found the government at fault for cancelling the contract and issued a $95 million judgment in favor of the U.S. company. In 2020, the ICC upheld its earlier decision. To date, the government has not complied with the ICC decision.

#### International Commercial Arbitration and Foreign Courts

Benin has adopted OHADA’s Universal Commercial Code (codified law) to manage commercial disputes and bankruptcies. Benin is a member of the OHADA, CCJA, and ICSID.

### Bankruptcy Regulations

OHADA provisions govern bankruptcy. Debtors may file for reorganization only, and creditors may file for liquidation only.

							4. Industrial Policies					

### Investment Incentives

Depending on the size of the investment, investors may benefit from reduced tax liability on profits or imported industrial equipment for up to one year from the date of business registration. Investors must meet several criteria including employing a minimum number of Beninese nationals, safeguarding the environment, and meeting nationally accepted accounting standards. The Investment Control Commission monitors companies that receive these incentives to ensure compliance. The GDIZ also offers many investment incentives, notably tax breaks and government services located on-site to expedite business start-up requests.

### Foreign Trade Zones/Free Ports/Trade Facilitation

The Investment Code allows for the creation of SEZs and establishes incentives such as tax reductions for investors. SEZ investors may benefit from reduced tax liability on profits and exemptions for import and export duties. Investors must meet several criteria including employing a minimum number of Beninese nationals, safeguarding the environment, and meeting nationally accepted accounting standards. Local entities and foreign investors enjoy the same opportunities.

### Performance and Data Localization Requirements

There are no government-imposed conditions on permission to invest and there is no “forced localization” policy pertaining to the use of domestic content in goods or technology. Moreover, there are no requirements in place for foreign IT providers to turn over source code and/or provide access to encryption.

The Benin Post and Communications Regulatory Authority (ARCEP) ensures the confidentiality of the content of all communications by the service provider or operator, whether this is information or other data the service provider obtains in the course of providing the services offered. No information may be disclosed without the written consent of ARCEP or a signed order of the competent judicial authority. Additional information may be found at www.arcep.bj.

							5. Protection of Property Rights					

### Real Property

The Land Act, amended in 2017, codifies real property rights. Land ownership disputes account for roughly 80 percent of the cases seen by Beninese tribunals. The Land Act is designed to ensure fair access to land and protect ownership rights. The Land Act establishes a transparent legal procedure for obtaining and documenting ownership, reduces property speculation in urban and rural areas, and encourages land development. The Land Act stipulates that development projects financed by international or multinational agencies cannot implement or result in forced evictions. The state is obligated to do everything possible at each stage of project development to ensure due respect of economic, social, and cultural rights recognized by international conventions and the Beninese constitution.

Secured interests in real and personal property are recognized and enforced. Secured interests in property are registered with the Land Office of the Ministry of Economy and Finance. However, it is recommended that foreign and non-resident investors buy land with title deeds and the services of a notary public in order to avoid land disputes that may result from the acquisition process. Large land leases for investment in rural areas are enforced by local city halls in conformity with the Land Act. Additional information regarding the acquisition of property may be found at the Beninese Land Agency’s website at https://www.andf.bj/. Beginning in 2023, the government will require a title deed for all transactions involving real property.

### Intellectual Property Rights

The 2005 Law on Copyright and Related Rights regulates intellectual property rights. Benin is a member of the World Intellectual Property Organization (WIPO) and has acceded to WIPO treaties and conventions on copyrights and intellectual property protection. However, enforcement of intellectual property rights in Benin is constrained by the government’s limited capacity.

Benin is not included in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en.

							6. Financial Sector					

### Capital Markets and Portfolio Investment

Government policy supports free financial markets, subject to oversight by the Ministry of Economy and Finance and the Central Bank of West African States (BCEAO). Foreign investors may seek credit from Benin’s private financial institutions and the WAEMU Regional Stock Exchange (Bureau Regional des Valeurs Mobilieres – BRVM) headquartered in Abidjan, Cote d’Ivoire, with local branches in each WAEMU member country. There are no restrictions for foreign investors to establish a bank account in Benin and obtain loans on the local market. However, proof of residency or evidence of company registration is required to open a bank account.

### Money and Banking System

The banking sector is generally reliable. Twelve private commercial banks operate in Benin in addition to the BCEAO; planning is under way to open a subsidiary of the African Development Bank. Taking into account microfinance institutions, roughly 31.2 percent of the population had access to banking services in 2020, the latest year for which data is available. In recent years, non-performing loans have been growing; 15 percent of total banking sector assets are estimated to be non-performing. The BCEAO regulates Beninese banks. Foreign banks are required to obtain a banking license before operating branches in Benin. They are subject to the same prudential regulations as local or regional banks. Benin has lost no correspondent banking relationships during the last three years. There is no known current correspondent banking relationship in jeopardy. Foreigners are required to present proof of residency to open bank accounts.

### Foreign Exchange and Remittances

#### Foreign Exchange

All funds entering the country from abroad for investment purposes require reporting and registration with the Ministry of Economy and Finance at the time of the funds’ arrival. Evidence of registration is required to justify remittances of investment capital, earnings, loan/lease repayments, or royalties. Such remittances are allowed without restrictions. Funds entering the country from abroad for investment purposes must be converted into local currency. For the purposes of repatriating such funds, either the invested funds or the interest/earnings or royalties can be converted into any world currency.

The currency of Benin is BCEAO-CFA Franc (international code: XOF). The XOF has a fixed parity with the Euro and fluctuates against all other currencies based on this parity. This parity was established at the time of the Euro’s creation (January 1, 1999) and has not changed since then. The parity stands at XOF 655.957= EUR 1.00, guaranteed by the French government under an arrangement between the Treasury of France and the European Union.

#### Remittance Policies

There have been no recent changes to investment remittance policies. Banks require documents to justify remittances related to investments. In practice, the waiting time to remit investment returns does not exceed 60 days.

### Sovereign Wealth Funds

Benin does not maintain a sovereign wealth fund.

							7. State-Owned Enterprises (SOEs)					

There are several wholly-owned SOEs operating in the country, including public utilities, fixed and mobile telecommunications, postal services, port and airport management, pension funds, agricultural production, and hotel and convention center management. There are also a number of partially-owned SOEs in Benin. Some of these receive subsidies and assistance from the government. There are no available statistics regarding the number of individuals employed by SOEs.

With the exception of public utilities, pension funds, and landline telephone service for which the public telephone company retains a monopoly, many private enterprises compete with public enterprises on equal terms.

SOE senior management may report directly to a government ministry, a parent agency, or a board of directors comprised of senior government officials along with representatives of civil society and other parastatal constituencies. SOEs are required by law to publish annual reports and hold regular meetings of their boards of directors. Financial statements of SOEs are reviewed by certified accountants, private auditors, and the government’s Bureau of Analysis and Investigation (BAI). The government audits SOEs, though it does not make available information on financial transfers to and from SOEs.

SOEs are established pursuant to presidential decrees, which define their mission and responsibilities. The government appoints senior management and members of the board of directors. SOEs are generally run like private entities and are subject to the same tax policies as the private sector. The courts process disputes between SOEs and private companies or organizations.

### Privatization Program

Foreign investors may participate in privatization programs. The Talon administration has launched targeted divestiture programs rather than total privatization of SOEs.  In 2021 the GOB awarded the management of state-owned telecommunications company, Societe Beninoise d’Infrastructures Numeriques (French acronym-SBIN) to Senegal’s SONATEL, a subsidiary of the French telecom company Orange.  With support from MCC, SBEE is managed privately through a management contract through 2023, even though the government retains full ownership.  The government is pursuing major transactions to attract private investment into thermal and solar power generation, as well as natural gas supply for power generation. In 2017, the government signed a three-year renewable management contract for the Port of Cotonou with the Belgian firm Port of Antwerp International (PAI).  PAI took over management of the port in May 2018. The move was intended to improve port management and attract foreign investors to fund a planned project to modernize and expand the port.

							8. Responsible Business Conduct					

In general, government policies and public tenders are made public online and in the newspapers. Anti-corruption and human rights NGOs and activists are active in Benin, though their ability to report misconduct and violations of good governance has weakened under the Talon administration. The government-funded agencies in charge of monitoring business conduct include the High Commission for the Prevention of Corruption (HCPC), the Court of Accounts, the National Financial Information Processing Unit, and the National Commission on Systems and Freedom.

### Additional Resources

**Department of State**

- Country Reports on Human Rights Practices ;
- Trafficking in Persons Report ;
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ;
- U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ; and;
- Xinjiang Supply Chain Business Advisory 

**Department of the Treasury**

- OFAC Recent Actions

**Department of Labor**

- Findings on the Worst Forms of Child Labor Report ;
- List of Goods Produced by Child Labor or Forced Labor ;
- Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
- Comply Chain .

### Climate Issues

Benin has a 2016-2025 national climate change strategy. It is a cross-sectorial, thematic, short to medium-term strategy and responds to Benin’s dual needs to address the adverse effects of climate through the identification, adoption, dissemination, ownership of adaptation measures, and the reduction of greenhouse gas emissions. The vision of the strategy is “By 2025, Benin is a country of low carbon instensity and resilient to climate change.” This vision stems from Benin’s longer 25-year strategy, known locally as Alafia, which calls for “Benin by 2025 to be a flagship, well-governed, united and peaceful country that enjoys a prosperous and competitive economy.” Through its climate change strategy and Alafia, Benin seeks to contribute to sustainable development through the integration of climate considerations in strategic sectorial operational plans of the country. The strategy focuses on reducing emissions resulting from deforestation, reducing human activity-induced greenhouse gas emission, and increasing carbon capture. As part of this strategy, the GOB is offering incentives for private investment in the renewable energy sector. The second PAG’s public procurement policies include environmental and green growth considerations such as resource efficiency, pollution abatement, and climate resilience.

							9. Corruption					

Benin has laws aimed at combatting corruption and has made progress combatting the most common forms of corruption, but work remains in rooting it out. The new HCPC is the lead government entity on corruption issues and has the authority to refer corruption cases to court. The HCPC has the authority to combat money laundering, electoral fraud, and economic fraud in the public and private sectors. Benin’s State Audit Office is also responsible for identifying and acting against corruption in the public sector. The CRIET processes cases related to economic crimes, which include corruption. In 2018, the National Assembly approved the lifting of parliamentary immunity of a small number of opposition parliamentarians accused of corruption or embezzlement during their past positions in former governments.

Bribery is illegal and subject to up to 10 years’ imprisonment, but enforcement remains inconsistent.

Beninese procurement law allows for open and closed bid processes. Contracts are often awarded based on government solicitations to short-listed companies with industry-specific expertise, often identified based on companies’ commercial activities conducted in other overseas markets. The government often uses sole sourcing for projects, including for PAG implementation, and in these cases does not publish procurement requests before selecting a vendor. Foreign companies have expressed concerns about unfair treatment, biased consideration, and improper practices specific to the process of selecting short-listed companies.

Benin is a signatory of the UN Anticorruption Convention and the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

### Resources to Report Corruption

**Government of Benin**

Haut-Commissariat a la Prevention de la Corruption (HCPC)01 BP 7060 Cotonou, Benin+229 21 308 686anlc.benin@yahoo.fr

**Social Watch Benin**

Ms. Blanche Sonon, President02 BP 937, Cotonou, Benin+229 21042012 – 229 95961644swbenin@socialwatch-benin.org

							10. Political and Security Environment					

Benin transitioned to a democracy in 1990, enjoying a reputation for regular, peaceful, and, until recently, inclusive elections. In 2018, the National Assembly adopted, and the government implemented stringent rules for political parties to qualify to participate in legislative elections. In 2019 and 2021 the government held legislative and presidential elections, respectively, neither of which was fully competitive. The National Assembly is currently made up exclusively by two pro-government parties. Elections-related unrest in 2019 and 2021 resulted in several deaths. In April 2021, President Patrice Talon was re-elected for a second and final five-year term, pursuant to Benin’s constitution. The largest security issues facing Benin are the threat of terrorism spilling across its porous northern borders and piracy offshore in the Gulf of Guinea.

							11. Labor Policies and Practices					

The government adheres to internationally recognized rights and labor standards. Benin’s constitution guarantees workers’ freedom to organize, assemble, and strike. Government authorities may declare strikes illegal if they are deemed a threat to public order or the economy and may require those on strike to maintain minimum services. In 2018, the Constitutional Court reinstated a law prohibiting public employees in the defense, health, justice, and security sectors from striking. A 2018 law limited strikes to a maximum of 10 days per year for private-sector workers and public employees not covered by the existing ban. Approximately 75 percent of salaried employees belong to unions. Unions are obliged to operate independently of government and political parties. Benin’s labor code, as revised in 2017, is favorable to employers.

The World Bank official unemployment rate for Benin in 2020 was 2.54 percent, though estimates of actual unemployment figures are significantly higher. Unskilled and skilled labor and qualified professionals are generally available. Nearly 90 percent of youth between the ages of 15 and 29 work in the informal sector. The standard legal workweek is 40 hours and payment of overtime is allowed.

In 2017, the government adopted a law enshrining the framework for private sector and government employment, termination of employment, and placement of labor in Benin.  The law sets a maximum limit of three to nine months’ salary (calculated using the last 12 months of salary) to be paid to an employee in case of abusive termination of employment or layoffs.  If fired for cause (not including a crime or crimes), an employee with a minimum of one year on the job is entitled to receive two months’ salary as severance pay.  The law also allows for multiple renewals of limited term contracts. Under the former law, private companies who dismissed employees for unsatisfactory performance were routinely sued.

Benin’s Ministry of Economy and Finance reported in 2012 (the most recent year available) that the informal sector contribution to the country’s annual GDP rangeds between 60 and 70 percent. Additionally, according to a 2020 International Labour Organization report, 95 percent of businesses operating in Benin are estimated to be in the informal economy.

							12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs					

The DFC offers financial underwriting and other products for companies wishing to invest in Benin.

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics