**Table 2.** Selected Features of the Macroeconomic Environment, 2003

|_Feature_|_Benin_|_Ghana_|_Tanzania_|_Sub-Saharan Africa_|
|---|---|---|---|---|
|Population (millions, 2002)|6.6|20.3|35.2|689.3|
|Annual population growth (percent, 1995–2002)|2.6|2.2|2.5|2.5|
|Annual labor force growth (percent, 2001-2010)|2.8|2.0|2.0|2.2|
|Rural population (percent of total population), 2002|56.3|63.3|65.8|64.5|
|Gross national income (US$ billions, 2003)<sup>a</sup>|2.5|5.5|9.7|310.9|
|Annual GDP growth rate (percent, 2001–2002)|6.0|4.5|6.3|2.8|
|Gross national income per capita (US$)<sup>a</sup>, 2002|380|270|290|450|
|Gross domestic savings/GDP (percent), 2002|6.0|10.3|9.7|18.5|
|Value added in Agriculture as a percentage of GDP, 2002|36.0|33.8|44.4|17.7|
|Principal commodity export|Ginned cotton|Cocoa|Coffee|—|
|National poverty line (US$ per person per year)|131|138|143|—|
|Percent of population below national poverty line<sup>b</sup>|33|31.4|41.6|—|
|Depth of financial sector (percent)<sup>c</sup>, 2001|31.0|17.4|20.4|35.2|
|Credit provided by banking sector (percent)<sup>d</sup>, 2001|4.6|0.8|9.6|74.2|

— Not available.

a. Calculated using the Atlas method.

- b. Benin-1995; Ghana-1992; Tanzania-1993.

c. M3/GDP.

d. Domestic credits provided by banking sector /GDP. _Source:_ World Bank: World Development Indicators 2003; African Development Indicators 2004

# **STRUCTURE OF THE FORMAL FINANCIAL SYSTEM**

18. The financial sectors of Benin, Ghana, and Tanzania are relatively shallow: the degree of monetization of the economy as measured by the ratio of M3 to GDP is 31 percent for Benin, 17.4 percent for Ghana, and 20.4 percent for Tanzania – somewhat below the level for Sub-Saharan Africa. Moreover, domestic credit provided by the banking sector as a percentage of GDP is rather low in each of the three countries, and especially in Ghana. Each of the countries has undergone a period of restructuring and liberalization of the financial sector, wherein the government has privatized and reorganized banking institutions that it previously owned, controlled, and managed.

## **_Benin_**

19. At the end of 2002, Benin’s formal financial system consisted of a branch of the Banque Centrale des Etats de l’Afrique de l’Ouest (Central Bank of West African States or BCEAO), 7 private commercial banks, 2 leasing and credit institutions, 7 insurance companies, and more than 600 microfinance and savings and loans associations. In the last two years two of the seven commercial banks were newly licensed and started operations and two NBFIs were liquidated. All the older banks were created during the early 1990s. The government liquidated the three commercial banks it owned that were operating before this period following the collapse of the banking system as a result of the banking crisis of the late 1980s. The financial sector remains somewhat shallow, although at 26 percent the ratio of M2 to GDP is higher than for Ghana, Tanzania, and the average for Sub-Saharan Africa. In 2002 credit to the private sector stood at only 12 percent of GDP, total credit extended by MFIs was equivalent to 10 percent of total financial sector credit, and MFIs held an estimated 10 percent of total financial sector deposits.

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