According to the UNCTAD World Investment Report 2022, FDI inflows increased from USD 174 million in 2020 to USD 242 million in 2021, following the recovery from the Covid-19 pandemic. The stock of FDI reached USD 2.845 billion at the end of 2021. According to UNCTAD’s Investment Trends Monitor, global FDI momentum weakened in 2022 in the context of the war in Ukraine, rising food and energy prices, financial turmoil and debt pressures. The National Infrastructure Development Plan, which contains a series of private-public partnerships, should help boost FDI. The main investors are France, India, China, Nigeria and the Ivory Coast (IMF). Among the current investment projects, Eiffage won a EUR 160 million contract to extend and renovate the port of Cotonou by 2027; and the China National Petroleum Corporation will commission the pipeline between Agadem (Niger) and Port Sémé (Coface).
Benin government has implemented a series of reforms to foster investment. These include creating a unified regulatory framework for public-private partnerships, a single business registration desk as well as multiple tax incentives to support private investments. Moreover, the Talon administration initiated a process to modernise public procurements’ provision, and to revise fees to transfer state-owned lands. The tax regime in place was also simplified to favour micro and small enterprises (Synthetic Professional Tax). A Presidential Investment Council was created and an online platform for providing information to investors was put in place. Benin's strong points are its strategic location: the country has access to the sea and shares a border with Nigeria, one of Africa’s leading economies, its role as a trade hub for second-hand vehicles imported from Europe and resold throughout Western Africa and the fact that it is one of the most democratic nations in the African continent. However, corruption, poor quality of infrastructure and problems related to electricity supply limit the country's potential attractiveness.
|Foreign Direct Investment||2020||2021||2022|
|FDI Inward Flow (million USD)||174||346||267|
|FDI Stock (million USD)||2,831||2,945||3,044|
|Number of Greenfield Investments*||3||5||0|
|Value of Greenfield Investments (million USD)||44||231||0|
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Among the factors that make Benin an attractive destination there are:
Several factors still hinder the country’s attractiveness:
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Latest Update: September 2023