Entrepreneurship in Benin
Background & History
Benin formerly known as Dahomey is a country in West Africa. It was also known as Slave Coast, due to large number of people who were kidnapped and trafficked to the West during the Trance Atlantic slave trade. The French colonized it around the 1890’s and the region was named as French Dahomey until 1960, by when Dahomey secured its independence from the French. It was renamed as Benin or Kingdom of Benin in 1976 and to Republic of Benin in 1990.
It has a land area of 114763 sq kms and a population approximately 11 million. Most of the population is inhabited in the south coast. French is the official language in the country, however there are 68 other languages spoken in the country, making it Africa’s most linguistically diverse country. Porto Novo is the capital of Benin, however the government seats itself in the City of Cotonou. Benin is ranked 18th out of 52 African countries and scored best in the categories of Safety & Rule of Law and Participation & Human Rights.
Economy
Benin is highly dependent on agriculture, employing around 45% to 55% of the workforce, and is a large exporter of cotton and palm oil. Cotton accounts for 40% of the GDP and roughly 80% of official export receipts. Major industries include Textiles, Food Processing, Construction Materials and Cement.
Benin’s geographical location is favorable in enabling trade, transportation, transit and tourism activities with its neighboring states. Besides agriculture, Benin’s economy is heavily reliant on the informal re-export and transit trade with Benin’s economy is heavily reliant on the informal re-export and transit trade with Nigeria which is estimated at approximately 20% of GDP and making the Port of Cotonou a prime source of revenue for the government. Benin’s GDP growth rate of 4-5% has remained consistent over the past two decades.
Entrepreneurship and Startups
The world bank doing business report ranks Benin at 149 of the 190 countries. By simplifying the business registration process and making it free, the government is encouraging micro and small enterprises to formalize and benefit from various advantages. A pilot program conducted in 2014 ensured the process of registering a business becomes easier, cheaper and faster for entrepreneurs in Benin. The program targeted over 3,600 informal micro enterprises located in Cotonou and over 400 small entrepreneurs had formalized their business at the time as part of the program.
With the help of the United nations it is currently the fastest place in the world to start a business. Entrepreneurs can upload the required information digitally on the United nations eRegistrations platform on a smart phone, and receive the certificate of incorporation in a couple of hours. In Benin the online platform was launched just before the pandemic lockdowns in 2020 and the registrations spiked between February and July, to approximately 3600 registrations per month.
Non profits organisations such as TechnoServe and Startup Accelerators such as BeniBiz are actively helping shape the entrepreneurial ecosystem in Benin. Entrepreneurs are launching startups in the Agri sector, Health, Digital marketing, Finance and in tertiary services.
Conclusion
In order to raise growth still further, Benin plans to attract more foreign investment, place more emphasis on tourism, facilitate the development of new food processing systems and agricultural products, and encourage new information and communication technology. Projects to improve the business climate by reforms to the land tenure system, the commercial justice system, and the financial sector were included in Benin’s US$307 million Millennium Challenge Account grant signed in February 2006. In continuation to that, one can see increased interest by world organisations such as the United Nations, the World Bank in assisting with programs and resources, ensuring development of a vibrant entrepreneurial ecosystem in Benin.
References
Stimulating Entrepreneurship in Benin
Worlds Fasted Place to Start a Business
Startup Accelerators and other Non Profit Organisations shaping Entrepreneurial Landscape in Benin
