Trade

Cotonou Agreement was signed in 2000 between African, Caribbean and Pacific countries (ACP countries) and put into action instead of the Lomé Convention forming a basis for ACP-EU development cooperation since 1975. Cotonou Agreement plays a key role for trade relations of ACP countries. This agreement is aimed at reduction of poverty while contributing to sustainable development. In this way, the integration of ACP countries into the world economy can be provided, well. Unlike the Lomé Convention, central government is not only one actor of state. According to Cotonou Agreement, central government is still a main actor but civil society, private sector and local governments have been gaining importance in decision making process.

The Harbour of Cotonou is the most important international trade center of Benin and most of imported products are transmitted towards Nigeria.

The economy of Benin depends on subsistence agriculture, cotton production and regional trade.

Percentages of GDP composition by sector (2010 est):

  • Agriculture: 35,5 %
  • Industry: 6,1 %
  • Services: 58,4 %

Benin has an increasing budget deficit (-4,3% of GDP in accordance with the 2011 estimates). Its inflation rate is increased, too (3,3% in accordance with the 2011 estimates). However, GDP (real growth rate) of Benin is increased from 2,6% to 3,8% in accordance with the statistics of 2011.

Cotton, yams, beans, corn, peanuts, cashews and cassava are mostly known agricultural products of Benin. Besides, Cotton is known as the main revenue generating agricultural product of this country.

Food processing, textiles, construction materials and cement become prominent in the Beninese industrial sector. Especially, cement and construction materials progress rapidly in the recent times.

Trade relations between Turkey and Benin gain acceleration in every year. In 2009, the trading volume between Turkey and Benin is $ 29 million. In 2010, trading volume increases towards $ 121,5 million between them (increasing 325 %) Turkey exports cereals, mineral oil and mineral fuel, iron, steel and some electric appliance to Benin. On the other hand, Benin exports only cotton to Turkey.

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Investment Opportunities

In order to raise growth, the government of Benin plans to attract more foreign investment into the borders of Benin. In this way, information and communication technology can progress in there. Also, the government can emphasize on tourism and can facilitate the development of new food processing system with new investments. After 1990, market transition have occured step by step and economy of Benin have liberalized with each passing day. Many foreign investors enjoy some privilages given by the government. Also, Benin supports foreign investors about almost all issues to take them in there. The Free Zone of Benin provides attractive terms for many investors. The foreign investors can make partnership agreements with Beninese tourism agencies and industrial corporations without any significant restriction.

The subsoil in Benin is rich in materials such as iron, phosphate, chalk, marble, clay and ornamental stones. The government of Benin provides some opportunities to foreign investors to make their investment to the Beninese underground sources.

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Free Zone

The Free Processing Zone of Benin is served by an important road network and it is the first geographically delimited zone with the area of 230 hectares, away 20 km from the port and the international airport of Cotonou, and 10 km from the biggest sub saharian market, Nigeria. The main platform is located in Seme-Podji. The companies in Free Processing Zone are mainly export oriented and they can enjoy favorable treatment and tax exemptions.

Zones promoters should comply with the following conditions:

  • Priority is given to Benin nationals rather than equally qualified foreign nationals.
  • Use of Beninese raw materials and office supplies with equal competitiveness.
  • Justify sufficient financial and technical abilities to develop their site and ensure duties assigned to them.

More info: www.a-zfibenin.com

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