WT/TPR/S/131 Trade Policy Review 
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IV. TRADE POLICY BY SECTOR 
(i) Introduction 
1. Since the first review of trade policy, tariff protection has been reinforced and efforts to 
deregulate some key sectors of th e economy have been initiated. 
2. Despite the increase in the area of land under cultivation, there has been a decline in the 
primary sector’s contribution to GDP. Deregulation effo rts have led to increased participation by the 
private sector and better organization within the sect or. The continuing regulatory, financial and fiscal 
problems appear to hamper broader participation by the private sector. The introduction of the CET 
has raised the level of tariff protection for the ma jority of agricultural products and has introduced a 
customs duty for rice; the agricultural policy adopted  by the WAEMU could lead to a further rise in 
the level of tariff protection. Exports of some st rategic products are prohibi ted, for example, seed 
cotton, teak in the rough and charcoal, while coco a beans are subject to export duties. Indicative 
prices for certain agricultural products for export are fixed. The buffer stock of food crops is in the 
hands of the State, which manages it. 
3. The timid progress made and the currently limite d opportunities for diversification (towards 
cassava and yams) mean that the cotton subsector  remains the dominant activity, providing the 
majority of export earnings, which explains Beni n’s position and sense of urgency during the Doha 
negotiating round. The wide-ranging reforms im plemented in the cotton subsector have, inter alia , led 
to the liberalization of the marketing of seed cott on and cotton ginning, as we ll as the abolition of the 
practice of fixing the producer price for cotton (up to the 2001-2002 season) and preparations for privatizing the State enterprise SONAPRA. 
4. Benin’s dependence on energy from outside the country remains a major constraint on its 
development and on public finance. “Pure” indus tries (cement works and breweries) receive 
electricity at lower rates (around 90 per cent less) than some other consumers. 
5. The manufacturing sector continues to make a modest contribution to GDP and employment. 
The sector’s tariff protection at the border has also increased slightly since the introduction of the CET. The State intervenes directly in the activiti es of the textiles and clothing sector, linked to the 
cotton subsector, while the cement sector seems to have benefited from the liberalization efforts 
made. 
6. Efforts have been made to open up some ser vices activities, which account for around half of 
Benin’s GDP, but with certain exceptions liberali zation has been halting. The banking sector does not 
appear to have enough financing instruments wholly adapted to the needs of investors and the result is 
an accumulation of liquidity. In 2002, a new orga nizational and regulatory framework was established 
to enhance the competitiveness of the telecommunicati ons sector; the private sector’s share of mobile 
services has increased and the same is expected in fixed network services in the near future with the 
termination of the State’s monopoly at the end of 20 05. Port maintenance has been liberalized. Since 
1999, Benin has taken part in the Yamoussoukro Initiative on gradual implementation of an “open 
skies” agreement in order to liberalize air transport of passengers and cargo. It appears that there is 
still State involvement in the hotel sector. Benin WT/TPR/S/131 
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(2) AGRICULTURE , LIVESTOCK AND FORESTRY  
(i) Overview 
7. The primary sector’s share of GDP has declin ed since 1997 and now accounts for over 33 per 
cent of GDP and over 95 per cent of export earnings (Table I.1). The area sown for crop production 
has, nevertheless, steadily increased and now amounts to 1 million hectares, of which 73 per cent is 
used for food crops and 27 per cent for industrial crops.1 Cotton remains the most important activity, 
accounting alone for 13 per cent of GDP, 35 per cent of tax revenue2, 85 per cent of export earnings 
and 77 per cent (1999) of total exports. In volum e terms, the main crops are cotton, maize3, cassava 
and yams. Animal production is still traditional despite  the efforts made to build dams and improve 
animal health following the liberalization of the veterinary profession.4 
8. In order to diversify agricultural production an d exports, Benin is promoting other promising 
subsectors such as cassava, maize, pineapples, rice, palm oil5, cashew nuts and pig breeding 
(Table IV.1). Although cotton is still the major ag ricultural export, followed by food crops, tobacco 
and oils6, there appears to be a slight trend towards diversification of agricultural exports7 as the share 
of products other than cotton rose gradually  from 11 per cent in 1996 to 18 per cent in 19998, 
according to the authorities, this trend is the result of the fall in global prices for cotton. 
9. Agriculture in Benin still depends to a larg e extent on climate conditions. During the 2002 
season, yields in comparison with average consum ption showed a large positive balance in food 
crops, higher than in the 2001 season. This means that  there are adequate supplies of food, with the 
exception of rice9 and fisheries products. If there is a serious  shortage or the supply chain is broken, 
the State has buffer stocks of food crops (Table IV .2) administered by the National Food Security 
Board (ONASA).10 According to the authorities, gifts of rice (KR 1) from Japan under their food aid 
programme from 1998 to 2002 amounted to 25,251.8 tonnes.11 
                                                      
1 Benin’s PRSP estimates that the area of  arable land is 4.8 million hectares. 
2 Economic Policy Analysis Unit (2002). Negotiations on agriculture: proposals by the EU and the 
United States for Cancún and implications for sub-Saharan African countries. 
3 Maize is the most widely grown crop in terms of surface and is found all over Benin. It is mainly 
exported to neighbouring countries. Benin has a compar ative advantage in maize pr oduction from the economic 
point of view, with a cost in internal resources coefficient of 0.54 (Working document No. 4/2001 of the 
Economic Policy Analysis Unit of Benin). 
4 Action programme for the development of Benin 2001-2010, Third United Nations Conference on 
Least-Developed Countries, Brussels, 14-20 May 2001. 
5 Until the early 1970s, this was the main export product. 
6 With the rising global prices there has been a certain resurgence of interest among cocoa producers. 
7 This is due in particular to exports of oilseeds and fruit. 
8 Operational Strategic Plan (July 2001). Available at 
http://www.gouv.bj/ministeres/maep/doc_telecharge s/PLAN%20STRATEGIQUE.P DF [13 October 2003]. 
9 According to a study by Benin’s Economic Policy Analysis Unit, rice has become dominant in 
feeding habits in Africa. Rice, however , was not originally a basic foodstuff. It has changed from being a special 
foodstuff, almost a luxury, to daily consumption as part of the quest for food security. In Benin, the basic food 
has traditionally been what is called paste (of maize, ya ms, cassava, etc.), still consumed by the majority of 
Benin’s people. Nevertheless, in sub-Saharan Africa there is a trend towards abandoning consumption of local foodstuffs in favour of rice. 
10 Ministry of Agriculture, Livestock and Fisheries (2001). 
11 The Japanese gift of rice came from the following countries: Australia, China, Japan, Thailand and 
the United States. WTO (2001). WT/TPR/S/131 Trade Policy Review 
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Table IV.1 
Production of food crops and principal crops, 1997-2003 
(‘000 tonnes) 
1997 1998 1999 2000 2001 2002 2003 
Maize 701.0 662.2 782.9 750.4 685.9 797.5 1,237.8 
Sorghum 120.1 138.4 126.4 155.2 165.3 182.6 203.5 
Millet 26.8 29.4 29.5 36.3 34.9 40.7 45.5 
Rice (paddy) 26.9 35.6 34.0 49.2 54.9 63.2 76.3 
Cassava 1,918.4 1,989.0 2,113.0 2,350.2 2,703.4 3,154.9 3,951.9 
Yams 1,407.7 1,583.7 1,647.0 1,742.0 1,701.0 2,151.4 2,475.3 
Beans 73.7 75.4 74.2 85.6 78.3 95.3 114.1 
Tomatoes 121.5 105.6 124.4 139.2 117.6 134.8 167.3 
Soya beans 1.2 1.9 3.4 4.3 3.5 4.7 5.6 
Seed cotton 377.3 359.3 375.6 339.9 393 376.7 484.8 
Groundnuts 102.3 98.9 101.9 121.1 125.3 130.0 164.7 
Pineapples 94.7 58.7 44.8 70.5 57.1 98.2 105.9 
Tobacco 0.4 0.6 0.4 0.7 0.6 8.8 0.9 
Source : Ministry of Agriculture, Livestock and Fisheries (2003) Rapport d'activités 2002-2003 . 
 
Table IV.2 
Buffer stock of food crops, 1998-2003 
 Stocks Price Price 
 Built up 
(tonnes) Sold 
(tonnes) Purchasea 
(CFAF/tonne) Saleb  
(CFAF/tonne) Purchasea 
(US$/tonne) Saleb  
(US$/tonne) 
1998 0 c  85,000  151.2 
1999  972.8 496.5  108,000  165.4 
2000  0 476.4d  115,000  163.1 
2001  202.7 202.7 100,000 130,000 134.4 174.7 
2002 552.6 552.6 125,000 150,000 199.8 239.8 
2003  1,078.9 1,078.9 110,000 96,000 183.3 160.0 
a Buying takes place through notification of collection on the radio, which sets out the conditions for participating, the 
specifications for the product, the pl ace of delivery and the buying price. 
b Sales are made to consumers against payment in cas h in the form of a delivery note and a receipt. 
c Residual stock “South African maize”. 
d 1999 residual stock. 
Source: ONASA. 
(ii) Agricultural policy12 
10. During the 1990s, opening up to the outside, devaluation of the CFA franc, regional 
integration, liberalization of the economy, State wit hdrawal from some of its  responsibilities, together 
with the decentralization of some public services, appears to have had an impact on the sector. 
Despite its sizeable potential, productivity continue s to be hampered by: (i) the outdated production 
techniques used; (ii) problems related to stor age (relatively high losses because of the lack of 
processing opportunities, the absence of warehousing facilities and refrigerated chains to conserve 
perishable goods); (iii) the landlocked situation of so me parts of the country and the poor state of the 
road infrastructure (rare, irregular and expensive tr ansport); and (iv) continued harassment by the 
police on the roads. All these factor s make transactions more expensiv e and accentuate still further the 
fluctuations in the price of food crops throughout the year. 
                                                      
12 Ministry of Agriculture, Livestock and Fisheries (2001). Benin WT/TPR/S/131 
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11. The sectoral objectives cited in the Letter on Rural Development Policy (LDPDR)13 of 1999 
and the “1998-2002” Orientation Plan14 consist of: (i) contributing towards economic growth, an 
improved trade balance and job creation; (ii) helping to raise the standard of living of the population 
by increasing the purchasing power of producers, combating poverty, controlling food quality and 
safety; (iii) maintaining the food and nutritiona l security of a rapidly expanding population; 
(iv) diversifying and intensifying agricultural pr oduction in a sustainable way without jeopardizing 
the national production base and the ecological herita ge; and (v) within rural communities, helping to 
improve gender relations. 
12. The Ministry of Agriculture, Livestock and Fisheries (MAEP) is still in charge of 
implementing sectoral policy. The State’s withdrawal from production and marketing has meant a 
change in its responsibilities, allowing it to move fro m being an operator and direct actor to a support 
and complementary role and as a facilitator for other operators. In the case of agricultural imports and 
the marketing of agricultural products, for exampl e, the State gradually began to withdraw in 1993 
with the opening up of imports of some agricultu ral inputs (chemical fertilizers and insecticides) to 
the private sector. In the cotton subsector, ginni ng was then opened up to private actors, which now 
own eight of the 18 plants in Benin. 
13. Since 1988, the “regional action centres  for rural development” (CARDER)15 have no longer 
been involved in activities such as the supply of inputs, marketing and production, which diverted 
them from their task of guiding farmers, carrying out  regulatory and technical controls, giving advice 
and support, and monitoring. These changes appear to  have been welcome in the cotton subsector, but 
the same cannot be said of the non-cotton-grow ing areas where CARDER’s withdrawal from the 
supply of inputs looks like an abandon of activities. 
14. In the agricultural sector, the insufficient involve ment of the private sector is mainly due to 
constraints such as: (i) the legal and regulatory environment for enterprises, consisting of outdated 
laws and a failure to disseminate them16, (ii) burdensome and ill-adapted taxation; and (iii) financing 
constraints.17 According to the authorities, measures have  been taken to involve the private sector 
more closely in the rural sector. It is not simply  a question of transferring competence to farmers’ 
associations for production, marketing and distribu tion of inputs, increased participation by NGOs 
and interprofessional organizations in non-exclusiv e activities such as disseminating information, 
training producers, and agricultural loans, but also  of liberalization of the cotton subsector and the 
privatization of the SONAPRA. 
15. At the subregional level, the major obj ectives of the WAEMU’s agricultural policy 
(Chapter II(6)(iii)(a)) are to assist in meeting the population’s food needs, the economic and social 
                                                      
13 This repeats the objectives set out in the Letter on Rural Development Policy (LPDR) of 1991 and 
the Round Table on the Rural Sector in 1995. 
14 The four main challenges identified in the Pl an are: (i) enhancemen t of the macroeconomic 
environment; (ii) stronger economic  growth; (iii) strengthening good governance; and (iv) developing human 
capital. 
15 CARDER, SONAPRA, ONAB, ONASA, ONS and INRAB are under the supervision of the 
Ministry of Rural Development. 
16 The main demands of the private sector are: simplification of the regulatory framework, reduction 
and simplification of formalities for registering enterprises, and broader and more rapid dissemination of 
standards. 
17 To remedy these problems, the private sector calls, inter alia , for: the creation of banks specializing 
in agricultural financing, the development of a partnership between public and the private sector with a view to 
joint financing of certain agricultural investments, the introduction of medium-term credits for the purchase of 
equipment, the establishment of a m echanism to support or gu arantee agricultural credit, and the granting of 
loans for non-cotton agricultural production (Ministr y of Agriculture, Livestock and Fisheries (2001)). WT/TPR/S/131 Trade Policy Review 
Page 60 
  
development of member States and the alleviation of poverty in rural areas. Ways of implementing 
this policy should be finalized shortly. In this c ontext, the protection given to agricultural products 
under the CET – relatively higher than that given to non-agricultural products – could increase 
further, but the authorities in Benin have not yet defined their position on this issue. 
(a) Border measures 
Tariff protection  
 
16. The major instrument of trade policy in the sect or is still the tariff, whose average MFN rate 
actually applied to agricultural products (WTO de finition) is 16.9 per cent (12.6 per cent in 1997), 
higher than the average rate for WTO definition non-agricultural products (excluding petroleum 
products), which is 14.2 per cent (13. 8 per cent in 1997) (Table III.1). 
17. The introduction of the CET (Chapter III(2)( iii)(a)) has increased tariff protection for the 
majority of agricultural products (WTO definition); this has meant a rise of some 34 per cent in the 
average MFN tariff actually applied. In Chart IV.1, this trend can be seen by HS section. According to 
Benin’s authorities, customs duties for animal produc ts (bovine animals, sheep, poultry, pigs, milk 
and eggs), fruit (mangoes, pineapples), coffee, cass ava, and cowpea (a type of bean) have increased 
from 5 or 10 per cent to 20 per cent.18 A customs duty of 5 per cent has been determined for rice, 
whereas this product was exempt from duty at the time  of the first review of Benin’s trade policy. 
Only a very few products have benefited from a reduction, for example, the rate for maize and 
groundnuts has fallen from 10 to 5 per cent. 
Non-tariff protection at the border  
 
18. The import of certain agricultural, food and liv estock products is subject to special import 
licences (fertilizer) or to mandatory rules (a permit fr om the Ministry of Agriculture is needed for the 
import of any fresh or chilled fruit or vegetables, for reasons of health and environmental protection 
(Chapter III(2)(iv)).19 
 
                                                      
18 Ministry of Agriculture, Livestock and Fisheries (2001). 
19 WTO (1998). Benin WT/TPR/S/131 
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0 5 10 15 20 25 
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21Chart IV.1 
Simple average of the tariff actually applied by HS sect ion, 1997 and 2003  (October)  
 
Percentag e 
1997 
2003 
Source:  HS section
WTO Secretariat estimates based on data provided by the authorities of Benin in October 2003.  
  01 
02 
03 
04 
05 
06 
07 Live  animals  and  animal  products   
Vegetable  products  
Fats and oils  
Products of the food industry  
Mineral products  
Products of the chemical industry  
Materials of  plastic and rubber  0809
10
11
1213
14Skins and hides
Wood and articles of wood
Wood pulp, paper, etc.
Textile materials
Footwear and headgear
Articles in stone
Precious stones, etc.15
16
17
18
19
20
21Base metals
 
Machinery  
Transport equipment  
Precision instruments  
Arms and ammunition  
Miscellaneous products  
Works of art, etc.  
 
Export measures  
 
19. An export tax continues to be imposed on exports of cocoa beans despite the extremely low 
levels of production and export (Chapter III(3)(ii)). 
20. Benin still prohibits the export of seed cotton20, teak in the rough and charcoal 
(Chapter III(3)(iii)), In 2002, the State enterpri se SONAPRA received a special authorization to 
export 30,000 tonnes of seed cotton at prices 96 per cent higher than the price to local industries. This authorization made it possible to fulfil two contract s, which had been signed for over two seasons but 
had not been put into effect because of the ban.
21 According to information from SONAPRA, 
however, there have been exports of much lower quantities of seed cotton each year since the 1998-
1999 season (Table IV.4). 
 
                                                      
20 According to the authorities, this ban makes it pos sible to guarantee supplies to factories which grind 
seed cotton as a raw material. 
21 Special authorization given in Letter No. 1 268/MICPE/DC/SG/DCC/SACPA/A of 12 June 2002. 
The authorities have not, however, provided any details on exports of seed cotton in coming seasons. Ministry of Agriculture, Livestock and Fisheries, SONAPRA (2002). WT/TPR/S/131 Trade Policy Review 
Page 62 
  
(b)  Domestic support measures 
21. Since the 2001-2002 season, cotton and other export products (shea nuts22, tobacco, cashew 
nuts, palm nuts, coffee, cocoa, groundnuts for oi l mills) and inputs have been the subject of 
coordination in the “Commission on Production Fact ors and Marketing of Agricultural Products”.23 
The Commission fixes an indicative price for these products for the following season 
(Chapter III(4)(i)) (Table IV.3). 
 
Table IV.3 
Producer purchase price (CFAF/kg) and international prices, 1997-2001 
Product 1997 1998 1999 2000 2001 
Cotton 200 200 185 185 200 
International pricea 474.3 368.2 346.7 415.9 357.3 
Palm regime 24 26 30 30 20 
International priceb 326,830.5 377,411.6 284,882.1 218,182.0 213,170.4 
Cashew nuts 155 175 190 190 225 
Groundnuts in the shell 120 125 125 125 125 
a Price in CFAF per lb – (index A (M 1-3/32"), Cotton Outlook, Liverpool). 
b Price in CFAF per tonne – (Malaysia, north-west European ports). 
Source : Economic Policy Analysis Unit (December 2002), Tableau de bord sur la compé titivité de l'économie béninoise. 
 
22. The Government has also stated its intenti on of continuing to withdraw from the cotton 
subsector (Box IV.1), in stages, and to transfer all production and marketing to private operators. It 
also seeks to encourage private inve stment, especially foreign direct investment, in the export of fresh 
produce and to modernize marketing channels and storage systems. 
23. The banking sector only makes a small cont ribution to financing the sector and the 
development of rural credit appears essential in orde r to offset the lack of self-financing by farmers. 
The Federation of Savings Banks and Mutual Ag ricultural Credit (FECECAM) does have local and 
regional agricultural credit banks, but according to the authorities the rates levied are extremely high24 
and the time-limit for repayment rarely exceeds 24 months , so only a very small part of the credit (less 
than 1 per cent according to the BCEAO) is granted for agricultural production. 
(iii) Measures affecting certain products 
Cotton subsector  
 
24. Benin has moved up from 19th (1998) to 13th (2002) place among the world’s producers of 
seed cotton.25 The cotton subsector still dominates many areas of Benin’s economy but its 
                                                      
22 Seeds with an edible fat content. 
23 This Commission groups the various ministries concerned, professional associations and civil society 
represented by the Chamber of Agriculture, the Cham ber of Commerce and the association of importers-
distributors of agricultural inputs. 
24 According to the Ministry of Agriculture, Livestock and Fisheries, the nominal interest rates are 
around 17 to 18 per cent. Ministry of Agriculture, Livestock and Fisheries (2001). 
25 Since the first review, Benin has been in 17th (1997), 19th (1998) and 18th (2000, 2001) places. 
“Countries by commodity” [on line]. Available at 
http://www.fao.org/es/ess/top/commodity.jsp?lang= EN&commodity=329&CommodityList=329&year=2002&y
earLyst=2002 [19 November 2003]. Benin WT/TPR/S/131 
 Page 63 
 
 
performance has fluctuated greatly since 1998 (secti on (2)(i)) (Table IV.4). Over 10 million people in 
the region depend directly on cotton production and seve ral other million are affected indirectly by the 
difficulties currently encountered in this subsector.26 Cotton therefore occupies a strategic place in 
development policy and in the poverty alleviation programme in Benin and in its WAEMU partners. 
Table IV.4 
Ginning of seed cotton, 1998-2003 
(Tonnes) 
 1998-99 1999-2000 2000-01 2001-02 2002-03 
National harvest (seed cotton) .. .. .. 409,000 .. 
Ginned cotton .. 187,401 168,210 226,031  
Cotton fibre 76,915 79,848 71,896 94,354 66,840 
Seed 100,393 101,577 91,779 122,882 84,460 
Exports 
Cotton fibre Seed cotton 74,607
9,039  
77,452 
9,158 69,739
8,178  
91,523 11,288  
64,834 
7,446 
.. Not available.  
Source : Société nationale pour la promotion agricole  (2002),  Rapport Annuel 2001-2002. 
 
25. Since the first review of its trade policy, Benin has made major efforts to liberalize and 
reform the cotton subsector.  Partial privatiza tion of marketing and opening up the market for 
distribution of inputs have affected  its functioning. Deregulation has, inter alia , led to a formal lifting 
of the purchasing monopoly of the SONAPRA fo r seed cotton (since the 2003-2004 season), the 
distribution of volumes of seed cotton negotiated wi thin the profession and the fixing of cotton prices 
that are far more closely related to export prices . Since 1993, the marketing of seed cotton has been 
handed over to farmers’  organizations (OP)27 (Box IV.1). 
26. Until the 2001-2002 season, producer prices were determined by the Government in order to 
“ensure a balance in the subsector”.28 During that season, because of the sharp fall in prices in 200129, 
State subsidies amounted to around CFAF 1 billi on (approximately US$1.6 million) in order to 
support the purchase price of seed cotton at CFAF 200/kg (around US$0.3). The State therefore assumed an amount of CFAF 35, the differenc e between the selling price to cotton ginners 
(CFAF 165) and the price paid to cotton growers (CFAF 200).
30 The authorities have pointed out that 
price support during the 2001-2002 season was exceptional. 
                                                      
26 WTO documents TN/AG/GEN/4 of 16 May 2003, WT/L/539 of 29 August 2003 and 
G/AG/NG/W/188 of 26 September 2002. 
27 Ministry of Agriculture, Livestock and Fisheries (2001). 
28 The prices represented the minimum amount that allowed the producer to cover his expenses and 
earn an income equivalent to the minimum income in rural areas. This price was paid irrespective of yields 
during the season, but if the season appeared to be a profitable one, produ cers received part of the profit. WTO 
(1998). 
29 The price of cotton (Cotton Outlook Liverpool price) in 2000 was US$0.59/lb, whereas in 2001 it 
was US$0.48/lb, corresponding to a decrease of some 23 per cent. 
30 Economic Policy Analysis Unit (2003). WT/TPR/S/131 Trade Policy Review 
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Box IV.1: Reforms in the cotton subsector and SONAPRA 
The reforms in Benin’s cotton subsector have been under way since 1988 in order to provide the conditions for 
sustainable development of the subsector as a whole and to make the best use of the State’s assets transferred to the 
private sector. The following inter alia took place during the first stage up to 1999: the elimination of subsidies on 
inputs (1988); fostering of increased participation by privat e operators (including farmers’ associations) (as of 1993);  
and the transfer of the industrial and commercial activities of the regional action centres for rural development 
(CARDER) to the State-owned National Agricultural Pr omotion Company (SONAPRA) (1998), whose objective is 
to diversify agriculture and develop new export outlets. Since 1995, Benin’s ginning capacity has increased 
following the authorization to establish eight private plants in addition to the 10 plants belonging to SONAPRA. 
Reform continued from 1999 onwards on the basis of a new institutional and regulatory framework. The new 
structures set up at State level are: (i) the committee to follow up studies on developing and opening up the registered 
capital of SONAPRA; and (ii) the committee guiding the reform of the cotton subsector. At the private level, the 
structures are: (i) the Interprofessional Cotton Associatio n (AIC); (ii) the Professional Association of Cotton Ginners 
of Benin (APEB); (iii) the Professional Association of Di stributors of Agricultural Inputs (GPDIA); and (iv) the 
Agency for Guaranteeing Payment and Collection (CSPR).  
The reforms also extend to include SONAPRA, which on 17 November 1999 lost its monopoly of the supply and 
distribution of inputs in favour of farmers’ associations, which were made responsible for following up the 
organization of consultations for the supply of inputs as of the 2001-2002 season. Since June 2000, SONAPRA has 
no longer enjoyed a monopoly on the primary marketing of seed cotton but no transitional provisions were made, a 
situation that led to negotiations and the conclusion of an agreement among the various actors in the subsector in 
order to obtain the best outcome for the primary marketing of seed cotton during the 2000-2001 season. 
Since January 2000, a “profile enhancement plan” has been implemented to stabilize SONAPRA’s financial situation 
and make it attractive when the privatization process is la unched. In 2002, actors in the cotton subsector drew up a 
programme for the privatization of SONAPRA in one single stage, following which the State would retain 34 per 
cent of the shares and would sell the remaining 66 per cent to private sources in the following manner: 51 per cent to 
the strategic block, 10 per cent to producers and 5 per cent to SONAPRA personnel. In 2003, after a second 
invitation to tender (the first was annulled because of an inadequate number of tenders), the Belgolaise Bank was 
selected to assist the Government in privatizing SONAPRA. 
Currently, the Beninese authorities are working on future reforms of the cotton subsector, in collaboration with the 
World Bank. 
Source : Ministry of Agriculture, Livestock and Fisheries (2002). Point sur l'évolution des processus de libéralisation 
de la filière coton et de la priva tisation de la SONAPRA ; Interministerial Order No. 
34/MPREPE/MDR/DC/SG/CSFOD of 5 November 1998 and No. 590/MDR/MCCAG-
PDPE/MFE/MCAT/DCAB/SP-C of 27 October 2000; Decree No. 99-537 of 17 November 1999 
transferring to private operators responsibility for or ganizing consultations on supply of agricultural inputs; 
and Decree No. 2000-294 of 23 June 2000, lifting the monopoly of primary marketing of seed cotton held 
by SONAPRA . 
27. Benin and other countries in the region31 produce high-quality cotton in line with international 
standards at production costs that are among the lowest in the world.32 Cotton plays a strategic role in 
development policies and poverty alleviation pr ogrammes in these LDCs. According to cotton-
producing countries in West and Central Africa, the subsidizati on of cotton production by certain 
WTO Members33 is considered to be one of the direct causes of the problems encountered in global 
cotton production. It artificially inflates the offe r on international markets and brings down export 
prices. Because of this situation, the WAEM U countries took a common position at the Cancún 
Ministerial Meeting on the sectoral initiative on cotton. They call for the following in particular:  
(i) the elimination of domestic support for co tton production and cotton export subsidies; and 
(ii) transitional measures in the form of financia l compensation to offset the loss of revenue they 
                                                      
31 Burkina Faso, Chad, Mali and Togo. 
32 WTO document TN/AG/GEN/4 of 16 May 2003. 
33 In particular, the United Stat es, China and the European Union (for Greece and Spain). WTO 
document TN/AG/GEN/4 of 16 May 2003. Benin WT/TPR/S/131 
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incur.34 Consultations among WTO Members after Cancún focused mainly on two substantive 
aspects: (i) the trade-related elements of the initiative; and (ii) development aspects. 
28. Under its Technical Assistance Plan for 2004,  the WTO Secretariat organized a regional 
workshop on cotton for African countries on 23 and 24 March 2004 in Cotonou, in which the 
Director-General of the WTO took part. This work shop dealt only with development aspects, notably 
financial and technical assistance opportunities. 
(iv) Forestry and wood products35 
29. In 2000, Benin’s forests still provided 67 per cent of the energy consumed in the country in 
the form of “biomass-energy”36 used to cook food. This situation, together with the establishment of 
migrants in forested areas, the movement of cattle and agricultural clearing accelerate the process of 
deforestation.37 Since the 1980s, the National Timber Bo ard (ONAB) has undertaken reforestation 
campaigns, estimated at 36,000 tonnes of firewood a year, although they do not meet annual demand, 
which in 1999 exceeded 3 million tonnes. Supply and demand for “wood as energy” shows a deficit in 
wood supplies which could in the medium term no longer cover household needs. 
30. The policy implemented appears to focus more  on securing national supplies and increasing 
value added than on preserving natural resources an d protecting the environment. Since 29 January 
1997, exports of teak in the rough and charcoal have  been banned, although exports of sawn teak in 
the form of boards, parquet flooring and planks are allowed38 (Chapter III(3)(iii)). According to the 
authorities, no reforms are planned. 
(3) MINING AND QUARRYING AND ENERGY  
(i) Mining and quarrying 
31. As was the case at the time of the first trad e policy review, the mining sector accounts for 
barely 0.2 per cent of GDP formation (2004 esti mates) (Table I.1). Nevertheless, Benin has 
considerable potential in mineral resources such  as gold (currently being exploited), building 
materials39, iron and phosphates. Moreover, according to th e experts, it also possesses other mineral 
wealth that is not yet exploited, for example, nickel, rutile, zircon and diamonds.40 
                                                      
34 WTO documents G/AG/NG/W/188 of 26 September 2002, TN/AG/GEN/4 of 16 May 2003, 
TN/AG/GEN/6 of 4 August 2003, WT/MIN(03)/W/2 of 15 August 2003, WT/GC/W/511 of 22 August 2003, WT/L/539 of 29 August 2003, WT/MIN(03)/ST/93 of 12 September 2003, WT/GC/W/516 of 7 October 2003 
and WT/GC/74 of 10 November 2003. 
35 Ministry of Mines, Energy and Water Resources (2003). Ministry of Mines, Energy and Water 
Resources (2002). 
36 This is composed of firewo od, charcoal and plant waste. 
37 In 1980, wooded areas amounted to 7,830,625 hectar es as compared with 6,940 ,101 hectares in 1990 
and 6,533,571 hectares in 1995. 
38 Interministerial Order No. 008/MCAT/NDR/DC/DCE/ SRE of 29 January 1997 on requirements for 
the export of processed teak and other forest varieties. 
39 Building materials are limestone, marble, clay, ka olin, silicate sand, gravel, and ornamental stone. 
40 Information on line. Available at http ://www.gouv.bj/ministeres/mmeh/actualite.php 
[18 November 2003]. WT/TPR/S/131 Trade Policy Review 
Page 66 
  
32.  Benin has started to reform its mining sector  by drawing up a new Mining Code in order to 
foster and encourage investment in exploration and produc tion of minerals.41 The mining sector is 
open to any enterprise. Exploration and prospection of mineral resources by large, medium and small 
enterprises with either national or foreign capita l are encouraged by the Government without any 
discrimination. According to the authorities, th e new Mining Code provides a legal, fiscal and 
regulatory framework that should allow investors to  carry out their activities with full security and 
under acceptable conditions of profitability. It aims to streamline procedures for granting mining titles 
and to exempt machinery and equipmen t from duties and taxes for 30 months.42 Table IV.5 shows the 
main changes introduced under the new Code. 
33. The Ministry of Mines, Energy and Water Resources43 draws up mining development policy 
and monitors and controls appli cation of the mining regulations. 
 
                                                      
41 The new Code was approved by the Council of Ministers and is before Parliament for adoption. It 
repeals Laws Nos. 83-003 and 83-004 of 17 May 1983 containing the Mining Code and mining taxation, and 
Decree No. 89-296 of 28 July 1989 defining the conditions and implementing modalities of the Mining Code. 
42 Ministry of Mines, Energy and Water Resources (2003). 
43 Decree No. 96-615 of 31 December 1996. Benin WT/TPR/S/131 
 Page 67 
 
 
Table IV.5 
Types and characteristics of mining permits 
Mining 
authorizations 
and titles Former Code New Code 
Prospection 
authorization 
  
Type A 
exploration permit 
 
  
 
 Type B 
exploration 
permit  
 
Operating permit  
 
  
 
  
Mining 
concession Valid for 2 years, renewable twice for 
periods of 2 years and applicable to large 
areas.  
Covers large areas, valid for 4 years and 
renewable twice for periods of 3 years.  
 
  
 
 Covers a maximum area of 25 km
2, valid 
for 3 years and renewable twice for 
periods of 2 years.  
 
Covers an area of 25 km
2, valid for 5 years 
and renewable 3 times for successive 
periods of 5 years. 
  
 
  
 
Covers large areas, valid for 30 years and renewable twice for periods of 20 years.  
Prospection authorizations for all mining 
titles are granted in decrees adopted by the Council of Ministers. 
 
The proportional royalty, called the “ ad 
valorem ” royalty, ranges from 5 to 
15 per cent of the value of the mining 
production at the mine site. Prospection authorizations are valid for 3 years and renewable 
3 times for successive periods of 2 years.  They are granted by the 
Director of Mining.  
There is one single category of exploration permit and a single 
category of operating permit. An e xploration permit is valid for 
3 years and renewable twice for successive periods of 3 years.  It is 
granted through an Order by the Minister responsible for mining. 
The area covered by an exploration permit ranges between a minimum and a maximum to be determined in the mining 
regulations. 
  
 
  
 
Operating permits are granted ex officio  by means of a decree 
adopted in the Council of Ministers at the proposal of the Minister 
responsible for mining to the holder of an exploration permit who 
has proved the existence of a deposit within the area of his permit. 
 
Operating permits are valid for 20 years and renewable twice for 
successive periods of 10 years.  
 
Mining titles are linked to an agreement defining the conditions under which the exploration, prosp ection and operations are to be 
carried out if deposits are discovere d. The agreement determines the 
rights and obligations of the holder of the mining title and of the 
State. It is signed by the Minister responsible for mining and the holder of the mining title. 
 
Small-scale and semi-industrial operations are regulated as nowadays they represent a new dimension of the mining industry in 
developing countries. Such operations are suitable for small deposits 
which cannot usually bear the cost of industrial operations.  
The holder of an exploration permit is exempt from tax on industrial 
and commercial profits, the business tax and communal taxes.  
Materials, machinery and equipmen t, with the exception of private 
automobiles, imported in connection with an exploration permit enter under the temporary admission regime. 
 
As far as mining operations are concerned, temporary admission of machinery and equipment, with the exception of private 
automobiles, lasts for the period during which the mine is being 
established, which is 30 months.  
The “ ad valorem ” royalty will be fixed in an implementing text. The 
rates will be attractive and aligned with those in effect in the West African region. 
 
The State holds 10 per cent of the shares in the operating company. This holding does not give rise to any financial contribution from the 
State because it represents the count erpart of the wealth distributed 
and the impoverishment of Benin’s subsoil. 
 
Source : Ministry of Mining, Energy and Hydraulic Resources (2003). 
 
 
 WT/TPR/S/131 Trade Policy Review 
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(ii) Energy 
34. Benin’s energy dependence (for electricity, petroleum and all other forms of energy) on 
outside sources is a major constraint on the count ry’s development and a heavy burden on government 
finance as in 2000 total expenditure on importing energy amounted to 4.4 per cent of GDP.44 Between 
the time of the first trade policy review and 2000, total energy consumption increased by 7.2 per cent, 
while between 2000 and 2001 it rose by 4 per cent. 
35. Biomass is by far the most widely consumed source of energy (section (2)(iv)), followed by 
petroleum products and electricity with 31 per cen t and 2 per cent respectively of final energy 
consumption. The structure of energy consumpti on shows that households are the largest consumers 
of energy. In 2001, they accounted for 66 per cent of final energy consumption, followed by transport with 19 per cent and industry with only 3 per cent. 
(a)
 Hydrocarbons 
36. Benin does not currently produce any petroleu m and in 2002 hydrocarbons represented 
approximately 12 per cent of imports (US$60.1 million).45 According to information provided by the 
Beninese authorities, surveys have highlighted the potential of petroleum reserves (estimated to be 
4.58 billion barrels).46 
37. The hydrocarbons sector is governed by the 1988 Petroleum Code. According to the 
authorities, new draft legislation on hydrocarbons (endorsed in December 2003) should shortly be put 
before the Council of Ministers. 
38. The hydrocarbons market has been liberalized since 199647 and is exploited by 15 private 
companies, which share imports, storage and dist ribution of petroleum products with SONACOP, a 
State enterprise that was semi-priva tized in 1999 (Chapter III(2)(viii)). 
39. The selling price of petroleum products is determined by decree (Chapter III(4)(i)).48 It is 
interesting to note that customs duties on petroleu m products amount to 10 per cent, except for lamp 
oil, diesel fuel and heating oil, for which it is 5 pe r cent. Petroleum products are also subject to excise 
duty (Chapter III(2)(iii)(b)).49 
40. In 2000, illegal imports of fuel from Nigeria50 at much lower prices were estimated to amount 
to 18 per cent of total imports of petroleum produc ts. Benin’s consumption of  petroleum products is 
around 500,000 tonnes a year. Illegal imports mean  an enormous loss of revenue for the State.51 
                                                      
44 Ministry of Mines, Energy and Water Resources (2003). 
45 IMF (2003). In 1999 and 2001 hydrocarbons accounted for 11.8 per cent of imports, while in 2000 
the figure was 14.9 per cent. 
46 The Sèmè oil field closed on 31 December 1998 an d produced only 20 per cent of its estimated 
reserves of 100 million barrels.  
47 Decree No. 95-139 of 3 May 1995. 
48 Decree No. 2000-43 of 7 February 2000. 
49 Directive No. 6/2001/CM/UEMOA. 
50 This illegal activity has grown over the past tw o decades, not only as a result of the sharp 
depreciation of the Naira, but also because Nigerian petroleum products are highly subsidized by the 
Government of Nigeria. The main products affected by this unlawful traffic are petroleum, diesel fuel for transport and lamp oil (Ministry of Mine s, Energy and Water Resources (2003)). Benin WT/TPR/S/131 
 Page 69 
 
 
 
(b)  Electricity52 
41. Benin depends on outside sources for over 98 per cent of its current commercial energy 
needs.53 In 2000, 20 per cent of the electricity consumed was generated locally. In 2002, 91 per cent 
of the electricity consumed in Benin came from hydroelectric power stations and 9 per cent from 
thermal stations, with a rate of electrifi cation of 22 per cent at the national level.54 
42. Production and distribution are still a de juris  monopoly of a public institution, the Benin 
Water and Electricity Company (SBEE).55 The latter buys electricity from another State company 
(belonging to Benin and Togo), the Benin Electricity Community (CEB), which imports it. Electricity 
is chiefly imported from Ghana (42.8 per cent in 20 00) and Côte d’Ivoire (32.8 per cent in 2000). 
43. In 2000, Benin supplied “pure” industries  (meaning cement works and breweries)56 with 
electricity at rates that were some 90 per cent lo wer than the rates for s hops, hairdressing salons, 
dressmakers and restaurants (Table IV.6). Electri city rates by type of consumer are shown in 
Table IV.6. 
Table IV.6 
Price of electricity, July 2000 
Sphere of activity Bracket Price /KWh Price/KWh
(in US$ ) 
Shops, hairdressing salons, dressmakers, restaurants 0-40 KWh 
41 KWh and over CFAF 83 
CFAF 88 0.12 
0.13 
Joiners’ and solderers’ workshops, bakeries, etc. All consumption CFAF 73 0.10 
Hotels, cafés and similar 0-5,000 KWh 
5,001 KWh and over CFAF 75 
CFAF 66 0.11 
0.09 
Pure industries (cement works, breweries)a All consumption CFAF 45 0.06 
a At peak hours, a standing premium of CFAF 4,026/KVA (US$6.71)  is paid if there is a partial shutdown or no shutdown. 
Source : Benin Investment Promotion Centre (2000). 
44. The main feature of the electricity sector is the weak organizational structure and the absence 
of regulation. The Government ha s drawn up new draft legislation57 in order to give this sector a 
proper legal instrument. The completion of the proj ect to build a gas pipeline from Nigeria to Ghana 
should allow Benin and other countries (Togo, Côte d’Ivoire and Ghana) to import natural gas from 
Nigeria in order to generate electricity. 
                                                                                                                                                                     
51 The fact that there is no petroleum refinery in Benin encourages the informal marketing of petroleum 
products. 
52 Ministry of Mines, Energy and Water Resources (2002); Ministry of Mines, Energy and Water 
Resources (2003). 
53 Commercial energy is composed of  petroleum products and electricity. 
54 The rate of electrification is less than 5 per cent in rural areas. The authorities estimate losses on the 
network in 2000, 2001 and 2002 to be 14, 17 and 18 per cent respectively. 
55 According to the authorities, the SBEE has been divided into two companies: the Benin Electric 
Power Company (SBEE) and the Benin National Water Company (SONEB). 
56 According to the authorities, the tariff in effect since 2002 does not define this term. The revision of 
the definition is being taken into account by the Ta riff Commission following demands from large customers. 
57 This includes the following: draft revised la w on the Benin-Togo Electricity Code; draft law 
containing the Benin electricity code; draft law on the creation, functions, organization and operation of the 
regulatory authority for the electricity and water sectors in  Benin; draft statutes of the energy control and rural 
electrification board. WT/TPR/S/131 Trade Policy Review 
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(4)  M ANUFACTURING  
45. The manufacturing sector is not very developed in comparison with the primary or tertiary 
sectors; during the period under review, its contributi on to GDP remained relatively stable at some 
8 per cent (Table I.1). Industrial production is co ncentrated mainly on two activities: the textile 
industry (more precisely, activities related to the ginning and processing of cotton, its spinning and 
weaving); and the cement industry. The other branch es of some importance are brewing and the fats 
industry (oil mills and soap works). Small-scale activ ities, the majority of which are informal, provide 
approximately 5 per cent of GDP and employ around 13 per cent of the working population.58 
46. Tariffs are the only trade policy instrument at the border; there do not appear to be any 
restrictions/prohibitions on imports  (except as regards sanitary measures) (Chapter III(2)(iv)). Benin 
applies the WAEMU’s CET as well as supplementary duties (statistical fee and community solidarity 
levy), while approved products of WAEMU origin  enter duty free. The simple average of duties 
actually applied on imports of non-agricultural produc ts (excluding petroleum) has increased slightly 
to 14.2 per cent (13.8 per cent in 1997), while the overall average for all products is 14.6 per cent 
(13.7 per cent in 1997) (Table III.1) . The introduction of the CET has le d to an increase of some 3 per 
cent (average MFN rate actually ap plied). This trend is also reflect ed by HS section in Chart IV.1, 
where it can be seen that textiles, footwear and headgear, base metals, and transport machinery and 
equipment have benefited from an increase in the average level of tariff protection since the first 
review of Benin’s trade policy. Some manufactur es are subject to excise duty (perfumes and 
cosmetics, alcoholic and non-alcoho lic beverages, and cigarettes) a nd a single VAT rate of 18 per cent 
also applies to imports (Chapter III(2)(iii)(c)). 
Textiles and clothing  
 
47. The State continues to have an important role in  this branch of industry, which is so closely 
linked to the cotton subsector, through its enterp rises COTEB (spinning and weaving complex) and 
SITEX (manufacture of unbleached fabrics), whose privatization is planned, and the CBT (Benin 
textiles company). When SOBETEX (factory making printed fabrics) was wholly privatized on 
20 January 1990, 20 per cent of the shares were reserved for nationa l investors (Table III.2); since 
1999 its production and export performance has declined.59 Cotton locally ginned by the State 
enterprise being privatized – SONAPRA (Box IV.1) – is used for spinning, but COTEB is authorized 
to obtain supplies from private ginning plants at freely negotiated prices. 
48. The trade in textiles, clothing and worn clothing is significant, notably as a result of re-
exports to Nigeria. As there is a ban on importing these products into Nigeria, the majority of the 
exports go through informal channels.  This activity , which is important in terms of employment and 
earnings, could disappear rapidly if imports into Nige ria are liberalized, as prev iously happened in the 
case of rice at the time of the first review.60 
                                                      
58 Law No. 098-037 of 22 November 2001 states that the branches of small-scal e activity recognized as 
such are: building; foodstuffs; metals and mechanical co nstruction; stonework; wood and plant fibres; textiles; 
clothing; hides and skins; art and decoration; pottery and ceramics; installation and maintenance and upkeep; 
repair and images; electronics; electricity and refrigeration; hygiene and beauty treatments. 
59 According to SOBETEX, the trend in production in volume terms (metres) from 1999 to 2003 
declined by around 400 per cent, while production in value terms between 1999 and 2002 fell by approximately 
90 per cent. As regards exports between 1998 and 2003, both in value and in volume terms, the decrease is 
around 400 per cent, although strong growth was recorded in 2001. 
60 WTO (1998). Benin WT/TPR/S/131 
 Page 71 
 
 
(5)  S ERVICES  
49. During the period under review, this sector’s c ontribution to GDP remained stable (45 per 
cent, Table I.1), although it only employs 36 per cent of the working population. The major branches of the services sector in terms of share of GDP are:  international trade, transport, tourism, banking and 
financial services. 
50.
 Since the first review, exports (earnings) by co mmercial services (mainly maritime transport, 
individual travel and services provided to enterpri ses) have increased more rapidly than imports 
(payment), essentially due to an increase in t ourism earnings. Nevertheless, between 1997 and 2001, 
exports of services excluding factor income in creased by 26.9 per cent approximately to reach 
US$147.1 million; in 2002; exports of commercial se rvices accounted for 41.9 per cent of total 
exports of goods and services excluding factor in come. Over the same period, imports (mainly 
maritime transport, individual travel, financial servic es and services to enterprises), which in the main 
concerned transport services, increased by 11.3 per cent to reach US$191.9 million 
51. Under the General Agreement on Trade in Serv ices (GATS), banking services relating to 
deposits, loans, payments and transfers, conferen ce services, hotel and restaurant services and 
maritime transport were bound.61 A large number of services have not, however, been the subject of 
any liberalization. The Government did not  participate in the negotiations on basic 
telecommunications or financial services in the WTO under the GATS framework. 
(i) Financial services 
(a)  Banking services 
52. In 2002, eight private commercial banks62 absorbed 91.74 per cent of savings in the formal 
sector.63 The banks have few long-term savings instru ments adapted to investment financing. The 
reliability of the system of legal guarantees does not incite banks to manage risks effectively, 
particularly in the case of small and medium ente rprises (SMEs). Consequent ly, the loans granted are 
at particularly low levels, which restricts the inve stment financing opportunities in Benin. The result 
is an accumulation of liquidity in the banks, where demand deposits in December 2002 were reported 
to exceed CFAF 254 billio n (around US$406 million). 
53. Banking institutions which offer support for SMEs and micro-enterprises are: Crédit 
promotion Bénin ; Credit du Bénin and Equibail  (subsidiary of the Bank of Africa (BOA)). For 
financing in rural areas, Benin has mutual agricultural credit funds64, which collect savings and make 
loans in this sector. 
54. Benin’s banking sector continues to show signs  of recovery and to confirm its generally 
healthy situation by marked improvement in observa nce of prudential standards. All the banks seem 
                                                      
61 WTO documents GATS/SC/11 and GATS/EL/11 of 15 April 1994. 
62 These are: Bank of Africa (BOA), Eco-bank Bénin , Financial Bank, Benin, Banque internationale du 
Bénin , Continental Bank, Diamond-Bank, Société Générale des Banques du Bénin  and  Banque Sahélo-
Saharienne pour l'investissement et le commerce . 
63 In 1998, the banks absorbed 91 per cent; 91.39 per cent in 1999; 94.21 per cent in 2000; and 
93.86 per cent in 2001. 
64 All Benin’s sub-prefectures have a local mutu al agricultural credit f und (CLCAM). These are 
associated at the departmental level through the region al mutual and agricultural credit funds (CRCAM), which 
are themselves grouped together at the national level in the Federation of Savings and Mutual Agricultural Credit Funds (FECECAM). WT/TPR/S/131 Trade Policy Review 
Page 72 
  
to observe prudential standards for capital representa tion, while five respect the solvency, liquidity, 
transformation and capital adequacy ratios. Only three banks, however, observe the risk criterion.65 
55. The banking services sector in Benin is  subject to the WAEMU’s common banking 
regulations and the prudential measures determined by the WAEMU Banking Commission, which 
also has a monitoring role (Chapter I). Applications  for approval must be addressed to the Minister for 
Finance and submitted to the BCEAO, which forwards them to the various relevant structures. After 
the application has been considered, the Banki ng Commission gives its opinion and the Minister 
grants approval. 
56. In 1996, the West African Monetary Union (W AMU) also created a West African Regional 
Stock Market (BRVM), which started operations  on 16 September 1998) and is a new source of 
financing to supplement traditional sources such as bank financing or private investment in the form 
of debt instruments or shares. The Regional Co uncil for Public Savings and Financial Markets 
regulates the BRVM, and is responsible for giving  authorizations and monitoring its operation. The 
Regional Council must authorize the i ssues of shares traded on the BRVM.66 
(b)  Insurance 
57. Since the insurance sector was opened up to  competition in 1992, eight new insurance 
companies67 have been approved by the Ministry of Finan ce. Benin is also party to the Inter-African 
Insurance Market Conference (CIMA)68, created within the franc zone in 1992 and whose 1995 
Insurance Code lays down the fra mework regulations for all land-re lated insurance (maritime, river, 
or aviation insurance are excluded from its scope). 
58. According to the authorities, there is no discrimination between foreign and national 
insurance companies. Nevertheless, according to the Community Regulations (CIMA), foreign 
insurers must provide proof that they are legally es tablished in their country of origin, their accounts 
for the previous three financial years, and propose a natural person as a general agent. 
59. The authorities indicate that the obligation in eff ect at the time of the first trade policy review 
to the effect that importers established in Be nin must insure their imported goods with a State 
enterprise, the Benin National Insurance and Re insurance Company (SONAR), was abolished when 
this company was liquidated. 
(ii) Telecommunications 
60. In 2003, the density of fixed telephone lines  in Benin was around 1 per cent and covered 
80 per cent of the country. The supply of services, other than mobile telephony, is a monopoly of the 
                                                      
65 IMF (2004). 
66 The BRVM is a private company holding a community public service concession established by the 
WAEMU. The majority of its capital is held by commercial operators and States only account for some 
13 per cent. The BRVM’s headquarters are in Abidjan,  Côte d’Ivoire, and in each member State it has a 
National Stock Market Office (ANB), whose tasks are inter alia : (i) to centralize the transmission of orders; 
(ii) to disseminate information; and (iii) to organize local promotion of the market. 
67 These are: Africaine des assurances  (AA), Assurance et réassurance du Golfe de Guinée  (ARGG), 
Fédérale d'assurance  (FEDAS), Colina-Africa-Bénin , Nouvelle société d'assurance du Bénin  (NSAB), 
Générale des assurances du Bénin  (GAB), Société béninoise d'assurance accident  (SOBAC) and Union 
béninoise d'assurance vie  (UBA-VIE). All these are privat e companies and are operating. 
68 The other members are Burkina Faso, Cameroon, Central African Republic, Chad, Comoros, Congo, 
Côte d’Ivoire, Equatorial Guinea, Gabon, Mali, Niger, Senegal and Togo. Benin WT/TPR/S/131 
 Page 73 
 
 
Posts and Telecommunications Board (OPT), a pub lic institution of an i ndustrial and commercial 
nature. 
61. In January 2002, a new organizational and re gulatory framework was drawn up to enhance 
competitiveness in the sector.69 It provides the following: (i) the creation of an environment conducive 
to the entry of private investors; (ii) definition of  the rules of competition applicable to the sector; 
(iii) separation of the postal and communications branches of the Posts and Telecommunications 
Board (OPT); (iv) liberalization of the telecommuni cations market; (v) promotion of universal access 
to telecommunications services; and (vi) opening up of the capital of the traditional 
telecommunications operator to outside participa tion. The telecommunications operator that takes 
over from the traditional operator will be given a tr ansitional exclusive licence whose scope and term 
are fixed by decree by the Council of Ministers, although this monopoly may not extend beyond 31 December 2005, when all telecommunications  networks and servic es will be open to 
competition.
70 Access to universal service is mentioned in a very general way in the legislation.71 
62. The “telecommunications” and “postal” branches have not yet been separated. The budget has 
been drawn up and put into effect separately, however, but there is still a single system of accounting. 
63. In 1999, Benin launched a pub lic invitation to tender and thus initiated the gradual 
liberalization of mobile telephony, which until th en had been provided by the cellular telephone 
network of the OPT, with the participation of  three private companie s (BENINCELL, TELECEL, and 
BBCOM), and one semi-State enterprise (LIBERCOM- OPT). Contracts have been signed for a period 
of 10 years. The network is currently managed by pr ivate companies in partnership with the OPT. In 
December 2003, the number of subscribers to the network was 69,000. 
64. The authorities have indicated that the body res ponsible for regulating the market is not yet 
functioning.72 Until the end of February 2004, it appeared that there was tacit agreement among 
mobile operators to fix their rates at similar leve ls. Since 1 March 2004, however, the Government has 
given effect to a decree providing that communications  tariffs in the mobile network must decrease by 
20 and 40 per cent.73 
(iii) Transport 
(a)  Maritime transport and port services 
65. Ninety per cent of formal foreign trade in goods is by sea. The deep-water port at Cotonou, 
the fifth largest port in the West African subregion74, continues to play an essential role in Benin’s 
development. The port has a subregional vocation and 20 to 25 per cent of its traffic is on behalf of 
other countries, chiefly Niger.75 The Autonomous Port of Cotonou (PAC), a government institution of 
an industrial and commercial nature with civil st atus and financial autono my, is responsible for 
                                                      
69 Ordinance No. 2002-002 of 31 January 2002 containing the basic principles governing the 
telecommunications regime in Benin. 
70 Article 35 of Ordinance No. 2002-002. 
71 According to the authorities, this service is gu aranteed by the OPT while awaiting the effective 
creation of the Telecommunications Regulatory Body created by Ordinance No. 2002-003 of 31 January 2002, 
which should shortly start to function because technically everything is ready. 
72 This body was created under an ordinance dating from the end of 2003 but it is not yet operational. 
73 Posts and Telecommunications Board. 
74 The port of Cotonou comes in fifth place after those in Lagos (Nigeria), Tema (Ghana), Abidjan 
(Côte d’Ivoire) and Dakar (Senegal) – Investment Promotion Centre (2000). 
75 Niger accounts for some 14 per cent and Nigeria 7 per cent (around 400,000 tonnes). WT/TPR/S/131 Trade Policy Review 
Page 74 
  
management and various installation works. Since 1997, the handling sector has been liberalized and 
two private companies have become involved, th e container terminal handling company (SMTC), 
belonging to the Bolloré group, and the Cotonou handling company (COMAN SA), belonging to the Maersk-Sealand group, in addition to th e Benin port handling company (SOBEMAP). 
66.
 The Benin National Dockers’ Council (CNCB)76, which existed before the first trade policy 
review of Benin, looks after the interests of Beni nese dockers. It negotiates freight charges directly 
with shipping companies. The CNCB’s resources  come from annual payments by importers and 
exporters (CFAF 50,000 (US$83)), commissions on the customs value of goods consumed in Benin at 
a rate of 1.8 per thousand, and commissions paid by shipping companies whose ships dock at the port 
of Cotonou at a rate of CFAF 400 (US$0.7) pe r tonne for imports and CFAF 300 (US$0.5) for 
exports, and CFAF 100 (US$0.2) per tonne for liquid and solid cargo in bulk, with no differentiation 
between imports and exports. 
67. At the time of the first trade policy re view, the Benin Maritime Navigation Company 
(COBENAM), a shipping company owned by two States, had a monopoly of traffic rights in Benin.77 
Today, it appears that the COBENAM no longer owns any ships and sells its “rights” to shipping 
companies that make the best offers. Hence, there no longer seems to be any sharing of traffic and 
prices are determined freely. 
68. During the first review of Benin’s trade policy, the slowness of port services was identified as 
one of the major obstacles to increased productivity by Benin’s enterprises. Handling takes on average 
four times longer than in competitor ports such as  those of Lomé (Togo) and Tema (Ghana). The time 
for loading and unloading containers is 10 days, twice the regional average; productivity in handling 
cotton bales is the lowest in the region.78 The port is close to asphyxia with extremely long delays79, 
there is no fluidity of traffic and, combined with lack of investment recently, this could make the port 
an obstacle to national growth. Furthermore, in comparison with its competitors, goods transiting 
through Benin are liable for additional costs (incid ental costs) for land transport because of random 
controls, costly escort services that are not yet pr operly controlled, parts of the road network that are 
not sealed and a number of levies.80 
69. It would appear that the Cotonou port has not been able to take advantage of the crisis in Côte 
d’Ivoire to increase its share of traffic going to Burkina Faso and Mali, even though the ports of Lomé 
and Tema have been saturated since the beginning of 2003, but loaders and forwarding agents have 
obviously preferred to experience long delays in th ese two ports rather than send their cargo through 
Benin.81 
                                                      
76 WTO (1998). 
77 These rights are defined according to the provisions of the United Nations Convention on a Code of 
Conduct for Liner Conferences (the UN CTAD Code), in force since 6 Octobe r 1983, to which Benin acceded on 
27 October 1975. The Code provides for the sharing of liner traffic as follows: 40 per cent for national shipping, 
40 per cent for national shipping of countries partners in  the trade, and 20 per cent open to competition from all 
shipping companies. 
78 UNCTAD (1996). 
79 Delays of over 25 days are common. 
80 IDA (2003). 
81 IDA (2003). Benin WT/TPR/S/131 
 Page 75 
 
 
(b)  Road and rail transport 
70. The road network is estimated to be some 16,325 km, of which 40 per cent is sealed. This 
network takes 80 per cent of the volume of traffic. Rail transport82 is not very developed and only 
functions over a stretch of 438 km. Although nominal  capacity is 600,000 tonnes, only 340,084 tonnes 
of goods were transported in 199 8. The obsolescence of the infrastru cture and the rolling stock, the 
poor management of the network and prohibitive transport costs are the major problems in this area.83 
Furthermore the Organisation Commune Bénin–Niger des chemins de fer , a two-State body set up to 
operate the rail network, is no longe r in a position to ensure the effective transport of goods to Niger, 
which regularly leads to bottlenecks in goods in the port.84 
(c)  Air transport 
71. Benin only has one international-class air port in Cotonou; it does not yet have any 
refrigeration facilities, which is a constraint on th e export of perishable goods such as pineapples. 
Some dozen foreign airlines fly to Cotonou. 
72. Benin nevertheless signed the 1988 Ya moussoukro Declaration and Memorandum 
liberalizing African airspace in favour of African airlines.85 In 1999, a new Yamoussoukro Initiative86 
set out guidelines for the gradual application of  an “open skies” agreement with the aim, inter alia , of 
liberalizing passenger and cargo transport, granting the five freedoms of the air, eliminating restrictions on capacity, and intr oducing rules for competition and non-discrimination requirements. 
The airspace of the 11 countries participating in Air Afrique was already liberalized at the end of the 
1980s. 
(iv)
 Tourism 
73. Benin has numerous tourist attractions, few of which are currently being exploited. Tourism 
nevertheless represents the second source of foreign currency earnings after cotton.87 At the time of 
the first trade policy review, the Investment Code di d not allow direct investment in the hotel sector, 
which was fully owned by the State; a 1992 la w restricted privatization in the sector.88 Direct 
investment has, however, been bound by Benin under the GATS. 
74. In its Schedule of Specific Commitments under th e GATS, Benin undertook to maintain hotel 
industry and catering services open to foreign comme rcial presence. The entry and temporary stay of 
directors, senior executives and specialists tran sferred by a company establishing itself in these 
sectors in Benin were also bound. Travel agenci es established outside Be nin (cross-border supply) 
must work through a Beninese or foreign agency  established in the country. The granting of the 
licence required to open an agency is based on probity  and the professional criteria laid down in the 
regulations in force in Benin but is not, according to the authorities, subject to nationality conditions. 
                                                      
82 Investment projects estimated to amount to CFAF 14,885 million intended to extend the 
infrastructure and increase the volume of materials and equipment. 
83 Ministry of State responsible for coordinating government action, planning, development and 
employment promotion (2001). 
84 IDA (2003). 
85 The Declaration of Yamoussoukro (Côte d’Ivoire) was signed in 1988. Its aim was to integrate and 
liberalize the African aviation market over a period of eight years. However, its objectives have not been 
reached. Information available on line at http://www.i uneca.org/itca/yamoussoukro  [27 November 2003]. 
86 Twenty-three countries, including Benin, signed the Protocol of Understanding. 
87 Ministry of Planning, Forecasting and Development (2002). 
88 WTO (1998). Benin WT/TPR/S/131 
 Page 77 
 
 
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