The telecom market in Benin is severely restricted by the poor condition of the country’s fixed-line infrastructure. The use of fixed-line voice and internet services is low, and little revenue is derived from these sectors. Mobile networks account for almost all internet connections, and also carry most voice traffic. As such, it is this sector which is attracting most investment among operators. The fixed-line monopoly operator has also expanded its fixed-wireless and DSL-based broadband services in recent years, extending its national fibre backbone and international fibre connections.
The free market economy of Benin has grown consecutively for three years, but its close trade links to Nigeria expose Benin to risks from volatile commodity prices. Cotton is a key export commodity; high prices supported export earnings, but prices have fallen. Inflation has subsided and remain just 1% over the past several years. However, private foreign direct investment is small, and foreign aid accounts for the majority of investment in infrastructure projects.
Benin’s 2001 privatization policy continues in telecommunications, water, electricity, and agriculture. Benin has appealed for international assistance to mitigate piracy against commercial shipping in its territory. The Port of Cotonou is the largest component of Benin’s economy with revenues projected to account for more than 40% of Benin’s national budget.
Realizing its economic potential requires further efforts to infrastructure upgrades, stemming corruption, and expanding access to foreign markets in Nigeria and neighboring landlocked countries. In order to raise growth, Benin plans to attract more foreign investment, place more emphasis on tourism, facilitate the development of new food processing systems and agricultural products, encourage new information and communication technology, and establish Independent Power Producers (IPP).