COUNTRY HIGHLIGHTS BENIN 2016 The World Bank Group conducted face-to-face interviews with top managers and business owners of 150 enterprises in Benin from July 2016 through October 2016. The Enterprise Survey (ES) sample is representative of Benin’s formal private sector. The ES covers several aspects of business environment along with measures of firm performance. Below are the main highlights from the survey. Firms in Benin perform worse than regional comparators in both sales and employment growth 20 Between 2013 and 2015, Benin experienced negative real annual sales growth (-6.2%), in 15 contrast to Sub-Saharan African countries for which ES data are available (AFR30) that, on 10 Percentage average, experienced sluggish but still positive 5 annual sales growth (0.6%). Benin in 2009 performed remarkably better, with an annual sales 0 growth rate of 16%. Similarly, despite being Real annual sales growth (%) Annual employment growth (%) 2016 BENIN ENTERPRISE SURVEY -5 positive, the annual employment growth rate for Benin in 2016 is also significantly lower than in 2009 -10 (2.3% in 2016 compared to 12.2% in 2009) and Benin2016 Benin2009 AFR30 underperforms the regional average of 6.3%. Firms experience lower levels of corruption compared to 2009 30 20 Benin firms experienced lower levels of corruption in 2016 compared to 2009. In 2016, 12% of public 15 transactions were reported to be accompanied with 20 Percentage Percentage a request of a gift or informal payment (bribery 10 depth). This is less than half the figure of 2009 10 (27%) and below the regional average of 17%. 5 Interestingly, medium sized firms (20–99 employees) are more likely to experience a request 0 0 of a gift or informal payment than small or large Bribery depth (% of public Bribery depth (% of public transactions where a gift or informal transactions where a gift or firms. While bribery depth is 18% for medium sized payment was requested) informal payment was requested) firms it is only 7% and 4% for small (5–20 Benin2016 Benin2009 AFR30 Small(5-20) Medium(20-99) employees) and large (more than 100 employees) Large(100+) firms, respectively. The percentage of firms obtaining bank credit has decreased since 2009 60 80 The percentage of firms that are using bank credit has fallen by almost 50% since 2009. The availability 60 of credit enables firms to fund projects that 40 otherwise would be constrained by each firm’s Percentage Percentage limited pool of funds. In 2016 only 24% of firms 40 have a bank loan or line of credit compared to 46% 20 in 2009. However, this figure is comparable to the 20 regional average of 22%. Access to credit varies by firm size. While 60% of large firms have a bank loan 0 0 Percent of firms with a bank Percent of firms with a bank or line of credit only 16% of small and 16% of loan/line of credit loan/line of credit medium size firms obtained their credit from a bank. Small(5-20) Medium(20-99) Benin2016 Benin2009 AFR30 Large(100+) Significantly more firms are exporting compared to 2009 30 20 The percentage of firms exporting directly has increased more than five-fold between 2009 and 2016. In 2006, 21% of firms in Benin directly 15 engaged in international trade compared to 4% in 20 Percentage 2009, and more than double the regional average of Days 10 10%. Efficient customs procedures enable businesses to directly export goods while delays in 10 5 clearing customs create additional unanticipated costs to the firm. In 2016, it takes twice as long to 0 clear direct exports through customs compared 2009 0 Days to clear direct exports Percent of firms exporting directly (18 days compared to 7 days); longer than the (at least 1% of sales) through customs regional average of 10 days. Benin2016 Benin2009 AFR30 Electricity supply has significantly deteriorated since 2009 30 80 The supply of electricity to firms in Benin has significantly deteriorated since 2009 and is worse than the regional average. Efficiency in private sector 60 2016 BENIN ENTERPRISE SURVEY 20 operations requires a reliable supply of electricity. In Percentage Number 2016, firms experienced approximately 28 electrical 40 outages in a typical month, compared to 5 outages in 2009 and 9 outages per month in regional 10 20 comparators. This deterioration in electricity supply is also reflected in the increased percentage of firms that own or share generators. Sixty percent of firms 0 0 Number of electrical outages in a Percent of firms owning or in Benin indicate they own or share a generator, more typical month sharing a generator than in 2009 (42%) and above the average for the Benin2016 Benin2009 AFR30 regional comparators (52%). Firms consider access to finance as the biggest business environment obstacle Among 15 areas of the business environment, 32% Access to finance of firms in Benin indicated access to finance as the Electricity Informal competitors biggest obstacle to their daily operations. This is Tax administration consistent with the firms’ experience presented Tax rates above which indicates that access to bank credit has Customs & trade regulations deteriorated since 2009. Electricity is ranked second Corruption Transport (cited by 19% of firms) and informal competitors is Political instability ranked 3rd by 14% of firms. There has not been much Crime, theft and disorder shifts in the top obstacles identified by firms over Poorly educated workers Labor regulations time as the top obstacles in 2016 were similarly Benin2016 Access to land ranked in 2009; further, compared to 2009, a larger Courts Benin2009 proportion of businesses view the three most cited Licensing and permits obstacles – finance, electricity, and informality - as 0% 10% 20% 30% 40% impediments to the business environment. Percentage of firms The Enterprise Analysis Unit is a joint World Bank and IFC team of economists, survey experts specialized in private sector development. Surveys implemented by the team reveal what businesses and firms experience across the world by interviewing representative samples of the formal, non-agricultural, non-extractive, private sector with 5 employees or more. The resulting globally comparable firm-level data is used to construct business environment indicators and measure firm performance. The findings and recommendations help policy makers identify, prioritize, and implement policy reforms that support efficient private economic activity. For more information on the survey visit http://www.enterprisesurveys.org Generated using Enterprise Survey data as of September 11, 2017