The World Bank's fourth edition of the Benin Economic Outlook report highlights a paradox in Benin's economic growth. Despite sustained macroeconomic performance, the country struggles to generate sufficient formal and better-paying jobs. The report, titled "Accelerating Benin's Structural Transformation for More and Better Jobs: The Role of the Electricity Sector," analyzes the country's economic performance and identifies levers to promote job creation.
Benin's economic growth has been sustained, with a growth rate of 8.1% in 2025, after an average of 7.1% between 2021 and 2025. The budget deficit stood at 2.7% of GDP, below the 3% ceiling set by the West African Economic and Monetary Union (UEMOA). Inflation remained low at 1.1%. These performances reflect the solidity of the country's economic fundamentals, according to the World Bank. However, this growth has not yet translated into stable and well-paying jobs.
In 2022, 96.3% of workers were in the informal sector, and eight out of ten jobs created were in the form of self-employment. In 2024, only 19.8% of workers held salaried jobs, with this proportion being even lower among young people, at 9%. This situation keeps a large part of the active population in low-productivity service activities with limited prospects for income improvement.
The report emphasizes the energy constraints that weigh on businesses. Nearly one Beninese company in two considers access to electricity as a significant obstacle to its activities. Additionally, 86.1% of companies report experiencing power outages. These difficulties are linked to the aging of infrastructure, network losses, and supply constraints.
In 2024, network losses reached 24.7%, while about half of the transmission lines and substations were over 25 years old. The gas shortages also force the country to rely more heavily on heavy fuel oil, an expensive energy source. Improving energy supply is essential for the competitiveness of companies and job creation, according to Karine Bachongy, Resident Representative of the World Bank Group in Benin.
The World Bank report emphasizes that the implementation of the Mission 300 initiative could contribute to generating nearly 159,000 additional jobs of better quality. The bank reaffirms its availability to accompany the government in mobilizing the necessary public and private financing.
The Beninese government has inscribed the report's recommendations into its economic ambitions for the next seven years. The government's program aims to "intensify well-being for all and everywhere" on the national territory. The goal is to reduce disparities between territories by promoting the emergence of development centers integrating industry, tourism, innovation, and education.
Key points
- Improving access to electricity is crucial for job creation in Benin.
- The country's economic growth has not translated into quality jobs, with most workers in the informal sector.
- The implementation of the Mission 300 initiative could generate nearly 159,000 additional jobs of better quality.
