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English Versions of This Report Report No. 97242-BJ The Republic of Benin Public Disclosure Authorized Diagnostic Trade Integration Study (DTIS) Update: From rents to competitiveness Final report – Mai 2015 Public Disclosure Authorized Public Disclosure Authorized Trade and Competitiveness Global Practice Africa Region Public Disclosure Authorized Document of the World Bank Contents Acknowledgements .............................................................................................................................. x Executive Summary ............................................................................................................................ xi Action matrix ................................................................................................................................... xxv Trade ............................................................................................................................................ xxv Trade facilitation ........................................................................................................................ xxvii Services ........................................................................................................................................ xxx Agriculture ................................................................................................................................. xxxii Chapter 1: Eight years on: Selective progress ..................................................................................... 1 1.1 Introduction ................................................................................................................................ 1 1.2 Background: A slow-growing, low-income economy ............................................................... 1 1.2.1 Macroeconomic management has remained prudent in a turbulent period ........................ 2 1.2.2 But structural competitiveness remains weak ..................................................................... 3 1.2.3 Poverty and vulnerability remain prevalent ........................................................................ 6 1.3 DTIS implementation: limited progress on an ambitious agenda .............................................. 7 1.3.1 Mainstreaming trade in Benin’s development strategy ...................................................... 7 1.3.2 Assessing impact: Broad outcome indicators ..................................................................... 8 1.3.2 Action-matrix implementation .......................................................................................... 13 1.3.3 A new approach aligned with the government’s priorities ............................................... 14 Chapter 2: Harnessing trade policy for competitiveness ................................................................... 17 2.1 Introduction .............................................................................................................................. 17 2.2 A trade performance that largely reflects the cotton sector’s crisis ......................................... 18 2.2.1 Formal trade ...................................................................................................................... 18 2.2.2 Informal trade.................................................................................................................... 21 2.2.3 Regional trade ................................................................................................................... 23 2.3 Trade policy: Update, scenarios and options for the future ..................................................... 25 2.3.1 A tariff environment in transition ..................................................................................... 25 2.3.2 Non-tariff measures .......................................................................................................... 32 2.3.2 Export & investment promotion ....................................................................................... 36 2.4 Looking ahead .......................................................................................................................... 38 Chapter 3: Trade facilitation .............................................................................................................. 40 3.1 Transport and logistics in Benin .............................................................................................. 40 3.1.1 Regional context ............................................................................................................... 41 3.1.2 Traffic volumes ................................................................................................................. 42 ii 3.1.3 Transport infrastructure and logistics services in Benin ................................................... 44 3.1.4 Transport costs and prices ................................................................................................. 51 3.2 Modernizing customs to strengthen Benin’s regional competitiveness ................................... 53 3.2.1 The importance of customs modernization in Benin ........................................................ 53 3.2.2 Current performances of customs in Benin ...................................................................... 54 3.2.3 Main strengths and weaknesses of Beninese customs ...................................................... 59 3.2.4 Benin’s Customs modernization efforts............................................................................ 60 3.2.5 Moving forward with customs modernization .................................................................. 62 3.2.6 Looking ahead ................................................................................................................... 65 Chapter 4: Diversification through services ...................................................................................... 67 4.1 The role of services and services trade in the Benin economy ................................................ 67 4.1.1 Services value added ......................................................................................................... 67 4.1.2 Services trade performance ............................................................................................... 67 4.2 The state of services trade integration in Benin ....................................................................... 73 4.2.1 Openness and multilateral commitments .......................................................................... 73 4.2.2 North-South integration .................................................................................................... 74 4.2.3 South-South integration .................................................................................................... 76 4.3 Looking ahead: Promoting services activities in Benin ........................................................... 79 4.3.1 Cross-cutting constraints ................................................................................................... 79 4.3.2 Sector-specific issues ........................................................................................................ 82 Chapter 5: Agriculture ....................................................................................................................... 87 5.1 Why agriculture matters for Benin .......................................................................................... 87 5.2 Cotton ....................................................................................................................................... 88 5.2.1 Developments since the DTIS .......................................................................................... 89 5.2.2 The "transitional" season of 2012/2013 ............................................................................ 90 5.2.3 Looking ahead ................................................................................................................... 91 5.3 Non-traditional sectors ............................................................................................................. 93 5.3.1 Cashew .............................................................................................................................. 93 5.3.2 Pineapple ......................................................................................................................... 102 5.3.3 Shea ................................................................................................................................. 106 5.4 Cross-cutting export barriers .................................................................................................. 110 5.4.1. Agricultural inputs ......................................................................................................... 110 5.4.2 Quality control ................................................................................................................ 111 5.4.3. Metrology and packaging .............................................................................................. 113 iii 5.5 Looking ahead ........................................................................................................................ 113 5.5.1. Institutions for the development of agro-food chains .................................................... 114 5.5.2. Strengthening the capacity of stakeholders and promoting products ............................ 115 5.5.3. Investing
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