{
  "title": "Benin: Harnessing the Power of Economic Diversification",
  "publication": "IMF News, December 12, 2017",
  "sourceUrl": "https://www.imf.org/en/news/articles/2017/12/11/sp121117-md-benin-speech",
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  "summary": "b) Diversification Is Key - IMF analysis finding: - A small increase in export diversification—roughly the difference between Senegal and Thailand—can lead to a one percentage point increase in per capita GDP growth. - Country examples of successful shifts: - Rwanda: shift from basic agriculture to ",
  "authors": [
    "Christine Lagarde"
  ],
  "publishDate": "2017-12-12",
  "sections": [
    {
      "heading": "I. Introduction and Theme",
      "content": "- Economic diversification framed as building a more complex, more resilient economic “fabric” that benefits families and communities.\n- Diversification reduces vulnerability to sector-specific shocks that can cause unemployment, falling wages, lower revenue, and rising debt.\n- Diversification requires:\n  - Entrepreneurs launching new ventures in promising areas.\n  - Workers upgrading skills for higher-productivity firms.\n  - Policymakers and community leaders creating the right environment.\n- IMF supports country-specific diversification efforts and identifies common policy threads that increase chances of success."
    },
    {
      "heading": "II. Boosting Economic Diversification in Sub-Saharan Africa",
      "content": "a) Transitions and Challenges\n- Progress over the past generation due to improved policies and institutions.\n- Select regional outcomes and statistics:\n  - Over the past 25 years, life expectancy has increased by a fifth.\n  - Infant and maternal mortality rates have halved.\n  - Primary school enrolment is up to 80 percent.\n  - This year, 12 of 45 countries in sub Saharan Africa—home to about 400 million people—are expected to see negative per capita income growth.\n  - By 2030, half of the annual increase in the global working age population is expected to come from sub-Saharan Africa.\n- Policy focus needed on job creation and skill development to capture a potential demographic dividend.\n\nb) Diversification Is Key\n- IMF analysis finding:\n  - A small increase in export diversification—roughly the difference between Senegal and Thailand—can lead to a one percentage point increase in per capita GDP growth.\n- Country examples of successful shifts:\n  - Rwanda: shift from basic agriculture to higher-value activity, especially services.\n  - Botswana: expanded along the diamond value chain into trading, cutting, polishing, and retailing.\n  - Mauritius: moved from single-crop farming in the 1960s to tourism, manufacturing, and financial services.\n- Common policy threads that support diversification:\n  - Macroeconomic stability.\n  - Access to credit and a sound business environment.\n  - Quality infrastructure.\n    - African Development Bank estimate: $93 billion annually over the medium term for Africa’s infrastructure financing requirements.\n  - Openness and trade integration.\n  - Foreign direct investment for technology transfer, skills development, and competition.\n  - Lower income inequality and higher gender equality.\n    - IMF staff research: increasing gender equality can lift a country from the lowest rank for export diversification closer to the median.\n    - Quotation: “Our booming economies in Africa need more female engineers, teachers and doctors to prosper and sustain growth.” — Angelique Kidjo\n\nc) IMF as Partner\n- IMF engagement modalities:\n  - Financial assistance.\n  - Analysis and policy advice.\n  - Capacity development for economic management.\n- Regional emphasis:\n  - Sub-Saharan Africa is the largest recipient of IMF capacity development efforts.\n- Example policy linkages:\n  - Strengthening revenue collection to finance infrastructure, education, training, and research and development.\n  - Support for the Compact with Africa (a joint initiative between the G20 and seven African nations, including Benin) to boost private investment and create jobs.\n- IMF membership scope: 189 member countries."
    },
    {
      "heading": "III. Harnessing Economic Diversification in Benin",
      "content": "- Benin strengths and outlook:\n  - Political stability and reform orientation.\n  - Growth is expected to accelerate this year to 5.5 percent, and is expected to remain strong over the medium term.\n- Structural challenge:\n  - Agriculture employs about 70 percent of Benin’s workforce.\n- Government diversification priorities:\n  - Transform agricultural sector to focus on high-value-added crops and develop food processing.\n  - Unlock tourism potential as a new engine of growth and employment.\n- Major policy threads recommended/underway:\n  - Macroeconomic stability:\n    - IMF Executive Board approved a three-year arrangement totaling $150 million under the Extended Credit Facility to reduce the fiscal deficit, strengthen revenue collection, and support diversification.\n    - Capacity building focus: tax policy, revenue administration, and public financial management.\n  - Boosting infrastructure investment:\n    - Priorities: reliable electricity supply, upgraded road networks, a new international airport, and modernization of the Port of Cotonou.\n    - Financing: higher public and private investment, including through the Compact with Africa.\n    - Strengthening revenue collection to scale up public investment while maintaining sustainable debt.\n    - Public investment governance: estimated potential to increase investment efficiency by 55 percent on average with the same amount of investment.\n  - Improving the business environment:\n    - Cut red tape and boost transparency in public administration.\n    - Combat corruption to restore investor confidence; private sector responsibility emphasized as well.\n    - Regulatory strengthening against money laundering and recommendation to implement an effective asset declaration regime.\n    - Fighting corruption characterized as a multi-year, multi-generational struggle.\n  - Promoting more inclusive growth:\n    - Inequality drivers: high informality and low agricultural productivity.\n    - Policy measures: strengthen land tenure, boost irrigation, foster rural food security.\n    - Increase fiscal transfers to disadvantaged areas and adopt cost-effective safety nets such as e-vouchers and mobile transfers.\n    - Investment in health and education to raise worker productivity.\n    - Gender empowerment:\n      - Benin ranks 7th out of 144 countries in a sub-ranking of female labor force participation in the World Economic Forum’s Gender Gap Index.\n      - Overall WEF Gender Gap index ranking: 116 (out of 144) due to very low rankings in education, health & political empowerment.\n      - Priority: close the gender gap in education so women can access secondary education and universities and move into higher-paying formal sectors."
    },
    {
      "heading": "IV. Conclusion",
      "content": "- Closing message: actions taken today will be “etched in history” and matter for future generations.\n- Call to action: work together as partners to weave a better economic fabric that benefits all.\n\nBy Christine Lagarde, IMF Managing Director; Chamber of Commerce, Cotonou, December 12, 2017 — IMF Communications Department\n\n---\n\n\n References\n\n- Christine Lagarde\n- Benin and the IMF\n- The IMF and Good Governance -- A Factsheet\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/12/11/sp121117-md-benin-speech"
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    "Authors: Christine Lagarde",
    "Published: December 12, 2017",
    "Economic diversification framed as building a more complex, more resilient economic “fabric” that benefits families and communities.",
    "Diversification reduces vulnerability to sector-specific shocks that can cause unemployment, falling wages, lower revenue, and rising debt.",
    "Diversification requires:",
    "IMF supports country-specific diversification efforts and identifies common policy threads that increase chances of success.",
    "Progress over the past generation due to improved policies and institutions.",
    "Select regional outcomes and statistics:",
    "Policy focus needed on job creation and skill development to capture a potential demographic dividend.",
    "IMF analysis finding:",
    "Country examples of successful shifts:",
    "Common policy threads that support diversification:",
    "IMF engagement modalities:",
    "Regional emphasis:",
    "Example policy linkages:",
    "IMF membership scope: 189 member countries.",
    "Benin strengths and outlook:",
    "Structural challenge:",
    "Government diversification priorities:",
    "Major policy threads recommended/underway:",
    "Closing message: actions taken today will be “etched in history” and matter for future generations.",
    "Call to action: work together as partners to weave a better economic fabric that benefits all.",
    "[Christine Lagarde](https://www.imf.org/en/About/senior-officials/Bios/christine-lagarde)",
    "[Benin and the IMF](http://www.imf.org/external/country/BEN/index.htm)",
    "[The IMF and Good Governance -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/the-imf-and-good-governance)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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