Global Journal of Human Social Science, E: Economics, Volume 23 Issue 3

revenues (CAPOD 2000), 85% of export revenues and 77% (1999) of total exports. The desire to increase exports and gradually reduce the economy’s vulnerability to external shocks has led Benin to choose to diversify the economy by promoting other promising sectors such as cassava, maize, pineapple, rice, oil palm, cashew nuts and pig farming. Although the main agricultural export products remains cotton, followed by food crops, tobacco and oils, a slight trend towards diversification of agricultural exports seems to be underway, as the share of products other than cotton has gradually increased from 11% in 1996 to 18% in 1999. According to the authorities, this trend is due more to the downward trend in world cotton costs. This will have a considerable impact on the country’s economic performance. (Operational Strategic Plan, July 2001.) Indeed, Benin’s economic growth is driven by exports of primary products of agricultural origin (cotton, cashew nuts, maize, etc.) and mining (cement, wood), whose revenues are highly dependent on exchange rate instability, climatic hazards, external demand and their world prices, which make growth prospects uncertain. Given the important role that exports play in Benin’s economy, the question that arises is whether exports have contributed to its long-term economic growth? And whether there is a causal link between economic growth and exports. With the new statistics that focus on the promotion of economic growth, it is necessary to rethink the role and place of exports in the Beninese economy, in order to channel and accelerate the expected positive effects and the measures to be taken to cope with the shocks that the Beninese economy is experiencing. Our paper is organised as follows. Section 1 deals with the evolution of the economic growth rate and exports in Benin, sections 2 and 3 with the literature review and methodology. The conclusion is given in section 4. I. R ecent T rends in E conomic G rowth and E xports in B enin Benin’s growth improved in 2021 to reach 7.0% compared with 3.8% in 2020. On the supply side, growth is the result of the good performance of the primary sector (+3.9% after 2% growth in 2020), benefiting from the positive effects of reforms that have increased yields and improved governance in the agricultural sector; and, on the other hand, the tertiary sector, which grew by 7.2% in 2021, compared with an expansion of 4.9% in 2020, due to the increase in port traffic, the opening of Nigeria’s borders and better governance of the port of Cotonou. On the demand side, growth comes from a 17% increase in investment, with the continuation of a counter-cyclical fiscal policy. Inflation has fallen to 1.7% in 2021 due to improved food supply (African Economic Outlook (AEO) 2022). However, the budget deficit widened in 2021 to 6.1% of GDP, financed in part by the allocation of DtS 118.6 million for Benin, with the remainder of the amount used to finance the 2022 budget deficit. Public debt stands at 47.2% of GDP in 2021 compared to 46.1% in 2020, but the risk of debt distress remains moderate. The current account deficit is estimated to have doubled in 2021, reaching 3.7% of GDP, due to a 64.5% decline in public transfers; foreign exchange reserves cover 5.9 months of imports in 2021. The soundness of the financial system has been strengthened with the rate of outstanding loans falling to 14.8% in September 2021 from 17% in September 2020. The poverty rate was estimated at 38.5% in 2019 and unemployment at 2.4%, with a high level of underemployment (72.9%) (African Economic Outlook (AEO) 2022). Growth is expected to reach 6.1% in 2022 and 6.4% in 2023. These forecasts are based on governance reforms in the agricultural sector, as well as improvements in public financial management and the business climate. The increase in food supply is expected to allow inflation to continue to decline to about 2.8% in 2023. The budget deficit is expected to narrow to 4.3% of GDP in 2022 and 3.7% in 2023, but these figures remain above the WAEMU criterion of 3% of GDP. After rising to 48.9% of GDP in 2022, public debt is projected to decline to 46.3% in 2023, thanks to robust growth and better debt structuring over this period. The current account deficit is projected to widen to 5.4% of GDP in 2022 before narrowing to 4.6% in 2023, the latter year due to a reduction in the trade balance. Foreign exchange reserves are expected to increase to an average of 6 months of import cover in 2022-23. The main risks are the resurgence of the health crisis, fluctuations in cotton and oil prices, the impacts of the Ukrainian crisis, bad weather and deteriorating security in the northern regions (African Economic Outlook (AEO) 2022). Benin is vulnerable to climate change, which manifests itself in drought, deforestation, land degradation and flooding. The Bank’s 2021 Country Policy and Institutional Assessment places Benin’s environmental policies and regulations at 4 in 2021. The socio-economic effects of climate change could, by 2030 and 2050, decrease maize yields by 21.6% and 28.8% respectively, and cotton yields by 0.9% and 6.3%. GHG (Greenhouse Gas) were estimated at 17.3Mt CO2e, or 1.5t CO2e per capita, in 2018. Benin has adopted a National Climate Change Management Policy 2020-2030 and prepared its NDC for 2030. It has implemented a National Renewable Energy Policy 2020- 2030. A 25 MW solar photovoltaic plant, expandable to 50 MW, is expected to be operational by April 2022 and produce 35 GWh of electricity, reducing the country’s CO2 emissions by 23,000 tonnes over 25 years. Finally, Benin has created the National Environment and Climate Fund, worth CFA F 1.2 billion (African Economic Outlook (AEO) 2022). © 2023 Global Journals Volume XXIII Issue III Version I 2 Global Journal of Human Social Science - Year 2023 ( )E Analysis of Agricultural Exports and Economic Growth in Benin