Earlier this summer, the Millennium Challenge Corporation (MCC) announced a $70 million commitment to bring in one billion dollars in public-private investments for developing countries. This plan will take place over the next five years, and the grant money given to Africa is expected to generate $750 million in investments from the private sector. The MCC is heavily investing in the continent’s energy sector, and the ultimate goal is to reduce poverty, increase economic growth, and attract more investors to countries such as Malawi, Benin, Lesotho, Liberia, Tanzania, Ghana, and Morocco. According to Kyeh Kim, the Deputy Vice-President of Compact Operations for the MCC, “these are countries that have a good track record in terms of good governance and democracy, have made strong efforts toward anti-corruption and are investing in their social sectors: education and health, as well as creating an enabling business environment through things like good fiscal policy, trade policy.”
In Benin in particular, Kim stated that the MCC is “working very hard to modernize their policies to allow for more private sector investment and to strengthen the utility companies so that they perform better for their customers and are also financially viable.” Ambassador Omar Arouna from the Republic of Benin has also described a multitude of benefits to doing business in the country. Although there may be a general language barrier due to the native language being French, most business is conducted using the English language. According to Arouna, it is possible to set up a business in the country in only an hour, and due to clear tax laws, it is also possible to repatriate almost all income earned in the country. A local business partner is also not necessary to start a business in the country.
In August 2015, the first of a flurry of government tenders will reach Benin. Arouna explains that Benin will spend the awarded $400 million dollars to help produce, generate, and distribute power throughout the country since there is a growing need there. The two main types of energy that having growing opportunities in the country are hydropower and biomass, but Arouna also states that since there are now policies or procedures in place for the energy industry, there is also the necessity for well-seasoned consulting firms to bring their expertise to Benin. Although Benin is a small country, it has a big footprint and is a gateway to doing business in other African countries, where most business growth is currently occurring. And despite the size of the large tenders, U.S. companies would still be able to successfully compete, seeing as the business environment is best suited for small and mid-sized companies.
To learn further information regarding the Benin business environment, please view the U.S. Commercial Service’s video on Doing Business with Benin, West Africa, and also browse through the official website for the Benin Embassy to the United States.