Benin Corruption Report

Corruption in the police is a very high risk in Benin, and crime is a serious problem. Police officials engage in corruption without consequence; extortion at roadblocks is a noteworthy problem (BTI 2016; HRR 2015). As many as 80% of citizens do not report a crime to the police, primarily because of police performance-related issues (Afrobarometer, Nov. 2015). Companies place more trust in the police services than citizens but report significant business costs due to crime and violence (GCR 2015-2016).

Corruption is a high risk for businesses acquiring public licenses or permits. Businesses routinely pay bribes or other irregular payments to obtain utilities (GCR 2015-2016). The administration of public services is inefficient in rural regions; for instance, electricity service availability is twice as high in urban areas than in rural areas (BTI 2016; Afrobarometer, Feb. 2015). Furthermore, the process of obtaining electricity in Benin counts among the most expensive in the world (DB 2016). Around one-third of Beninese respondents report having paid a bribe or providing a favor to obtain a public service in the past 12 months (TI, Dec. 2015).

There is a very high risk of encountering corruption in the Beninese tax administration. Annual tax payments often involve irregular payments, and the vast majority of surveyed Beninese believe tax officials are involved in corruption (GCR 2015-2016; Afrobarometer, Mar. 2014). The total business tax rate is 63 percent (DB 2016).

There is a very high risk of corruption when interacting with Benin’s customs authorities: Irregular payments are common when importing and exporting goods (GETR 2014). Overall, there is a lack of transparency at the border, and the clearance processes are not very efficient (GETR 2014). Poor infrastructure (e.g., at the port of Cotonou) is also problematic for traders (BTI 2016). Nevertheless, importing and exporting takes less time in Benin than it does elsewhere in the Sub-Saharan Africa region (DB 2016).

Suspected traffickers and smugglers reportedly evade bribe payments by using motorcycles and taking backstreets and bush paths between Nigeria and Benin (All Africa, Jan. 2016). Travelers are often defrauded by immigration officers, so many choose to avoid the main control posts and pay bribes of a smaller value to other officials (All Africa, Jan. 2016). Immigration officers depend on such bribes as they are poorly remunerated; additional pressure comes from their superiors, who often expect returns from the money made at checkpoints (All Africa, Jan. 2016).

Corruption in public procurement (especially embezzlement) is a very high risk in Benin. The diversion of funds is highly problematic and deters foreign investment (BTI 2016). Corruption is pervasive throughout the political system and affects the distribution of state resources, which often go to patronage networks (BTI 2016). Correspondingly, businesses cite favoritism to well-connected firms and individuals when officials decide upon policies or contracts (GCR 2015-2016). They also report that irregular payments and bribes are commonplace in connection with the awarding of public contracts (GCR 2015-2016). Oftentimes, contracts are awarded based on government solicitations to shortlisted companies with industry-specific expertise often identified during commercial activities conducted in overseas markets (ICS 2016). Foreign companies note unfair treatment, bias, and improper practices in the process of selecting companies (ICS 2016).

Judicial prosecutions have not curtailed embezzlement among officeholders and public administrators (BTI 2016). In a widely publicized case in 2015, an audit revealed that EUR 4 million disappeared from Dutch development aid designated for a clean drinking water program; as a consequence, cooperation with Benin was suspended (Gov of NL, May 2015).

Companies are strongly recommended to use a specialized due diligence tool on public procurement to mitigate corruption risks associated with public procurement in Benin.