- Risk key
- MODERATELY LOW
- MODERATELY HIGH
There is a very high risk of corruption in this sector. Irregular payments or bribes to obtain favorable decisions are commonly exchanged (GCR 2015-2016). In addition, many magistrates have been implicated in various financial scandals in the recent past (BTI 2016). Reports vary in terms of judicial independence: While the executive seems to generally respect court rulings, it exerts influence in judicial nominations and promotions (FitW 2015; BTI 2016). An exception is the Constitutional Court, which operates free from influence and places an effective check on the government’s actions (BTI 2016).
The implementation of the law suffers from low territorial and functional penetration (BTI 2016). Businesses identify a lack of efficiency when challenging regulations or settling disputes; dispute resolution processes are routinely protracted and slow (GCR 2015-2016; ICS 2016). Similarly, enforcing contracts takes more time and is more costly than elsewhere in the region (DB 2016). The commercial section at the Court of First Instance in Cotonou is responsible for expedited settlements of business-related disputes (ICS 2016). Benin is a member of the International Center for the Settlement of Investment Disputes (ICSID).
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).
Corruption is a moderate risk in the land administration. Property rights are well-defined in the Benin Land Property Act in principle, but judicial corruption affects these rights (BTI 2016). Transport infrastructure was declared a top priority of the Yayi administration (which ended in April 2016), but widespread corruption, poverty, and an increase in natural disasters hindered overall development in the country (BTI 2016). As a consequence, a significant percentage of roads in Benin are not tarred or paved, and many are impassable, presenting a challenge for businesses (Afrobarometer, Jan. 2016; GCR 2015-2016). Registering property takes twice as much time as it does elsewhere in the region (DB 2016).
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.
There are no specific reports of corruption available in the sector, but the high levels of corruption in other sectors are likely to impact natural resource industries, as well. There are reports of political interference in key industries, such as the cotton industry. Businessman (and now President) Patrice Talon’s private companies previously lost business in this sector as a consequence of government interference (BTI 2016). While official reasons were the protection of public economic interest, personal rivalry in the political and economic elite is a likely explanation (BTI 2016).
Benin’s legal framework pertaining to corruption is inadequate (BTI 2016). Prosecution of those implicated in corruption is unsystematic, and many powerful people accused of corruption have ultimately not been convicted (BTI 2016). A law against corruption (in French) prohibits public agents from engaging in corruption, bribery, trading in influence or false declaration of assets; the maximum penalty is a fine and ten years’ imprisonment. The same law addresses active and passive corruption in the private sector: Undue direct or indirect advantages in exchange for the performance or abstention of actions in a manner contrary to one’s duties are illegal. The maximum punishment for private sector corruption is 5 years’ imprisonment and a fine of minimum CFA 2 million, or twice the value of the undue advantage (ICS 2015).
Benin has ratified the United Nations Convention against Corruption and the African Union Convention on Preventing and Combating Corruption.
Freedom of speech is generally respected, but there are isolated examples of restrictions in the recent past (FotP 2015). Laws and regulations are sometimes used to curtail journalists’ reporting (FotP 2015). In one case, the director of a TV station was sentenced to jail and fines for offending the head of state after reporting on corruption in former president Yayi’s administration; Yayi later pardoned the director and suspended the fine (Global Journalist, Feb. 2013). The High Authority for Audiovisual Media and Communication (HAAC) is supposed to serve as an independent media regulator but is understood to have increasingly close ties to the government (FotP 2015). Overall, the status of the press is considered “partly free” (FotP 2015).
Civil society in Benin is robust and heterogeneous and functions effectively as a watchdog vis-á-vis political affairs (BTI 2016). When it comes to corruption, civil society actors are more active and effective than the government in uncovering cases (BTI 2016). One of the leading local NGO networks fighting corruption is the National Organizations Front against Corruption (HRR 2015). Freedoms of assembly and association are protected by law and respected by the government (HRR 2015).
- Bertelsmann Foundation: Bertelsmann Transformation Index 2016.
- World Bank: Doing Business 2016.
- US Department of State: Investment Climate Statement – Benin 2016.
- Afrobarometer: AD69: Building on progress: infrastructure development still a major challenge in Africa, 14 January 2016.
- All Africa: “Nigeria: Corruption Thrives at Nigeria’s Borders,” 3 January 2016.
- World Economic Forum: Global Competitiveness Report 2015-2016.
- US Department of State: Investment Climate Statement 2015.
- US Department of State: Country Report on Human Rights Practices for 2015.
- Freedom House: Freedom of the Press 2015.
- Freedom House: Freedom in the World 2015.
- Transparency International: People and Corruption: Africa Survey 2015 – Global Corruption Barometer, 1 December 2015.
- Afrobarometer: AD56: Police corruption in Africa undermines trust, but support for law enforcement remains strong, 2 November 2015.
- Afrobarometer: WP154: The face of African infrastructure: Service availability and citizens’ demands”, February 2015.
- The Government of the Netherlands: “The Netherlands halt aid to Benin,” 7 May 2015.
- World Economic Forum: The Global Enabling Trade Report 2014.
- Afrobarometer: AD3: Developing Africa’s infrastructure: The rough road to better services, 14 November 2014.
- Afrobarometer: Africa’s willing taxpayers thwarted by opaque tax systems, corruption, 5 March 2014.
- Global Journalist: “The President of Benin Pardoned Offenses of the TV Head,” 12 February 2013.