Overview
Benin reported its first COVID-19 case on March 16, 2020. After peaking in June 2020, the total number of active cases and fatalities subsided in the second half of 2020. New cases and deaths related to Covid-19 have seen another sharp increase in the first quarter of 2021, but have since subsided significantly.Benin launched its vaccination campaign on March 29, 2021. However, the vaccination rollout has been slow with only 8000 doses administered by end-April 2021, reflecting significant deployment challenges. Following the initial outbreak of the virus, the authorities have swiftly implemented strong containment and social distancing measures, including the partial lockdown (cordon sanitaire) around ten cities most exposed to the pandemic to isolate the contaminated population and contain the spread of the virus. They have also (i) significantly limited the transit of people across land borders; (ii) restricted the issuance of entry visas to the country; (iii) introduced a systematic and compulsory quarantine of all people coming to Benin by air; (iv) suspended all public gatherings; (v) introduced a ban on the movement of public transportation; and (vi) made wearing face mask in public compulsory. Economic activity was mostly affected during the second quarter of 2020, due to containment and mitigation measures in Benin and the global economic slowdown, while some signs of recovery appeared in June 2020. Agriculture, commerce and trade, transport, and the hospitality industry were among the most affected sectors. Inflation has been on the rise, driven by higher food and transport prices. Import and value chains disruptions, lower travel and tourism receipts in addition to diminished inflow of remittances have resulted in widening of current account deficit. After having soared about 550 points following the outbreak of Covid-19 pandemic in March 2020, spreads on Benin’s Eurobond continued to compress and, since January 2021, have fallen below SSA average. The fiscal position has deteriorated as a result of the implementation of the authorities’ COVID-19 response plan (see section on fiscal response below).
In addition to Covid-19 shock, Benin continues to be impacted by the impeded trade with Nigeria. On 20 August 2019, Nigeria decided unilaterally to close the border with some neighboring countries, including Benin. The Nigerian authorities motivated their decision by the need to curb smuggling and spur local agricultural production. Following a 16-month border closure, the Nigerian authorities announced in December 2020 the immediate reopening of Nigerian land border-crossing point with Benin. Nonetheless, traffic remains limited to private vehicles and pedestrians, thus impeding the cross-border trade. Following the meeting of the presidents of two countries in January 2021, a working group has been set up with objective of resuming the land trade by second half of 2021.
Reopening of the economy. The authorities have announced measures to gradually start reopening the economy, with the cordon sanitaire lifted on May 6, 2020. Middle schools, high schools and universities resumed their activities on May 11, 2020. Public transportation, places of worship and bars resumed their activities on June 2, 2020. International flights resumed on July 15th, 2020, accompanied by strict protocols for testing and quarantine for new arrivals. The gradual reopening is subject to continued social distancing guidelines and mandatory use of masks, among other measures.
Official Resources
Emergency Hotline Number : +229 95361104, +229 95361102
- Government of Benin COVID-19 webpage (in French)
COVID-19 Restrictions
Movement Restrictions:
- Is a curfew in place? No.
- Are there restrictions on intercity or interstate travel? No.
Transportation Options:
- Are commercial flights operating? Yes.
- Is public transportation operating? Yes.
- Masks are required to be worn in public including in taxis, at the airport, and on the plane.
Fines for Non-Compliance:
- Failure to wear a mask in public or in a vehicle may result in a fine or the confiscation of the vehicle.
Economic Measures
Key Policy Responses as of June 3, 2021
FISCAL
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The authorities acted swiftly to contain the spread and mitigate the economic impact of the virus. Cognizant that the impact of the virus will spill over into 2021, they have adopted a set of measures in 2020 amounting to CFAF 323 billion or 3.7 percent of GDP, and extending over 2020-22, with the majority of the plan already having been executed in 2020 (2 percent of GDP, or CFAF 178 billion). These measures comprise (i) a health preparedness and response plan for 2020 (0.9 percent of GDP) and 2021 (0.7 percent of GDP), and (ii) a socio-economic response plan to support formal sector companies (0.9 percent of GDP) and vulnerable households—for the latter, through cash transfers, electricity and water bills subsidies, and urgent social projects (0.2 percent of GDP). In addition, a public guarantee plan (1.0 percent of GDP) and credit lines and refinancing measures (0.7 percent of GDP) were established to foster access to finance for micro, small, and medium enterprises.
MONETARY AND MACRO-FINANCIAL
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The regional central bank (BCEAO) for the West-African Economic and Monetary Union (WAEMU) has taken steps to better satisfy banks’ demand for liquidity and mitigate the negative impact of the pandemic on economic activity. In April 2020, the BCEAO adopted a full allotment strategy at a fixed rate of 2.5 percent (the minimum monetary policy rate) thereby allowing banks to satisfy their liquidity needs fully at a rate about 25 basis points lower than before the crisis. In June 2020, the Monetary Policy Committee cut by 50 basis points the ceiling and the floor of the monetary policy corridor, to 4 and 2 percent respectively. The BCEAO has also: (i) extended the collateral framework to access central bank refinancing to include bank loans to prequalified 1,700 private companies; (ii) set-up a framework inviting banks and microfinance institutions to accommodate demands from solvent customers with Covid19-related repayment difficulties to postpone for a 3 month renewable period up to end-2020 debt service falling due, without the need to classify such postponed claims as non-performing; and (iii) introduced measures to promote the use of electronic payments. In addition, the BCEAO launched in April 2020 a special 3-month refinancing window at a fixed rate of 2.5 percent for limited amounts of 3-month "Covid-19 T-Bills" to be issued by each WAEMU sovereign to help meet immediate funding needs related to the current pandemic. The amount of such special T-Bills initially issued initially by Benin amounted to 1.5 percent of GDP, with some rollover possibility through such special T-bills benefitting from a refinancing rate equivalent to the prevailing monetary policy rate but to be all paid back by end-2020. The BCEAO has launched in February 2021 a special 6-month refinancing window at the floor of the interest rate corridor to help WAEMU governments meet Covid recovery funding needs. Through this special window banks shall be able to refinance all bonds with maturity of 3 years or more governments currently plan to issue on the regional financial market in 2021. The amount of bonds eligible to the new refinancing window for Benin is equivalent to 5.3 percent of projected 2021 GDP. The new refinancing window is expected to remain in place for the term of the eligible bonds issued in 2021. Finally, WAEMU authorities have extended by one year the five-year period initiated in 2018 for the transition to Basle II/III bank prudential requirements. In particular, the regulatory capital adequacy ratio will remain unchanged at end-2020 from its 2019 level of 9.5 percent, before gradually increasing to 11.5 percent by 2023 instead of 2022 initially planned. In addition, in June 2020, the West African Development Bank (BOAD) decided to create a CFAF 100 billion window for extending 5 to 7 year refinancing of banks’ credit to SMEs in the 8 WAEMU member countries. In December 2020, the BCEAO instructed WAEMU banks to refrain from distributing dividends with a view to strengthening their capital buffers in anticipation of the impact of the Covid crisis on asset quality.
Civic Freedom Tracker
TEMPORARY QUARANTINE
The decree imposes a temporary quarantine, until April 12, around most cities affected by the virus. People within these cities will only be allowed to move for essential reasons (health, food supply). People are advised to minimize their movements within the country. Gatherings of 10 or more people are prohibited. (See primary source or citation here)
Type: order
Date Introduced: 30 Mar 2020
Issue(s): Assembly, Movement
COVID-19 HEALTH CORDON
The Government of Benin establishes a health cordon around 15 municipalities in order to isolate them and contain the spread of COVID-19. Travel in and out of the health cordon zone is prohibited except for emergencies. Within the cordon zone, public transportation is suspended and taxis and motorcycle taxis must abide by strict passenger limits. Bars and nightclubs are closed, gatherings of more than 10 people are banned, and people are required to practice social distancing and wear face masks at all times in public. (See primary source or citation here)
Type: order
Date Introduced: 30 Mar 2020
Issue(s): Movement
PROHIBITING NON-ESSENTIAL GATHERINGS
The decree prohibits non-essential gatherings indefinitely, and imposes a mandatory quarantine for 14 days of those arriving into the country. (See primary source or citation here)
Type: order
Date Introduced: 17 Mar 2020
Issue(s): Assembly
