Benin - Industry

In Benin there is no significant mining except for limestone, which is used in cement production. Improvements in mining regulations have stimulated foreign interest in recent years. Gold mining has attracted investment from 8 foreign companies and there are also proven reserves of iron and phosphates.

In 1999 the government signed a contract with Zetal Oil to rehabilitate the Sémé oil field at a cost of US$45 million. Sémé began production in 1982 and reached its peak production in 1985 at 10,000 barrels per day. Production ended in 1998 when low world prices and dwindling reserves meant that the field was not economical. Foreign companies (especially from the United States and Canada) are exploring Benin for further viable fields.

In 1999 a US$17.9 million oil terminal opened in Cotonou Port. The oil distribution company, Sonacop (previously state-owned), was sold to the private sector in 1999. Plans for a 1,000-kilometer gas pipeline from Nigeria to Benin, Togo, and Ghana moved forward in 1999 when 2 international companies and 4 regional gas boards signed a deal on the US$400 million project.

Manufacturing focuses on the processing of agricultural products and the production of consumer goods . The latter sector depends on imported inputs and was hit hard by the 1994 currency devaluation. However, this impact also meant the local raw material companies found it easier to compete with imports.

Cotton led agro-industry in the 1990s. Ginning capacity expanded rapidly, and the country currently can process 462,500 metric tons per year in 10 government-owned plants and 6 private plants. Capacity could be increased to 673,000 metric tons per year if the planned expansion is carried out. Restructuring plans for the government-owned plants are currently underway.

Palm oil has been in decline since the 1980s. Sonicog runs 6 small palm oil mills, though only 3 have operated in recent years. The sector is being restructured with World Bank assistance for privatization. Food, drink, and tobacco processing, as well as footwear manufacture and ceramics, form the basis of the import substitution sector.