World Bank says Benin electricity reforms could support job creation and growth

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Benin electricity reforms for jobs

Highlights

Benin's GDP growth reaches 8.1% in 2025 with a fiscal deficit of 2.7% and inflation at 1.1%, according to the World Bank.
Formal job creation remains weak as only 19.8% of workers hold wage jobs in 2024, but industrial jobs in Glo-Djigbé Industrial Zone rise 28.8% to 22,798 in 2025.
Mission 300 Compact could add nearly 159,000 jobs by diversifying energy, modernizing grids and improving sector governance, while deeper trade ties with Nigeria could generate up to $1.3 billion annually.

Economic update links power reform to employment

As reported by the World Bank, the fourth edition of its annual Benin Economic Update finds that the country remains one of the region's most dynamic economies, with growth reaching 8.1% in 2025 and averaging 7.1% between 2021 and 2025.

The report says Benin's macroeconomic position rests on a solid base. The fiscal deficit falls to 2.7% of GDP in 2025, below the West African Economic and Monetary Union ceiling of 3%, while inflation remains low at 1.1%.

Even so, the study says growth is not yet generating enough formal jobs. In 2022, 96.3% of workers are employed in the informal sector, while eight out of 10 jobs created are self-employment. In 2024, fewer than one in five workers, or 19.8%, hold a wage job, and the share among young people is 9%.

The report points to some signs of progress in industrial employment. Jobs in the Glo-Djigbé Industrial Zone reach 22,798 in 2025, up 28.8% from a year earlier, indicating that formal industrial jobs can be created at scale.

Electricity bottlenecks shape business outlook

The World Bank says electricity remains a central constraint on business development in Benin. Nearly one in two firms sees access to power as a major obstacle, and 86.1% of firms experience outages.

Despite recent progress, the report says infrastructure and governance problems persist. Grid losses reach 24.7% in 2024, about half of transmission lines and substations are more than 25 years old, and gas shortages force costly reliance on heavy fuel oil.

According to the update, implementing the Mission 300 Compact could generate nearly 159,000 additional and better-quality jobs. It says that would require diversifying energy sources, modernizing grids, improving sector governance, lowering supply costs and making it easier for households and businesses to connect.

The medium-term outlook remains positive, with growth expected to stay robust at 7.6% in 2027-2028. Still, the report flags risks from the conflict in the Middle East, rising energy prices, climate change effects and security challenges, while saying closer trade integration with Nigeria could generate up to $1.3 billion a year and create 26,000 direct jobs in sectors including grain processing, textiles, energy, higher education and tourism.

Our earlier article on the IMF’s updated outlook for sub-Saharan Africa highlighted that growth expectations improved, but the inflation trajectory worsened, pointing to a potentially firmer monetary-policy stance across the region. It also underscored how higher global borrowing costs, debt-servicing pressures, and climate shocks such as El Niño could strain fiscal buffers and complicate countries’ efforts to sustain inclusive growth.

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