Benin’s Electricity Reforms Could Turn Strong Economic Growth Into Better Jobs

The World Bank’s fourth annual Benin Economic Update says the next challenge is to turn that solid economic performance into more formal, better-paid work.

Benin's economy continues to rank among the region's most dynamic, with growth reaching 8.1% in 2025 and averaging 7.1% over the 2021–2025 period. The country has also brought its fiscal deficit down to 2.7% of GDP, below the West African Economic and Monetary Union's 3% ceiling, and kept inflation at 1.1%. The World Bank's fourth annual Benin Economic Update says the next challenge is to turn that solid economic performance into more formal, better-paid work.

The report, titled Accelerating Benin's Structural Transformation for More and Better Jobs: The Role of the Electricity Sector, identifies energy reforms as one way to support that shift. Electricity access and reliability matter to businesses seeking to expand, invest and hire. The report says the Mission 300 Compact could help make the energy sector a stronger source of job creation.

Informal work remains widespread, and many workers are in low-productivity services with limited room for income growth. In 2022, 96.3% of workers were employed informally, and eight out of ten jobs created were self-employment. By 2024, fewer than one in five workers had a wage job, with the share falling to 9% among young people.

Industrial employment offers a sign of what is possible

The Glo-Djigbé Industrial Zone recorded 22,798 jobs in 2025, a 28.8% increase from the previous year. The report points to this expansion as evidence that formal industrial employment can grow at scale. World Bank economist and report lead author Mamadou Tanou Baldé says strong economic fundamentals need to be matched with productivity gains and more well-paid jobs, especially for young people.

Electricity constraints weigh on businesses

Nearly half of Beninese firms see electricity access as a major obstacle, and 86.1% report experiencing outages. Grid losses stood at 24.7% in 2024, with around half of transmission lines and substations more than 25 years old. Gas shortages also lead to costly reliance on heavy fuel oil, adding pressure to businesses and the wider energy system.

The report estimates that implementing the Mission 300 Compact could generate nearly 159,000 additional, better-quality jobs. It calls for a more diverse energy supply, modernized grids, stronger sector governance, lower supply costs and easier connections for households and businesses. World Bank Group Country Manager in Benin Karine Bachongy says the Bank will work with the government to mobilize public and private financing and support the reforms.

Growth prospects come with risks and opportunities

Benin's growth is projected to remain robust, reaching 7.6% in 2027–2028. Risks include conflict in the Middle East, rising energy prices, climate change and security challenges. Closer economic trade with Nigeria could bring up to $1.3 billion a year and create 26,000 direct jobs, including in grain processing, textiles, energy, higher education and tourism.