Benin-Nigeria border closure and Covid-19 health crisis: Is Benin's economy resilient in the face of this double shock?

The aim of this article is to analyze the degree of resilience of the Beninese economy in the face of the double shock of the border closure and the health crisis. The methodology adopted is both analytical and empirical. Data are drawn from UNCOMTRADE (2021), UNCTAD (2021) and WDI (2021), extended over the period 1998-2020. We obtain three main results: (i) the results of the dynamic regression model of per capita output identify, one-period lagged per capita output, public investment, and trade openness as the main determinants of the Beninese economy's ability to be resilient; (ii) factors such as the development of the financial sector and the concentration of exports could help to absorb the shocks, depending on how the public authorities use macroprudential and structural policies; (iii) given that the crisis is still ongoing, the econometric results do not allow us to draw any definitive conclusions on the effect of the double shock on the Beninese economy. However, our results imply that, to guard against exogenous shocks, Benin needs to strengthen its resilience by implementing both structural and cyclical measures.

Keywords: Covid-19, Benin-Nigeria borders, double shock, resilience, Benin