EXECUTIVE SUMMARY __________________________________________________________________________ 3.47 Assisted by independent regional structures, Benin’s banks are governed by a prudential mechanism defined by the WAEMU Council of Ministers in June 1999, and are about to implement the pillars of the Basel II agreement. As for enterprises, they hardly adapt their activities and products to international standards in terms of quality or respect for the environment, and there is no code or charter for corporate governance in Benin. 3.48 Evolution of enterprises in Benin. Although the creation of enterprises was facilitated by the Enterprise Formalities Centre (Single Window), managed by the Chamber of Commerce and Industry of Benin (CCIB), much still remains to be done to simplify procedures and help youths to assess and cope with corporate risks within a formal framework. One of the key stumbling blocks seems to be tax pressure, which causes many economic and social distortions, including hypertrophy of the informal sector. The multifaceted and multidimensional informal sector is the greatest generator of wealth and employment in Benin. Accused of being a source of corruption, tax evasion and money laundering, this sector is a safety valve for social unrest and one of the pillars of family solidarity, especially as no formal support is given to citizens in general and to businesspeople in particular. 3.49 In other respects, the results of privatisation in Benin are mixed. While contributing a total of 33.6 billion CFA franc (United Nations Conference on Trade and Development – UNCTAD, 2005) to the state, public utility services were not part of these privatisation operations, which were sometimes discriminatory or nontransparent. Furthermore, the privatisation programme was behind schedule, and efforts still have to be made to stabilise the enterprises for privatisation and evaluate their assets. However, the government has prepared a regulation that defines the terms and conditions of privatisation and has announced a programme for the next two years. 3.50 The business environment in Benin. The formal sector in Benin suffers from unfair competition from the informal sector and from the relatively narrow domestic market. Due to the absence of a national legal competition regulation structure with the required skills, independence and material resources, coupled with relatively weak structures to defend consumers, there are often cases of violations and serious breaches of the rules of fair competition. 3.51 Penalised by low domestic demand and the illegal (‘underground’) practices of some well-established enterprises, businesspeople of the formal sector in Benin often depend on public sector demand, which is difficult to obtain. Indeed, public procurement suffers many of the same problems affecting the entire national economy (i.e. both the public and private sectors). Added to the scourge of corruption, there is also the lack of training in public procurement procedures, dysfunction of the relevant authorities, and delays in contract awards and payment of suppliers. 3.52 The difficulties of the formal sector enterprises are compounded by the uncooperative attitude of the administration (particularly taxation services) and some lack of support from the banking sector. Indeed, although the banks are in a situation of over-liquidity and do not encounter any serious problems 17