Between 2000 and 2005 infrastructure made an important contribution of 1.6 percentage points to Benin’s improved per capita growth performance, which was the highest among West African countries during the period. Raising the country’s infrastructure endowment to that of the region’s middle-income countries could boost annual growth by about 3.2 percentage points. Benin has made significant progress in some areas of its infrastructure, including roads, air transport, water, and telecommunications. But the country still faces important infrastructure challenges, including improving road conditions and port performance and upgrading deteriorating electrical infrastructure. The nation must also improve the quality and efficiency of its water and sanitation systems.Benin currently spends about $452 million a year on infrastructure, with almost $101 million lost to inefficiencies. Comparing spending needs with existing spending and potential efficiency gains leaves an annual funding gap of $210 million per year. Benin has the potential to close that gap by adopting alternative technologies in water supply, transport, and power, which could save as much as $227 million a year. The nation would also benefit from raising tariffs to costrecovery levels and reducing inefficiencies, which could substantially boost financial flows to the infrastructure sectors.