Benin’s Economic Prospects Brighten: S&P Upgrades Outlook to ‘Positive’ Amid ‘BB-‘ Rating Affirmation

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The international financial status agency S&P has confirmed the ‘BB-‘ rating of the Republic of Benin, with the outlook revised from ‘stable’ to ‘positive’. This review reflects the soundness of the country’s economic and financial fundamentals, despite an unstable international and regional environment; it was October 16, 2024.

S&P highlights the dynamics of the Beninese economy, with growth of 6.4% of GDP in 2023 and an average forecast of 6.6% for the next four years. This performance is attributed to ambitious structural reforms undertaken by the Republic, as well as i strategic investmentssuch as the development of the Glo-Djigbé industrial zone and the extension of the Port of Cotonou, which contributes to the diversify and to theimprovement of theeconomic attraction of the country.

The agency draws attention to the significant progress in terms of budgetary control, with a projected deficit of 3.7% in 2024, which should fall below the community threshold of 3% from 2025. This improvement results from increase in tax revenue and a optimizing public expenditurereflecting the success of the reform program supported by the IMF.

S&P also predicts a gradual reduction in debtwhich is expected to increase from 54.5% of GDP in 2023 to around 50% in 2026. This level is considered sustainablespecial thanks to the expense management and to the budgetary consolidationas well as continuous growth and the country’s privileged access to concessional finance.

Finally, S&P recognizes the key role of the Central Bank of West African States (BCEAO) in stabilizing reserves, ensuring currency stability. Thanks to these recent efforts, the actions of the BCEAO over the past five years have reinforced the economic soundness of the country.