Moody’s, the international financial rating agency, has maintained its B1 rating for the Republic of Benin, with a stable outlook. This decision testifies to Benin’s economic dynamism, driven by the ambitious reforms implemented since 2016. Moody’s underscores the country’s robust growth and favorable outlook for fiscal consolidation, and once again praises the authorities’ proactive debt management.Moody’s emphasizes Benin’s very favorable economic outlook, with growth of 6% to 7% expected over the 2026-2027 period, driven by the implementation of the Government Action Program (PAG). In this respect, the agency praises the modernization program for the Port Autonome de Cotonou, which should reinforce Benin’s position as a regional hub in West Africa, with significant economic spin-offs. The agency also highlights the expected benefits of the Glo-Djigbé special economic zone, which should contribute to the development of high value-added agro-industrial activities. Moody’s also expects the situation in Niger, Mali and Burkina Faso to have no major impact on Benin’s economic dynamism, given the structural transformation of the Beninese economy. Moody’s anticipates a favorable fiscal consolidation path, driven by improved revenue mobilization, supported by the ongoing program with the International Monetary Fund (IMF). The agency forecasts a reduction in the budget deficit to 2.9% of GDP by 2025, below the EU target, and a reduction in debt levels to below 50% of GDP by 2027. Finally, Moody’s recognizes the quality of the authorities’ proactive debt management, enabling Benin to post a relatively low average cost of debt. The agency also praises Benin’s innovative financing strategy, which enables the government to continue to mobilize financing at attractive terms despite current market conditions.
September 2023