Over the past decade, Benin has recorded one of the fastest growth rates in West Africa. Growth is projected at 7% in 2026, the highest in the WAEMU region, driven by reforms and the expansion of tourism and industry.

Benin’s economy expanded strongly between 2016 and 2026 under President Patrice Talon, driven by reforms and public investment. Growth rose from 3.3% in 2016 to 7.2% in 2021 and is projected at around 7% in 2026, after an estimated 7.3% in 2025, according to the World Bank. This is among the highest rates in the WAEMU zone.

The expansion has been accompanied by infrastructure upgrades, improved business and tourism appeal, and a push to process raw materials locally. Former finance minister Romuald Wadagni, now president-elect, is widely seen as a key figure behind these reforms.

Reforms underpin growth

Between 2016 and 2021, the government rolled out the “Benin Revealed” Government Action Program (PAG), a reform plan worth 9,039 billion CFA francs, or about $15 billion. It focused on strengthening institutions, maintaining macroeconomic stability, and expanding social services.

The program included 45 flagship projects, 95 sector initiatives and 19 institutional reforms. It helped lift growth from 5.7% in 2017 to 7.2% in 2021, according to UMOA-Titres.

Prices fell by 0.8% in 2016 before inflation reached 1.7% in 2021, staying below the regional ceiling of 3%. The investment rate rose from 24% of GDP in 2017 to 28.9% in 2021, with spending focused on transport, energy, urban development and water infrastructure, the World Bank said. Benin reached lower-middle-income status in 2020.

Investment drive continues

The second phase of the program, covering 2021 to 2026, aims to sustain growth through infrastructure spending, economic diversification and education reforms.

Investment has targeted digital services, agriculture, tourism, energy, industry and crafts to boost competitiveness and living standards.

Growth reached 7.5% in 2024, the highest since 1990, supported by services and industry, the World Bank said. Agriculture also contributed, driven by cotton and export crops.

Poverty stood at 36.2% between 2019 and 2022, down 2.3 percentage points from the previous period. Unemployment was 2.4%, while underemployment remained high at 72%.

Benin’s Human Development Index rose from 0.351 in 1990 to 0.515 in 2023. Life expectancy increased by 7.8 years, while expected schooling rose by 5.6 years. Gross national income per capita grew by about 70.9% over the same period.

Debt rises but remains manageable

Public debt reached 6,960 billion CFA francs, or $12.47 billion, in the fourth quarter of 2024, up from 35.9% of GDP in 2016 to about 53.7% in 2024, according to the Autonomous Debt Management Fund.

The IMF classifies the risk of debt distress as moderate, with external debt indicators below critical thresholds.

The budget deficit narrowed to 3% of GDP in 2024 from 4.1% in 2023, supported by higher domestic revenue and lower capital spending, the World Bank said. Despite an 8.9% rise in nominal current spending, expenditure remained contained relative to GDP.

In 2025, Benin launched a debt management operation to refinance a Eurobond due in 2032.

Tourism gains traction

Tourism has become a growing source of revenue, supported by investment in infrastructure and heritage sites.

Flagship projects such as the Amazon Statue, inaugurated in 2022, and sites like Ouidah, Ganvié and Porto-Novo have strengthened the country’s appeal. Cultural events such as Vodun Days are also drawing visitors.

Tourist arrivals rose from 267,000 in 2016 to 325,000 in 2020, according to Country Economy. The government aims to attract more than 2 million visitors annually by 2030 and raise tourism’s contribution to 13.4% of GDP, backed by nearly $1.4 billion in planned investment.

Industrial push gathers pace

Benin is also expanding local processing capacity through the Glo-Djigbé Industrial Zone, launched in 2021.

The 1,640-hectare zone processes products including cotton, cashew nuts, soy, shea and pineapple. Textile units processed nearly 40,000 tons of cotton in 2024. More than 170 billion CFA francs has been invested and over 14,000 jobs created.

The World Bank said GDIZ has supported growth despite lower public investment. The zone targets $1.4 billion in investment and more than 300,000 direct jobs by 2030.

Despite strong growth, poverty reduction and job creation remain key challenges. Wadagni, the president-elect with more than 94% of the vote, will also face security risks linked to jihadist attacks in northern Benin, alongside economic and environmental pressures.

Lydie Mobio