Despite a challenging global economic context,  Benin recorded the lowest inflation in the WAEMU in 2022. In its latest assessment, Fitch confirmed the country’s B+ rating with a stable outlook, expecting continued strong macroeconomic performance.

Benin is expected to record economic growth of 6.5% on average in 2023 and 2024. This is at least what the international rating agency Fitch forecasts in a report published on Friday 24 March.

The growth projected is up from the 5.7% recorded by the country in 2022, per IMF figures. According to Fitch, growth should be supported by a strong performance of the agricultural sector and investments made under the Government Actions Program (PAG). Thanks to investments, notably in the development of the Glo-Djigbe industrial zone (GDIZ), industrial production should also contribute significantly to growth.

The projection is made amid a regional and global context marked by inflation as commodity prices have risen due notably to the war in Ukraine.  In 2022, the Beninese government issued subsidy and price management measures, which, coupled with other factors, allowed it to have an average annual inflation of only 1.3%, far from the WAEMU average of 7.3%.

Hailing the resilience of Benin's economy, the U.S. financial rating agency has confirmed its B+ rating for the country with a stable outlook for 2022. "Benin's 'B+' rating reflects strong trend growth, a moderate government debt-to-GDP ratio that we expect will remain below peers, a recent record of economic reforms, prudent fiscal policies and proactive debt management," it explained. 

“This is balanced by low - albeit growing - government revenues, a relatively undiversified economy heavily exposed to Nigeria and the agriculture sector, and low development indicators compared to rating peers,” the rating agency added. 

It also indicated that “the Stable Outlook reflects our expectation that growth will remain strong and the government will resume budget consolidation, based on a record of delivering consolidation plans under the current administration.” 

The IMF has also forecast higher economic growth for Benin this year. According to Fitch, inflation is expected to rise slightly to 1.9% this year and then 1.4% in 2024. The budget deficit is expected to narrow to 4.5% and then 3.2%, thanks in part to rising revenues and the implementation of the IMF's economic program.

Moutiou Adjibi Nourou