Fitch Revises Benin’s Outlook to Positive, Affirms at ‘B+’
Fitch Ratings has revised the outlook on Benin’s long-term foreign-currency issuer default rating (IDR) to positive and affirmed the default rating at ‘B+’.
The revision of the outlook reflects Benin’s strong economic growth prospects and the authorities’ commitment to a prudent fiscal stance, which supports a declining government debt/GDP trajectory over the medium term.
Benin’s ‘B+’ issuer default rating also reflects a record of structural reforms, supporting gradual diversification of the economy, and a favourable debt composition.
These strengths are set against weak structural indicators compared with peers, a relatively small economy dependent on trade with Nigeria and a high level of informality constraining government revenue.
Fitch said risks from regional tensions also weigh on the rating, highlighted that the revision of the Outlook on Benin’s IDRs reflects strong economic outlook, commitment to fiscal prudence, declining government debt among others.
Fitch estimates Benin’s real GDP growth was 7.5% in 2025 and forecasts it will remain above 6.5% in 2026-2027, well above the projected average ‘B’ median of 4.5%.
This is supported by broad-based growth, driven by a continued increase in agricultural production, higher industrial output and expanding services such as tourism and activities fostered by the Port of Cotonou and large infrastructure projects.
The economy has shown resilience to external shocks, including the border closure with Niger and removal of fuel subsidies in Nigeria.
In addition, Fitch estimates a fiscal deficit of 3.1% of GDP in 2025, broadly unchanged from 2024, and in line with the West African Economic and Monetary Union’s (WAEMU) deficit norm of 3%.
“We forecast the fiscal deficit to remain broadly stable through 2027, as expenditure increases, notably capex, will be financed by higher tax revenue. We forecast that Benin’s revenue mobilisation programme will lead to an increase in revenue/GDP to 15.8% by 2027”.
Ratings analysts estimate Benin’s government debt/GDP declined to 51.8% in 2025, forecast debt will remain on a downward trajectory to 49.8% through 2027, due to modest primary deficits and strong economic growth.
This is below the projected debt/GDP ratio of 55% for the ‘B’ median in 2026-2027, according to Fitch. Benin has a high level of government deposits that we estimate at 10% of GDP at end-2025.
The Central Bank of West African States’ pooled international reserves significantly increased to USD33 billion in October 2025, from USD16 billion in October 2024, reducing risks to external liquidity.
The increase in reserves is being driven by a surge in exports receipts in member states, re-establishment of market access and IMF disbursements among most WAEMU member states.
Benin’s IDRs also reflect favourable debt structure, structural weaknesses, expected policy continuity among others. The average maturity of Benin’s government debt stock is 9.3 years, 99% has a fixed interest rate and 57% is concessional, reducing refinancing and interest-rate risks.
Close to 82% of debt is either CFA franc or euro-denominated, representing limited exchange-rate risk given the credibility of the peg to the euro. The debt stock has a low average interest rate of 3.4% at end-2025, reflecting proactive debt management.
GDP per capita, expected to be USD1,600 in 2025, is well below the ‘B’ median of USD2,660. The attempted military coup in 2025, although thwarted by the authorities, highlights potential domestic political risk. Threats from Islamist groups in the north highlight persistent security risks.
Parliamentary elections were held in January 2026 and presidential elections will be held in April 2026.
“Our current expectation is that the ruling government may have secured a large coalition, which could contribute to its re-election, ensuring broad policy continuity.
“Nevertheless, tensions may rise in the run-up to the presidential election, but our base case is that any disruptions will be contained and not have significant impact on the economy or economic policy direction”, Fitch said.
Ratings analysts forecast the current account deficit will gradually narrow to 4.0% in 2027 from 6.2% of GDP in 2024 as stronger agricultural proceeds and gradual diversification increase export receipts, and the import needs of capital-intensive projects reduce. First HoldCo Names New Boards in Non-Banking Subsidiaries
