2023-09-15 14:04:17
The Executive announced Tuesday September 12, 2023 that Benin’s economic growth is estimated this year at 5.5%. By 2025, this performance should increase with the impact of improving the wealth produced nationally.
Performance indicators show satisfactory economic growth for Benin, informed the government on September 12, 2023. The Beninese authorities inform that the international financial rating agency Fitch maintains for Benin, “ grade B+ (…) with stable outlook”.
Fitch “ assesses the growth of Benin at 5.5% in 2023”. The rapidly expanding agro-industrial sector in the Glo-Djigbé Special Economic Zone has a considerable impact on this improvement observed in the Beninese economy.
The rating agency announces that in 2024, Benin’s growth could increase from 5.5% to 6%. “[Le] cotton sector, [la] decline in inflationary pressures, and [la] stabilization of economic reforms undertaken in Nigeria” will contribute to increasing this rate by 5% according to the government.
Reduction of debts and budget deficit
Fitch observes a “budgetary consolidation” in Benin. This resilience constitutes a favorable factor for “reduction of the budget deficit in 2023”.
Fitch expects the production of national wealth to increase. The agency refers to the prospects of the International Monetary Fund (IMF) which forecasts for Benin, the achievement of “almost 3% of GDP in 2025”
The debt level of Patrice Talon’s country should also decrease in 2024 and 2025. Fitch finds “the prudent and proactive management of public debt, and Benin’s ability to maintain the cost of debt very attractive despite the environment of rising international interest rates”.
The Beninese State ensures that “this decision [de l’agence internationale de notation Fitch] attests to the resilience of Benin’s economic fundamentals in a context of increased international and regional instabilities”.
Note B+ et implication
The B+ rating awarded to Benin is not a first under the Talon era. Several times already, the country has been mentioned.
The financial rating is granted to companies or States which operate loans on financial markets. The B+ is awarded to countries after the analysis of several vital sectors including agriculture, commerce and many others.
According to financial marketthe B+ indicates that “bonds are more vulnerable to adverse commercial, economic and financial conditions, but the capacity to meet financial commitments is present”.
For Barthélémy Sènou, doctor in economics, it is “a strong positive signal that the rating agencies give to the country by giving it a better rating. This means that the cost of credit on the financial market will fall” in order to produce more wealth that will benefit the people.
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