On the occasion of a press conference held last Friday at the Yellow River Room of the Ministry of Foreign Affairs and Cooperation, then relayed on National Television this Saturday, July 11, the Minister of Economy and Finance, Romuald Wadagni took stock of the various performances recorded by the Beninese economy over the past three years. It emerges from his intervention that in a sustainable way and since 2017, the Beninese economy has been performing steadily and making a school on the continent. Indeed, according to Minister Wadagni, Benin has become a reference country that best respects the principles and rules of free trade, movement of people and goods. For example, among French-speaking countries in Africa, Benin was noted in 2019 as the leading country in terms of budget transparency.

A rating carried out in partnership with independent financial institutions, and also financed by the European Union. Better yet, Benin was the first country in Africa to issue bonds in Euro. Most countries in Africa, and the rest of the world, make their bonds in dollars, because the dollar market is the market that offers more money to raise. And so in order not to take risks, everyone goes to the dollar market. But in Benin, the Head of State, President Patrice TALON wished that in the desire to control the risks, that the operation be carried out in Euro (Eurobond). According to the speaker, several specialists in financial circles predicted a failure for this operation at the beginning, but on arrival, it was a success with a subscription rate of 250%. A feat that has been congratulated by several financial institutions including the International Monetary Fund (IMF).

A success that will then be recognized and crowned at the last Annual General Meeting of the African Development Bank (AfDB) where Benin, for the first time in its history, wins the Best Minister of Finance Award. For Minister Romuald WADAGNI, today, at the global level, when major international financial institutions seek to take models in Africa, they think of Benin. This is how we can explain the fact that under the impetus of Germany and the European Union, the G20 launched the Compact with Africa (CwA) initiative which made Benin the very first country selected to participate.

As a reminder, the CwA is an initiative that aims to support the State in making reforms in order to expand the fabric of the private sector and attract foreign investment. Subsequently, the United Nations, in partnership with the International Monetary Fund (IMF), decided to choose five (05) countries at the global level to participate in the Costing initiative, which also focuses on the costing of the SDGs. Here too, Benin was chosen with Rwanda as the only two countries in Africa, while in Latin America Guatemala was chosen, then Indonesia and Vietnam for Asia. In addition, in 2019, over several days, the World Bank's internet portal posted the debt reprofiling operation that Benin has carried out with partners including a good twenty insurance companies that for the most part have never heard of Benin.

But who came together to help raise funds, to replace expensive debt with much longer and cheaper debt. The World Bank welcomed this operation, which was presented on its website for several days, said Minister Romuald WADAGNI. This is an operation considered by the World Bank and many other financial institutions as the best financial operation of 2018. In the same order of economic performance, at the last annual meetings of the World Bank in Washington, Benin won the Award for Best Debt Management in Sub-Saharan Africa.

Recent exploits...

In addition to these various performances, Benin has revealed itself to the world by achieving other feats that the Minister was pleased to list during his press conference. Indeed, on July 1, 2020, in its latest ranking, the World Bank raised Benin to the rank of middle-income countries, while the country was previously in the category of low-income countries. Then, the World Bank also released its cba index which measures the quality of economic governance. And in this context, for the first time since 2008, Benin has progressed to win the second best performance in Africa, in terms of public financial management.

And finally, the rating agencies have agreed to maintain Benin's ratings in a context where most countries are downgraded. According to the national treasurer, Benin could in no way chain in a sustainable way, and this for three years all these results, especially in a context of economic crisis aggravated by the covid 19 pandemic, which shakes up even the most prosperous economies, if upstream, there was not a whole people who by their sacrifices on a daily basis, pushes a government team to give the best of itself, to synchronize its actions in a Government Action Program led by President Patrice TALON who pursues the objectives set since December 16, 2016.

What about the transition to middle-income countries?

In his speech at this press conference, the Minister of Economy and Finance, Romuald WADAGNI reassured that Benin, because of having become a middle-income country, has not lost concessional financing, as it is distilled in public opinion. To do this, it is fundamentally based on two arguments. The first argument he develops relates to the World Bank, which published on July 1, 2020 the ranking of countries, as well as the support component it intends to provide to countries over the period 2020 to 2022.

What is great, according to the Minister, is that the World Bank, which over the past three years had granted Benin a financing program of USD 480 million, is contributing USD 627 million this time. That is, much more, with half, more than 300 million USD, as debt. This is the first way to answer to say NO, that the fact that Benin is moving from low to middle income is not a handicap to access financing, he reassured. The second argument is that when you take institutions like the World Bank or even the AfDB, there are several windows.

And a country classified as low-income has access to what is called the ADF window. Then when it is a middle-income country not only does it continue to benefit from the ADF window, but now it has access to the AfDB window . And Benin, for the historical fact of moving from low to middle incomes, joins Senegal and Côte d'Ivoire in the West African sub-region which, today, at the level of the AfDB benefit from both the ADF Window, the window for weak countries, but also the AfDB window . A ranking that therefore increases Benin's financing possibilities, even beyond the World Bank and other financial partners. Thus, Benin keeps intact its achievements and has access to complementary windows that now open the field to the acceleration of its development, with a consequent increase in the volume of financing already available. For him, Benin's transition from low- to middle-income countries is proving to be an asset in that it now broadens the scope of the financing market and paves the way for more development actions in favor of the populations.

Benin, an economic model in Africa

Also in his speech, the Minister of Economy and Finance, Romuald Wadagni also spoke about the health of the Beninese economy which shows that from 2016 to date, Benin has achieved economic performances that place it in pole position in Africa and echo in the world. Indeed, it is apparent from Minister Wadagni's statements that:

Benin in the WAEMU

UNDP ranked Benin at the top of the performance over the period 2018-2019, in terms of the HDI (Human Development Index); an index that assesses the quality of care, the life expectancy of populations, the quality and access to education. The latest report of the WAEMU Commission presented Benin as the country with the strongest performance in terms of reforms and internalization of community standards and directives. The rating obtained in the last WAEMU report has never been obtained since the creation of the Union, for more than 40 years.

Benin in ECOWAS

The latest ECOWAS report indicates that Benin is the only country that has effectively implemented the principles and rules of free trade and movement of people and goods. Never produced before.

Benin in all French-speaking countries in Africa

Benin was again noted for 2019 as the number 1 in terms of budget transparency and public finances.

Benin in Africa

Benin was the first country to issue a Euro Bond in euros. Most countries in Africa and outside Africa usually make their first issue in dollars because it is the deepest market for not taking risks. Despite the risks, Benin obtained a subscription rate of more than 250% with the congratulations of several international institutions including the IMF. For the first time, Benin is doing something that no one in Africa has yet achieved. Benin has been awarded, for the first time, the prize for the best Minister of Finance.

Benin at the global level

When large institutions seek to take models in Africa, we think of Benin. When the United Nations, at the global level, decided to choose 5 countries for the cost assessment of the SDGs, Benin was chosen with Rwanda as the only two countries in Africa.