Launched in a wave of privatizations and driven by rising growth, Benin received a double positive rating from the Bloomfield agency, which nevertheless noted that the economy remains too undiversified and is concerned about a fragile banking sector.

“A dynamic economy with good prospects, but quite vulnerable […]. A relatively undiversified economic structure, relying mainly on the cotton sector and trade with Nigeria. The Bloomfield Investment Corporation rating agency, based in Abidjan, has carried out Benin's first financial rating. The result is good: it gives it a long-term investment rating of A-, with a stable outlook, due to “high credit quality” enabled by “good protection factors”.

Regarding short-term investment, Benin obtains an A2 rating with a stable outlook, justified in particular by "good certainty of timely repayment", "good access to the capital market" and "minimal risk factors". .

The agency's rating is based on Benin's economic performance, which has shown an accelerating economic growth rate since 2016 (rising from 2.1% in 2015 to 6.7% in 2018) with relatively stable prospects according to the IMF and AfDB.

"A generally positive 2019 report"

Through the "Revealed Benin" program initiated at the start of Patrice Talon's five-year term (2016-2021), which notably focused on the development of the port of Cotonou, the establishment of a regulatory framework for public-private partnerships and tax incentives for investors, the government presents "a generally positive assessment in 2019 in several areas (infrastructure, energy, investments, public finances, etc.)," considers the agency. The latter also underlines that “the budget deficit was thus significantly reduced between 2014 and 2018, from 8% of GDP to 4% of GDP”.

The authorities highlight the positive impact of the reforms on the private sector, with business creation up by 66.9% between 2015 and 2018. However, priority reforms remain to be implemented in order to pursue the plan, such as those on land, the orientation law for SMEs, the management of road infrastructures, the creation of a deposit and consignment fund, or even the creation of a research and innovation agency.

Regarding the management of public debt (54% of GDP in 2019 against 30% in 2014 according to the IMF), analysts point to "a rising but controlled level of debt", and welcome an "innovative mechanism for reprofiling the debt” which allows the State to save 34.37 billion CFA francs (56 million euros) on debt service over the next five years.

Tense political situation

Regarding the main factors of fragility identified, the agency stresses that the growth of the Beninese economy is "relatively undiversified" since it is based mainly on agriculture, the cotton sector and the dynamism of trade with its imposing neighbour, Nigeria.

She also points to a “fragile” banking sector for a few years, and “a fairly tense political situation in connection with the new electoral code”. Adopted last September, it notably led to the exclusion of opposition parties during the April 2019 legislative elections, after which several demonstrations were severely repressed.

“Weak overall social indicators” also dampen the agency's enthusiasm. According to an AfDB report published in 2018, “with a poverty rate of 40.1% in 2015, persistent unemployment, and a human development index of 0.485, inclusive growth remains a major challenge for Benin”.