The rating agency Fitch improves the rating outlook for Benin to “B / Positive”: the agency’s first “stable” to “positive” outlook revision on the rating of a sovereign since the start of the pandemic

The international financial rating agency Fitch has raised the rating outlook for the Republic of Benin from “stable” to “positive”, making Benin the first country to benefit from a “stable” to “positive” outlook revision of agency since the start of the Covid-19 crisis.

This decision confirms the resilience of the economic fundamentals of the country, which will post one of the most dynamic economic growth rates in sub-Saharan Africa in 2020, despite the pandemic. This remarkable decision comes as several African countries have seen their rating downgraded since the start of the pandemic, attesting to the quality of the authorities’ management of the crisis, but also to the success of the ambitious reforms undertaken by the government since 2016. . Benin thus remains among the African countries benefiting from the best credit rating, standing out once again for its resilience in the face of external shocks.

By improving the rating outlook from “stable” to “positive” and affirming Benin’s “B” rating, Fitch welcomes Benin’s resistance to the “double shock” of the Covid-19 crisis and the closure of the borders with Nigeria, and reaffirms the strong growth prospects for the country.

Thus, Fitch estimates GDP growth at 2.3% in 2020, well above the median of Benin’s peer countries at -4.5% in the same year, and forecasts growth of 5.6% in 2021 then by 6.2% in 2022, driven by the rebound in the trade, transport, agriculture and construction sectors. In addition, the agency believes that the reopening of borders with Nigeria in December 2020 should allow trade flows to resume and accelerate growth. Benin’s economy is thus demonstrating unparalleled dynamism in the region, supported by the government’s efforts in fiscal policy and investment.

Fitch also welcomes the improvement in Benin’s financial flexibility. The success of the bond issue in two tranches carried out in January 2021 on the international markets, for an amount of one billion euros, confirmed the confidence of investors in the credit of Benin. Strong investor demand has enabled Benin to issue a 2052 maturity instrument, the longest maturity ever reached by an African state for an international bond in euros.

Fitch anticipates a relatively contained development of public debt in 2020 to 46% of GDP and estimates that progress in fiscal consolidation and strong growth expectations in the medium term will stabilize its level at around 48% of GDP. GDP in 2022, i.e. a rate significantly lower than the median of 70% of Benin’s peer countries, reflecting the prudent debt management policy.

Cotonou, February 12, 2021