Economic activity remained robust during the first half of 2026, although growth is projected to moderate to 7.8% for the year and about 7% in 2027.
The IMF attributed the slowdown to the gradual effect of higher transport and import costs.
Inflation remains contained and is expected to increase to the 2% target in 2027. “Benin’s economy has continued to demonstrate resilience in the face of multiple shocks,” IMF Mission Chief Sonali Das said.
The medium-term outlook remains favourable, supported by reforms, economic transformation and efforts to increase local value addition to agricultural commodities.
The Fund said stronger performance by special economic zones, deeper regional cooperation and faster structural reforms could increase investment, exports and employment.
However, volatile commodity prices, tighter international financial conditions, trade fragmentation, regional insecurity and extreme weather remain significant risks.
The fiscal deficit declined from 2.5% of gross domestic product in 2024 to an estimated 2.3% in 2025, supported by strong revenue collection.
The deficit is projected to remain at 2.3% in 2026 before increasing to 2.9% in 2027, remaining below the West African Economic and Monetary Union ceiling of 3%.
The Fund said prudent fiscal management should continue while protecting priority social spending and providing targeted support to vulnerable households.
Benin should broaden the tax base, reduce exemptions, strengthen tax and customs administration and improve compliance, the Fund said.
Updating the Single Social Registry should improve the targeting and monitoring of social programmes.
The Fund welcomed steps to improve debt and fiscal transparency, including legal reforms for public debt management and the publication of revised debt data aligned with international standards.
Further improvements in state-owned enterprise oversight, procurement and fiscal-risk reporting could strengthen accountability and protect public resources, the Fund said.
Benin’s financial system remains broadly sound, while credit to private businesses continues to expand.
The Fund said increased digital payments and improvements to credit registries, collateral frameworks and financial infrastructure could ease financing constraints for small and medium-sized businesses.
The Fund concluded, saying reforms supporting business formalisation, agricultural productivity, human-capital development and private investment could deliver more inclusive growth and employment.
–IMF/ChannelAfrica–
