(Ecofin Agency) - The American rating agency cited the strength of Benin's economic and financial fundamentals to explain the revision of its outlook, despite the unstable international and regional environment.

Standard and Poor's (S&P) maintained Benin's credit rating at "BB-" on October 16, but upgraded its outlook from "stable" to "positive." The information was made public on October 22 by the Beninese government.

According to the announcement, S&P cited the strong performance of Benin's economy as a key reason for the outlook change, with GDP growth reaching 6.4% in 2023. The forecast for the next four years is equally promising, averaging 6.6%. This growth demonstrates the country's resilience in facing external shocks.

The growth results from significant structural reforms and strategic investments. Notable projects include the development of the Glo-Djigbé Industrial Zone and the expansion of the Port of Cotonou. These initiatives are helping diversify the economy and making Benin more attractive to foreign investors.

In terms of budget management, the West African nation is on a path to fiscal improvement. The projected budget deficit for 2024 is 3.7%, and it is expected to drop below the critical 3% mark by 2025. There is also a gradual reduction in public debt, with expectations of it falling to about 50% of GDP by 2026. This fiscal consolidation is supported by increased tax revenues, tighter control on public spending, and assistance from the International Monetary Fund (IMF).

On October 17, the IMF announced a staff-level agreement for a $95 million disbursement to Benin. This funding, part of the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) programs, as well as support for climate reforms through the Resilience and Sustainability Facility (RSF), marks an important milestone in the international support for the country's economic reforms.

The Bretton Woods institution highlighted Benin's notable economic transformation, particularly marked by increased exports of high-value-added products. Moreover, the growth of the information technology and tourism sectors plays a crucial role in this evolution. These advancements, along with disciplined budget management and sustained reforms, have bolstered the confidence of investors and international institutions.