The Benin Economic Outlook report emphasizes that adopting a more inclusive growth strategy, along with tax and spending policies tailored to the needs of vulnerable populations, could significantly enhance efforts to reduce poverty and inequality in the country.
The first section of the report, titled Raising Domestic Revenue Mobilization while Protecting the Poor, reviews recent economic trends and outlines Benin’s medium-term outlook. In 2024, Benin’s economy grew by 7.5%—its highest growth rate since 1990—driven by strong performance in the services and industrial sectors. This economic momentum contributed to a reduction in poverty, with the national poverty rate falling from 33.2% in 2023 to 31% in 2024.
Fiscal consolidation efforts led to Benin meeting the West African Economic and Monetary Union (WAEMU) fiscal deficit ceiling of 3% in 2024. The resulting reduction in public debt has contributed to an improved debt profile. Additionally, the development of the Glo-Djigbé Industrial Zone (GDIZ) positions the country to better integrate into global value chains. Despite uncertainties in global trade and fluctuations in regional trade relations, Benin’s economic growth is projected to average 7.1% between 2025 and 2027. The combination of economic expansion and moderating inflation is expected to further reduce the poverty rate to 22.3% by 2027.
The second section of the report examines the role of domestic revenue mobilization in sustaining growth while protecting the poor. Benin has made notable progress in tax policy simplification and digitalization of tax administration, leading to improved service quality and enhanced revenue security. Since 2016, domestic revenue mobilization has grown steadily despite challenges such as border closures, the COVID-19 pandemic, inflationary pressures in 2022, and regional insecurity. Tax revenue rose from 9.2% of GDP in 2016 to 13.2% in 2024, reflecting a 4 percentage point increase.
While Benin’s fiscal system already contributes to reducing inequality—lowering the Gini coefficient by 3 points—further reforms are needed. By implementing a more progressive mix of targeted taxes and social transfers, Benin could simultaneously increase resource mobilization and lift over 100,000 people out of poverty annually. These adjustments are critical to funding the country’s development agenda and ensuring long-term inclusive growth.
