Benin Republic's GDP Grows At Fastest Pace Since 1990

TLDR

Benin's economy expanded by 7.5% in 2024, the country's highest growth rate since 1990, driven by activity in services and manufacturing
The World Bank has praised the macroeconomic progress but called for deeper tax reform and targeted redistribution to make growth more inclusive
Growth is projected to average 7.1% annually from 2025 to 2027, with poverty declining to 22.3% by 2027

Benin's economy expanded by 7.5% in 2024, the country's highest growth rate since 1990, driven by activity in services and manufacturing. The World Bank has praised the macroeconomic progress but called for deeper tax reform and targeted redistribution to make growth more inclusive.

The poverty rate fell from 33.2% to 31% in one year. Benin also met the WAEMU's 3% budget deficit target while reducing public debt. Growth is projected to average 7.1% annually from 2025 to 2027, with poverty declining to 22.3% by 2027.

Tax revenue has grown from 9.2% of GDP in 2016 to 13.2% in 2024, but remains below peer-country averages. The World Bank recommends enhancing progressive taxation, digitizing tax collection, and improving the efficiency of social spending. It estimates these reforms could lift over 100,000 people out of poverty each year.

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Key Takeaways

Benin's rapid growth and fiscal discipline create space for broader reforms. The World Bank notes the country's ability to meet budget targets and attract investment--supported by the Glo-Djigbé Industrial Zone--as a platform for integration into global value chains. But inequality and low tax mobilization remain challenges. While revenue performance improved over the last decade, the narrow tax base limits funding for essential services. The World Bank urges Benin to strengthen safety nets and prioritize tax justice to reduce poverty sustainably. With budgetary space in place, the next phase will test the country's capacity to translate strong GDP numbers into equitable social outcomes.

Read the original article on Daba Finance.