Moody’s has upgraded Benin’s sovereign credit rating one notch to Ba3 from B1, a move that lowers the country’s borrowing costs and strengthens its standing with global investors after years of fiscal tightening, debt restructuring and sustained economic growth.
The agency cited a gradual strengthening of Benin’s overall credit profile.
The upgrade applies to Benin’s local- and foreign-currency issuer ratings, as well as to the debt of Benin Sukuk S.A., a state-owned special-purpose vehicle.
Moody’s also shifted the outlook to stable from positive. Ba3 remains three notches below investment grade, the threshold generally required for inclusion in major institutional investor portfolios meaning Benin still sits outside the tier of markets commanding the deepest, cheapest pools of global capital, even as it narrows the gap.
The upgrade lands 10 weeks after the May 24 inauguration of President Romuald Wadagni, who served as Benin’s economy and finance minister from 2016 to 2026 and was, according to Moody’s, the architect of the debt strategy behind the improvement.
Wadagni, elected president on April 12, has made continued reform central to his term, and Moody’s cited policy continuity as key to its stable outlook.
The growth figures are striking by regional standards. Benin’s economy expanded 8.1% in 2025, its fastest pace since 1990 and has grown by an average of 6.6% annually since 2018, according to Moody’s, which expects growth of 6.5% to 7% through the end of the decade.
That trajectory held even as Benin absorbed the COVID-19 pandemic, fallout from conflicts in Ukraine and the Middle East and border closures with Nigeria and Niger, two of its largest trading partners.
A rebasing of national accounts, updating the reference year from 2015 to 2023, lifted nominal GDP by roughly 25% to $29 billion. Using the older methodology still applied to debt ratios, public debt peaked at 61% of GDP in 2023 and is projected to fall to about 55% by 2028. The central government deficit narrowed sharply, to roughly 3% of GDP in 2025 from 7% in 2021, while public investment held steady at around 8% of GDP.
Revenue mobilization tells a more mixed story. Tax revenue has risen by 2.9 percentage points of GDP since 2021, but total government revenue, including grants, stands at just 15.8% of GDP well below the 27.2% median for Ba-rated sovereigns.
Financing conditions have improved materially. The weighted average cost of Benin’s outstanding debt stood at 3.4% at the end of 2025, with an average maturity of nearly nine years; domestic debt maturity alone stretched to 4.9 years, up from 2.8 years in 2019.
External debt makes up 77% of the total, but 85% of the debt stock is denominated in euros or CFA francs, limiting currency risk given the CFA franc’s peg to the euro. Multilateral lenders account for 37% of financing.
Benin has established a notable track record in financial market innovations. In January, it issued the first sovereign sukuk in sub-Saharan Africa in over a decade. This was followed by a dollar bond in 2024, which was the first in 14 years. Additionally, in 2021, Benin launched Africa’s first eurobond linked to the Sustainable Development Goals.
At its August 4 meeting, Moody’s rating committee assigned Benin a ba2 fiscal-strength score, up from an initial b3, reflecting the GDP rebasing and the credibility of the euro peg. Country ceilings rose to Baa2 in local currency and Baa3 in foreign currency.
Challenges remain. Per capita income stands at $4,758 on a purchasing-power-parity basis, about one-fifth of the Ba-rated median. Exports remain highly concentrated, with more than 70% going to Nigeria, and Benin remains exposed to security threats spilling over from the Sahel. A reclassification of on-lent loans to state-owned enterprises added 7 percentage points of GDP to the debt ratio, exposing past reporting weaknesses.
Benin’s IMF program, which concluded in February, was fully implemented, meeting all quantitative criteria and all 23 structural benchmarks.
Moody’s said further upgrades depend on narrowing income and revenue gaps, broadening the export base and managing security and reporting risks while sustaining a decade of policy continuity.
