S&P Global Ratings assigned long- and short-term foreign- and local-currency sovereign credit ratings of B+/B to Benin, with a stable outlook.
The ratings are supported by S&P's expectation that Benin's external and fiscal position, along with its economic activity, would slowly improve in the future, driven by the country's program of pro-growth reforms.
S&P expects real GDP growth to average close to 6.3% in 2018 to 2021, supported by private and public investments that would boost agricultural productivity, infrastructure and the tertiary sector. Meanwhile, it noted that income levels are low, and that there are significant structural weaknesses which limit Benin's potential funding and tax bases.
Ratings are constrained by factors such as Benin's high external financing requirements, low per-capita income and rapidly increasing public debt, the rating agency noted.
In addition, S&P said the stable outlook reflected its expectation of robust economic growth and fiscal consolidation against weaker reform delivery risks than currently anticipated.
Benin's ratings could be downgraded if economic and fiscal reform eases, resulting in slow GDP growth or a decline in fiscal performance. Conversely, S&P could upgrade the ratings in case of a significant increase in the pace of Benin's economic growth.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.