Benin’s 2026 budget aims to keep the fiscal deficit within the West African Economic and Monetary Union (WAEMU) ceiling of 3 percent of GDP, according to IMF report on Wednesday.
Authorities plan to anchor fiscal adjustments in the Medium-Term Revenue Strategy through sustained tax revenue mobilisation and streamlined public expenditure.
Officials highlighted the importance of rebalancing the debt portfolio toward domestic sources over time, in line with the Medium-Term Debt Strategy. While Benin maintains a moderate risk of debt distress due to stronger debt-carrying capacity, the recent upward revision of central government debt underscores the need for heightened vigilance.
Continued proactive debt management and closer monitoring of public enterprises’ liabilities are expected to mitigate external rollover risks.
The Government is also urged to strengthen fiscal transparency by publishing revised debt and fiscal data in regular statistical bulletins.
Enhanced governance and oversight of state-owned enterprises (SOEs) and public agencies remain a priority, given their growing role in the economy.
Supervisory authorities are advised to maintain rigorous oversight of both public and private financial institutions to safeguard financial stability and limit contingent liability risks.
Authorities are also encouraged to promote formalisation of the economy, support small and medium enterprises, update the social registry, and implement recommendations from the recently mapped social protection programs to improve targeting of vulnerable households.
Under the Resilience and Sustainability Facility (RSF), Benin has adopted new climate-related public financial management regulations, improved climate-financial information systems, reformed water tariffs, implemented an agricultural insurance scheme, and strengthened social protection mechanisms. Going forward, continued reform momentum is expected to bolster balance of payments stability and further catalyse private-led climate finance initiatives.