BENIN

RISK RATING
Moderate
Default High Risk Score 2.80
Normal Average 1.84
Weighted Average 1.69
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

Benin’s management of the pandemic has inspired confidence in the state’s ability to manage the crisis ahead of presidential elections in March 2021. The reopening of the Nigerian border has also boosted economic prospects. However, a range of economic, political, and security challenges still loom, particularly the prospect of more violent unrest ahead of elections, which will be a stark reminder of the narrowing of the political space in Benin. After those elections, President Patrice Talon will continue to assert his political authority to further implement free-market and liberalisation policies. Incremental privatisation in agriculture, healthcare, and telecommunications have triggered several waves of protest action, which are likely to repeat in the two-year outlook. However, from an economic and financial perspective, the risk outlook is generally moderate which bodes well for the completion of large financing deals.

  • The centralisation of authority was the main outcome of the 2019 legislative elections and 2020 municipal elections. A dispute over the country‚Äôs electoral law that could exclude the opposition from the 2021 presidential elections is likely to spill onto the streets with a resumption of violent protests expected around the elections period and beyond. Despite some voiced commitments to reforming the electoral law and to re-opening the political space, there have been no overt signals that such reforms are underway. Instead, Talon‚Äôs administration has continued to take actions which have resulted in the suppression of opposition voices and independent media. Nevertheless, Talon‚Äôs agenda of economic liberalisation has been welcomed by the international community and key domestic stakeholders. As his power goes unchecked by a pliable judiciary, Talon is expected to implement his pro-investment and liberalising economic agenda.
  • The threat of Islamist militancy from the Sahel is mounting, particularly the risk of kidnap in Pendjari National Park in northern Benin, near the border with Burkina Faso. Here militant group Ansarul Islam, which collaborates with Mali and Burkina Faso groups, has made increasingly frequent incursions into northern Benin. Meanwhile, Benin‚Äôs ambitions to develop Cotonou into a major regional transit hub faces several potential impediments, not least of which is the growing piracy threat posed to international shipping in Benin‚Äôs coastal waters. Without a concerted effort at greater cooperation by regional security authorities, the offshore security situation is likely to continue to deteriorate, exposing commercial shipping operators transiting Benin‚Äôs waters to an increasing threat of armed robbery and kidnapping.
  • Benin‚Äôs economy is set for a pre-pandemic trajectory within two years if international lenders continue to provide additional funding to cover budget shortfalls and stimulate economic recovery. Benin is also set to benefit from considerable debt service relief from international creditors in the coming year, which will likely forestall the threat of a default. Meanwhile, a resilient economy and improvements in economic management have created appetite for debt-financed infrastructure. From an economic and financial perspective, the risk outlook is generally moderate which bodes well for the completion of such financing deals. The Port Cotonou is likely to be a primary focus of efforts to attract investment.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
1.8
Expropriation, Nationalisation, Confiscation & Deprivation
1.0
Contract Frustration & Breach
1.5
Taxation
1.0
Bribery & Corruption
2.0
Regulatory Burden
1.5
Strikes, Riots & Civil Commotion
2.8
Security
2.2
Sovereign Default
2.0
Economic Volatiliy
2.6

Risk Rating Scale (small)

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Risk Score BTN

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