Industry and the primary sector have also contributed, through the construction of the Glo-Djigbé Industrial Zone, cotton production and agricultural diversification. Headline inflation fell to 1.2% in 2024, thanks to lower energy and transport prices, while food inflation doubled to 0.8%.
Benin's fiscal consolidation has reduced the deficit and public debt, reaching the WAEMU target of 3% of GDP in 2024 thanks to higher tax revenues and lower investment spending. This momentum continued in the first half of 2025, with public debt decreasing to 51.6% of GDP at the end of June 2025. The progress made reflects tax modernization, broadening the tax base and controlling expenditure. Benin has a moderate risk of debt distress.
Thanks to its strong commitments in terms of macroeconomic stability since 2016, the government has been able to count on fiscal leeway to support economic activities during the pandemic. The continuation of the economic recovery will depend on its ability to absorb the fragilities linked to its growth model. Indeed, the economy is dependent on exports of unprocessed agricultural products (cotton, cashew nuts) and the re-export of imported goods and commodities (used cars, rice, etc.) to Nigeria. Nearly 85% of the workforce works in the informal economy.
