Benin adopts revised 2026 budget with sweeping reforms

The National Assembly of Benin has unanimously approved the revised 2026 finance law during a plenary session at the Governor’s Palace in Porto-Novo. The revised budget, which reflects an 8% increase, now stands at over 4,148 billion CFA francs, up from the 3,700 billion initially planned in the original finance law.

Key figures behind the revised budget

• The revised budget amounts to 4,148 billion CFA francs, an 8% rise compared to the initial 3,700 billion.
• The deficit is capped at 487 billion CFA francs, equivalent to 3.1% of GDP, aligning with Benin’s commitments to the West African Economic and Monetary Union (WAEMU).
• Capital expenditures reach 1,572 billion CFA francs, an 8.5% increase, while ordinary ministry expenses total 1,777 billion CFA francs.
• The public sector employment ceiling remains unchanged at 102,740 full-time equivalents.

Social priorities take center stage

The revised budget places a strong emphasis on social welfare, with several measures designed to improve living standards. Free tuition fees are now extended to all girls in general secondary education. A national electrification and potable water access program is being expanded to include health centers. The law also enshrines the principle of no prepayment for emergency medical care and strengthens local social safety nets, particularly for vulnerable children.

Agriculture is not left behind, with 90 billion CFA francs allocated in subsidies, while targeted interventions aim to support children living on the streets, especially in northern and border regions.

Modernizing the fiscal framework

The revised finance law introduces several structural fiscal measures. One of the most significant changes involves the taxation of undistributed distributable profits. Companies that fail to reinvest their profits within three years of generation will face taxation. To encourage voluntary compliance, a reduced rate of 7.5% applies to cases regularized before December 31, 2026. After this deadline, the standard tax rate will apply, along with penalties.

The digital economy is also brought into focus, with online platforms—including those facilitating e-commerce and money transfers—now subject to withholding tax obligations. Capital gains from the sale of shares in Beninese companies will be taxable, regardless of the seller’s residence. Tax audit durations for small businesses (turnover under 2 billion CFA francs) are reduced from three to two months, and digitalization of tax procedures is now legally binding.

Streamlining public finances

The law includes a cleanup of special Treasury accounts, with three funds being abolished: the Fund for Modernizing Financial Administrations, the Fund for Arts and Culture Development, and the Sports Development Fund. Their remaining balances will be transferred to the general budget.

Additionally, the Disaster Prevention and Management Account has been renamed to include vulnerability in its scope. In 2026, it will be funded by 56.2% of mobile telephony royalties. The criteria for state financial support to local governments now also factor in climate change adaptation and mitigation.

Strong oversight and swift parliamentary approval

The Economic and Social Council, consulted as required by the constitution, issued a favorable opinion while proposing fourteen recommendations. Among these, the Council calls for a plan to bring the deficit below 3% of GDP by 2027-2029, semi-annual public debt sustainability reports, the implementation of geolocated digital tracking for agricultural subsidies, and biannual budget execution reviews involving the Council and the Audit Court.

Parliamentary debates were brief, with both the Republican Bloc and the Progressive Union for Renewal limiting their interventions to fifteen minutes each. While broadly supporting the text, lawmakers stressed the need for rigorous execution oversight and tighter control over social measures.

The Finance Commission, which reviewed the law in detail, forwarded four key recommendations to the executive: enhanced monitoring of street children with a focus on northern and border areas, clarification of the emergency care program, extension of social measures to university services, and equitable distribution of investments nationwide.