Press Release: Statement by the IMF Staff Mission on the Second Review Under Benin's PRGF-Supported Program
March 8, 2007Press Release No. 07/41
The following statement was issued yesterday in Cotonou by Mr. Mbuyamu Matungulu, International Monetary Fund (IMF) mission chief to Benin:
"An IMF mission visited Benin during February 21-March 7 to conduct the second review under Benin's Poverty Reduction and Growth Facility (PRGF) Arrangement. The mission met the President of the Republic, His Excellency Boni Yayi, the Minister of Development, Economy and Finance, Mr. Pascal Koupaki, his deputy, Mr. Albert Houngbo, Mr. Marcel A. de Souza, the National Director for the Central bank (BCEAO), and other senior officials of the government. The mission also held fruitful discussions with members of the donor community and private sector.
"The mission noted that macroeconomic developments were broadly favorable in 2006, although economic growth was less buoyant than anticipated under the program, owing to lower-than-expected cotton output and heightened energy shortages. Reflecting a good food harvest, average inflation eased off, notwithstanding continuing pressures on oil prices. Moreover, against a background of enhanced discipline in spending policy, the budgetary situation improved as revenue recovered in response to strong governance measures by the new administration.
"Reflecting these developments, all program quantitative performance criteria and indicative targets at end-December 2006 were observed. In the structural area, the authorities took steps to revive their stalled reform agenda for the key sectors of cotton, telecommunications, and electricity. However, limited progress was achieved in the port area where implementation of consolidated electronic billing of port services, an end-December 2006 structural performance criterion, was not effected. By and large, Benin's PRGF-supported program was maintained on track.
"Overall, program review discussions have been productive and key elements of the authorities' policy framework for 2007 have been agreed upon. Budgetary prospects remain consistent with the medium-term macroeconomic framework under the PRGF arrangement, with further revenue gains sustained by efforts to strengthen tax and custom administration, and spending likely to remain under adequate control. The authorities reiterated commitment to pursuing programmed reforms in the cotton, electricity, and telecommunication sectors, and to expediting implementation of measures to enhance Cotonou port competitiveness. To remedy delays in the latter area, they have handed over reform management to their U.S.-funded Millennium Challenge Account unit.
"The staff team would like to thank the authorities for their hospitality and the close collaboration and constructive policy dialogue."