October 29, 2018
PRESS OFFICER: Lucie Mboto Fouda
Phone: +1 202 623-7100Email: MEDIA@IMF.org
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
A staff team from the International Monetary Fund (IMF) led by Luc Eyraud visited Cotonou during October 18 to 29, 2018 to hold discussions on the third review of the three-year economic and financial program supported by the IMF under the Extended Credit Facility (ECF) [1] arrangement with the Republic of Benin. The discussions covered the draft 2019 budget, recent economic and financial developments, as well as policies needed to foster high and inclusive growth, preserve debt sustainability, enhance governance, and promote financial stability.
At the end of the visit, Mr. Eyraud issued the following statement:
“The discussions on the third review under the ECF-supported program have allowed the authorities and the IMF team to reach a staff level agreement, subject to approval by IMF management and the Executive Board. Consideration by the IMF’s Executive Board is expected in December 2018.
“High public investment, record cotton production and processing, as well as the recovery of the Nigerian economy were the main drivers of 2017 growth, which is estimated at 5.8 percent. The current account deficit widened in 2017, due to an increase in imports of goods, reflecting the scaling-up of public investment. For 2018 preliminary estimates indicate that growth will further accelerate, mostly because of buoyant port activity. The medium-term outlook remains favorable with economic growth projected to remain above 6 percent over 2019–23, driven by rising private investment and stronger demand from Nigeria. Inflation is expected to stay below the WAEMU convergence rate of 3 percent in 2019.
“Performance under the ECF-supported program remains satisfactory. Based on available data, all program monitoring indicators (quantitative and structural) at end-June 2018 were broadly met.
“The authorities and the IMF mission agreed on fiscal policy measures for the 2019 budget to secure key program objectives. These measures should enable the projected fiscal deficit to decrease to 2.7 percent of GDP in 2019 and thus comply with the WAEMU regional deficit norm.
“The IMF welcomed the efforts included in the budget to mobilize domestic revenues. The revenue measures will help allocate more resources to social programs to protect the most vulnerable segments of the population. In particular, the new health insurance system will enter in pilot phase next year. Better revenue mobilization will also create space to finance the infrastructure projects of the Government Action Program (2017-2021).
“In the area of public expenditure management, further efforts are needed to strengthen the evaluation and prioritization of new investment projects and, more generally, improve the efficiency of public investment. In this regard, the authorities are implementing the recommendations of the Technical Assistance mission on the management of public investment conducted by the IMF at the end of 2017.
“The authorities and IMF staff also agreed on policies to secure public debt sustainability through a prudent borrowing strategy and the reinforcement of debt management. In this regard, the team encouraged the authorities to pursue their recent actions to lengthen debt maturities, lower interest costs and rebalance the structure of the debt portfolio. The recent debt reprofiling operation, contributes to this objective.
“Going forward, the authorities and the IMF staff agreed on the need to pursue efforts to strengthen governance and accelerate reforms aimed at improving the business environment. The mission noted the recent improvement in these areas and encouraged the government to push further reforms that facilitate access to electricity and finance, as well as the reinforcement of the anti-corruption framework.
“The team met with President Patrice Talon; Abdoulaye Bio Tchané, Minister of State for Planning and Development; Romuald Wadagni, Minister of Economy and Finance; Alain Komaclo, National Director of the regional central bank, BCEAO; and other senior government officials.
“The mission thanks the authorities for their strong cooperation and the constructive discussions.”
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