IMF Staff Concludes Visit to Benin

IMF News, November 23, 2021

Source details

Press Release No. 21/345; November 23, 2021.
IMF mission led by Constant Lonkeng conducted in-person and virtual meetings with Beninese authorities during November 15–23 to discuss recent economic developments and policy priorities to inform future discussions on an IMF-supported program.
The mission followed an official request for a new Fund-supported program by the Beninese authorities to anchor the country’s homegrown development plan.
Views expressed are those of IMF staff; the mission will not result in a Board discussion.

Benin’s three-year Fund-supported Extended Credit Facility (ECF) arrangement (about US$255 million, including the augmentation of access of US$103 million at the onset of COVID-19) reached an end in May 2020.
IMF emergency financing approved in December 2020 under the Rapid Credit Facility and the Rapid Financing Instrument: US$178 million.
IMF general SDR allocation received in August 2021: US$168 million, 1 percent of GDP.

Strong macroeconomic fundamentals entering COVID-19 provided much-needed fiscal space and continuous access to financing, helping contain the economic fallout.
Government pandemic response and public investment contributed to economic activity expanding by 3.8 percent in 2020.
The government designed a package of mitigating health-related and economic support measures totaling 4.5 percent of GDP extending over 2020–22.
A robust economic recovery is underway despite setbacks in agriculture due to weather-related events.
Recovery is aided by the normalization of merchandise traffic at the Port of Cotonou—identified as one of Benin’s main economic engines.
Inflation and food prices:
- Aggregate inflation has remained subdued.
- Food prices rose 8 percent in October 2021, y/y.

Benin experienced its most severe wave of COVID-19 infections, with weekly confirmed cases peaking at 4,760 in September.
Situation has since eased, but vaccination coverage remains low:
- Only about 460,000 persons or 3.7 percent of the population have been fully vaccinated.
Authorities are revamping the vaccination strategy through close engagement with local communities and expansion of rollout capacity to increase take-up and reduce vulnerability to future outbreaks.

The mission noted online publication of procurement documents and key contract information related to major projects implemented under the COVID-19 response plan.
Operationalization of the Court of Auditors (previously Accounting Chamber) following an institutional change that set it at arm’s length from the Supreme Court is underway.
The institutional transition has delayed the ex-post independent audit of COVID-19 related funds; the authorities intend to accelerate this audit to preserve the integrity of emergency financing and bolster trust in public institutions.

The mission discussed recent economic developments and the outlook, budget execution under the 2021 supplementary, and assumptions underpinning the 2022 budget, as well as authorities’ policy priorities.
These discussions will inform the upcoming Article IV consultation and discussions on a possible Fund-supported program for Benin, expected to take place early next year.
The mission met with:
- Senior Minister of Economy and Finance Wadagni;
- Minister of Development and Coordination of the Governmental Action Bio Tchané;
- Minister of Health Hounkpatin;
- Minister of Social Affairs and Microfinance Tognifodé;
- National Director of the BCEAO Assilamehoo;
- Other senior government officials, civil society, representatives of the business community (including the national federation of small-and-medium-size enterprises), the banking association, and other private sector actors in Cotonou and other communes.

IMF Press Release No. 21/345; November 23, 2021.