## Benin Taps Two IMF Facilities to Counter Headwinds and Support SDGs

_IMF News, July 14, 2022_

## Source details

**Canonical URL:** [Benin Taps Two IMF Facilities to Counter Headwinds and Support SDGs](https://www.imf.org/en/news/articles/2022/07/14/cf-benin-taps-imf-facilities)

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## Bibliographic details
- Published: July 14, 2022

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### Overview
- Benin has made significant strides in managing its economy over the past five years, but gains are at risk from: a deteriorating regional security situation at its northern borders; COVID-19-induced scars; and higher living costs amid the war in Ukraine.
- To address financing needs and support the National Development Plan 2018-25, Benin accessed the IMF’s Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) with a financial package to the tune of nearly US$650 million.
- The arrangement combines resources under the IMF’s High Combined Credit Exposure (HCCE) policy and is one of the largest Fund-supported programs in the region at about four times Benin’s quota at the IMF.

### Program financing, timing, and immediate support
- Total financial package: nearly US$650 million over 42 months.
- Upfront financing: US$300 million for the first six months of the arrangement.
- Immediate disbursement: US$143 million were disbursed immediately after program approval by the IMF Executive Board on July 8.
- Financing characteristics: large financial support at near-zero interest rate, enabling Benin to postpone until 2023 the reduction in the budget deficit that was planned in the original 2022 budget.

### Government priorities and reform pillars
- The Government Action Program (PAG) 2021–2026, anchored in the National Development Plan (PND) 2018–25, centers on three pillars:
  - (i) strengthening democracy, the rule of law, and consolidating governance;
  - (ii) pursuing structural transformation and integrating national and regional value chains, supported by measures to enhance the business environment;
  - (iii) improving the well-being of the population.
- Sectoral focus and projects:
  - Promote agriculture, tourism, the digital economy, and the knowledge economy, with emphasis on technical education and vocational training.
  - Complete major projects launched during 2016–21 to reduce infrastructure gaps in transport, energy, and water.
- Fiscal framework:
  - Initiatives are underpinned by sound public financial management, transparency, and robust domestic revenue mobilization to consolidate macroeconomic stability and lessen debt burdens on future generations.

### Social protection, inclusion, and public spending safeguards
- Social programs and targets:
  - Expand existing social programs and introduce new ones to strengthen social safety nets.
  - Flagship program ARCH aims to improve access to health services among vulnerable groups.
  - Expand national school feeding program (PNASI) from current coverage of 75 percent of schools to all schools in the upcoming school year.
  - Provide conditional cash transfers to more than 30,000 girls and young women attending school across all 77 municipalities of Benin.
  - Strengthen assistance to disabled people and caregivers.
  - Raise the minimum wage after consultation with unions (last adjusted in 2014) to alleviate purchasing power erosion among low-wage earners.
  - Step up investment in health infrastructure and access to clean water in rural areas; promote girls’ education and vocational training.
- Program safeguard:
  - The amount of priority social spending is subject to a semi-annual floor under the program.

### Security response and related spending
- Northern border threats: Benin has faced an upsurge in terrorist attacks along its northern borders since 2019.
- National security strategy:
  - A “civilian approach” to strengthen state presence and basic public services in communities at risk.
  - Programs include rehabilitating farm roads, improving access to microcredit, promoting agriculture and income-generating activities, providing clean water in rural areas, and supporting livestock management.
- Estimated cost of the strategy: 630.8 billion West African CFA francs (about US$1 billion) over 2021–2026.
- The program includes upfront spending to mitigate security risks and consolidates counterterrorism and sub-regional security cooperation.

### Governance, revenue mobilization, and institutional support
- Revenue mobilization is the cornerstone of the government’s economic reform program to meet development and security needs while preserving debt sustainability.
- Governance and anti-financial-crime measures:
  - The program aims to strengthen public financial management, the rule of law, the fight against money laundering and terrorist financing, and the governance framework.
  - The IMF is providing technical assistance as part of a governance diagnostic and will provide technical inputs into a homegrown medium-term revenue mobilization strategy.
- Expected institutional conditions:
  - The IMF assessed Benin meets HCCE qualifying criteria: (i) exceptional balance of payments needs; (ii) risks to public debt sustainability are adequately contained; and (iii) institutional capacity is robust enough to ensure reasonably strong prospects of program success.

### Significance and expected outcomes
- First-ever use of HCCE policy to combine PRGT/PRGT-like concessional financing and GRA resources beyond the normal combined access limit for a blended EFF/ECF arrangement.
- Frontloaded disbursements represent a vote of confidence in Benin’s track record in fiscal responsibility.
- Anticipated near-term objectives:
  - Help meet urgent financing needs tied to COVID-19 scars, higher cost of living amid the war in Ukraine, and regional security risks.
- Anticipated medium- to long-term objectives:
  - Support pursuit of the SDGs, spur private sector initiatives, leverage Benin's potential, and improve daily lives of Beninese families through steadfast program implementation.

*Benin Taps Two IMF Facilities to Counter Headwinds and Support SDGs — July 14, 2022 (IMF).*

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/publications/weo](https://www.imf.org/en/publications/weo)
- [Global Economy in Crosscurrents of War and Technology](https://www.imf.org/en/publications/weo/issues/2026/07/08/world-economic-outlook-update-july-2026)
- [https://www.imf.org/en/publications/gfsr](https://www.imf.org/en/publications/gfsr)
- [Global Financial Markets Confront the War in the Middle East and Amplification Risks](https://www.imf.org/en/publications/gfsr/issues/2026/04/14/global-financial-stability-report-april-2026)
- [https://www.imf.org/en/publications/fm](https://www.imf.org/en/publications/fm)
- [Fiscal Policy under Pressure: High Debt, Rising Risks](https://www.imf.org/en/publications/fm/issues/2026/04/15/fiscal-monitor-april-2026)
- [https://www.imf.org/en/publications/reo](https://www.imf.org/en/publications/reo)
- [Asia and Pacific](https://www.imf.org/en/publications/reo/apac)
- [Europe](https://www.imf.org/en/publications/reo/eu)
- [Middle East and Central Asia](https://www.imf.org/en/publications/reo/meca)
- [Sub-Saharan Africa](https://www.imf.org/en/publications/reo/ssa)
- [Western Hemisphere](https://www.imf.org/en/publications/reo/wh)
- [https://www.imf.org/en/publications/areb](https://www.imf.org/en/publications/areb)
- [Getting to Growth in an Age of Uncertainty](https://www.imf.org/en/publications/areb/issues/2025/09/24/annual-report-2025)
- [More Publications](https://www.imf.org/en/publications)
- [Press Release of Program Approval](https://www.imf.org/en/News/Articles/2022/07/08/pr22252-benin-imf-executive-board-approves-usd638m-eff-ecf-concludes-2022-article-iv-consultation)
- [Extended Fund Facility (EFF)](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/20/56/Extended-Fund-Facility)
- [Extended Credit Facility (ECF)](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/04/Extended-Credit-Facility)
- [High Combined Credit Exposure (HCCE)](https://www.imf.org/en/Publications/Policy-Papers/Issues/2020/09/18/Policy-Safeguards-For-Countries-Seeking-Access-To-Fund-Financial-Support-That-Would-Lead-To-49759)
- [Regional Economic Outlook](https://www.imf.org/en/Publications/REO/SSA/Issues/2022/04/28/regional-economic-outlook-for-sub-saharan-africa-april-2022)
- [Benin and the IMF](https://www.imf.org/en/Countries/BEN)
- [Ukraine](https://www.imf.org/en/Topics/IMF-and-Ukraine)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/07/14/cf-benin-taps-imf-facilities_