## IMF Executive Board Completes the First Reviews under the Extended Fund Facility and Extended Credit Facility Arrangements for Benin

_IMF News, December 14, 2022_

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## Bibliographic details
- Published: December 14, 2022

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### Program review and disbursement
- The Executive Board completed the First Review of Benin’s Fund-supported program on December 14, 2022.
- The program is a 42-month blended EFF/ECF under High Combined Credit Exposure (HCCE), approved on July 8, 2022.
- This review completion allows for the immediate disbursement of SDR 108.30 million (about US$144 million) toward budget support.
- Total disbursements under the program so far amount to SDR 216.6 million (about US$287 million).

### Economic outlook and key projections
- Economic activity is projected to expand by 6 percent this year, driven by agroindustry, construction, and port-related activity.
- The current account deficit is projected to widen to 6.1 percent of GDP, due to high fuel and food prices, compounded by the strong US dollar appreciation.
- Inflation has remained subdued, owing to a strong harvest season and subsidy measures adopted by the government since Russia’s invasion of Ukraine.

### Program performance and fiscal stance
- All end-June 2022 program quantitative performance criteria and indicative targets were met with wide margins.
- All structural benchmarks for end-June 2022 were implemented.
- After three years of warranted policy accommodation to contain the impact of severe and repeated shocks, the National Assembly adopted a budget law resuming the consolidation of public finances next year.
- The adopted budget law allocates substantial resources to critical social and security-related spending.
- The envisaged revenue-based fiscal consolidation aims to create space for Benin’s large development needs while preserving debt sustainability.
- Near-term support for consolidation will come from the authorities’ recent strategy for streamlining tax expenditures.
- Outer-year support will come from the upcoming Medium-Term Revenue Mobilization Strategy (MTRS) that seeks to further expand the tax base and improve the overall efficiency of the tax system.

### Policy recommendations and institutional priorities (from Mr. Okamura, Deputy Managing Director and Acting Chair)
- Continue strong tax collection efforts and spending reprioritization to complement frontloaded IMF financing and meet unanticipated spending needs related to the protracted war in Ukraine and regional security spillovers.
- Fine-tune policy calibration to translate macroeconomic gains into improved social outcomes.
- Implement a fundamental reform of fuel subsidies to help release resources toward human capital development for future generations.
- Clearly communicate policy tradeoffs and provide targeted support measures to the most vulnerable to maintain broad support for necessary reforms.
- Swiftly operationalize the recently established social registry to provide the necessary infrastructure to channel support to vulnerable households in the adjustment process.
- Steadfastly implement the authorities’ action plan to strengthen the AML/CFT framework.
- Enhance governance and transparency—building on the IMF governance diagnostic once finalized—to bolster institutional foundations of private-sector led inclusive growth.
- Promote access to finance, particularly for small- and medium-sized enterprises, while remaining vigilant vis-à-vis financial sector risks.
- Undertake efforts to mitigate food insecurity and strengthen climate resilience.

*IMF Press Release No. 22/432 (December 14, 2022).*

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## References

- [Kenji Okamura](https://www.imf.org/en/About/senior-officials/Bios/kenji-okamura)
- [Benin and the IMF](http://www.imf.org/external/country/BEN/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [PR 22/252](https://www.imf.org/en/News/Articles/2022/07/08/pr22252-benin-imf-executive-board-approves-usd638m-eff-ecf-concludes-2022-article-iv-consultation)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/12/14/pr22432-benin-imf-executive-board-completes-first-reviews-under-eff-and-ecf-arrangements_