Washington, D.C.: An International
Monetary Fund (IMF) team, led by Mr. Constant Lonkeng, visited
Cotonouduring September 6–12, 2023, to assess
recent economic developments and gauge progress in commitments under
Benin’s Fund-supported program. The IMF Executive Board approved, on July
8, 2022, a blended arrangement under the Extended Fund Facility (EFF) and
Extended Credit Facility (ECF) for Benin in the amount of US$638 million,
equivalent of 391 percent of quota (see
Press Release No 22/252), to help meet pressing financing needs and support the country’s progress
towards the Sustainable Development Goals. The Second Review of the program
was successfully completed in May 2023
(Press
Release No 23/158).
At the end of the visit, Mr. Lonkeng issued the following statement:
“After strong GDP print in the first half of the year (6.3 percent), the
Beninese economy faces headwinds from Niger border closure amidst regional
sanctions following the recent coup. Pump price hikes in Nigeria have
translated into significant increases in the price of smuggled gasoline in
Benin (by about 60 percent), exerting pressure on inflation.
Following policy accommodation in recent years, fiscal consolidation is
underway, underpinned by tax collection. Budget support to Benin from
development partners is expected to be larger than programmed this year,
which could unlock additional spending under the EFF/ECF in these
challenging times.
The authorities are preparing a draft 2024 budget in line with their broad
objective of converging to the West African Economic and Monetary Union
(WAEMU) deficit norm of 3 percent of GDP by 2025. They are also developing
a medium-term revenue mobilization strategy to support fiscal consolidation
while meeting Benin’s large development needs.
The authorities requested Fund support under the new Resilience
Sustainability Fund (RSF). In this context, the IMF team—joined by experts
from the Global Center on Adaptation (GCA)—explored the authorities’
climate agenda with various domestic stakeholders.
“The mission met with Senior Minister of Economy and Finance Wadagni,
Senior Minister of Development and Coordination of the Governmental Action
Bio Tchané, Minister of Justice and Legislation, Detchenou, Minister of
Social Affairs and Microfinance Tognifode, National Director of the Central
Bank of West African States (BCEAO) Assilamehoo, and other senior
government officials. The team also met with the donor community, the
banking association, the civil society, private sector representatives and
the women business association.
“The IMF team would like to thank the authorities and various stakeholders
for their warm hospitality and open and constructive discussions. The team
is expected to return to Cotonou later this year for the Third program
Review and RSF considerations.”