IMF Staff Concludes Visit to Benin

IMF News, September 11, 2024

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Benin’s macroeconomic performance remains strong despite a challenging external environment, including the sharp depreciation of the naira.
Economic activity is estimated to have expanded by 6.6 percent in 2024:Q2 year-over-year.
Growth in 2024:Q1 was 6.3 percent year-over-year.
This momentum is expected to continue in the coming quarters.

Aggregate inflation was limited to 3 percent in August (year-over-year).
Food prices rose by 6.6 percent (year-over-year), partly driven by higher exports to neighboring countries amidst a challenging regional security situation.
Government plans to extend its flagship school feeding program to all primary schools in rural areas to keep students at school and fend off food security risks.

Budget execution was strong in the first half of the year, driven by tax collection.
The authorities have started crafting the 2025 budget.
The 2025 budget targets convergence to the West African Monetary Union (WAEMU) overall fiscal deficit norm of 3 percent of GDP, described as a fundamental anchor of their fiscal strategy at EFF/ECF inception.

The IMF Executive Board approved in July 2022 a blended Extended Fund Facility (EFF)/Extended Credit Facility (ECF) arrangement.
This was complemented by the Resilience and Sustainability Facility (RSF) in December 2023.
The combined Fourth EFF/ECF and First RSF reviews were completed in June 2024.
The mission gauged progress in commitments under the current blended EFF/ECF arrangement, including:
- operationalization of the anti-corruption agency and the social registry;
- closure of public bank accounts in commercial banks;
- reform measures under the RSF, including fuel subsidy reform that accounts for Benin’s specificities.
A formal assessment of Benin’s performance and prospects will take place in the context of the combined Fifth EFF/ECF and Second RSF reviews, with the team scheduled to return to Cotonou later this year.

Benin is actively exploring climate finance options with its development partners following the multi-stakeholder climate finance roundtable held in Cotonou in July.

An IMF team, led by Mr. Constant Lonkeng, visited Cotonou during September 5–11, 2024, to assess recent economic developments, discuss the contours of—and policy intentions under—the 2025 budget and gauge progress in commitments under Benin’s Fund-supported programs.
The mission met with:
- Senior Minister of Economy and Finance Wadagni;
- Senior Minister of Development and Government Action Bio Tchane;
- Minister of Health Hounkpatin;
- National Director of the BCEAO Assilamehoo;
- other senior government officials.
The team also met with civil society, the World Food Program, the banking association, and other private sector representatives.
The IMF team expressed thanks for the authorities’ and stakeholders’ warm hospitality and open and constructive dialogue.

IMF Staff Concludes Visit to Benin — Press Release No. 24/328, September 11, 2024.