The International Monetary Fund (IMF) Executive Board has completed its sixth reviews of Benin's Extended Fund Facility (EFF) and Extended Credit Facility (ECF), as well as the third review of the Resilience and Sustainability Facility (RSF). The completion of these reviews enables an immediate disbursement of approximately US$36 million under the EFF/ECF, bringing total disbursements to about US$623 million. Additionally, around US$54 million will be disbursed under the RSF arrangement.
Economic activity in Benin has accelerated over the past five years, reaching a growth rate of 7.5 percent year-over-year in 2024. This growth is expected to remain robust in the medium term. Although there was a temporary deterioration in the current account due to imports related to the Glo-Djigbé Industrial Zone, it is anticipated that this will recover gradually as exports increase.
Benin's program performance under the EFF/ECF has been strong, with all targets met by December 2024. In terms of resilience and sustainability, new regulations have been adopted for water resources monitoring, construction, and renewable energy. Electricity tariff regulations have also been revised to improve financial sustainability.
Following discussions on Benin's progress, Mr. Okamura, Deputy Managing Director and acting chair at IMF stated: “Benin’s performance under its Fund-supported arrangements has been strong. Its strong institutional foundation and the authorities’ economic reform drive and sound macroeconomic management have yielded tangible dividends... The authorities should nonetheless remain vigilant to regional and global risks...”
Mr. Okamura highlighted that fiscal consolidation supported Benin's compliance with West African Economic and Monetary Union fiscal deficit norms ahead of schedule. He emphasized maintaining tax collection efforts while ensuring prudent spending to preserve fiscal discipline.
The focus remains on fostering inclusive private sector-led growth and enhancing fiscal transparency for market confidence. Efforts are needed to support small- and medium-sized enterprises (SMEs) development and improve social assistance targeting vulnerable households.
Mr. Okamura concluded by noting: “The authorities have revised regulations for water resources monitoring... The authorities should accelerate reforms aimed at enhancing resilience to climate change...”