Benin—Letter of Intent

Cotonou, February 17, 2004

The following item is a Letter of Intent of the government of Benin, which describes the policies that Benin intends to implement in the context of its request for financial support from the IMF. The document, which is the property of Benin, is being made available on the IMF website by agreement with the member as a service to users of the IMF website.

Mr. Horst Köhler
Managing Director
International Monetary Fund
700 19th Street, NW
Washington, D.C. 20431
U.S.A.

Dear Mr. Köhler:

1. In 2003, the government of Benincontinued to implement the program supported by the Poverty Reduction and Growth Facility (PRGF) arrangement approved on July 17, 2000. Overall, macroeconomic performance in 2003 was satisfactory. GDP growth rate reached 5½ percent and inflation remained below 2 percent, while the current account deficit narrowed to 8 percent of GDP.

2. All the performance criteria and structural benchmarks for end-September 2003, as well as the corresponding indicative quantitative targets for end-December 2003, were met; all of the prior actions for the conclusion of the review (listed in the attached table) have been implemented.

3. On the basis of the above, the government requests completion of the sixth review and the release of the last disbursement under the arrangement in an amount of SDR 1.35 million.

4. The government remains committed to the objectives of fostering growth and reducing poverty after the expiration of the current arrangement.

5. As was the case in the past, the government consents to the Fund's publication of this letter and the staff report for the sixth review under the PRGF arrangement.

Sincerely yours,

Prior Actions for the Sixth Review of the PRGF Program

Measures

Resume the privatization process for SONAPRA in a transparent manner.

Adopt an action plan for the recovery of the national oil distribution company (SONACOP) tax arrears.

Adopt cuts in budgetary allocations for 2004 (amounting to CFAF 6 billion) to compensate for unplanned salary raise granted in late November 2003.

Abstain from adopting a supplementary budget for 2004 to provide for new expenditure for the organization of the junior Pan-African soccer games until an agreement is reached with major donors on the magnitude and financing of such a budget.