Press Release No. 17/59

IMF Reaches Staff-level Agreement with Benin on an Extended Credit Facility Arrangement

February 22, 2017

• Benin’s authorities and an IMF staff team reached staff-level agreement on a three-year economic program that could be supported by an ECF for about USD 150.4 million.
• The request is subject to approval by the IMF Executive Board, which is expected to consider it in March/April 2017.
• The authorities’ program would help Benin achieve a strong and inclusive growth in order to reduce poverty while ensuring public finance and debt sustainability.

At the request of the government of Benin, a team from the International Monetary Fund (IMF), led by Norbert Toé, Mission Chief for Benin, visited Cotonou from February 15 to 22, 2017, to finalize discussions with the authorities on a three-year economic program that could be supported by the IMF under its Extended Credit Facility (ECF) arrangement. [1]

At the conclusion of the mission, Mr. Toé issued the following statement:

“The IMF team reached staff-level agreement with the authorities, subject to approval by IMF Management and the Executive Board, on a three-year program that could be supported by an arrangement under the ECF in an amount of SDR 111.42 million (about USD 150.4 million) or 90 percent of Benin’s quota in the IMF.

“The three-year economic program reflects the strategic orientations of the Government’s Action Plan, 2016-21, and aims to improve the living conditions for the population, maintain a stable macroeconomic environment, and preserve public debt sustainability. The main objectives of the program are to (i) create fiscal space through the modernization of the tax and customs administration and enhancing the efficiency of government spending; (ii) refocus policies on sustainable and inclusive growth through targeted social spending and investment in infrastructure; and (iii) strengthen the business environment. The program includes a set of comprehensive structural reforms aimed at improving revenue administration, strengthening public financial management and debt management, and supporting private sector development. Regarding domestic revenue mobilization, the government aims to increase domestic revenues from 14.7 percent of GDP in 2016 to 17.4 percent of GDP by the end of the program, essentially through a broadening of the lax base.

“The ECF-supported program would help Benin achieve a strong and inclusive growth in order to reduce poverty while ensuring public finance and debt sustainability. The IMF resources will help the country address its balance of payment need and also catalyze significant support from development partners that would preserve debt sustainability.

“The authorities and IMF staff agreed on the importance of preserving debt sustainability in light of the important public investment program. In this context, a debt sustainability analysis will be carried out on a regular basis and the government has committed to improve public investment management and promote partnership with the private sector as well as technical and financial partners in order to improve infrastructure investment.

“A report on the staff-level agreement is expected to be submitted to the IMF Executive Board for consideration in March/April 2017.

“The mission met with President Talon, and held discussions with Romuald Wadagni, Minister of Economy and Finance; Abdoulaye Bio Tchané, Senior Minister of State of Planning and Development; Pascal Irénée Koupaki, Senior Minister of State, General Secretary at the Presidency, Alain Komaclo, National Director of the regional central bank (BCEAO), and other senior government officials, as well as with representatives of Benin’s international development partners and the banking and business communities.

“The mission is grateful to the authorities for the constructive spirit in which discussions were held and for their warm hospitality.”