A staff team from the International Monetary Fund (IMF), led by Norbert
Toé, visited Benin from June 7–14, 2017, to review recent economic and
financial developments and discuss program implementation ahead of a formal
review slated for later this year.
At the end of the visit, Mr. Toé issued the following statement:
“The economy grew by 4 percent in real terms in 2016, overcoming the
low-growth environment that resulted from negative spillovers from Nigeria.
Inflation turned negative in 2016 (-0.8 percent), reflecting bumper harvest
and low oil prices. The fiscal deficit narrowed in 2016, thanks to the
authorities’ strong measures to contain expenditure. Prospects for 2017 and
the medium term are favorable and largely dependent on a sustained
implementation of the Government’s Action Program (GAP), 2016–21 and the
recovery of the Nigerian economy. For 2017-19, the budget program foresees
an average deficit (including grants) of 4.6 percent of GDP consistent with
the sustainability of the budget and the debt. The medium-term
macroeconomic framework foresees a shrinkage of the deficit to 1.9 percent
of GDP in 2019, well below the West African Economic and Monetary Union
convergence criterion of 3 percent of GDP.
“Consistent with the economic program supported by the Extended Credit
Facility (ECF) arrangement approved by the Executive Board on April 7,
2017, the authorities are implementing a package of measures to maintain
macroeconomic and financial stability and raise living standards. They have
passed legislation to strengthen domestic revenue mobilization and improve
the quality of spending to create fiscal space for infrastructure and
priority social spending, preserving debt sustainability. They are also
implementing reforms to integrate the electronic systems of the tax and
customs administrations to enhance their respective efficiencies,
strengthen their coordination, and improve revenue mobilization.
“IMF staff and the authorities agreed that the early progress in program
implementation should be strengthened through timely enactment of the
programmed reforms. In this regard, continued efforts to promote good
governance and transparency are needed to attract private investments and
foster implementation of the GAP. Accelerating the implementation of the
new harmonized framework at regional level for the resolution of bank
failures and the strengthening of the microfinance supervisory body is
critical to maintain the stability and development of the financial sector.
Policies to achieve more efficient financial intermediation and deepening
the financial sector are needed to increase rural people's access to
financial services and promote financial inclusion.
“The IMF team met with the Minister of State in charge of Planning and
Development, the Minister of Economy and Finance, the National Director of
the regional central bank (BCEAO), and other government and central bank
officials, as well as representatives of the diplomatic community and
international development partners. The first review of the ECF arrangement
is expected to take place in September, 2017.
“The IMF team wishes to express its gratitude to the authorities, as well
as all other interlocutors, for the constructive, candid discussions and
their hospitality.”
