End-of-mission press releases include statements from IMF teams conveying preliminary findings after a country visit. The views expressed in this statement are those of the staff of the IMF and do not necessarily represent the views of the Executive Board of the IMF. Based on the preliminary findings of this mission, staff will prepare a report which, subject to management approval, will be presented to the IMF Executive Board for discussion and decision. 

• The Beninese authorities and the IMF mission reached an IMF staff level agreement on the latest review of the program supported by the extended facility credit. Authorities have called for increased support provided by the IMF, which, subject to the approval of the IMF Board of Directors, would provide around 125 million dollars as of mid-May 2020.
• The COVID-19 pandemic will have a significant impact on the short-term economic outlook of the Benin, leading to a deterioration of its external accounts and budgetary.
• The authorities have prepared a emergency response plan, focused on increasing spending on health, assistance to the most vulnerable groups and support to most affected companies. Increased access to IMF financing will meet health and socio-economic needs urgently needed, to catalyze funding from other donors and to support the economic activity.

Washington – A team from the International Monetary Fund (IMF), led by Luc Eyraud, conducted discussions on the Sixth Economic Program Review and triennial financial support supported by the IMF as part of the Extended Credit Facility (ECF) ^[1] with the Republic of Benin from April 9 to 17, 2020.

At the end of the mission, Mr. Eyraud made the following statement:

“The authorities and the IMF team have reached a staff level agreement, subject to the approval of IMF management and the Executive Board. The review by the IMF’s Executive Board is scheduled for mid-May 2020. Staff will recommend an increase in IMF support to Benin equivalent to 61.4 percent of its quota (about $ 103.5 million) to help finance health and economic measures, meet balance of payments needs. stemming from the COVID-19 pandemic, and catalyze financial support from the international community. This would bring the total disbursements related to the completion of this review to $ 125 million.

“The results obtained under the IMF-supported program remain very satisfying. All quantitative performance criteria at the end December 2019 and the structural benchmarks were respected.

“After strong growth estimated at nearly 7 percent in 2019, the pandemic as well as the prolonged closure of the border with Nigeria economic prospects are expected to weaken considerably in the short term of Benin. Economic growth is expected to decelerate to 3.2 percent in 2020 due to the restrictions imposed by COVID-19 on the activity domestic demand, the substantial drop in external demand and the disruptions in global trade and supply chains.

“The authorities are taking crucial steps to contain pandemic and limit its repercussions. The response plan, estimated at 1.7 percent of GDP includes increased spending on health, aid to the most vulnerable segments of the population and targeted support and temporary to affected companies. The authorities undertake to maintain sound governance and full transparency in the implementation of these programs.

“The budget deficit for 2020 is expected to widen to 3.5 percent of GDP, due to the decline in revenue, the increase in expenditure of health and economic support measures. The authorities are in the process of mobilize additional financing from the IMF and other international partners to finance this increase in the deficit budgetary. While public debt is expected to reach 43.3 percent of GDP in 2020, the authorities remain fully dedicated to the objective of fiscal sustainability, anchored in a constant decline in the ratio of government debt to GDP over the medium term, as the crisis eases.

“The IMF team would like to thank the authorities for the discussions open and constructive in this difficult context. The IMF team would also like to express its deepest sympathy and support for the Beninese people whose lives are deeply affected by the effects devastating effects of COVID-19. ”

[1] The Benin program supported by the ECF was approved by the IMF Board of Directors in April 2017. FEC is an agreement loan that provides for sustained program engagement in the medium and long term in case of prolonged problems with the balance of payments.