Benin still has the confidence of the institutions of Bretton Woods. As proof, the International Monetary Fund (IMF) has just endowed the country with a large pot in order to cope with the Coronavirus pandemic. Read the institution’s press release below.

Press release

The IMF Executive Board Approves $ 177.96 Million in Emergency Aid US dollars in Benin to fight the COVID-19 pandemic

• The IMF Executive Board has approved $ 177.96 million in emergency aid to Benin under the the rapid finance instrument (RFI) and the rapid credit facility (RCF). Today’s disbursement completes the increase of 103.3 million US dollars approved under the CEF in May 2020.
• Weak external demand and the deepening economic impact of the COVID-19 pandemic have worsened the external and budgetary positions.
• Additional resources in the RCF / RFI framework will help scale up the government’s response to the COVID-19 and catalyze additional donor resources.
• The authorities are committed to further improve the transparency of COVID-19 spending, to ensure that the funding provided is dedicated to the resolution of the crisis.

Washington, DC: The Board of Directors of International Monetary Fund (IMF) approved a disbursement under the Quick Credit Facility (FCR) equivalent to SDR 41.30 million (59.35 million, 33.33% of quota) and a purchase under the rapid financing instrument (RFI) equivalent to SDR 82.54 million (USD 118.61 million, 66.67% of quota) to meet the needs urgent budget and balance of payments resulting from the efforts aimed at tackling the lingering impact of the COVID-19 pandemic.

This is the second emergency assistance from the IMF since the outbreak of pandemic: on May 15, 2020, the IMF Executive Board approved a increase in access under the FEC 2017-20 agreement by 103.3 million dollars (see IMF Press Release 20/216). Funding Today’s additional aid brings aid to US $ 281.26 million total IMF loan provided to Benin to fight the pandemic of COVID-19.

COVID-19 pandemic has had a more severe impact than expected on activity economic, affecting almost all sectors of the economy. The economic outlook has deteriorated further with worsening budget and current account deficits. IMF emergency support will finance scaling up health and economic aid, will build confidence and will help catalyze donor support. To ensure that the funding provided is spent as planned to deal with the crisis, authorities are committed to further enhancing the transparency of the procurement.

Following the discussions of the Board of Directors, Mr. Mitsuhiro Furusawa, Deputy CEO and Acting President, made the statement next:

“Benin’s macroeconomic outlook has deteriorated further since the completion in May 2020 of the sixth and final examination under the agreement supported by the FEC. Economic growth is expected to slow to 2% in 2020, against nearly 7% in 2019, due to containment measures and mitigation, global economic slowdown and prolonged shutdown from the border with Nigeria. While the response to the pandemic of Benin has been effective in curbing the spread of COVID-19, the shock economy has created urgent budgetary pressures and balancing needs payments.

“The authorities are taking action to deal with the implications human and economic consequences of the COVID-19 pandemic while preserving their hard-won budgetary achievements. It is expected that the pandemic slows socio-economic trends that were improving previously and that it undermines inclusion. The authorities are implementing a plan aimed at increasing health spending and providing assistance to vulnerable households and support for affected businesses.

“The authorities have reiterated their commitment to sound management and transparency of public finances, which they consider essential to guarantee that the funds are spent as planned. They published information key contracts in the main contracts awarded as part of their fight against pandemic and have committed to undergo ex post expenditure audits pandemic.

“Once conditions allow, the authorities are committed to returning to their medium-term fiscal path, keeping the budget deficit below the regional ceiling. Raising domestic revenue closer to the regional target should remain a primary fiscal target, as this would strengthen debt sustainability, ensure the COVID-19 shock does not compromise fiscal sustainability, and allow Benin to finance its development plan. medium-term economic development and poverty reduction. . “

IMF Communications Department