IMF Okays $150m Extended Credit Facility for Benin

By Modupe Gbadeyanka

The International Monetary Fund (IMF) has approved the sum of $150.4 million for Benin Republic under the Extended Credit Facility (ECF) arrangement.

The IMF team led by Mr Norbert Toé, Mission Chief for Benin, visited Cotonou from February 15 to 22, 2017, at the request of the government authorities, to finalize discussions with on a three-year economic program that could be supported by the IMF.

Mr Toé said, “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.”

According to the IMF team, the main objectives of the program are to create fiscal space through the modernization of the tax and customs administration and enhancing the efficiency of government spending; refocus policies on sustainable and inclusive growth through targeted social spending and investment in infrastructure; and strengthen the business environment.

It said further that 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 catalyse 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,” Mr Toé stated.