COTONOU, Benin, July 16, 2013/African Press Organization (APO)/ – An International Monetary Fund (IMF) mission visited Cotonou during July 1-12, 2013 to conduct discussions on the fifth review of the program supported by the Extended Credit Facility (ECF), approved by the IMF Executive Board on June 14, 20101. The mission had an audience with Dr. Boni Yayi, President of the Republic of Benin. The mission also held discussions with: Mr. Pascal Koupaki, Prime Minister; Mr. Jonas Gbian, Minister of Economy and Finance; Mr. Marcel de Souza, Minister of Economic Analysis, Development, and Planning; and members of parliament (members of the Finance Commission of the National Assembly). The mission also met with representatives of the private sector, civil society, and the donor community. Discussions focused on recent economic developments, policy implementation under the ECF, and structural reforms.
At the conclusion of the mission, Ms. Christine Dieterich, mission chief for Benin, issued the following statement:
“Benin has been recording favorable macroeconomic results. In 2012, growth accelerated to 5.4 percent, driven by the agricultural sector and commerce. Inflation, which stood at 6.7 percent in 2012 following the reduction of fuel subsidies in Nigeria, has been falling since January 2013 (5 percent in May 2013).
“Government finance has performed well, thanks to improving customs revenue attributable to reforms at the Port of Cotonou, and to the sale of a cell phone license. Conversely, growth in tax revenues has been lower than economic growth, reflecting the major contribution to growth accounted for by the informal sector. With respect to expenditure, improved execution of domestically funded capital expenditure has been accompanied by effective control of other expenditure. The budget deficit turned out at 2.6 percent of GDP, and quantitative targets under the program were met.
“The economic outlook for the remainder of 2013 is favorable. Growth in real GDP is projected to attain 5 percent in 2013 and inflation is expected to return to the West African Economic and Monetary Union (WAEMU) convergence criterion—3 percent—by end-2013. Fiscal policy will remain cautious.
“In order to strengthen growth while preserving macroeconomic stability, the government has undertaken to expedite reforms. Priority will be attached to implementing the customs reform program, focusing on modernization and capacity-building for the customs administration. A further challenge will be to improve the rate of execution of capital expenditure while continuing to enhance the quality of such expenditure, with the attendant need to strengthen public financial management. Furthermore, the mission is encouraging the government to expedite the ongoing reforms aimed at improving the business climate.
“The mission will recommend the conclusion ad referendum of the fifth review of the program, which is to be taken up by the IMF Executive Board in August 2013. Approval of the review will allow the disbursement of the sixth tranche in the amount of SDR 10.61 million (about US$16.2 million).
“The mission wishes to thank the authorities for their cooperation and hospitality.”
1 The ECF is the IMF’s main tool for medium-term financial support to low-income countries. Financing under the ECF currently carries a zero percent interest rate, with a grace period of 5½ years, and a maturity of 10 years
International Monetary Fund (IMF)