- Benin's authorities and IMF staff have reached a staff-level agreement on the sixth review under the EFF/ECF-supported program and the third review of the Resilience and Sustainability Facility (RSF) arrangement.
- The economic transformation in Benin continues, with higher value-added goods exports and momentum in information technology. Economic growth in 2024 was 7.5 percent, outperforming initial projections.
- The authorities converged to the West African Economic and Monetary Union (WAEMU) fiscal deficit norm of 3 percent of GDP in 2024, one year ahead of the program schedule. They intend to reduce the fiscal deficit to 2.9 percent of GDP in 2025, in line with the budget law.
Washington, DC: An International Monetary Fund (IMF) team, led by Frederic Lambert, visited Cotonou during April 1-11, 2025, to hold discussions on the sixth review of Benin's economic and financial program supported by the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) and the third review of the Resilience and Sustainability Facility (RSF) arrangement.
At the end of the mission, Mr. Lambert issued the following statement:
"Benin's authorities and IMF staff have reached a staff level agreement on policies to complete the sixth review of Benin's 42-month blended EFF/ECF-supported program and the third review of the RSF-supported arrangement, subject to approval by IMF management and the Executive Board. Consideration by the IMF's Executive Board is expected in June 2025.
"The economic transformation in Benin continues, with higher value-added goods exports and momentum in information technology. Economic activity was stronger than expected, with a growth rate of 7.5 percent in 2024, about one percentage point higher than the initial projection of 6.5 percent. Growth is expected to remain strong in the medium term. There has been a temporary increase in the current account deficit, in part due to investment and professional services needs related to the development of the special economic zone; the deficit is expected to decrease gradually as the on-site processing of local commodities boosts exports.
"Program performance has been strong—all quantitative targets for end-December 2024 were met, and a frontloaded fiscal consolidation accelerated convergence to the WAEMU fiscal deficit norm of 3 percent of GDP one year ahead of program schedule. The fiscal consolidation was supported by robust tax revenue collection and prudent budget execution.
"In line with their 2025 budget law, the authorities will maintain the overall fiscal deficit within 3 percent of GDP. Continued revenue mobilization efforts (drawing on the authorities' medium-term revenue strategy) will create room for higher social spending in the areas of education, health, and social assistance. In addition to the operationalization of the social registry (RSU), the ongoing development of a comprehensive mapping of social protection programs would improve the efficiency of the holistic social protection policy in Benin.
"The mission discussed measures to strengthen the availability of information on state-owned enterprises through the timely publication of their financial statements.
"The mission welcomed the completion of reforms aimed at improving the business climate, including the operationalization of a single electronic window to promote investment and facilitate exports and the extension of the online land registry to completely cover the city of Cotonou. Staff also discussed efforts by the authorities to improve the private sector's access to credit while safeguarding financial stability.
"The authorities continue to advance reforms to implement their climate agenda and strengthen Benin's resilience to climate change. After a comprehensive fuel subsidy reform, the authorities adopted regulations to support renewable energy generation. Following the adoption by Parliament of a new construction law referencing climate risks, they are working to develop secondary legislation to support adaptation to future climate conditions. The mission discussed next steps in advancing water tariff reform in urban areas and electricity tariff reform, as well as the expected adoption of a green taxonomy to catalyze climate finance from the private sector.
"The mission met with Senior Minister of Economy and Finance Romuald Wadagni, Minister of Health Benjamin Hounkpatin, National Director of the BCEAO (the regional central bank) Emmanuel Assilamehoo, and other senior government officials. The team also met with civil society, representatives of small and medium enterprises and farmers, the donor community and other stakeholders.
"The IMF team would like to thank the authorities for their warm hospitality and open and constructive dialogue."
