- Benin's macroeconomic performance remains strong despite a challenging external environment, including the sharp depreciation of the naira.
- The authorities have started crafting the 2025 budget, targeting compliance with the West African Monetary Union (WAEMU) overall fiscal deficit norm of 3 percent of GDP, a fundamental anchor of their fiscal strategy at EFF/ECF inception.
- Benin is actively exploring climate finance options with its development partners following the multi-stakeholder climate finance roundtable held in Cotonou in July.
Washington, D.C.: An International Monetary Fund (IMF) team, led by Mr. Constant Lonkeng, visited Cotonou during September 5–11, 2024, to assess recent economic developments, discuss the contours of—and policy intentions under—the 2025 budget and gauge progress in commitments under Benin's Fund-supported programs. The IMF Executive Board approved in July 2022 a blended Extended Fund Facility (EFF)/Extended Credit Facility (ECF) arrangement (see PR 22/252). This was complemented by the Resilience and Sustainability Facility (RSF) in December 2023 (see PR 23/452). The combined Fourth EFF/ECF and First RSF reviews were completed in June 2024 (see 24/249).
At the end of the visit, Mr. Lonkeng issued the following statement:
"Benin's macroeconomic performance remains strong despite a challenging external environment, including the sharp depreciation of the naira. Economic activity is estimated to have expanded by 6.6 percent in 2024:Q2 year-over-year (6.3 percent in 2024:Q1), a momentum expected to continue in the coming quarters. While aggregate inflation was limited to 3 percent in August (year-over-year), food prices rose by 6.6 percent, partly driven by higher exports to neighboring countries amidst a challenging regional security situation. The government plans to extend its flagship school feeding program to all primary schools in rural areas to keep students at school and fend off food security risks.
"Budget execution was strong in the first half of the year, driven by tax collection. The authorities have started crafting the 2025 budget, targeting convergence to the West African Monetary Union (WAEMU) overall fiscal deficit norm of 3 percent of GDP, a fundamental anchor of their fiscal strategy at EFF/ECF inception.
"The mission gauged progress in Benin's commitments under the current blended EFF/ECF arrangement, including the operationalization of the anti-corruption agency and the social registry, the closure of public bank accounts in commercial banks and reform measures under the RSF, including fuel subsidy reform that accounts for Benin's specificities. Benin is actively exploring climate finance options with its development partners following the climate finance roundtable held in Cotonou in July.
"A formal assessment of Benin's performance and prospects will take place in the context of the combined Fifth EFF/ECF and Second RSF reviews, with the team scheduled to return to Cotonou later this year.
"The mission met with Senior Minister of Economy and Finance Wadagni, Senior Minister of Development and Government Action Bio Tchane, Minister of Health Hounkpatin, National Director of the BCEAO (the regional central bank) Assilamehoo, and other senior government officials. The team also met with the civil society, the World Food Program, the banking association, and other private sector representatives.
"The IMF team would like to thank the authorities and various stakeholders for their warm hospitality and open and constructive dialogue."
