The international monetary fund Executive Board has approved an immediate disbursement of $125.1 million to Benin to address the urgent financing needs to curtail the spread of COVID-19 and mitigate its economic and social impacts.
While disclosing this on Saturday May 17, 2020, IMF authorities stated that they were implementing a response plan that will raise significantly health spending and provide support to vulnerable households and impacted businesses.
This sixth review marks the end of the three-year Fund-supported program. Its implementation has been very satisfactory.
The Executive Board of the International Monetary Fund completed the sixth and final review of Benin’s economic performance under a program supported by an Extended Credit Facility arrangement.
The completion of the review enables the disbursement of SDR 91.931 million (about US$125 million), bringing total disbursements under the arrangement to SDR 187.43 million (about US$ 254.8 million).
Benin’s three-year arrangement of SDR 111.42 million (about US$151.5 million, 90 percent of Benin’s quota) was approved on April 7, 2017 (see Press Release No.17/124).
In completing the sixth review, the Executive Board also approved the authorities’ request for an augmentation of access under the ECF arrangement of 61.4 percent of Benin’s quota (SDR 76.013 million or about US$103.3 million) to address the urgent financing needs stemming from the authorities’ efforts to control the spread of COVID-19 and mitigate its economic and social impacts.
Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair said, “Benin’s strong growth momentum has been halted by the COVID-19 pandemic and border closure with Nigeria.
“Growth is projected to decelerate, and the outlook is subject to a high degree of uncertainty. The authorities are taking immediate actions to address the human and economic implications of the health and economic crisis, while safeguarding hard-won fiscal achievements.”
Their response plan aims at raising healthcare spending, granting cash transfers to vulnerable households, and providing support to impacted businesses.
“Sound and transparent public financial management will be paramount with the sizeable reprioritization of spending. Careful monitoring and ex-post audit of the execution of the new measures will strengthen accountability and ensure that the additional funds are spent as intended,” he noted.
He further stated that “Once the shocks wear off, the authorities expect to revert to their medium-term fiscal path by maintaining the deficit within the regional ceiling to safeguard fiscal sustainability.
“On the economic reform front, the authorities’ efforts to modernize the Beninese economy should be pursued, in particular by diversifying the economic structure, improving the business environment, and strengthening the banking sector.”
He concluded that “In this difficult context, performance under the ECF-supported arrangement has remained very satisfactory with a strong track record. All quantitative performance criteria at end-December 2019 and structural benchmarks under the review were met.”
