Washington D.C, Sept. 13, 2023 – The International Monetary Fund (IMF) says the Benin Republic is facing hardship from the Niger border closure following the recent coup and higher prices of petrol due to removal of petrol subsidy in Nigeria.
This is part of the conclusion of the IMF team that visited the country between Sept. 6 and Sept 12, 2023 to access recent economic developments in the country.
The IMF said it approved US$638 million facility to Benin under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) on July 8, 2022.
It said the petrol pump price hikes in Nigeria translated into significant increases in the price of smuggled gasoline in Benin, by about 60 percent, exerting pressure on inflation.
“Following policy accommodation in recent years, fiscal consolidation is underway, underpinned by tax collection.
“Budget support to Benin from development partners is expected to be larger than programmed this year, which could unlock additional spending under the EFF/ECF in these challenging times.
“The authorities are preparing a draft 2024 budget in line with their broad objective of converging to the West African Economic and Monetary Union (WAEMU) deficit norm of 3 percent of GDP by 2025. T
“They are also developing a medium-term revenue mobilization strategy to support fiscal consolidation while meeting Benin’s large development needs.”.
The IMF team reported that the Beninois authorities requested for additional support from the Fund under the new Resilience Sustainability Fund (RSF).
“In this context, the IMF team, joined by experts from the Global Center on Adaptation (GCA), explored the authorities’ climate agenda with various domestic stakeholders.”
It said it expected budget support to Benin from development partners to be larger than programmed which could unlock room for additional spending in these challenging times. (GBN)
