(Ecofin Agency) - Since July 2022, Benin has been receiving support from the IMF through a combined agreement under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), along with funding from the Resilience and Sustainability Facility. An IMF team visited Cotonou from October 8 to 17, 2024, to check on the progress of these reforms.

Benin is set to receive around $95 million from the International Monetary Fund (IMF) after the board approves the country’s ongoing reform programs. Constant Lonkeng, head of the IMF mission to Benin, announced this in a statement on October 17. The announcement came after the IMF reached a staff-level agreement with Benin’s authorities following a review of the country’s programs under the Extended Credit Facility (ECF), the Extended Fund Facility (EFF), and climate reforms supported by the Resilience and Sustainability Facility (RSF).

The IMF was upbeat about Benin’s progress, highlighting positive economic transformation. It pointed to rising exports of high-value goods and growth in both the information technology and tourism sectors as signs of this transformation.

“Economic activity is estimated to have expanded by 6.5 percent year-over-year in the first half of this year; growth is expected to remain strong in the near-term. The balance of payments has deteriorated temporarily, due to large investments, including related to the special economic zone (SEZ) (the Glo-Djigbé Industrial Zone, ed). It is expected to recover gradually as the transformation of local commodities at the SEZ boosts exports,” the IMF said.

About the climate-focused RSF program, steps have been taken to integrate climate concerns into the 2025 budget plan, ensuring the program’s smooth implementation.

Back in 2022, the IMF approved a historic 42-month agreement for Benin under the ECF and EFF, amounting to $638 million, along with an additional $200 million under the RSF. The purpose of the ECF/EFF agreement is to address Benin’s urgent financing needs, support its sustainable development goals, and attract additional resources from international financial partners. If this new disbursement is approved, it would bring the total IMF funds released to $576 million.

The IMF also emphasized the need for Benin to continue implementing key structural reforms, especially those related to water tariffs and fuel subsidies. These reforms are vital to help Benin manage its water resources better, stabilize fuel prices, and protect consumers from unpredictable market changes.