The International Monetary Fund (IMF) has announced a staff-level agreement with the government of Benin following its latest mission to the country, marking progress on the sixth review of the Extended Fund Facility (EFF) and Extended Credit Facility (ECF), as well as the third assessment under the Resilience and Sustainability Facility (RSF).

0

Led by Frederic Lambert, the IMF delegation held discussions in Cotonou from April 1 to 11, 2025. In a statement following the mission, Lambert confirmed that the agreement is pending final approval from IMF management and the Executive Board, with the review expected to be considered in June 2025.

1

“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,” Lambert said.

2

He noted that Benin’s economy continues to undergo positive structural changes, with significant contributions from high value-added exports and a growing digital sector. Growth outpaced earlier expectations, reaching 7.5 percent in 2024—nearly a full percentage point higher than the original forecast of 6.5 percent. This momentum is projected to continue in the medium term.

3

While the current account deficit widened temporarily, Lambert explained it was partly due to increased investment and services linked to the country’s special economic zone. This shortfall is expected to narrow gradually as more locally sourced commodities are processed for export.

4

The IMF team praised Benin for its strong program implementation, reporting that all quantitative targets set for December 2024 were met. The country has also made notable fiscal progress, achieving the West African Economic and Monetary Union (WAEMU) fiscal deficit threshold of 3 percent of GDP a year ahead of schedule, aided by strong tax collection and prudent public spending.

5

“In line with their 2025 budget law, the authorities will maintain the overall fiscal deficit within 3 percent of GDP,” Lambert said. He added that sustained revenue efforts under Benin’s medium-term strategy will enable increased investment in education, healthcare, and social welfare.

6

Among other social reforms, Lambert welcomed steps to enhance the efficiency of Benin’s social protection systems, including operationalizing the national social registry (RSU) and mapping out existing welfare programs to streamline their delivery.

7

The IMF also discussed efforts to improve transparency, notably the need for more timely publication of financial data from state-owned enterprises. On the business front, the mission commended recent reforms to ease the investment climate, such as the introduction of a unified digital portal for trade and the full digitization of Cotonou’s land registry.

8

To support access to credit while maintaining financial stability, the team reviewed ongoing regulatory improvements aimed at benefiting small and medium-sized enterprises (SMEs) and other local businesses.

9

Climate resilience was another key focus. Lambert highlighted that Benin is progressing with its climate agenda, citing regulatory reforms supporting renewable energy and a new construction law addressing climate risk. Future plans include tariff reforms for water and electricity services and the adoption of a green taxonomy to attract private climate finance.

10

During the visit, the IMF delegation held discussions with several high-ranking officials, including Senior Minister of Economy and Finance Romuald Wadagni, Health Minister Benjamin Hounkpatin, and BCEAO National Director Emmanuel Assilamehoo. They also engaged civil society groups, development partners, small business representatives, and farmers.

11

“The IMF team would like to thank the authorities for their warm hospitality and open and constructive dialogue,” Lambert concluded.

12