Front Matter Page
IMF Country Report No. 19/203
BENIN
2019 ARTICLE IV CONSULTATION, FOURTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, AND REQUEST FOR MODIFICATION OF PERFORMANCE CRITERIA—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR BENIN
July 2019
In the context of the Article IV Consultation and fourth review under the Extended Credit Facility, the following documents have been released and are included in this package:
A Press Release including a statement by the Chair of the Executive Board.
The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on June 21, 2019, following discussions that ended on May 8, 2019, with the officials of Benin on economic developments and policies underpinning the IMF arrangement under the Extended Credit Facility. Based on information available at the time of these discussions, the staff report was completed on May 31, 2019.
An Informational Annex prepared by the IMF staff.
A Debt Sustainability Analysis prepared by the staffs of the IMF and the Internal Development Association.
A Statement by the Executive Director for Benin.
The documents listed below have been or will be separately released:
Letter of Intent sent to the IMF by the authorities of Benin*
Memorandum of Economic and Financial Policies by the authorities of Benin*
Technical Memorandum of Understanding*
Selected Issues Paper
*Also included in Staff Report
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.
Copies of this report are available to the public from
International Monetary Fund • Publication Services
PO Box 92780 • Washington, D.C. 20090
Telephone: (202) 623–7430 • Fax: (202) 623–7201
E-mail: publications@imf.org Web: http://www.imf.org
Price: $18.00 per printed copy
International Monetary Fund
Washington, D.C.
© 2019 International Monetary Fund
Front Matter Page
BENIN
STAFF REPORT FOR THE 2019 ARTICLE IV CONSULTATION, FOURTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, AND REQUEST FOR MODIFICATION OF PERFORMANCE CRITERIA
May 31, 2019
Key Issues
Context. The economy continues to grow at a fast pace, driven by port activity and cotton production. The execution of the 2019 budget is on track to bring the fiscal deficit within the WAEMU convergence criterion of 3 percent of GDP this year. Program implementation remains very satisfactory with all end-December 2018 quantitative performance criteria (QPCs) and structural benchmarks (SBs) met.
Program Policies.
Reduce the fiscal deficit by strengthening domestic revenue mobilization and enhancing spending efficiency, including for public investment.
Preserve public debt sustainability by pursuing a prudent borrowing policy and reinforcing the debt management capacity.
Promote strong and inclusive growth by improving the business environment, diversifying the economy, and investing in human capital.
Foster financial stability by addressing the low aggregate profitability of the banking sector and restructuring the two public banks.
Strengthen economic governance and anti-corruption frameworks.
Staff View. Staff supports the authorities’ request for completion of the fourth review of the ECF-supported program; the modification of the end-June 2019 QPCs on the basic primary balance and net domestic financing; and the modification of the continuous performance criterion (PC) on new external debt contracted or guaranteed by the government. Staff supports the addition of three SBs related to trade facilitation, customs administration, and the implementation of the Treasury Single Account (TSA). Completion of this review will release a disbursement equivalent to SDR 15.917 million. The Memorandum of Economic and Financial Policies (MEFP) sets out appropriate policies to achieve the program’s objectives.
Approved By
Dominique Desruelle (AFR) and Maria Gonzalez (SPR)
Discussions on the 2019 Article IV Consultation and Fourth Review under the Extended Credit Facility (ECF) Arrangement were held in Cotonou during April 25-May 8. The mission team comprised Messrs. Luc Eyraud (head), Goran Amidzic, Mohamed Camara, Mses. Aissatou Diallo and Alice Mugnier (all AFR), Mr. Mouhamadou Sy (FAD), Mr. Karim Barhoumi (Resident Representative), and Mr. Joseph Houessou (Economist at the Res. Rep. Office). Ms. Esso Boukpessi (OED) participated in the mission. The mission met with Mr. Abdoulaye Bio Tchané, Minister of State of Planning and Development; Mr. Romuald Wadagni, Minister of Economy and Finance; Mr. Benjamin Hounkpatin, Minister of Health; Mr. Alain Komaclo, BCEAO National Director; and senior economic and financial officials. Mr. Rachidi Kotchoni (World Bank) participated in some of the meetings. Ms. Nadia Margevich provided assistance for the preparation of this report.
Contents
BACKGROUND
RECENT DEVELOPMENTS
OUTLOOK AND RISKS
POLICY DISCUSSIONS
A. Creating Fiscal Space for Development Programs
B. Preserving Debt Sustainability
C. Promoting Economic Diversification
D. Strengthening the Financial Sector
E. Upgrading the Governance and Anti-Corruption Framework
PROGRAM CONDITIONALITY AND MODALITIES
DATA ISSUES AND CAPACITY DEVELOPMENT
STAFF APPRAISAL
BOXES
1. Medium-Term Growth in Benin
2. The Universal Health Insurance System
3. Debt Management Framework for Frontier Markets
4. Microfinance Institutions in Benin
FIGURES
1. Recent Economic Developments, 2010–19
2. Fiscal Developments and Projections, 2010–19
3. Real and External Sector Developments, 2011–18
TABLES
1. Selected Economic and Financial Indicators, 2017–24
2. Consolidated Central Government Operations, 2017–24 (billions of CFA francs)
3. Consolidated Central Government Operations, 2017–24 (percent of GDP)
4. Consolidated Central Government Operations, 2018–19 (billions of CFA francs)
5. Balance of Payments, 2017–24
6. Monetary Survey, 2017–20
7. Schedule of Disbursements Under the ECF Arrangement
8. Indicators of Capacity to Repay the IMF, 2019–33
9. Gross External Requirement, 2019–21
10. Financial Stability Indicators, 2012–18
ANNEXES
I. Implementation of Past IMF Recommendations
11. Risk Assessment Matrix
III. External Stability Assessment
IV. Technical Assistance, 2017–19 Assessment
V. Capacity Development Strategy for FY2019–20
APPENDIX
I. Letter of Intent
Attachment I. Memorandum of Economic and Financial Policies for 2018–19
Attachment II. Technical Memorandum of Understanding
Front Matter Page
BENIN
STAFF REPORT FOR THE 2019 ARTICLE IV CONSULTATION, FOURTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, AND REQUEST FOR MODIFICATION OF PERFORMANCE CRITERIA—INFORMATIONAL ANNEX
May 31, 2019
Prepared By
The African Department
(In consultation with other departments)
Contents
RELATIONS WITH THE FUND
JOINT WORLD BANK-IMF WORK PROGRAM, 2019–20
STATISTICAL ISSUES
Front Matter Page
BENIN
STAFF REPORT FOR THE 2019 ARTICLE IV CONSULTATION, FOURTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, AND REQUEST FOR MODIFICATION OF PERFORMANCE CRITERIA—DEBT SUSTAINABILITY ANALYSIS
May 31, 2019
Approved By
Dominique Desruelle and Maria Gonzalez, (IMF) and Marcello Estevao (IDA)
Prepared by the staffs of the International Monetary Fund (IMF) and the International Development Association (IDA).
Front Matter Page
Press Release No. 19/231
FOR IMMEDIATE RELEASE
June 24, 2019
International Monetary Fund
Washington, D.C. 20431 USA
Telephone 202–623–7100
Fax 202–623–6772
Front Matter Page
Press Release No. 19/230
FOR IMMEDIATE RELEASE
June 21, 2019
International Monetary Fund
Washington, D.C. 20431 USA
Telephone 202–623–7100
Fax 202–623–6772
