(Ecofin Agency) - The International Monetary Fund announced yesterday it has approved $177.9 million to help Benin strengthen its response plan against the coronavirus pandemic.

The money includes $118.6 million granted under the Rapid Financing Instrument (RFI) and $59.3 million under the Rapid Credit Facility (RCF). It will be used to meet the country’s urgent budget and balance of payment needs induced by the anti-Covid-19 measures.

This is the second emergency disbursement approved by the Fund since the outbreak of the pandemic. Last May, IMF granted the West African country an increase in the financing it was to receive under a three-year extended credit facility (ECF) agreement.

“Benin’s macroeconomic outlook has further deteriorated since the completion, in May 2020, of the sixth and final review under the ECF-supported arrangement. Economic growth is projected to decelerate to 2 percent in 2020, from nearly 7 percent in 2019 […] While Benin’s pandemic response has been effective in curbing the spread of the COVID-19, the economic shock has created urgent fiscal pressures and balance of payment needs,” the IMF statement read.

“Once conditions permit, the authorities are committed to reverting to their medium-term fiscal path, by maintaining the fiscal deficit below the regional ceiling. Raising domestic revenue closer to the regional target should remain a primary fiscal objective, as this would strengthen debt sustainability, ensure that the COVID-19 shock does not jeopardize fiscal sustainability, and allow Benin to finance its medium-term economic development plan and reduce poverty,” the statement said.

Let’s note that the new disbursement brings the total amount of loans granted by the IMF to Benin as part of the fight against the Covid-19 to $281.26 million. According to the latest official data, Benin has 3,167 cases of coronavirus with 44 deaths and 3,061 recoveries.

Moutiou Adjibi Nourou