• Fiscal deficit cut to 3.1% of GDP

• Debt revised to 60.5% of GDP end-2024

The International Monetary Fund said on Tuesday, Feb. 24, it had completed the final reviews of its programs with Benin, paving the way for the immediate disbursement of about $118 million.

The reviews mark the seventh and final assessments under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF), and the fourth and final review under the Resilience and Sustainability Facility (RSF).

The IMF Executive Board approved $36.3 million under the ECF/EFF arrangements, bringing total disbursements since their approval in July 2022 to nearly $665 million. It also approved $81.6 million under the RSF, launched in late 2023 to support climate-related reforms, raising total funding under that facility to about $204 million.

Strong performance

The IMF cited strong program performance. In 2024, Benin reduced its fiscal deficit to 3.1% of gross domestic product (GDP), supported by sustained tax revenue mobilization and tighter spending control, while preserving priority social expenditure. Authorities aim to lower the deficit to below 3% of GDP, in line with West African Economic and Monetary Union (WAEMU) convergence criteria.

Economic growth is projected at 7.5% in 2025, maintaining the pace recorded in 2024. The current account deficit narrowed after widening due to service imports linked to the Glo-Djigbe Industrial Zone (GDIZ). It is expected to continue shrinking as exports from special economic zones increase.

The IMF noted that central government debt was revised upward to 60.5% of GDP at end-2024 following the reclassification of certain loans previously recorded under state-owned enterprises. Despite the revision, Benin remains at a moderate risk of debt distress.

The Fund also urged the authorities to maintain fiscal discipline, strengthen transparency, and advance structural reforms, including debt management, oversight of state-owned enterprises, and the integration of climate considerations into public finances.

Fiacre E. Kakpo