The Executive Board of the
International Monetary Fund (IMF) has completed the third review of Benin’s
economic performance under the program supported by an Extended Credit Facility
(ECF) arrangement.
The Board's decision, which was taken on a lapse-of-time
basis and enters into effect today, enables the immediate disbursement of an
amount equivalent to DR 10.61million (about US$16.4 million), bringing
total disbursements under the arrangement to an amount equivalent to SDR 42.45
million (about US$ 65.7 million).
Growth is projected to continue on a
modest upward trend in 2012, but will be adversely affected by external
spillover effects from higher gasoline prices because of the reduction of fuel
subsidies in Nigeria that will dampen domestic demand and, to a lesser extent,
by the ongoing global crisis. Inflation is expected to increase sharply in
2012, but the West African Economic and Monetary Union (WAEMU) convergence
criterion may still be within reach in the medium term, if second-round
inflationary pressures are contained.
Performance under the program was
broadly satisfactory during the third review period, and the end-September
performance criteria were met. The revenue target, however, was missed because
of an
under performance of customs revenue owing to resistance to customs
reform. The authorities implemented measures to strengthen revenue performance,
and customs revenue began to recover in December 2011. Sustaining the increase
of customs revenue over the medium term is critical for implementing the
authorities’ program. The priority social spending target was also missed
because of technical and administrative difficulties, indicating a need to
intensify their monitoring.
Long-awaited customs reforms were
introduced, but a stronger implementation of the structural reform agenda is
needed, inter alia to enhance revenue collection and fiscal
sustainability. The structural reform agenda includes further customs and tax
reforms, civil service reform, and the promotion of greater private sector
involvement in the energy sector—all of which would foster higher growth.
The authorities committed to
maintaining the wage bill within the program envelope and to adopt wage policy
decisions in the framework of civil service reform.
The financial sector has been
resilient, but banks’ loan portfolio deteriorated and a few small banks do not
meet strengthened capital requirements. This highlights the need for greater
vigilance by the supervisory body to strengthen the soundness of the banking
system.
The Extended Credit Facility (ECF)
has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s
main tool for medium-term financial support to low-income countries by
providing a higher level of access to financing, more concessional terms,
enhanced flexibility in program design features, and more focused streamlined
conditionality. Financing under the ECF carries a zero interest rate, with a
grace period of 5½ years, and a final maturity of 10 years. The Fund reviews
the level of interest rates for all concessional facilities every two years.
The Executive Board takes decisions
under its lapse-of-time procedure when it is agreed by the Board that a
proposal can be considered without convening formal discussions.
Issued By:
IMF External Relations Department
I had several times came to West Africa, the Republic of Benin, and when stayed use the Marina Hotel, after review the news above, I would like to advise you for establish independent organization and the member not local people, for maximize and utilize the correct program, like Economy Growth for Local People for agriculture, sanitation, clean water project or etc.
ReplyDeleteThe project which will establish have to be the local business for running the cash flow or turn over your funds.