The Executive Board of the International Monetary Fund (IMF) has approved the immediate disbursement of an amount equivalent to Special Drawing Rights (SDR) of 10.61 million (about US$16.4 million) for Benin.
An IMF statement received by PANA in New York on Saturday said that the approval followed the completion of the sixth review of Benin’s economic performance under a programme supported by the Extended Credit Facility (ECF) arrangement.
It noted that the ECF is the IMF’s main tool for medium-term financial support to low-income countries, stating that financing under the ECF currently carried a zero per cent interest rate, with a grace period of 5½ years, and a maturity of 10 years.
It said that the approval brought the total disbursements under the arrangement to an amount equivalent to SDR 74.28 million (about US$114.5 million).
The IMF stated: “In completing the reviews, the Board granted waivers for the non-observance of the continuous performance criterion on new non-concessional external debt with a maturity of more than one year.”
The statement recalled that the ECF arrangement for Benin was approved on 14 June, 2010 for the equivalent of a total of SDR 74.28 million (about US$114.5 million).
It said that Benin’s growth was projected to reach about 5.5 per cent in 2014 for the third consecutive year, noting that this performance had closed the gap in per capita GDP growth between Benin and the Sub-Saharan African (SSA) average which was about 2 percentage points on average between 2005 and 2011.
It said that the programme performance was satisfactory and most criteria were met except for the ceiling on non-concessional borrowing.
“Thanks to prudent fiscal policy, macroeconomic performance remains satisfactory and progress has been achieved in structural reforms and the implementation of the new approach to customs reform is moving ahead well despite some delays.
“Sound policies have created fiscal space for scaling up investment to create favourable conditions for sustainable long-term growth. To preserve the authorities’ achievements under this ECF arrangement, rising investment has to be accompanied by further progress in public financial management and integrated into a medium-term framework anchored in debt sustainability.”
The statement said in addition, the government had initiated reforms to strengthen the efficiency of investment spending, adding that government’s efforts to enhance the business environment were starting to show some results, but broad-based reforms would be necessary to improve productivity.