Another important support that Benin has won in the fight against Coronavirus.

The IMF Executive Board has just approved US$177.96 million in emergency assistance to Benin under the Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF).

Today's disbursement completes the US$103.3 million increase approved under the ECF in May 2020. Weaker external demand and the deepening economic impact of the COVID-19 pandemic 19 worsened external and fiscal positions.

The additional resources under the RCF/RFI will help grow the government's response to COVID-19 and catalyze additional donor resources.

The authorities have pledged to further improve the transparency of COVID-19 spending, to ensure that the funding provided is dedicated to addressing the crisis.

This is the IMF's second emergency assistance since the outbreak of the pandemic: on May 15, 2020, the IMF Executive Board approved an increase in access under the 2017-20 ECF arrangement of $103.3 million.

Today's additional financing brings the total IMF loan assistance provided to Benin to combat the COVID-19 pandemic to $281.26 million.

The COVID-19 pandemic has had a more severe than expected impact on economic activity, affecting almost all sectors of the economy.

The economic outlook has deteriorated further with the worsening of the budget and current account deficits.

The IMF's emergency support will fund scaled-up health and economic assistance, build confidence, and help catalyze donor support.

To ensure that the funding provided is spent as planned to address the crisis, the authorities have committed to further enhance the transparency of the procurement process. Following the Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting President, made the following statement: “Benin's macroeconomic outlook has deteriorated further since the completion in May 2020 of the sixth and final review under the ECF-supported arrangement.

Economic growth is expected to slow to 2% in 2020, from almost 7% in 2019, due to containment and mitigation measures, the global economic slowdown and the prolonged closure of the border with Nigeria.

While Benin's pandemic response has been effective in curbing the spread of COVID-19, the economic shock has created urgent fiscal pressures and balance of payments needs.

And to add: “The authorities are taking measures to address the human and economic implications of the COVID-19 pandemic while preserving their hard-won fiscal achievements.

The pandemic is expected to dampen previously improving socio-economic trends and undermine inclusion.

The authorities are implementing a plan to increase health spending and provide assistance to vulnerable households and support for affected businesses.

He was also reassured that the “authorities have reiterated their commitment to sound and transparent management of public finances, which they consider essential to ensure that funds are spent as planned.

They have published key information on the main contracts awarded in the context of their fight against the pandemic and have committed to undergoing ex post audits of pandemic expenditure.

He will also continue in these terms: “Once conditions permit, the authorities are committed to returning to their medium-term fiscal trajectory, keeping the fiscal deficit below the regional ceiling.

Raising domestic revenues 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 undermine fiscal sustainability, and allow Benin to finance its development plan. medium-term economy and reduce poverty. . »