Updated: March 2, 2021
The executive board of the International Monetary Fund (IMF) on Friday approved the disbursement of additional $22 million to the West African country of Benin, part of the $154.2 million loan it secured in 2017 under the extended credit facility arrangement.
An extended credit facility allows the borrowing country to take out money over an extended period of time rather than reapplying for a loan each time it needs money. In effect, a credit facility lets a country take out an umbrella loan for generating capital over an extended period of time.
[read_more id="2" more="Read full article" less="Read less"]
The latest disbursement, which brings total disbursements under the arrangement to SDR 95.502 million (about US$132.2 million), came after the IMF Executive Board completed the 5th review of the three-year arrangement with Benin on a lapse of time basis.
Benin and the IMF mission also agreed on fiscal policy measures for the 2020 budget to secure key program objectives and maintain the deficit below 2 percent of GDP next year.
The funds aim at supporting the country’s economic and financial reform program and focus on raising living standards and preserving macroeconomic stability, IMF said.
In completing the review, the Executive Board also approved Benin’s request for a four-month technical extension and the introduction of adjustors to the end-December 2019 quantitative performance criteria (QPCs) on revenue, basic primary balance, and net domestic financing.
Overall, IMF said Benin’s economic performance remains strong despite a less supportive external environment and the border closure with Nigeria.
Real GDP is expected to slow down to 6.4 percent in 2019. However, growth should bounce back in 2020 and remain sustained over the medium term, buttressed by vigorous cotton production, construction, and port activity.