Benin seeks IMF support as economy slows and fiscal position worsens

Benin seeks IMF support as economy slows and fiscal position worsens

Benin is seeking support from the International Monetary Fund (IMF), to help cushion it from a widening fiscal deficit and slowing economic growth caused by the sharp deceleration in its giant West African neighbour Nigeria linked to falling oil prices.

“The government found a difficult macroeconomic and treasury situation upon assuming office in April 2016. In particular, while fiscal policy was generally sound in earlier years, the fiscal deficit increased to around 8.5 percent of GDP in 2015, with continued spending overruns in the first quarter of 2016,” IMF said in a statement .

“This widening of the fiscal deficit was financed by large bond issuances in the regional financial market, adding significantly to future debt service. Worse, during the last quarter of 2015 and first of 2016, contracts were signed for off-budget projects close to 24 percent of GDP. These loans are expensive and have short maturities,” Christine Dieterich, who headed the IMF mission to the West African nation that ended on Saturday said in a statement. The government found a difficult macroeconomic and treasury situation upon assuming office in April 2016. 2015 growth is estimated to have decelerated to around 5 percent, as the slowdown in Nigeria – Benin’s […]

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