Benin
Economy - Development
Benin's economic performance and indicators; 2000afrol News - The International Monetary foundation (IMF) in 2000 assessed Benin's economic and financial performance under the 1998-99 program "as broadly satisfactory, although the financial situation in the cotton sector deteriorated sharply and implementation of key structural reforms was delayed." However, the government has taken corrective measures and is accelerating the pace of reforms under the new program. Economic and financial developments in 1999 and early 2000 were broadly in line with the program. In spite of a drop in cotton production, real GDP growth is estimated to have risen to about 5 percent in 1999 from 4.5 percent in 1998, and is projected to increase to 5.6 percent in 2000, with cotton production estimated to increase by 8 percent. The government is determined to implement a medium-term program aimed at achieving high and sustainable economic growth, maintaining financial stability, and reducing poverty over the period 2000-03. The objectives are to achieve real GDP growth of 5-6 percent and contain inflation below 3 percent. The external current account deficit is expected to widen by a 1.5 percentage point of GDP to just over 7 percent in 2000 before narrowing to 5.5 percent of GDP the following years. Fiscal policy is geared toward maintaining a balanced overall fiscal position, including grants. It focuses on improving tax administration and public resource utilization, and provides for increased budget appropriations for programs to reduce poverty and develop human capital. The government has continued to reduce domestic arrears in line with the program, settling the equivalent of 0.8 percent of GDP in 1999. It is further preparing a plan for settling remaining arrears over the next few years. On the expenditure side, the goals are to ensure that actual spending reflects the government priorities for the social sector and infrastructure. The government is also taking action to improve the efficiency of tax administration and to reduce tax fraud and corruption. The structural reforms under the program focus on strengthening public resource management, implementing a prudently flexible wage policy for the civil service, pursuing the government divestiture program to enhance resource allocation and promote private investment, expanding social programs, and reducing poverty. The government intends to reform public administration, including the civil service, improve its efficiency, increase its focus on core government activities, and bring it closer to the public. Furthermore, it plans to pursue the price liberalization policy begun in the early 1990s. The government also intends to continue reducing public sector involvement in production and commercial activities, and to develop a regulatory framework promoting competition in sectors to be privatized. On overall poverty reduction, the government is expected to complete the formulation of a broad strategy by April 2001 with the participation of elected officials, civil society, nongovernmental organizations and development partners. Pending the elaboration of this overall strategy, the government has adopted a series of measures in education, health, and social protection, which are reflected in the interim PRSP and are to be implemented over the next 12 months in the context of the completion point of the enhanced HIPC Initiative.
Main Economic Indicators, 1998-2003 | | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | | | (Annual changes in percent, unless otherwise indicated) | | | | | | | | | National income | | | | | | | GDP at current prices | 8.9 | 7.5 | 8.4 | 8.2 | 8.0 | 8.1 | GDP at constant prices | 4.5 | 4.9 | 5.6 | 5.7 | 5.6 | 5.6 | GDP deflator | 4.2 | 2.5 | 2.6 | 2.4 | 2.3 | 2.0 | Consumer price index (average) | 5.8 | 0.3 | 3.0 | 2.5 | 2.5 | 2.0 | Consumer price index (end of period) | 5.6 | -3.2 | 3.0 | 2.5 | 2.5 | 2.0 | | | | | | | | | Central government finance | | | | | | | Revenue | 15.9 | 11.4 | 5.9 | 10.5 | 10.1 | 9.2 | Expenditure and net lending | -2.7 | 9.9 | 21.1 | 5.0 | 9.1 | 9.0 | | | | | | | | | Money and credit | | | | | | | Net domestic assets 1/ | 0.2 | 4.8 | 9.1 | ... | ... | ... | Domestic credit 1/ | 0.9 | 3.4 | 9.5 | ... | ... | ... | Net claims on central government 1/ | -8.0 | -13.3 | 3.2 | ... | ... | ... | Credit to the nongovernment sector | 40.6 | 52.8 | 17.9 | ... | ... | ... | Broad money | -2.7 | 37.1 | 3.0 | ... | ... | ... | Velocity (GDP relative to average M2) | 4.2 | 3.8 | 3.6 | ... | ... | ... | | | | | | | | | External sector (in terms of CFA francs) | | | | | | | Exports, f.o.b., excluding reexports | 26.5 | 0.3 | -2.1 | 16.5 | 9.5 | 10.2 | Imports, f.o.b., excluding reexports | 7.0 | 6.6 | 12.5 | 4.9 | 5.4 | 6.5 | Export volume, excluding reexports | 18.9 | 21.7 | -5.5 | 4.2 | 4.4 | 3.9 | Import volume, excluding reexports | 6.6 | 2.9 | 5.3 | 6.2 | 6.1 | 6.1 | Terms of trade | 6.0 | -20.4 | -3.1 | 13.2 | 5.5 | 5.7 | Nominal effective exchange rate (- deprec.) | 4.0 | -3.5 | ... | ... | ... | ... | Real effective exchange rate (- deprec.) | 7.6 | -3.5 | ... | ... | ... | ... | | | | | | | | | | | (In percent of GDP, unless otherwise indicated) | | | | | | | | | Basic ratios | | | | | | | Gross investment | 17.1 | 17.6 | 18.8 | 19.2 | 20.0 | 20.3 | Government investment | 5.7 | 6.0 | 6.8 | 6.9 | 7.2 | 7.4 | Private sector investment | 11.4 | 11.6 | 12.0 | 12.3 | 12.8 | 12.9 | Gross domestic saving | 6.6 | 5.5 | 6.0 | 7.6 | 9.0 | 9.8 | Government saving | 5.5 | 5.7 | 4.4 | 5.4 | 5.4 | 5.6 | Private saving | 1.0 | -0.2 | 1.6 | 2.2 | 3.6 | 4.2 | Gross national saving 2/ | 11.3 | 11.8 | 11.6 | 12.7 | 13.8 | 14.6 | | | | | | | | | Central government finance | | | | | | | Revenue | 15.5 | 16.0 | 15.7 | 16.0 | 16.3 | 16.5 | Expenditure and net lending | 16.8 | 17.1 | 19.2 | 18.6 | 18.8 | 18.9 | Primary balance 3/ | 0.0 | -0.2 | -2.3 | -1.5 | -1.7 | -1.8 | Overall fiscal deficit (payment order basis) 4/ | -1.3 | -1.1 | -3.5 | -2.6 | -2.5 | -2.5 | Overall fiscal deficit (cash basis) 4/ | -5.0 | -2.8 | -4.0 | -2.8 | -2.5 | -2.5 | Debt service (after debt relief) 5/ | 32.2 | 22.8 | 19.1 | 16.7 | 14.2 | 13.5 | | | | | | | | | External sector | | | | | | | Current account balance (- deficit) 2/ | -5.8 | -5.8 | -7.2 | -6.5 | -6.2 | -5.7 | Overall balance of payments (- deficit) | -0.1 | 8.6 | -0.7 | 0.5 | 0.5 | 0.5 | Debt-service ratio (before debt relief) 6/ | 16.1 | 16.8 | 19.5 | 16.7 | 14.5 | 13.8 | Debt-service ratio (after debt relief) 6/ | 12.7 | 16.8 | 19.5 | 16.7 | 14.5 | 13.8 | Net present value of debt-to-exports ratio (after debt relief) 6/ | 236.1 | 231.2 | 226.6 | 202.3 | 189.5 | 167.8 | Debt-to-GDP ratio (after debt relief) | 57.7 | 55.2 | 51.7 | 48.2 | 45.2 | 42.3 | | | | | | | | | | | | | | | | | Nominal GDP (in billions of CFA francs) | 1,360.6 | 1,463.3 | 1,586.1 | 1,716.7 | 1,854.6 | 2,004.4 | CFA francs per U.S. dollar (period average) | 590.0 | 614.8 | ... | ... | ... | ... | Population (midyear, in millions) | 6.0 | 6.1 | 6.3 | 6.5 | 6.7 | 6.8 | | | | | | | | | Table sources: Beninese authorities; and IMF staff estimates and projections. |
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