Identifier
Created
Classification
Origin
08COTONOU188
2008-04-01 09:50:00
UNCLASSIFIED
Embassy Cotonou
Cable title:
BENIN - IMF FOURTH REVIEW, 4TH QUARTER 2007
how-toVZCZCXRO0299 RR RUEHMA RUEHPA DE RUEHCO #0188 0920950 ZNR UUUUU ZZH R 010950Z APR 08 FM AMEMBASSY COTONOU TO RUEHC/SECSTATE WASHDC 0251 INFO RUEHDK/AMEMBASSY DAKAR 1427 RUEHFR/AMEMBASSY PARIS 1247 RUCPDOC/DEPT OF COMMERCE WASHDC RUEATRS/DEPT OF TREASURY WASHDC RUEHZK/ECOWAS COLLECTIVE RUEHLMC/MILLENIUM CHALLENGE CORP WASHDC
UNCLAS COTONOU 000188
SIPDIS
SIPDIS
STATE PLEASE PASS TO USTR/AFRICA, AF/EPS, AF/W: BANKS
E.O. 12958: N/A
TAGS: ECON EIND EINV BN
SUBJECT: BENIN - IMF FOURTH REVIEW, 4TH QUARTER 2007
UNCLAS COTONOU 000188
SIPDIS
SIPDIS
STATE PLEASE PASS TO USTR/AFRICA, AF/EPS, AF/W: BANKS
E.O. 12958: N/A
TAGS: ECON EIND EINV BN
SUBJECT: BENIN - IMF FOURTH REVIEW, 4TH QUARTER 2007
1. SUMMARY: An IMF team visited Benin, March 3-18, 2008 for the to
review the country's economic performance in the last quarter of
2007. The team shared its generally favorable conclusions with
international donors on March 18. However, the IMF team urged the
GOB to continue to improve economic performance and implement
structural reforms to render the economy more competitive. END OF
SUMMARY.
2. According to the team growth trends remained positive. Real GDP
is 4.6% and projected to reach 5.3% in 2008. However, the economy
would perform better if the implementation of structural reforms did
not delay and there was not a decrease in cotton production either.
3. The team noted that the tertiary sector is doing very well.
Traffic at the port has increased and positively impacted the
transportation sector. Year 2007 imports of fuel totaled 170 billion
CFA (USD 400 million) compared to 131 billion CFA (USD 300 million)
in 2006. In 2007, the telecommunications sector, including GSM,
generated about 61 billion CFA (USD 145 million) in revenues.
4. The inflation rate is 1.3 percent, well below the WAEMU rate of 3
percent. Nonetheless, the country witnessed a strong increase in
prices, even beyond 3 percent on high consumption goods. The team
expects that the surge in prices will slow down and stabilize in the
near future.
5. The team praised GOB budget implementation. Fiscal pressure has
increased by 20 percent, and the revenue collection trend improved.
Regarding expenditures, Benin is within the limits of its budget
provisions. The implementation rate of the investment budget has
increased by 67 percent against 56 percent in 2006, but remains
weaker than anticipated under the program. The GOB is struggling to
spend international donor funds. However, the country's money supply
has increased by 18 percent. The balance of payments is positive,
external credit has been increased to CFA 84 billion (USD 200
million.)
6. The IMF team expressed its concerns about the challenges with
respect to structural reforms. The cotton, electricity and telecoms
parastatals are yet to be privatized. However, the GOB has
reaffirmed its intention to implement these reforms as of December
2008 or the first quarter of 2009 after assessing the state owned
companies' assets. The IMF encourages the GOB to speed up the single
tax identification process, the national pension funds, and the
study on Benin customs efficiency.
BROWN
SIPDIS
SIPDIS
STATE PLEASE PASS TO USTR/AFRICA, AF/EPS, AF/W: BANKS
E.O. 12958: N/A
TAGS: ECON EIND EINV BN
SUBJECT: BENIN - IMF FOURTH REVIEW, 4TH QUARTER 2007
1. SUMMARY: An IMF team visited Benin, March 3-18, 2008 for the to
review the country's economic performance in the last quarter of
2007. The team shared its generally favorable conclusions with
international donors on March 18. However, the IMF team urged the
GOB to continue to improve economic performance and implement
structural reforms to render the economy more competitive. END OF
SUMMARY.
2. According to the team growth trends remained positive. Real GDP
is 4.6% and projected to reach 5.3% in 2008. However, the economy
would perform better if the implementation of structural reforms did
not delay and there was not a decrease in cotton production either.
3. The team noted that the tertiary sector is doing very well.
Traffic at the port has increased and positively impacted the
transportation sector. Year 2007 imports of fuel totaled 170 billion
CFA (USD 400 million) compared to 131 billion CFA (USD 300 million)
in 2006. In 2007, the telecommunications sector, including GSM,
generated about 61 billion CFA (USD 145 million) in revenues.
4. The inflation rate is 1.3 percent, well below the WAEMU rate of 3
percent. Nonetheless, the country witnessed a strong increase in
prices, even beyond 3 percent on high consumption goods. The team
expects that the surge in prices will slow down and stabilize in the
near future.
5. The team praised GOB budget implementation. Fiscal pressure has
increased by 20 percent, and the revenue collection trend improved.
Regarding expenditures, Benin is within the limits of its budget
provisions. The implementation rate of the investment budget has
increased by 67 percent against 56 percent in 2006, but remains
weaker than anticipated under the program. The GOB is struggling to
spend international donor funds. However, the country's money supply
has increased by 18 percent. The balance of payments is positive,
external credit has been increased to CFA 84 billion (USD 200
million.)
6. The IMF team expressed its concerns about the challenges with
respect to structural reforms. The cotton, electricity and telecoms
parastatals are yet to be privatized. However, the GOB has
reaffirmed its intention to implement these reforms as of December
2008 or the first quarter of 2009 after assessing the state owned
companies' assets. The IMF encourages the GOB to speed up the single
tax identification process, the national pension funds, and the
study on Benin customs efficiency.
BROWN