Information about Asia and the Pacific Asia y el Pacífico
Journal Issue

Press Releases

International Monetary Fund. External Relations Dept.
Published Date:
January 1999
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Information about Asia and the Pacific Asia y el Pacífico
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Benin: ESAF

The IMF has approved the second annual loan for Benin under the Enhanced Structural Adjustment Facility (ESAF), in an amount equivalent to SDR 9.1 million (about $13 million) in support of the government’s economic and financial program for 1998-99. The loan is available in three installments, the first of which will be available on January 15, 1999.

To consolidate the progress made over the past few years, the government intends to rigorously implement economic and structural reforms and make up for recent delays. The medium-term strategy for 1998-2001 aims at further reducing financial imbalances, keeping the economy on the path of sustained growth and job creation, and diversifying the productive base. The principal objectives are to achieve an average real GDP growth of 5.5 percent a year, keep inflation below 3 percent, and reduce the external current account deficit to levels that can be covered without recourse to exceptional financing.

In order to achieve this medium-term strategy, the authorities’ economic and financial program for 1998-99 is designed to promote access to basic public services by improving public resource management and to increase government saving so as to reduce the share of investment financed by external resources.

Structural Reforms

To revitalize public administration and strengthen civil service management the government will implement civil service reform. To increase foreign and private domestic investment, the government is determined to broaden the divestiture program, including the restructuring and privatization of a number of public enterprises and the liberalization of the telecommunications utilities and cotton sectors. The government will provide an improved regulatory framework to promote sound and sustainable development of the private sector.

Addressing Social Needs

A priority of the government will be to cushion the impact of the adjustment policy on the most vulnerable groups of the population by improving access to essential services and continuing the implementation of its strategy for addressing social dimensions of development.

Benin joined the IMF on July 10, 1963. Its quota is SDR 45.3 million (about $64 million), and its outstanding use of IMF resources currently totals SDR 66 million (about $93 million).

Pakistan: ESAF, Extended Arrangement, CCFF

The Executive Board of the IMF approved on January 14, 1999 Pakistan’s second annual program under the Enhanced Structural Adjustment Facility (ESAF), completed the second review under the Extended Arrangement, and approved a purchase under the Compensatory and Contingency Financing Facility (CCFF) in respect of a shortfall in export earnings during 1998.

Under these facilities, SDR 409.5 million (about $575 million) will be disbursed following the Executive Board meeting. Additional assistance of SDR 417.0 million under the ESAF and SDR 379.1 million under the Extended Arrangement will be made available during the remainder of the program period.

Program Objectives

To strengthen the balance of payments and lay the basis for sustainable high rates of growth, the government of Pakistan has adopted a program of macroeconomic policies and structural reforms that are supported by the IMF, the World Bank, and the Asian Development Bank. The macroeconomic objectives for 1998-2001 are

  • recovery in real GDP annual growth from 3-4 percent to 5-6 percent over the medium term;

  • reduction in annual inflation to about 6 percent in 2001/02;

  • reduction of the external current account deficit from about 3 percent of GDP in 1998/99 to less than 1.5 percent of GDP in 2001/02;

  • stabilization of the total public sector debt-to-GDP ratio; and

  • improvement in social indicators.

Benin Main Economi indicators
(annual percent changes)
GDP at constant prices4.
(percent of GDP)
Overall fiscal deficit (cash basis)2-8.9-6.0-5.4-5.7-3.3-3.2-2.8
Debt service (after debt relief)329.920.718.418.918.118.516.2
Current account balance4-6.4-4.5-5.2-4.9-4.4-4.5-4.5


Before all official grants.

In percent of fiscal revenue.

Including current official grants but excluding project grants.

Data: Beninese authorities and staff estimates and projections


Before all official grants.

In percent of fiscal revenue.

Including current official grants but excluding project grants.

Data: Beninese authorities and staff estimates and projections

Macroeconomic Policies and Structural Reforms

A key to achieving these objectives is fiscal consolidation. The budget deficit is targeted to decline from 5.5 percent of GDP in 1997/98 to 4.3 percent of GDP in 1998/99, and to 3.3 percent in 1999/2000. The monetary policy stance is being geared toward restoring confidence in domestic financial markets and ensuring a steady flow of credit to the private sector consistent with growth and balance of payments objectives.

Pakistan’s structural reform agenda is largely focused on the budget and on restructuring and strengthening the financial position of public enterprises. The government is in the process of making substantial efforts to broaden the tax base, revamp tax administration, and implement the restructuring plans for the energy sector and other public enterprises. Simultaneously, the government intends to move forward with the privatization of financial institutions and trade liberalization and make further progress in developing market-based foreign exchange and payments systems.

External Financing

The financing of the agreed program will involve significant efforts by all of Pakistan’s creditors. In this context, a meeting of the Paris Club is expected late in January to consider a request by Pakistan for a rescheduling of its medium- and long-term debt-service payments falling due to Paris Club official creditors during the program period. The Pakistani authorities intend to seek comparable treatment from all its other official, bilateral, commercial, and private creditors.

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