Large annual transfers from the French government and other sources are necessary for Benin to offset its chronic trade deficit. As producer prices declined in the late 1980s, Benin's export revenues fell sharply. By 1989 and 1990, foreign aid matched export earnings. Benin's current account deteriorated sharply from the years of high prices for crude oil exports, and since oil production slowed down in the 1990s. A growing dependence on imports also increased the deficit, but official statistics do not include substantial amounts of informal trade flows to neighboring countries. The total percentage of debt service over exports in 1998 was 9.6%.
Benin accepted an IMF structural adjustment program in the early 1990s. The IMF formula called for modest real GDP growth, reducing public sector employment, improving tax collection and privatizing of public-sector enterprises. In addition, Benin's government initiated tariff reforms and lifted price controls. While debt cancellations by the US and France helped bring the debt-service ratio down to 7.0%, Benin still has a serious debt problem that has only partially been resolved.
The US Central Intelligence Agency (CIA) reports that in 2000 the purchasing power parity of Benin's exports was $353 million while imports totaled $437.6 million resulting in a trade deficit of $84.6 million.
The International Monetary Fund (IMF) reports that in 2000 Benin had exports of goods totaling $392 million and imports totaling $516 million. The services credit totaled $136 million and debit $192 million. The following table summarizes Benin's balance of payments as reported by the IMF for 2000 in millions of US dollars.
|Balance on goods||-124|
|Balance on services||-56|
|Balance on income||-12|
|Direct investment abroad||-8|
|Direct investment in Benin||64|
|Portfolio investment assets||6|
|Portfolio investment liabilities||1|
|Other investment assets||25|
|Other investment liabilities||-76|
|Net Errors and Omissions||7|
|Reserves and Related Items||-87|