The two foreign policy areas that the Kérékou administration must concern itself with are good relations with neighboring countries and the maintenance of foreign aid. Relations with Benin's neighbors deteriorated during the Soglo administration because their military leaders feared Beninese democracy. However, tensions with Niger and Nigeria have lessened since Kérékou's election and since Obasanjo's election in Nigeria. A border issue over refugees seeking political asylum from the military regime of Sani Abacha was resolved in April 1996. In June 1999, Benin began withdrawing its 140 troops from Guinea-Bissau. In December 1999, Benin strained relations with Togo over its bid to host the African, Caribbean, and Pacific trading partners accords, which Togo has hosted since 1975. Benin will be a beneficiary of the future West African gas pipeline.
Foreign and multilateral aid is vital for the economic survival of Benin. Kérékou has had to convince donors and international relief agencies that he is committed to market reforms. While IMF-initiated structural adjustment policies under Soglo have been credited with restoring budgetary health, they have led to increased unemployment and hardships for the vast majority of Beninese. Faced with tremendous domestic pressure for an expanded government role, Kérékou has had to balance austerity with growth. In December 1999, US $30.4 million became available for private sector development through the International Development Association (IDA).
Based on the IMF's endorsement in November 2001 of the government's handling of fiscal, monetary, and economic reforms, donors (including the European Union (EU), Switzerland, and the World Bank) approved further assistance to Benin. The largest of the assistance packages was a World Bank credit of US $21.9 million for programs for the prevention and treatment of HIV/AIDS.
In 2002, Kérékou's immediate priority was to meet several conditions for reaching the completion point under the World Bank-IMF's heavily indebted poor countries (HIPC) initiative. The most controversial of these points could be the privatization of Benin's cotton parastatal, the National Society for Agriculture (Société Nationale pour la Promotion Agricole). Benin's trade unions protested reforms affecting public sector employment and virtually shut down the economy with their strikes from January to March 2002. In March, Kérékou conceded defeat and granted the strikers' demands for wage increases. The strikes were a setback as the country struggled to meet the World Bank and IMF requirements.
Regionally, the Kérékou government faced security threats from robbers and bandits crossing the borders from Niger, Burkina Faso, and mainly Nigeria. Armed robbery also has increased in Cotonou and Porto Novo, with negative implications for Benin's tourist industry. Local communities have resorted to vigilante law, burning and lynching thieves.