Benin experienced a long period ofpolitical instability and economic challenges afterachieving its independence in August 1960. In 1991 a newgovernment initiated far-reaching reforms aimed at thecreation of a market-based economy, resulting in significantliberalization of Benin's political and economicsystem. Growth fluctuated in the range of 4-6 percent until2000, after which it began to trend downwards, fluctuatinglargely in response to variation in the exchange rate aswell as to movement in the prices of cotton, Benin'smain export, and oil, a major import. Benin benefited fromsupport under the Environmental and Social AssessmentFramework (ESAF) and Poverty Reduction and Growth (PRGF)facilities, the latter continuously since 1993. According toan independent ex-post review (International Monetary Fund2004), program implementation during 1993-2003 was broadlysuccessful. Real economic growth averaged 5 percent andfiscal consolidation improved as key initial challengesarising from the Government's low revenue collectionand high wage bill were addressed. But overall progress instructural reform was mixed. Initial efforts to liberalizethe economy and reduce government intervention weresuccessful, and there was progress in introducingfar-reaching reforms in the cotton sector. A new povertyreduction growth facility was approved in August 2005.
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