A $638 million extended fund and extended credit facility for Benin under a 42-month agreement has been approved by the International Monetary Fund’s (IMF) executive board, the IMF announced in a statement late on Friday. The funds will be used to help the West African country meet its urgent financing needs.

The IMF stated that the decision will allow for an immediate release of $143 million, which the Benin authorities want to utilize for budget support.

Like other countries in the region, Benin’s economy has been battered by global shocks including the coronavirus pandemic, the war in Ukraine, and increasing attacks by Islamist militants in the north of the country.

“Benin faces significant headwinds from a deteriorating security situation at its northern border, COVID-19-induced scars, the war in Ukraine, as well as significant climate risks, which could erode hard-won economic gains in recent years,” the IMF said.

“The programme is calibrated flexibly to accommodate large spending needs in the near term; it then pivots to revenue-based fiscal consolidation starting in 2023 to ensure medium-term debt sustainability,” it added.