AfDB Approves US$67.19 Million for Agricultural Infrastructure in Benin

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The Board of Directors of the African Development Bank Group (AfDB) on Wednesday, 23 October 2013 in Tunis approved a combination of one loan and two grants amounting to US$ 67.19 million to finance the Oueme Valley Agricultural Infrastructure Support Project (PAIA-VO) in Benin.

The objective of the PAIA-VO is to help ensure sustainable increase in agricultural productivity and production by promoting growth sub-sectors. Overall, the project is expected to enhance food and nutrition security, as well as strong and inclusive economic growth in Benin.

The total project cost is estimated at UA 49.93 million (CFAF 37.74 billion), of which UA 39.50 million (CFAF 29.85 billion) and UA 0.53 million (CFAF 400.59 million) secured respectively from an ADF loan and grant, and UA 4.8 million (USD 7.2 million, or about CFAF 3.6 billion) in the form of a grant by GEF’s Least Developed Countries Fund.

The government’s counterpart contribution is about UA 4 million (CFAF 3.02 billion), while Municipal councils and the beneficiaries will provide UA 1.1 million (CFAF 832 million) in the form of financial contributions or unskilled labour for the execution of infrastructure works.

The PAIA-VO will reduce poverty and improve food and nutrition security by targeting economically and socially disadvantaged zones with a huge agricultural potential linked with the fertile lands of the Oueme Valley, and by supporting infrastructure development and agricultural entrepreneurship.

The project is tied to Benin’s Growth and Poverty Reduction Strategy (GPRS III) adopted in March 2001,  an operational rollout of the “Benin 2025” Vision which seeks to achieve strong and inclusive growth capable of substantially improving the living conditions of the population.

It is in line with the Bank’s Agricultural Sector Strategy (AgSS 2010-2014) as well as its Ten-Year Strategy 2013-2022, since it seeks to achieve strong, inclusive and green economic growth. To finance PAIO-VO, Benin was able to access GEF’s Least Developed Countries Fund (LDCF) resources, through the Bank’s support and expertise.

The project is anchored on the first pillar of the Country Strategy Paper 2012-2016, which focuses on the need to develop production and competitiveness support infrastructure by developing valleys and strengthening irrigation and marketing infrastructure to enhance competitiveness and improve domestic and regional market integration. It also focuses on the second pillar of the CSP on promoting good governance through local governance support and capacity building of municipal councils and the Ministry of Agriculture, Livestock and Fisheries.

The project area, which spans 4,770 square kilometres and covers 14 municipal councils in three divisions, namely Ouémé, Zou and Atlantique. It is a very fertile valley situated along River Ouémé. The farmland area is more than 70,000 hectares, less than 30% of which is currently being exploited.

PAIO-VO has three components: (i) Development of Agricultural Infrastructure, (ii) Development of Value Chains, and (iii) Project Management. Apart from investing in structuring infrastructure, the project will help to promote three agricultural sub-sectors (rice, maize and market garden crops) targeted in the Strategic Plan for Agricultural Sector Rehabilitation (PSRSA).

Most important activities concern: Irrigation schemes (5 000 hectares); Storage, marketing and access infrastructure; Provision of advisory support to 21 000 farmers and research and development; Capacity building of stakeholders. The project will also promote agricultural entrepreneurship and youth employment. It will establish and strengthen two regional training centres using the “Songhai” model.

PAIA-VO will support the establishment of more than 2,500 youth agribusinesses through training and facilitation for acquisition of modern farming equipment. The project will also prioritise rural activities usually valued by women (horticultural crops and rice farming, processing, marketing, etc.).  It will support the development of secured land tenure system, particularly for women.

The PAIA-VO project will directly affect more than 420 000 people and about 1.4 million people indirectly.