AfDB to Support Benin’s Economic Reforms with a 24 Billion CFA Franc Budget Support
The African Development Bank (AfDB) Group on September 6, in Tunis approved a loan of UA 30 million, equivalent to 24 billion CFA francs, to the Republic of Benin as funding to support the country’s economic and financial reforms. The funding amount will be deducted from the resources of the African Development Fund (ADF), the Bank’s concessional window.
The program will contribute to institutional development and knowledge accumulation in the area of public finance reforms and provide support for private sector development in the country.
The development objective of the program for the support of economic and financial reform (Programme d’Appui aux Réformes Economiques et Financières, or PAREF) is to contribute to the creation of conditions for inclusive economic growth driven by the private sector and generate employment by strengthening economic and financial governance. At the operational level, the program aims to modernize the legal and regulatory framework in order to boost the private sector, support job creation and strengthen public finance management to improve social service delivery.
PAREF is fully aligned with the Bank’s 2012-2016 Country Strategy Paper (CSP) and is consistent with the 2011-2015 Growth Strategy for Poverty Reduction, GSPR-Phase III, approved in March 2011. The program ties in well with the new strategy and is based on three of the five strategic pillars, including (i) sustainable acceleration of growth and economic transformation; (ii) strengthening human capital; and (iii) promoting good governance. In addition, PAREF contributes to efforts at achieving actions of the second pillar of the CSP, namely, supporting good governance and, above all, the overall objective of the CSP to promote inclusive growth and job creation.
PAREF’s deliverables include: (i) strengthening the private sector with a revised private sector development policy, the adoption of a legal and institutional framework for the financing of private public partnerships (PPPs), increasing the number of skills training centres, and creating a trade certification institution; (ii) financial governance reinforced with the adoption of a legal framework for public finance and a results-based budgeting consistent with West African Economic and Monetary Union (WAEMU) directives, the adoption of annual plans for procurement by contracting authorities and the transformation of the Supreme Court’s Accounts Chamber into a Court of Auditors.
To date, AfDB’s cumulative commitments to Benin stand at nearly 483 billion CFA francs.