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Sixteen Economic Policy Notes to Better Inform Decision Making in Benin

© AP

COTONOU, December 12, 2016 ─ The Word Bank recently published a series of sixteen economic policy notes presented at a government-organized workshop discussing social and economic development challenges facing Benin.

The documents are intended to stimulate discussion and provide support for decision makers, through analysis and the formulation of recommendations for the country’s sixteen key development sectors: poverty and inequality; fiscal policy; public administration and governance; agriculture and rural land management; cotton; energy; water and sanitation; education; health; nutrition; population; social safety nets and social inclusion; demographic dividend in Benin; employment; gender equality; competitiveness and business environment; regional integration and inter-sectoral synergies in the infrastructure sector; and information technology.

“The publication of the notes coincides with Benin’s adoption of a government recovery plan for sustainable social and economic development,” asserted Abdoulaye Bio Tchané, Minister of Planning and Development, speaking at the workshop. He welcomed the World Bank initiative, noting that the various studies presented “provide specific insights into the implementation strategies of the government’s action program.”

Taken together, the notes present the challenges facing the country as well as short and medium term solutions for overcoming them. “These studies by no means claim to provide a detailed assessment of the full extent of Benin’s challenges. The purpose of the proposed recommendations is to provide points for contemplation, going forward, in terms of the country’s social and economic development programs,” underlined Katrina Sharkey, World Bank Country Manager for Benin.

The following are the key messages that emerged from the policy notes:

  • Between 2011 and 2015, the poverty rate rose, despite a relatively rapid average annual growth rate of 5.2% over the same period;
  • Benin has not been able to accelerate the structural transformation of its economy that would allow it to generate significant productivity gains in its traditional sectors, while reallocating the labor force to higher-productivity modern sectors;
  • The existing infrastructure gap in the water and sanitation, energy, transport, and communication sectors, in particular, hinders accelerated growth and provides a partial explanation for the lack of a positive direct link between economic growth and poverty reduction;
  • Several of the country’s social indicators—access to education at all levels, the supply of potable water to urban and rural areas, and the geographic accessibility of health services—have improved, notwithstanding a mixed performance in the area of poverty reduction. These successes have parlayed into better living conditions for many households and are likely to have a positive impact on the country’s longer-term growth prospects.

Included in the actions to be taken by the Government of Benin, based on the main priorities identified by the policy notes, are: 

  • The re-establishment of macroeconomic and fiscal stability and the improvement of its tax system to garner more resources for investment in infrastructure that is crucial for growth, while addressing the social demands of an expanding population;
  • The development of high-quality infrastructure aimed at furthering regional integration and improving market access;
  • Better leveraging of information and communication technologies (ICT) capabilities (given its dual access to fiber-optic submarine cables and its strategic geographic location) to transform Benin into a regional data transport hub.
  • The improvement of the business climate to strengthen the country’s competitiveness;
  • The enhancement of human resources in education for improved quality, greater equity, and better management and oversight of the education system. Similar action is required to bring about more inclusive growth in the maternal and child health sector and the nutrition sector, and to establish a more effective social safety net system;
  • The promotion of technology and innovation in productive sectors such as agriculture, cotton, and land.

The policy notes represent the initial stage of proposed assistance from the World Bank for Benin’s new government. The World Bank will, in 2017, carry out a systematic assessment of the country’s social and economic situation, which will provide a more in-depth analysis of the country’s main social and economic development constraints and opportunities. This analysis will be followed by the development of a new partnership framework that will guide the World Bank Group strategy in Benin over the course of the next four to five years.