World Bank increases the level of resources to meet the financing needs resulting from the disastrous floods of 2010 in Benin
WASHINGTON, April 21, 2011 - The World Bank’s Board of Directors today approved a US$22 million grant to the Republic of Benin to provide Supplemental financing to the Sixth Poverty Reduction Support Credit (PRSC-6).
The overall objective of this grant is to increase the level of resources provided to Benin under PRSC-6 in order to meet the increased financing needs resulting from the disastrous floods experienced in late 2010. PRSC-6 supports the implementation of Benin’s poverty reduction strategy through: (i) modernizing the regulatory framework and policy environment for private investment and infrastructure, including support for completion of cotton sector and infrastructure reforms; (ii) increasing progress toward the millennium development goals by raising the quality, efficiency and access to basic social services; and (iii) promoting better governance through public financial management reforms.
The torrential rainfall combined with record-high water levels on all the major rivers in Benin in late 2010 caused severe flooding throughout the country, which resulted in extensive damages to dwellings, livestock, crops, and social and economic infrastructure. An assessment of the flood’s impact on the macroeconomic and fiscal front by the World Bank and the International Monetary Fund indicated an economic loss in excess of US$36 million from lost agricultural production alone. The Government has announced that unanticipated budget commitments as a result of the flood will total CFAF5 billion (US$10 million) in 2010. But it is expected that expenditures for 2011 would exceed that figure significantly. The PRSC-6 Supplemental Financing has been prepared to help government address the crisis and reduce the impact of the floods on its budget.
This new grant is complementary to several investment projects that have been modified or augmented to directly address specific flood related needs in several sectors, including agriculture, urban infrastructure and education. These additional investments will address medium term needs to repair damaged infrastructure, address ongoing and medium term food needs of affected populations and assist in disaster preparedness and mitigation. Together these various operations constitute a coordinated and coherent package of support to Benin following the floods.
The Country Director for Benin, Madani M. Tall, expressed satisfaction upon the Board’s approval of the grant: “The Bank responded quickly to Benin’s request for assistance following the floods. The initial assessment conducted by our teams confirmed the general scale of the disaster which is very important. I am glad that we have been able to mobilize these resources quickly, to help government adequately address some of the implications of the flood crisis”. In view of the emergency, Tall has recommended that the necessary actions are taken for the grant to become effective quickly, for the benefit of the poor.
The PRSC series is an integral part of the Bank Group’s Country Assistance Strategy (CAS) for Benin for 2009-2012. The CAS restates the importance of relying on a combination of development policy and investment operations to ensure a coherent approach to supporting structural reforms. PRSCs are therefore key instruments in the Bank’s dialogue with Government and development partners on policy issues. This Supplemental Financing will help ensure continued progress toward established objectives and indicators in light of the impact of the floods.