World Bank approves $20 million to help Benin remove barriers to investment and minimize distortionary policies for structural transformation and a boost in growth
WASHINGTON, March 17, 2015--The World Bank’s Board of Executive Directors today approved a US$20 million (more than FCFA10 billion) International Development Association (IDA[i]) credit to boost the Government of Benin’s effort to promote good governance and strengthen private-sector competitiveness.
Today’s financing supports the Tenth Poverty Reduction Support Credit (PRSC-10), the second in a programmatic series of three development policy operations designed to help accelerate and extend opportunities for equitable growth by addressing key challenges in governance, public financial management and business-climate reforms.
“The PRSC-10 will create a healthy, competitive business environment conducive to investment in the country’s most promising sectors. Removing administrative barriers to investment and formalization, reducing transaction costs, alleviating infrastructure bottlenecks, and leveling the playing field by minimizing distortionary policies and interventions are all essential to facilitating the structural transformation of the economy and permanently boosting the country’s growth”, said Ousmane Diagana, World Bank Country Director for Benin.
The new budget support program, which is fully in line with Benin’s third poverty reduction strategy (SCRP-3[ii]) will help improve public financial management in an effort to promote good governance and public sector accountability. The focus will mainly be on budget execution and public procurement processes, while also supporting efforts for good governance and anticorruption. PRSC-10 will also strengthen private sector competitiveness by enhancing the business environment, improving port operations and customs performance, and fostering agricultural growth and diversification.
Effective and efficient delivery of government services and sound management of public resources are key to achieving the two goals of PRSC-10: “The role of government in fostering growth is not only to provide a suitable environment for the private sector to prosper; it also consists of delivering effective public services that maximize the impact of available revenues”, Diagana added. He also indicated the World Bank’s willingness to continue to support Benin’s government in that sense and advised that: “Strong governance and responsible public financial management grounded in a commitment to transparency and accountability are critical to ensure that prosperity is equitable and shared widely and that growth is closely linked to poverty reduction in Benin”.
PRSC-10 will be released in a single tranche.