On September 15, the World Bank approved $230 million in funding from the International Development Association (IDA) for Benin. The aim is to help the government strengthen private sector-led growth, boost domestic revenue collection, and strengthen social and climate resilience.

The development policy support program is based on three pillars. The first pillar supports the establishment of a new public-private partnership (PPP) framework, the creation of a new ecosystem for the development of micro, small and medium-sized enterprises, and the improvement of the investment climate. The second supports reforms to stimulate domestic revenue collection, creating the fiscal space necessary for public investment and debt sustainability. The third targets reforms aimed at increased social and climate resilience, in particular through subsidized medical coverage for poor people, adaptive social protection, and strengthening disaster risk management. This is the first operation to support reforms conducive to inclusive, resilient and private-sector-led growth

For Nestor Coffi, World Bank Operations Manager for Benin, this financing will allow Benin to reform fiscal space, facilitate job-creating investments by the private sector, and strengthen social and climate resilience. This operation was designed in alignment with the Benin Government's Action Plan 2021-2026. The reform program supports the green, resilient and inclusive development agenda by strengthening the country's adaptation and resilience to climate change through improved practices for preventing, preparing for, and responding to climate shocks. It helps the government to be better prepared financially in the event of the immediate needs of a natural disaster.

Addressing the immediate needs of natural disasters

Benin ranks 152nd out of 181 countries in terms of extreme climate vulnerability. The increase in the frequency of floods is having a major impact on the population and the agricultural sector. Its coastal erosion rate, one of the highest in the Gulf of Guinea, threatening more than 50% of the population living in the coastal region, existing key infrastructure, and economic activity. To help Benin better prepare financially to respond to the immediate needs of natural disasters, this new funding includes an $80 million disaster deferred drawdown option (Cat DDO) that can be fully or partially disbursed in the event of a natural disaster or a public health emergency

The adoption of a new law on PPPs and the implementation of accompanying measures will facilitate the participation of the private sector in public projects and help attract private investors to implement public-private partnership projects. Increasing the mobilization of private capital should also help meet the financing needs of the fight against climate change.

by Félicienne HOUESSOU