Benin report - Institut Africain de la Gouvernance

CHAPTER FOUR: ECONOMIC GOVERNANCE AND MANAGEMENT__________________________________________________________________________348. The end of the period was, therefore, marked by the interventions of theBretton Woods Institutions. Strict conventional stabilisation programmes andSAPs were „negotiated‟ and implemented through various agreements. Theywere not successful in terms of either growth or the social welfare of thepopulation. Social unrest followed and these soon became politicaldemonstrations. The collapse of the Soviet regime during the same period onlyserved to alienate the country further from socialist developmental policy anda single-party system. The National Sovereign Conference marked the end ofthis period and ushered in another.349. The third period (1990 to the present) was known as the Democratic NewDeal. It started at the conclusion of the National Sovereign Conference. Thereturn to liberalism, and its related governance systems, became the basis ofeconomic management. Then international aid arrived. It brought with itinternal social and political cohesion and a new-found confidence in managingand mitigating social evils and for making the necessary efforts to establishmacroeconomic stability. The economic governance of this period was markednot so much by the need for structural transformation as by the need to achieveeconomic stability in order to create the conditions for economic recovery.Day-to-day economic management ignored the importance of constructing anew economic vision to solve the basic problems of Benin‟s economy.350. The macroeconomic results were satisfactory in terms of economic growth,external trade, public finances and inflation. The new democratic frameworkhelped enormously. However, this method of economic governance, based onroutine management, soon ran out of steam after the devaluation of the CFAfranc in 1994. The SAPs and he PRSP I could not resolve the country‟seconomic difficulties. Its vulnerability to both internal and external shocks andthe weaknesses in the current style of economic management were clear,particularly in the decline in growth and the standard of living of thepopulation. The issue of economic development and structural change boileddown to a frantic search for financial equilibrium, which then served as adevelopmental policy.351. Although the country had championed compliance with the macroeconomicconvergence criteria adopted in WAEMU, or at least most of them, itscompetitiveness continued to decline. It became increasingly incapable ofplaying its role as a transitional economy effectively. Benin‟s heavydependence on the world‟s economy and on the economy of its powerfulneighbour, Nigeria, did not help it to define, let alone implement, governance– except in terms of routine economic management with a short-termperspective. There was just no policy on structural change to assist in theconstruction of an alternative and long-term vision. It is here that we findanother focus and core challenge for economic governance in Benin. This is todefine and implement a vision, for the Benin of tomorrow, to achievesustained and equitable growth, to reduce poverty, and to transform economicstructures into an integrated national economy that is open at both regional andworld levels and capable of resisting internal and external shocks.132