Benin report - Institut Africain de la Gouvernance

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CHAPTER FOUR: ECONOMIC GOVERNANCE AND MANAGEMENT__________________________________________________________________________could not achieve a sustainable increase in market output – which is mainlybased on cotton – nor reduce the level of poverty significantly.398. In the agriculture and forestry sector, the implementation of the programmebudget for the agricultural sector encountered difficulties with regard tomobilising resources, and stakeholders have not mastered budgetaryprocedures. This alarming situation also exists in the social sectors of healthand education, which are priority areas for poverty reduction. Publicexpenditure in the social sectors remains low. However, decisions taken forthe 2007-2008 financial year (see Chapter Six on socioeconomic development)open prospects for new hope.399. In the industrial sector, administrative sluggishness and obstacles toinvestment contribute greatly to increases in operational costs and to the risksfacing the formal sector. More than 80% of the 400 formal enterprisesinterviewed in the World Bank survey on investment climates considercorruption in Benin, the functioning of the justice system, as well as customsand fiscal procedures as being very serious obstacles to their development.Similarly, delays in the implementation of the privatisation process in theelectricity sector reduce the competitiveness of enterprises because of frequentoutages and the high cost of electricity.400. Benin has a good image with its development partners. However, the progressmade at the macroeconomic level has not significantly reduced poverty, whichaffects nearly 30% of the population. The major obstacles to economic growthand poverty reduction are structural. They are the rigidity of the productionmachinery and structure, low investment, and limited diversity in exports –which are dominated by cotton. This situation makes the economy veryvulnerable to external shocks and weakens the country‟s balance of payments.The country also experiences other constraints, particularly with regard to landissues, the legal protection of businesses, taxation and customs tariffs, themanagement of public utility services, and the development of infrastructure.These barriers considerably affect the competitiveness of enterprises.401. In conclusion, it should be pointed out that the government faces two keychallenges that need to be addressed: (i) improvement in the overall andsectoral competitiveness of the economy to provide a macroeconomicframework for promoting development; and (ii) eradication of poverty andimprovement of the quality of life of the population.Box 4.2: Current practice in developing the MTEF in BeninThe MTEF method of budget preparation started in 2002. First, the General Directorate ofEconomic Affairs (DGAE), in consultation with the General Directorate of the Budget (DGB)and the permanent secretariat of the National Development and Poverty ReductionCommittee (CNDLP), presents guidelines that indicate, for the medium term, thegovernment‟s objectives with regard to economic growth, inflation, tax pressure and budgetdeficit. The guidelines define the macroeconomic framework of the government‟s policy andanalyse recent developments both at the national level and in light of the economic policies ofcountries in the subregion. They give an estimate of the resources expected by Benin for the148
CHAPTER FOUR: ECONOMIC GOVERNANCE AND MANAGEMENT__________________________________________________________________________next three years so as to assess expenditure projections within reasonable limits.Based on these guidelines, the sectoral allocations are determined according to criteria like:(i) increasing the relative proportions to priority sectors; and (ii) limiting the increases inallocations according to their absorptive capacity. In order to apply these criteria, the data oneffective expenditure by ministries play a very important role. After this stage of determiningsectoral allocations, the expenditures in the initial overall allocations are discussed andreviewed.The process ends with the compilation of proposals from all the sectoral ministries to preparethe country‟s MTEF, which is then sent to the government for approval. Consequently, it couldbe said that the MTEF preparation is a repetitive process that could be divided into sixphases:Phase 1: Macroeconomic framework and estimates of mobilisable resources.Phase 2: Preparation of preliminary sectoral budget ceilings.Phase 3: Discussions and review of the sectoral budget ceilings.Phase 4: Approval of ministerial ceilings and mechanisms by the government.Phase 5: Finalisation of CDS-MT.Phase 6: Finalisation of the MTEF and approval by the government.The government‟s ultimate goal is to make the MTEF a tool for budgetary discipline and forforecasting the financing of sectoral policies. The MTEF also makes it possible to rationalisethe allocation of resources by taking into account developmental priorities and povertyreduction. It also helps to strengthen a priori control of public expenditure and to establish aposteriori control. Consequently, it facilitates assessment of the impact of the budget on thepopulation and assesses budget efficiency.iii.Recommendations of the APR Panel402. The APR Panel makes the following recommendations:In the area of macroeconomic and sectoral governanceImprove the global and sectoral competitiveness of the economy bydeveloping infrastructures to provide a macroeconomic framework thatwill support development.Increase poverty reduction in order to improve the quality of life of thepopulation.Broaden the tax base and improve the efficiency of revenue offices byreorganising and modernising taxation and customs services.Improve the efficiency of public expenditure by introducing results-basedpublic affairs management.Broaden the production base by diversifying production.149
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Finally, the APR Panel would like t
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of democracy, tolerance and fair pl
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COUNTRY FACT SHEETLocation:West Afr
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SOME ECONOMIC AND FINANCIAL INDICAT
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Prospects for economic growth in me
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CSARCSRDCREDEPOLIPODFIDGIDDIVIDNMPE
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SONAPRASONEBSPTSTASTAGSTARSYSCOASYS
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EXECUTIVE SUMMARY__________________
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CHAPTER ONE: INTRODUCTION: THE APRM
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CHAPTER TWO: HISTORICAL CONTEXT AND
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CHAPTER THREE: DEMOCRACY AND POLITI
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Page 118 and 119: CHAPTER THREE: DEMOCRACY AND POLITI
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CHAPTER FIVE: CORPORATE GOVERNANCE_
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CHAPTER SIX: SOCIOECONOMIC DEVELOPM
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CHAPTER SEVEN: CROSSCUTTING ISSUES_
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CHAPTER EIGHT: GENERAL CONCLUSIONS:
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CHAPTER EIGHT: GENERAL CONCLUSIONS:
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APPENDIX I: PROGRAMME OF ACTION OF
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APPENDIX II: BENINESE GOVERNMENT CO
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APPENDIX III: REPORT ON THE PEER RE
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