Benin report - Institut Africain de la Gouvernance

EXECUTIVE SUMMARY__________________________________________________________________________3.90 People‟s access to resources plays an important role in peace and politicalstability, and therefore in building and consolidating democracy. It promotessocial cohesion and facilitates the building of consensus and the mobilisationof the bone and sinew of the nation around the development model chosenunder the guidance of the authorities. It is acknowledged that the state cannotbe the sole provider of development resources and services, even though theyare called social resources and services. Private sector and civil society areimportant partners in this process and in the process of improving citizens‟access to resources.3.5.6 The informal sector3.91 Born out of the weaknesses of the formal sector – which fosteredmarginalisation and impoverishment – the informal sector took root anddeveloped as an integral part of the economic, social and even political life ofthe Beninese society. Policies and attitudes to the informal sector in Benin aredictated by two viewpoints: positive and negative. On the positive side, theinformal sector is acknowledged for its economic and social importance. As amajor creator of wealth and jobs, the informal sector contributes to povertyreduction and acts as a safety valve for social problems associated with lack ofjobs and especially for alleviating the social tensions that could result fromunemployment. On the negative side, the informal sector stands accused ofmany economic ills and abuses. It is seen as the cause of the high, heavy andcomplex taxation of the formal sector, which is penalising the sector anddiscouraging investment. The state‟s policies and relations with the informalsector are marked by the „fiscal gendarme‟ attitude.3.92 The current and foreseeable reality of Benin‟s economy is that the informalsector plays, and will continue to play, an important role at all levels of socialand economic life in the country. The informal sector should therefore be theobject of special attention, both by the government and by its developmentpartners. The CRM is of the opinion that a strategy combining theseapproaches would be the best option for Benin. Such a strategy would have athreefold effect: it would promote the complementary nature of the formal andinformal sectors through subcontracting and consequent tax incentives; itwould identify ways of extending the tax base without this becoming a form of„harassment‟ of the informal sector; and finally, it would promote an aidprogramme in response to the needs of the informal sector.3.5.7 Reform and modernisation of the state3.93 The reform and modernisation of the state amount to defining the very natureof the state model that would ideally be established in the Benin of tomorrow.It also implies that reforms have to move from the present consumer state tothe facilitating state, which will be the pillar of transformation and the leaderin constructing the vision of an emerging Benin. The result is thetransformation of the state apparatus into a machine of change. Consequently,major reforms have been initiated over the past few years, involving mainly27