Benin Second Fiscal Reform and Growth DPF

closed

The fiscal reform and growth development policy financing (DPF) series aims at supporting the government’s effort to implement its government action plan (GAP) over the period 2016-2021. The operation continues supporting the reforms started under the same the two pillars of the first operation of this DPF series, with the inclusion of a third pillar on social services. The first pillar continues to focus on strengthening fiscal management. The second pillar aims at enhancing agricultural productivity through value addition and improving power sector’s financial viability. This operation entails two important changes with respect to the previous operation of this DPF series. The first is that a third pillar supporting a more equitable provision of education and health care services has been introduced. The inclusion of a third pillar reflects the results of the Benin systematic country diagnostic approved in January 2018 and the renewed commitment of authorities in this area. The second change in the operation is that it will include both an IDA Credit and an IDA policy-based guarantee (PBG). These two changes do not modify, and rather increase, the rationale for WBG support, which is to support the implementation of the GAP and the program for growth and sustainable development (PC2D). The project is fully anchored in the World Bank Group’s maximizing financing for development (MFD) approach. The reforms in both fiscal policy and social services should also help encourage private sector participation as macroeconomic as well as fiscal stability and human capital are key factors for firms’ investment and productivity.