Fourth Poverty Reduction Strategy Credit

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The overall objective of the Fourth Poverty Reduction Support Credit for Benin is to provide support for implementation of the government's reform agenda in the following areas: i) improving the policy environment for private investment and infrastructure; ii) pursuing progress toward the World Bank's Millennium Development Goals by improving access to basic services and ensuring greater efficiency of public expenditures on human capital formation; and iii) promoting better governance through financial management, civil service and justice reforms. This project is expected to have a significant positive impact on poverty reduction. First, through components designed to improve the business climate and private sector development, the project's operation will promote economic growth. Second, the strengthening of public financial management is expected to enhance the efficiency and effectiveness of public resources in the delivery of development services and in reaching the Bank's Millennium Development Goals. Third, this project supports equitable development through components emphasizing access to basic services, such as health, education, water and rural transport. The risks for this operation include: i) obstacles to the reform agenda; ii) weak capacity to implement the reforms; iii) vulnerability to commodity and currency rates; and iv) constraints to economic diversification. IDA is supporting the government of Benin in implementing measures to mitigate these risks by: supporting its consistent application of formal procedures and grounding reforms in participatory processes as well as in the dynamics laid out in the project's poverty reduction strategy paper; enhancing dialogue with the government of Benin, donor coordination and technical assistance; and improving the policy environment for private investment and infrastructure, diversifying agricultural production and improving the marketing of cotton production.