Poverty Reduction Strategy Credit - 1st PRSC

closed

The Poverty Reduction Support Credit Project is designed to help implement the Benin's December 2002 Poverty Reduction Strategy Paper (PRSP), by supporting key policy measures aiming at: a) bolstering the medium-term macroeconomic framework; b) improving service delivery; and, c) enhancing governance and institutional capacity. The focus of the project will be on further supporting selective cross-cutting themes, critical to improving service delivery, in particular, the public expenditure management reform, undertaken under the Public Expenditure Reform Adjustment Credit. Attention shall be given to three core sectors: rural water, health, and basic education. In addition to these three sectors, the project would support continuation on the implementation of the Environment and Urban Sanitation, and Forest Management programs, ensuring proper funding, execution and monitoring. While the programmatic approach should increase Benin's ownership of its development programs, strengthen budgetary institutions and reduce transactions costs in the delivery of external assistance, in addition to the promotion of inter-sectoral coordination, maximizing the impact on poverty reduction, risks could influence project outcomes. This entails the economy's vulnerability to falling cotton prices, which may hamper growth and significant reduction in poverty, in addition to the economic and political developments in Nigeria. Further risks are possible slippages in key reforms, weak institutional capacity; and, fiduciary risks. However, these risks have been mitigated by the strength of the Government's ownership and commitment to implement the proposed measures, and significant up-front actions.