## 1benea2023003 ## Source details **Canonical URL:** [1benea2023003](https://www.imf.org/-/media/files/publications/cr/2023/english/1benea2023003.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2023/english/1benea2023003.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2023/english/1benea2023003.pdf.json) --- ### Mission background and financing - Mission conducted by the IMF Fiscal Affairs Department (FAD) in Cotonou from March 1 to 15, 2023, to update the Public Investment Management Assessment (PIMA) carried out in 2018 and to supplement it with the Climate-Public Investment Management Assessment (C-PIMA). - Mission leader: Mr. Claude Wendling (senior economist, FAD). - Mission team: Ms. Sylke Von Thadden-Kostopoulos (technical assistance advisor, FAD); Ms. Marie-Christine Uguen; Messrs. Philippe Lonné, Pierre Roumegas, and Sidiki Traoré (experts, FAD). - Remote support: Ms. Letitia Li (research assistant, FAD). - Financing: Government of Japan through the Infrastructure Governance Facility and IMF Regional Technical Assistance Center for Western Africa (AFW). - Key events: score validation session (March 10); reporting of findings to H.E. Romuald Wadagni (March 14); presentation for technical and financial partners (March 15). ### Public investment trends and capital stock - Public investment averages and recent levels: - Public investment averaged 5.9 percent of GDP over 1990–2019 (IMF database). - WAEMU average over 1990–2019: 5.5 percent. - Public investment low point: 3.9 percent of GDP in 2019. - Authorities’ data: 6.9 percent of GDP in 2020 and 8.2 percent of GDP in 2021. - In 2015 private investment was 14.9 percent of GDP (total investment 20.5 percent). - In 2019 private investment was 21.3 percent of GDP (total investment 25.2 percent). - Public capital stock: - Benin public capital stock: 77.0 percent of GDP. - Comparators (2019): Senegal 71.4 percent of GDP; Ghana 40.5 percent of GDP; Côte d’Ivoire 36.7 percent of GDP; Togo 119.8 percent of GDP; Rwanda 104.9 percent of GDP. - Project portfolio and PIP sizing: - 2021–2026 PAG estimated overall cost: approximately CFAF 12,000 billion over five years. - 2023–2025 PIP: CFAF 5,634 billion in commitment authorizations; CFAF 2,856 billion in payment appropriations. - 201 out of 234 projects in the 2023–2025 PIP (80 percent) stem from the 2021–2026 PAG. - Analysis of 333 projects in the 2023–2025 PIP: average project duration 6.7 years; average project age 4.4 years. ### PIMA assessment: institutional design and effectiveness (planning, allocation, implementation) - Overall: - PIMA assesses 15 institutions across planning, allocation, implementation. - Institutional design generally scores better than SSA and EMEs, strengths concentrated in planning and budgeting; weaknesses in project appraisal and implementation monitoring. - Selected institutional design / effectiveness summary (changes 2018 → 2023 preserved as presented): - 1 Budget rules and objectives: Medium to High / High - 2 National and sectoral planning: High / Medium - 3 Coordination between entities: Medium to High / Medium to High - 4 Project appraisal: Low to Medium / Low - 5 Alternative infrastructure financing: Medium to High / Medium - 6 Multiyear budgeting: Medium to High / Medium - 7 Budget comprehensiveness and unity: NOT COMPARABLE / NOT COMPARABLE - 8 Budgeting for investment: High / Medium - 9 Maintenance funding: Medium / Low - 10 Project selection: Medium to Low / Low - 11 Procurement: High / Low to Medium - 12 Availability of funding: Medium / Low - 13 Portfolio management and oversight: High to Medium / Medium to Low - 14 Management of project implementation: Medium / Low - 15 Monitoring of public assets: Low to High / Low - Efficiency and access indicators: - PIMA physical access efficiency indicator: Benin 2018: 0.47; Benin current: 0.58; SSA 2018/current: 0.46; world average 2018: 0.59; world average current: 0.62. - Efficiency gap (physical access): Benin 42 percent vs. average 38 percent; Benin better than neighboring countries sample (61 percent) and all of sub-Saharan Africa (54 percent). - Multiyear budgeting and project costing: - Capital expenditures represent 43 percent of the State budget in 2023. - Multiyear forecast tables provided; visible inconsistencies across Execution, PIP, LFI, LFR, DPBEP documented (selected entries preserved exactly: Execution: 446 330 622 803 932; 2018 PIP: 469; 2019 PIP: 425; 2019 LFI (variance with PIP): +15; 2022–2024 DPBEP: 825 847 891; 2023–2025 DPBEP: 982 889 1,007; 2023–2025 PIP (variance with DPBEP): -22 +10 -9; 2023 LFI (variance with PIP): 0). - Identified shortcoming: budget documents often lack total project cost presentation (PIP column on total costs not filled). ### Climate integration (C-PIMA) — legal frameworks, findings, and priorities - Legal and strategic frameworks: - Law No. 2018-18 of August 6, 2018, on climate change provides the first framework for adaptation and mitigation in public policy. - Key documents: National Adaptation Plan (PNA), 2021 Nationally Determined Contribution (NDC). - Climate exposure and impacts: - Projected temperature increase: 1.0°C to 3.0°C by 2060. - Benin ranks 147th out of 191 countries on the INFORM Risk Index 2023. - 2010 floods: estimated US$257 million in economic losses (2 percent of GDP). - 2019 floods: estimated US$132 million in damages. - Financing needs: adaptation estimated at US$4.24 billion; total mitigation and adaptation resources to mobilize approximately US$10.5 billion (NDC). - C-PIMA institutional design ratings (selected): - C1 Climate-aware planning: Institutional design: Medium; Priority of reform: Low. - C2 Coordination between entities: Institutional design: Medium; Priority of reform: Medium. - C3 Project appraisal and selection: Institutional design: Low; Priority of reform: High. - C4 Budgeting and portfolio management: Institutional design: Low; Priority of reform: High. - C5 Risk management: Institutional design: Medium; Priority of reform: Medium. - Key climate integration gaps: - Land use and building regulations marginally consider climate change; reformulation underway. - Integration of climate-related criteria into project selection and preliminary appraisal is poor. - Asset management and maintenance policies do not consider climate risks. - First-time tagging of climate-related public investments and publication of a climate analysis appended to the 2023 draft budget law noted, but monitoring systems immature. ### Priority recommendations and 2023–2025 Priority Action Plan (highlights) - Seven recommendations of particular importance (verbatim as presented): - Increase the effectiveness of preliminary project appraisals, including regarding the impacts of climate change; - Enhance the effectiveness and transparency of the project selection process by incorporating criteria related to climate change; - Update and complete the PPP framework, particularly by finalizing the ongoing transposition of the WAEMU directive (taking climate into account when drawing up and managing PPP contracts) and by adopting a PPP strategy explaining the role of PPPs in achieving the objectives set in the 2021–2026 Government Action Program; - Improve the presentation of the PIP appended to the draft budget law further to the proposals made in Annex 3, particularly to provide overall project costs; - Effectively gather project implementation monitoring documents and summarize them, especially for agencies, based on the proposals contained in Annex 4; - Ensure greater public infrastructure sustainability by enriching standard maintenance methodologies, particularly to take account of climate vulnerabilities and specify capital maintenance needs, and by taking advantage of the implementation of accrual-based accounting and material accounting to better monitor assets over time; - Incorporate climate concerns into the budget circular on the approach already taken on gender-responsive budgeting and put in place effective monitoring of investments related to climate change in budget preparation and execution. - Action plan examples (targets and indicators preserved): - Incorporate principles on assessment report publication and systematic risk analysis into the PIM regulatory framework (Target: June; Indicator: Amendment of Decree 2021-586; Areas: DGPD, DGB 4/CJ). - Adopt draft order on the Project Preparation and Management Fund and increase fund resources in the 2024 draft budget law (Target: September). - Publish list of selection criteria in the unified annual budget circular (Target: July). - Pass draft law transposing WAEMU PPP directive and implement decrees (Target: March). - Complete information to Parliament on total cost of new and ongoing projects (Target: September; Indicator: Modification of tables in 2024 PIP; Area: DGB 6/8). - Ensure a “Climate” annex to the draft budget law (Target: July; Areas: MCVDD, DGB, MDC, SGPR). ### Maintenance, asset management, and material accounting - Maintenance funding and practices: - Standard methodologies exist for routine maintenance estimation but allocations insufficient to preserve asset values. - No standardized methodology for capital maintenance within DGML; rehabilitation/reconstruction often financed ad hoc as new projects. - Mission unable to quantify current financing gap for maintenance. - Illustrative SIRAT 2015 road maintenance need: CFAF 33.4 billion (no separation routine vs. capital). - Monitoring of public assets and accounting: - Accrual-based accounting (ABA) and material accounting (MA) framework adopted but not yet in effect. - SIGFP has an operational ABA module since 2022; MA module being tested. - Out of 33 material accountants to be appointed, 17 are in position (module testing). - Financial statements not yet produced pending completion of 2022 opening balance sheet (expected March–June 2023). - High-priority operational actions (core recommendations 16–19 preserved): - Supplement maintenance forecasting methodologies to include climate vulnerabilities (Target: April; Indicator: Formalization of standardized methodologies; Areas: DGML, SIRAT, sectoral ministries; PIMA/C-PIMA Ref.: 9/C4). - Reference these methodologies explicitly in the budget circular (Target: July; Indicator: Amendment of budget circular; Areas: DGB; PIMA/C-PIMA Ref.: 9/C4). - Operationalize material accounting with identification of climate-sensitive assets (Target: January; Indicator: Computerized material accounting with identification of CC-sensitive assets; Areas: DGML; PIMA/C-PIMA Ref.: 15/C4). - Put in place effective monitoring of climate-related investments in budget preparation and execution with a “Climate” annex to the draft budget law (Target: July; Areas: MCVDD, DGB, MDC, SGPR; PIMA/C-PIMA Ref.: C2/C4). ### Project selection, appraisal transparency, and pipeline - Key weaknesses: - Regulatory framework requires MEF review of appraisals (Decree No. 2021-586) but does not require publication of results; review process not documented. - No regulatory obligation for systematic risk assessment in appraisals; methodologies only briefly reference risk analysis. - No formal obligation for a pipeline of appraised projects; project pipeline support tool yet to be developed. - Authorities reported a sample: 43 out of 51 projects (84 percent in number; 80 percent by amount) were appraised and independently reviewed, but mission could not corroborate documentation. - High-priority recommendations: - Publish the annual MEF circular establishing PIP eligibility criteria (Target: April N for fiscal year N+1). - Describe the project selection process operationally in the updated PIM manual (Target: end of March 2023). - Include climate-related selection criteria in the circular and PIM guidance (Target: April). ### Procurement, availability of funding, and cash flow management - Procurement performance: - 2020 Public Procurement Code (CMP) aligns with international standards; open tendering preferred. - Statistics preserved exactly (DNCMP authenticated data): - 2021 total: 576 contracts / CFAF 577,866,070,146 / 100.0% - Direct Agreement 44 / 133,617,521,539 / 5.8% - Open Bidding 566 / 452,608,572,522 / 78.3% - Restricted Bidding 1 / 1,576,691,525 / 0.3% - Call for Expression of Interest 90 / 138,712,331,275 / 6.7% - Request for Information and Prices 136 / 134,614,578,759 / 6.0% - Request for Quotation 11 / 68,731,277,675 / 1.5% - Consultation of Suppliers 13 / 58,005,096,851 / 1.4% - 2022 total: 590 contracts / CFAF 669,930,988,554 / 100.0% - Direct Agreement 309 / 52,138,662,604 / 7.8% - Open Bidding 534 / 513,063,251,391 / 76.6% - Restricted Bidding 17 / 1,057,496,883 / 0.2% - Call for Expression of Interest 383 / 45,159,214,024 / 6.7% - Request for Information and Prices 164 / 145,449,528,047 / 6.8% - Request for Quotation 120 / 210,998,500,401 / 1.6% - Consultation of Suppliers 50 / 42,064,335,204 / 0.3% - Complaint processing: average processing time increased from seven days in 2019 to 12.3 days in 2020 and 36 days in 2021; most cases under two months; 2022 processing times not shown in statistics. - Availability of funding and cash flow: - Investment expenditure execution rate (payments) relative to forecasts: 63.5 percent for fiscal year 2022 (gap -36.5 percent). - Actual disbursements tended to be lower than forecasts: average gap -14 percent in 2022. - Many externally funded project funds remain in commercial bank accounts outside the TSA; TSA consolidation strategy envisages reintegration. - Legal references: Article 49 of the LOLF; Decree 2021-441-C; Decree 2021-068-C; Article 24 of the 2020 CMP; Decree No. 2018-231; 2023 Budget execution circular para. 2.4. ### Oversight of State-owned enterprises (SOEs), extra-budgetary entities, and agencies - SOE and agency landscape: - Reported counts (as at December 31, 2022): State-Owned Enterprises 22; Public Institutions 128; Total 150 (DGPDE - 2023). - EPA annex to 2023 draft budget law lists Agencies 53; Offices 28; Funds 9; Institutes 3; Centers 4; Total 97 (implied). - Execution and reporting gaps: - Investment execution by public institutions very low (DGB/DGPED Table 8 in CFAF billion): - 2019: Projected 21,088.7; Actual 14,690.5; Rate 69.7% - 2020: Projected 30,669.4; Actual 10,370.9; Rate 33.8% - 2021: Projected 75,998.7; Actual 15,776.8; Rate 20.8% - Only 24 percent of enterprises in the State-owned enterprise portfolio submitted 2021 certified financial statements to the DGPED (early 2023). - Mandate agreements exist but the shared model lacks a formal section on financial allocations. - Monitoring framework and deficiencies: - Decree 2021-586 articles 25–26 require quarterly reports and a consolidated semiannual PIP monitoring report; mission did not receive required documents. - No visibility on project time or cost overruns; traceability of reallocations is fragmented. - Ex post evaluations: formal requirement exists, but no systematic ex post reviews in practice; Court of Auditors has conducted no ex post audits of investment projects to date. - Recommendations to strengthen agency oversight: - Remove ineffective/inefficient agencies; improve compliance with Article 65 of Law 2020-20 starting from 2024 draft budget law and fully by 2025. - Add PIP summary table showing breakdown of projects by implementing entity for 2024 PIP. - Publish SGPR/BAI semiannual consolidated monitoring report and include agency investment execution summaries in State budget execution report. - Consider incremental sanctions for persistently noncompliant SOEs failing to submit financial statements (examples preserved: temporarily suspend capital grants; lump-sum reduction of operating subsidy; financially penalize management). ### Legal framework, IT systems, and staff capacity - Legal texts and recent reforms: - Cornerstone: Decree No. 2021-586 of November 10, 2021 (replaces Decree No. 2019-193). - Other key texts: Organic Law No. 2013-14; Decree No. 2015-035; Law No. 2016-24 (PPP); Law No. 2020-20 (SOEs); Law No. 2020-26 (CMP); Law No. 2018-18 (climate). - Pending texts: framework law on development planning and public policy assessment; draft law transposing WAEMU PPP directive. - IT systems and data integration: - PIM IT support split across multiple systems; SIGFP cornerstone not interfaced with SIGMAP; climate tagging not integrated. - Recommended: interface MDC, MEF, and agency information systems; roll out BAI-led project tracking application. - Human resources and capacity building: - PAGIPG (2016–2021) trained approximately 2,000 actors. - Identified capacity gaps, notably for climate-related PIM tasks: preliminary appraisals with climate risk assessments; costed sectoral strategies with climate dimensions; integration of climate vulnerabilities into maintenance assessments. - Recommended: formal PIM training plan and capacity development building on GRB lessons (training the trainers, establishing focal points). ### Selection criteria and climate-tagging instruments (annex materials preserved) - Annex 5: Selection Criteria for Projects with Climate Change Components — total score 100 with detailed sub-scores preserved exactly (examples): - Consistency total: 5 (1.1 Project intervention logic: 2.0; 1.2 Compliance with SDGs including climate: 1.0; 1.3 Compliance with national development guidelines including climate: 0.5; 1.4 Compliance with national and sectoral strategies including climate: 0.5; 1.5 Project compliance with sector priorities: 0.5; 1.6 Compliance with PIP directives including climate: 0.5). - Feasibility total: 55 with subcomponents such as Economic and financial feasibility 34.0 (including 5.4.3 ex ante assessment on climate-related aspects using standard methodology: 5.0). - Sustainability total: 5 (6.1 exit strategy: 2.0; 6.2 recurring charges/maintenance and climate exposure: 1.0; 6.3 risk management related to sustainability: 1.0; 6.4 beneficiaries’ ability to take ownership: 1.0). - Annex 6: Climate Budget Tagging (Uganda) lessons — leadership, pilot approach, use of existing tools, continuous capacity building noted as replicable elements. *Source: IMF mission report PREFACE and PIMA/C-PIMA assessment materials (mission conducted March 1–15, 2023; content unit 1benea2023003).* ### PREFACE _________________________________________________________________________________________ 7 ### PREFACE ### Mission background and financing - A mission was conducted by the IMF Fiscal Affairs Department (FAD) in Cotonou from March 1 to 15, 2023, to update the Public Investment Management Assessment (PIMA) carried out in 2018 and to supplement it with the Climate-Public Investment Management Assessment (C-PIMA). - Mission leader: Mr. Claude Wendling (senior economist, FAD). - Mission team: Ms. Sylke Von Thadden-Kostopoulos (technical assistance advisor, FAD); Ms. Marie-Christine Uguen; Messrs. Philippe Lonné, Pierre Roumegas, and Sidiki Traoré (experts, FAD). - Remote support: Ms. Letitia Li (research assistant, FAD). - Financing: This activity was financed by the Government of Japan through the Infrastructure Governance Facility and by the IMF Regional Technical Assistance Center for Western Africa (AFW). ### Key mission events and reporting - Welcome: The team was welcomed by Mr. Hermann Orou Takou, Chief of Staff to the Minister of State, Minister of Economy and Finance (MEF). - Score validation session: Held on March 10 with key contacts from units met during the mission. - Reporting of findings: The mission reported its findings on March 14 to H.E. Romuald Wadagni, Minister of State, Minister of Economy and Finance. - Presentation for technical and financial partners (TFPs): Organized on March 15. ### Institutions and stakeholders consulted - Within the MEF: Directorate General of the Budget (DGB); Directorate General for Material and Logistics (DGML); Directorate General for the Treasury and Public Accounting (DGTCP); National Directorate for Public Procurement Oversight (DNCMP); National Financial Control Directorate (DNCF). - Within the Ministry for the Development and Coordination of Government Action (MDC): Directorate General of Development Policies (DGPD); Directorate General for the Coordination and Monitoring of Sustainable Development Goals; Directorate General for Evaluation and Observatory of Social Change (DGEOCS). - Within the Ministry of Living Environment and Sustainable Development (MCVDD): Directorate General of the Environment and Climate (DGEC). - Other ministries: Infrastructure and Transportation; Energy; Water and Mines; Decentralization and Local Governance; Digital Affairs and Digitization. - Agencies and bodies: Autonomous Amortization Fund (CAA); Public Procurement Regulatory Agency (ARMP); Agency for the Promotion of Investment and Exports (APIEX); Société des infrastructures routières et de l’aménagement du territoire (SIRAT); Energy Regulatory Agency (ARE); Société Béninoise d’Énergie Électrique (SBEE); Analysis and Research Bureau (BAI) of the Office of the President of the Republic. - Oversight and accountability: National Assembly Finance Committee; Court of Auditors. ### Acknowledgements - Special thanks to Mr. Pierrot Sego, Head of the Economic and Financial Programs Monitoring Unit, for support in organizing meetings and coordinating document collection. - Gratitude expressed to Mr. Younes Zouhar, IMF Resident Representative, and his team for assistance. ### Key findings of the mission — public investment trends (exact figures preserved) - Public investment in Benin averaged 5.9 percent of gross domestic product (GDP) over the period 1990–2019 covered by the IMF database. - WAEMU average over the same period: 5.5 percent. - Public investment reached a low in 2019: 3.9 percent of GDP. - Data provided by the authorities show a strong upturn: 6.9 percent of GDP in 2020 and 8.2 percent in 2021. - In 2015 public investment stood at 14.9 percent of GDP (relative to a total investment of 20.5 percent). - By 2019 private investment had dropped considerably (context indicates a reduction in public share of total investment over 2015–2019). *Source: IMF mission report PREFACE and KEY FINDINGS OF THE MISSION (mission conducted March 1–15, 2023).* ### 21.3 percent of GDP relative to a total investment of 25.2 percent of GDP. The upward trend in ### 1benea2023003 - 21.3 percent of GDP relative to a total investment of 25.2 percent of GDP. The upward trend in ### Public investment stock and trends - Public investment observed at 21.3 percent of GDP relative to a total investment of 25.2 percent of GDP. - Public capital stock reached 77.0 percent of GDP. - Comparative public capital stock levels: - Senegal: 71.4 percent of GDP - Ghana: 40.5 percent of GDP - Côte d’Ivoire: 36.7 percent of GDP - Togo: 119.8 percent of GDP - Rwanda: 104.9 percent of GDP - Upward trend in public investment in 2020–2021 expected to rebalance public and private investment shares. ### Efficiency and PIMA assessment results - Benin’s PIMA efficiency indicator for physical access to infrastructure: - 2018 PIMA: 0.47 (close to SSA 0.46; below world average 0.59) - Current score: 0.58 (higher than SSA 0.46; close to world average 0.62) - Institutional framework and recent reforms strengthening PIM: - Decree No. 2021-586 of November 10, 2021, on the PIM framework replaced the earlier framework supported in 2019. - Implementation of the program budget since the initial budget law for 2022. - Adoption of the accrual-based accounting (ABA) framework. - Passing in 2020 of a law on State-owned enterprises. - Remaining institutional weaknesses: - Project selection and appraisal institutions show significant weaknesses. - Some execution-phase institutions show weaknesses to a lesser extent. - Effectiveness of practices: - Progress in coordination between entities and monitoring of contingent liabilities (publication of a fiscal risk analysis document and analytical notes on local finances and administrative public entities, or EPAs). - Improved degree of openness to competition for economic infrastructure and budget comprehensiveness. - Lack of publication of ex ante assessments and lack of documentation of review processes for project selection and preliminary appraisal prevent a positive evaluation of selection/appraisal effectiveness. - Maintenance remains weak due to institutional deficiencies. - Some PIP and budget documents are comprehensive, but overall cost of each project is sometimes missing. - PPPs remain very uncommon; information on PPPs is scarce. - Limited transparency regarding execution of investments by State-owned enterprises and EPAs in budget documents. - Implementation of ABA and material accounting is still in early stages for asset monitoring. ### Climate integration (C-PIMA) findings - Legal and strategic frameworks: - Law No. 2018-18 of August 6, 2018, on climate change provides the first framework for adaptation and mitigation in public policy. - Recent strategic documents include National Adaptation Plan and 2021 Nationally Determined Contribution. - Positive advances: - Incorporation of climate change considerations into public investment planning, including at the local level. - Establishment, via the 2018 law, of a decision-making coordination mechanism likely to influence public investment choices. - First-time tagging of climate-related public investments and publication of an analysis document appended to the 2023 draft budget law (PLF). - Development of a disaster risk management and ex ante financing mechanism strategy addressing infrastructure exposure to climate risks. - Gaps and weaknesses: - Land use and building regulations only marginally consider climate change; reformulation is underway. - Integration of climate-related criteria into project selection and preliminary appraisal is poor. - Asset management policy does not consider climate risks, including maintenance. - C-PIMA module summary priorities (selected): - C1 Climate-aware planning: Medium institutional design; land use planning and building regulations do not yet take climate change into account. - C3 Project appraisal and selection: Low institutional design; legal framework does not explicitly consider climate change in impact study methods and in PPPs. - C4 Budgeting and portfolio management: Low institutional design; first tagging of climate-friendly investments in 2023 draft budget law but climate not taken into account in asset management and maintenance policies. ### Institutional design and effectiveness (summary points from Table 1) - Planning: - Fiscal targets and rules: High institutional design; high effectiveness in practice for meeting public debt criterion and aligning budgeted investment with MTFF. - National and sectoral planning: High design; medium effectiveness due to difficulty establishing consistency between PAG cost estimates and budgeting; outcome targets not used in project decisions. - Project appraisal: Medium design; low effectiveness because appraisals are not published and systematic risk assessment not required. - Alternative infrastructure financing (PPPs): High design; medium effectiveness—framework fosters competition but PPP strategy is not explicit or operationalized. - Allocation: - Multiyear budgeting: High design; medium effectiveness because posting of full project cost is lacking. - Budget comprehensiveness and unity: High design; high effectiveness—PIP included in draft budget law centralized by DGB. - Maintenance funding: Medium design; low effectiveness—insufficient resources and maintenance data not used for decisions. - Project selection: Low design; low effectiveness—selection criteria not published and no appraised project pipeline. - Implementation: - Procurement: High design; medium effectiveness—open bidding preferred but contract monitoring could be improved. - Availability of funding: Medium design; low effectiveness—shortcomings in forecasting and under-execution of investment expenditures for 2022; donor funds in commercial banks. - Portfolio management and oversight: Medium design; low effectiveness—monitoring reports not provided and cannot measure deadline or cost overruns. - Management of project implementation: Medium design; low effectiveness—project managers designated but adjustment documents lacking. - Monitoring of public assets: High design; low effectiveness—nonfinancial asset records not available in sectoral ministries and financial statements not yet produced. ### Key quantitative scores and comparisons - Public investment share: 21.3 percent of GDP (public) vs. 25.2 percent of GDP (total investment). - Public capital stock: 77.0 percent of GDP (Benin). - PIMA physical access efficiency indicator: - Benin 2018: 0.47 - Benin current: 0.58 - SSA 2018/current: 0.46 - World average 2018: 0.59; world average current: 0.62 ### Priority recommendations (15 total; 7 highlighted as of particular importance) - Seven recommendations of particular importance (verbatim): - Increase the effectiveness of preliminary project appraisals, including regarding the impacts of climate change; - Enhance the effectiveness and transparency of the project selection process by incorporating criteria related to climate change; - Update and complete the PPP framework, particularly by finalizing the ongoing transposition of the WAEMU directive (taking climate into account when drawing up and managing PPP contracts) and by adopting a PPP strategy explaining the role of PPPs in achieving the objectives set in the 2021–2026 Government Action Program; - Improve the presentation of the PIP appended to the draft budget law further to the proposals made in Annex 3, particularly to provide overall project costs; - Effectively gather project implementation monitoring documents and summarize them, especially for agencies, based on the proposals contained in Annex 4; - Ensure greater public infrastructure sustainability by enriching standard maintenance methodologies, particularly to take account of climate vulnerabilities and specify capital maintenance needs, and by taking advantage of the implementation of accrual-based accounting and material accounting to better monitor assets over time; - Incorporate climate concerns into the budget circular on the approach already taken on gender-responsive budgeting and put in place effective monitoring of investments related to climate change in budget preparation and execution. - The report contains a total of 15 recommendations detailed in Table 3 and a Priority Action Plan with target dates, indicators, and responsible areas for 2023–2025. ### Selected actions from the Priority Action Plan (Table 3) and timelines (examples) - Increase effectiveness of preliminary project appraisals: - Incorporate principles on assessment report publication, access to information for independent reviewers, and systematic risk analysis into the PIM regulatory framework (Target: June; Indicator: Amendment of Decree 2021-586; modification of 2019 PIM guide; Areas: DGPD, DGB 4/CJ). - Adopt draft order on the Project Preparation and Management Fund and allocate sufficient appropriations (Target: September; Indicator: Publication of order; increase in fund resources in 2024 draft budget law; Areas: DGPD, DGB 4/CJ). - Incorporate rules to systematically assess impact of major projects on climate change into standard methodology (Target: December; Indicator: Modification of guides and manuals related to the assessment; Areas: MCVDD, DGD C3). - Enhance project selection transparency: - Publish list of selection criteria in the unified annual budget circular (Target: July; Indicator: Effective publication of project eligibility criteria in PIP directives and MEF annual circular; Area: DGB 10/C3). - Outline selection process in updated PIM manual (Target: March; Indicator: Modification of 2019 PIM guide; Areas: DGPD, DGB 10/C3). - Include selection criteria on combating climate change in the list of criteria (Target: April; Indicator: Incorporation in the circular of PIP eligibility criteria for projects relating to climate change; Areas: DGB, DGEC 10/C3). - Update PPP legal framework: - Pass draft law transposing WAEMU directive and implementing decrees (Target: March; Indicator: Finalization of draft law amending the 2016 law; Area: MEF 5/CJ). - Integrate climate change considerations into legal framework for risk allocation or long-term contract management (Target: March; Indicator: Inclusion in the amending law on PPPs and its regulations; Areas: MCVDD, MEF C3/CJ). - Develop and adopt PPP strategy (Target: September; Indicator: Publication of a PPP strategy; Areas: SGPR, MEF 5/C3). - Improve PIP presentation and execution monitoring: - Complete information sent to Parliament on total cost of new and ongoing projects (Target: September; Indicator: Modification of tables in 2024 PIP; Area: DGB 6/8). - Improve CA/PA budgeting and reliability of past execution data (Target: September; Indicator: CA/PA budgeting systematized in multiyear expenditure programming document (DPPD); Area: DGB 6/8). - Ensure physical and financial project monitoring transparency, particularly in agencies, and produce an annex to the draft budget law on progress of major investment projects (Target: September; Indicator: Enhancement of the three-year PIP document; Areas: DGB, BAI, SGPR, sectoral ministries). - Compile and publish statistics on contracting steps and processing of public procurement complaints (Target: January; Indicator: Enhancement of annual report and earlier publication of statistics; Areas: DNCMP, ARMP 11). *Source: IMF mission material as presented in the PIMA and C-PIMA assessment, including Table 1, Table 2, and Table 3 from the provided content.* ### 6. Ensure greater public infrastructure sustainability ### 6. Ensure greater public infrastructure sustainability ### Operational actions and targets (core recommendations 16–19) - 16. Supplement the methodologies used to forecast maintenance needs for major asset classes by including aspects on climate vulnerabilities. - Target date: April - Indicator: Formalization of standardized methodologies for the maintenance of main nonfinancial assets - Areas/Responsible: DGML, SIRAT, sectoral ministries - PIMA/C-PIMA Ref.: 9/C4 - 17. Ensure the effective implementation of these methodologies in the budgetary procedure through an explicit reference to them in the budget circular. - Target date: July - Indicator: Amendment of budget circular on PLF/PIP preparation - Areas/Responsible: DGB - PIMA/C-PIMA Ref.: 9/C4 - 18. Operationalize material accounting by incorporating climate risk concerns into asset monitoring. - Target date: January - Indicator: Computerized material accounting with identification of CC-sensitive assets - Areas/Responsible: DGML - PIMA/C-PIMA Ref.: 15/C4 - 19. Put in place effective monitoring of investments related to climate change in budget preparation and execution. - Target date: July - Indicator: “Climate” annex to draft budget law - Areas/Responsible: MCVDD, DGB, MDC, SGPR - PIMA/C-PIMA Ref.: C2/C4 ### Secondary recommendations (summary of actions 20–32) - 1. Update sectoral strategies - 20. Ensure better coverage of key public investment sectors (particularly transportation) by sectoral strategies, including in terms of climate change considerations. - Target date: December - Indicator: Update of existing strategies - Areas/Responsible: All sectoral ministries - PIMA/C-PIMA Ref.: 2/C1 - 2. Consider measurable output targets and investment project outcomes in PIP budget decisions - 21. Incorporate into PIP directives considerations surrounding measurable output targets and investment project outcomes in PIP budget decisions. - Target date: June - Indicator: Enhancement of circular letter for budget preparation - Areas/Responsible: DGB - PIMA/C-PIMA Ref.: 2 - 3. Build on the creation of the Communal Investment Fund - 22. Guarantee better visibility of transfers for local authorities by convening the National Local Finance Commission (CONAFIL) upon tabling of the draft budget law and by communicating the provisional allocations at that time. - Target date: September - Indicator: Publication of allocations no later than January; prior information to local authorities as of September N-1 - Areas/Responsible: MDGL - PIMA/C-PIMA Ref.: 3/C2 - 23. Provide distribution criteria favoring communal investments related to CC adaptation and disaster risk reduction. - Target date: September - Indicator: New FIC text - Areas/Responsible: MDGL - PIMA/C-PIMA Ref.: 3/C2 - 4. Improve monitoring of contingent liabilities and extra-budgetary entities - 24. Increase the transparency of existing documentation on PPPs and supplement it (fiscal risk statement, publication of project catalog). - Target date: September - Indicator: Section dedicated to PPPs in budget documents - Areas/Responsible: DGB, SGPR - PIMA/C-PIMA Ref.: 3/5 - 25. Broaden the scope of the analytical note on EPAs to State-owned enterprises for it to serve as a report under Article 6.5 of Law 2020-20 on State-owned enterprises. - Target date: September - Indicator: Enhancement of analytical note as of 2024 draft budget law - Areas/Responsible: DGB, DGPED - PIMA/C-PIMA Ref.: 3/5/13 - 26. Incorporate into the aforementioned report aspects on CC considerations in the strategy and investments of these enterprises. - Target date: September - Indicator: Enhancement of analytical note as of 2024 draft budget law - Areas/Responsible: DGB, DGPED, MCVDD - PIMA/C-PIMA Ref.: C2 - 5. Strengthen public procurement oversight - 27. Take advantage of the implementation of e-procurement to strengthen public procurement oversight through computerized monitoring of public procurement processes in ministries. - Target date: January - Indicator: Automatic feedback on public procurement - Areas/Responsible: DNCMP, ARMP - PIMA/C-PIMA Ref.: 11 - 6. Improve forecast quality - 28. Improve the quality and/or consistency of cash management and expenditure execution forecasting tools (AWP, PP, CP, and CFP). - Target date: January - Indicator: Improvement of execution data quality - Areas/Responsible: MEF, DGB, DNCMP, DGTCP - PIMA/C-PIMA Ref.: 12 - 7. Strengthen PIM information systems - 29. Interface the MDC, MEF, and agency information systems to better integrate project management between the various actors and roll out the project tracking application led by the BAI within executing agencies. - Target date: June - Indicator: Communication of PIM business applications - Areas/Responsible: DSI of the MDC, MEF, DGB, agencies, and BAI - PIMA/C-PIMA Ref.: IS - 8. Ensure capacity development - 30. Continue capacity development, particularly on (i) aspects relating to preliminary appraisals and (ii) aspects relating to the consideration of climate factors. - Target date: Ongoing process - Indicator: Training plans - Areas/Responsible: All ministries - PIMA/C-PIMA Ref.: HR - 9. Give greater consideration to public infrastructure risks - 31. Incorporate a quantitative assessment of medium-term climate risks to public infrastructure as well as a qualitative assessment of risks that can emerge in the longer term. - Target date: September - Indicator: Enhanced fiscal risk statement - Areas/Responsible: DGB, MCVDD, sectoral ministries - PIMA/C-PIMA Ref.: C5 - 32. Ensure that budgeting includes a public infrastructure risk response mechanism commensurate with the assessed risks. - Target date: September - Indicator: 2024 draft budget law - Areas/Responsible: DGB - PIMA/C-PIMA Ref.: C5 ### Public investment trends and capital stock (key findings) - Public investment rate (IMF public investment database, 1990–2019): average of 5.9 percent of GDP. - WAEMU average public investment rate (1990–2019): 5.5 percent of GDP. - Public investment low point: 3.9 percent of GDP in 2019. - Recovery in execution data (2023–2025 DPBEP / 2023 initial budget law LFI): public investment of 6.9 percent of GDP in 2020 and 8.2 percent in 2021. - Change in composition of total investment: - Private investment: 14.9 percent of GDP in 2015 (total investment 20.5 percent). - Private investment: 21.3 percent of GDP in 2019 (total investment 25.2 percent of GDP). - Public capital stock (2019): Benin at 77.0 percent of GDP. - Comparators in 2019: Senegal 71.4 percent of GDP; Ghana 40.5 percent; Côte d’Ivoire 36.7 percent; Togo 119.8 percent; Rwanda 104.9 percent. - Public capital stock trend: downward since mid-1990s in Benin; fairly stable in comparators. ### Efficiency and access to infrastructure (key findings) - Physical access indicators (latest available data): Benin favorable for public education infrastructure relative to SSA and emerging countries; about SSA average for access to drinking water; far behind for public health infrastructure. - Energy indicator caveat: electricity production per inhabitant in IMF database is not representative for Benin because Benin is largely an importer via interconnections. - Sectoral challenges: transportation and distribution infrastructure. - Efficiency gap (physical access): Benin has an efficiency gap of 42 percent versus an average of 38 percent. - Benin’s position relative to samples: better than neighboring countries sample (61 percent) and all of sub-Saharan Africa (54 percent). - Infrastructure quality efficiency indicator: not calculated due to most recent data dating to 2017. ### Update of the Public Investment Management Assessment (PIMA) — overview and changes - PIMA assesses 15 PIM institutions across three phases: planning, allocation, implementation. - Institutional design: Benin generally scores better than comparable countries (SSA and EMEs), with strengths concentrated in planning and budgeting phases; implementation strengths notably in procurement (institution 11) and monitoring of public assets (institution 15). - Effectiveness: often greater than comparator groups for many planning cycle institutions, but lags in project appraisal (institution 4), multiyear budgeting (institution 6), budget comprehensiveness and unity (institution 7), procurement (institution 11), availability of funding (institution 12), and monitoring of public assets (institution 15). - Progress since 2018 PIMA: - Institutional design improved for six institutions; declines for project selection (institution 10) and portfolio management and oversight (institution 13) mainly reflect methodology changes. - Effectiveness increased for two institutions: coordination between entities (institution 3) and procurement (institution 11); other institutions largely stable given higher PIMA requirements. - Table 4 summary (2018 → 2023 changes; Institutional Design / Effectiveness): - 1 Budget rules and objectives: Medium to High / High - 2 National and sectoral planning: High / Medium - 3 Coordination between entities: Medium to High / Medium to High - 4 Project appraisal: Low to Medium / Low - 5 Alternative infrastructure financing: Medium to High / Medium - 6 Multiyear budgeting: Medium to High / Medium - 7 Budget comprehensiveness and unity: NOT COMPARABLE / NOT COMPARABLE - 8 Budgeting for investment: High / Medium - 9 Maintenance funding: Medium / Low - 10 Project selection: Medium to Low / Low - 11 Procurement: High / Low to Medium - 12 Availability of funding: Medium / Low - 13 Portfolio management and oversight: High to Medium / Medium to Low - 14 Management of project implementation: Medium / Low - 15 Monitoring of public assets: Low to High / Low ### Fiscal targets, rules, and MTFF (Institution 1 assessment) - Institutional design: High; Effectiveness: High; Priority of reform: Low. - WAEMU debt ceiling: total public debt ceiling relative to GDP of 70 percent (Article 4 of Organic Law No. 2013-14 of September 27, 2013). - 2023-2025 DPBEP (appended to 2023 initial budget law LFI) estimates public debt at 51.65 percent of GDP at end-2022 and projects near stability over the period covered. - Fiscal balances (DPBEP source): -5.7 percent of GDP in 2021 and -5.9 percent of GDP in 2022. - WAEMU public finance convergence criteria implementation: suspended sine die for all member countries in 2020. - Local government budget rule: Territorial Government Code (Law 2021-14 of December 20, 2021) establishes a real budget balance rule (articles 364 and 365); communes reported a positive overall budget execution balance in 2021 of CFAF 13.3 billion (analytical note on local finances associated with the 2023 initial budget; figures across 69 communes). - MTFF: DPBEP required by LOLF (Article 59) annually; DPBEP provides projections distinguishing current and investment expenditures; DPBEP is published systematically in June (initial version) and in December (final version with LFI figures). - Historical variance between initial DPBEP and initial budget law in total capital expenditures: less than 10 percent over three years; specific notes: variance less than 2 percent in 2021 and 2023; +22 percent in 2022 due to overlap between completion of 2016–2021 PAG works and start of 2021–2026 PAG. - Reform urgency: Strengthening fiscal targets and rules considered less urgent given WAEMU rules and an IMF program in effect until May 2026. *Source: 1benea2023003 - 6. Ensure greater public infrastructure sustainability* ### 2. National and sectoral planning (Institutional design: High; Effectiveness: Medium; Priority of ### 2. National and sectoral planning (Institutional design: High; Effectiveness: Medium; Priority of reform: Medium) ### Overview and institutional setup - Public investment should be guided by national and sectoral strategies or plans with clear and realistic priorities, cost estimates, and precise objectives for each sector. - The 2021–2026 PAG is the cornerstone of the public investment planning mechanism and is considered a PND implementation instrument. - The PAG 2 is developed under the guidance of the MDC, specifically the Directorate General of Development Policies (Direction générale des politiques de développement – DGPD), which relies on the network of Planning, Administration, and Finance Directorates (Directions de la planification, de l’administration et des finances – DPAFs) within sectoral ministries. - PAG 2 comprises three pillars subdivided into seven strategic areas and is supplemented by sectoral strategies for a number of public policies, some of which need updating. ### Coverage, alignment, and traceability of projects - 201 out of the 234 projects listed in the 2023–2025 PIP (or 80 percent) stem from the 2021–2026 PAG. - Many projects in PAG 2 are presented as project ideas that require feasibility studies before inclusion in the PIP, complicating verification of consistency between PAG 2 and the PIP. - The overall cost of the 2021–2026 PAG is estimated to be approximately CFAF 12,000 billion over five years. - The 2023–2025 PIP covers three years with: - CFAF 5,634 billion in commitment authorizations - CFAF 2,856 billion in payment appropriations - Part of PAG 2 costs rely on private funding (hotels and tourism infrastructure examples); some project timelines extend beyond the 2023–2025 PIP. - Strengthening traceability of planned projects in budget documents is highlighted as important at both the aggregate level and the individual project level. ### Sectoral strategies, costing, and indicators - Nearly all sectoral strategies, including PAG 2, include overall cost estimates by sector and project. - Most sectoral strategies include measurable outcome and output targets and monitoring and evaluation frameworks. - The published report on PIP eligibility criteria provides for a project effectiveness rating based on the proportion of indicators provided. - According to the DGB, budget discussions effectively take outcome and output indicators into account for all investment projects; however, performance meetings focus more on internal consistency of budget program objectives and relevance of indicators reported in budget documents. - It is not established that each project’s contribution to the achievement of performance targets taken from various strategies is a systematically applied criterion to justify project selection in the absence of traceability. ### Project preparation support and sample-based findings - A “Project Preparation and Management Fund” averaged CFAF 11.3 billion over the period 2020–2023, which is less than 2 percent of the annual PIP; more than 88 percent was executed over three years from 2020 to 2023. - At the mission’s request, authorities prepared a significant sample based on the 2021–2026 PAG covering: - 51 out of 201 PAG 2 projects (or 25 percent) - CFAF 8,836 billion out of the CFAF 12,011 billion under PAG 2 (or 74 percent) - Based on this sample, authorities indicated that: - 43 out of the 51 projects (or 84 percent in number of projects and 80 percent in cumulative financial amount) were subject to a thorough appraisal, included a summary publication of the results, and underwent an independent review by the MEF. - The mission was unable to corroborate comprehensive application or documentation of these reviews; few feasibility study reports were provided and those available were insufficient to draw meaningful lessons. ### Appraisal methodologies, risk analysis, and transparency - Authorities have multiple standardized methodologies and central support structures (including manuals developed with TFPs), and MDC’s DGEOCS is entrusted with a central support role in public investment project appraisals. - The regulatory framework prescribes systematic preliminary appraisals and independent review by the MEF (Decree No. 2021-586 of November 10, 2021), but does not require publication of results; the review process is not documented. - There is no regulatory requirement for a systematic assessment of risks in appraisals of major public investment projects; methodologies make only very brief reference to risk analysis and do not require analysis of likelihood and potential impacts. - Some feasibility study reports shared included thorough risk analysis and mitigation plans, but many did not; overall, the mission could not confirm effective implementation of risk analysis. ### Reform priority and recommended actions - Improving investment planning at the national and sectoral levels is assessed as medium reform priority. - Key areas for improvement include: - Updating sectoral strategies in areas important to PIM (particularly transportation). - Strengthening effective consideration of performance indicators for investment projects in PIP budget decisions. - Ensuring better traceability of planned projects in budget documents at aggregate and individual project levels. - High-priority actions related to appraisal transparency and effectiveness: - Implement the new appraisal policy to build evaluation capacities and integrate systematic risk analyses into ex ante appraisals. - Enhance consideration of climate change impacts in preliminary project appraisals (see C-PIMA institution C3 referenced). - Update the PIM regulatory framework and management manual to include principles on publication of appraisal reports, access to information for independent reviewers, and systematic risk analyses. - Adopt the draft order on the “Project Preparation and Management Fund” and allocate sufficient appropriations to the Fund for planned activities. *Source: IMF mission report section 2. National and sectoral planning (extracted from provided content).* ### 32. Strengthening a legislative and regulatory framework favorable to competition ### 32. Strengthening a legislative and regulatory framework favorable to competition ### Strengthening of competition and sectoral outcomes - Over the past five years led to the emergence of private operators on a number of markets. - The regulatory framework was significantly strengthened since 2018 through the adoption of sectoral and cross-cutting legislation (Investment Code in 2020). - Creation of dedicated regulators accompanied legislative strengthening (example: Decree No. 2019-209 of July 31, 2019, on the organization and functioning of bodies of the Electronic Communications and Postal Regulatory Authority – ARCEP). - Market structure outcomes: - Private enterprises are now the majority in the telecommunications sector (MTN and Moove Africa). - Incumbent public operators remain larger in capital-intensive sectors: water (Société nationale des eaux du Bénin – SONEB) and electricity (Société béninoise d’énergie électrique – SBEE). - Private actors invest in rural areas not yet connected and benefit from increasing separation of generation, transmission, and distribution in the energy sector. - The electricity market remains highly dependent on imports from gas or hydraulic power plants in Nigeria and Ghana, but has opened to private actors in certain segments (solar) and geographic areas (Glo-Djigbé Industrial Zone). ### Public-private partnerships (PPPs): legal framework, implementation, and gaps - Legal and institutional status: - PPP normative framework in force since 2016 (Law No. 2016-24 of October 24, 2016) outlining definition, selection, instruction and approval of PPPs. - The PPP Support Unit (Cellule d’appui aux PPP – CAPPP) is provided for in Article 5 of Law No. 2016-24. - The PPP framework is in the process of being adapted to the WAEMU’s recent PPP directive (adopted in 2022). - Implementation outcomes and measures: - Number of signed PPP contracts has remained low; the list of PPPs that were or are in the process of being signed at end-March 2023 is less than a dozen according to a survey provided by the BAI to the Office of the President of the Republic. - Examples of PPP-related contracts (as reported): - Three leasing contracts signed for hydraulic works in rural areas (starting on March 1, 2023). - Three leasing contracts for the operation of sludge treatment plants (approved at the Council of Ministers meeting on March 1, 2023). - A contract to design, finance, build, and operate four solar power plants (signed in July 2022 for commissioning in October 2023). - Ambition vs. realization: - 2021–2026 PAG ambitions regarding PPPs: CFAF 6,246 billion over the period 2021–2026, including 791 in 2023. - Transition from intended PPPs to direct State investments attributed to a pragmatic economic analysis (cost differential related to the country risk assessment in Benin for financing provided by private partners) and a determination to better manage fiscal risks associated with PPPs. - Identified legal and strategic gaps: - Law No. 2016-24 has not been complemented by a PPP strategy specifying the sectors expected for private partners nor by a more operational guide. - The strategic guidance note on public investment dated August 2022 makes only a very brief reference to PPPs, despite being “the reference document for PIP in the three-year period 2023–2025.” - A preliminary draft of the law transposing the WAEMU directive was in the process of being finalized and was shared with the mission. ### Oversight of State-owned enterprises (SOEs) and PPP fiscal risks - Legal provisions: - Law No. 2020-20 of September 2, 2020, on the creation, organization, and functioning of State-owned enterprises provides for comprehensive government control on technical and financial performance of SOEs and requires the MEF, through the Directorate General of Government Holdings and Denationalization (Direction générale des participations de l’État et des dénationalisations – DGPED), to prepare a report every year on the economic and financial situation of State-owned enterprises, appended to the draft budget law (Article 65). - Implementation gaps and data constraints: - Substantial number of State-owned enterprises: 150, including 22 government corporations as at December 31, 2022, according to the 2023 DGPED report. - The Article 65 reporting provision is not applied because: - (i) the DGPED has inadequate data on State-owned enterprises, with just 24 percent of 2021 financial statements transmitted in early 2023; - (ii) only EPAs are included in an annex to the draft budget law, and the data seem skewed by the lack of responses. - Mission recommendations (priorities and measures): - Strengthening oversight of PPPs and SOEs is of medium priority. - Reform priorities include: - Finalization and adoption of the draft law transposing the WAEMU directive and all of its implementing decrees. - Development of an official PPP strategy. - Additional recommendations: - Enrich budget documents regarding PPPs (both within the fiscal risk analysis and via a note attached to the draft budget law or PIP). - Extend to State-owned enterprises the scope of the analytical note currently limited to EPAs to serve as the report expected under Article 65 of Law 2020-20. --- ### 6. Multiyear budgeting (Institutional design: High; Effectiveness: Medium; Priority of reform: High) - Institutional design and objectives: - PIM is based on a multiyear cycle requiring total project costs and a provisional schedule of needs for future years. - Multiyear forecasts must appear in the budget documents; sums required for ongoing and new projects must comply with spending ceilings established by the macro-fiscal framework. - Three assessment dimensions: (i) existence and detail of multiyear investment projections; (ii) communication of multiyear ceilings to ministries; (iii) availability of estimated total costs and year-by-year expenditures to the public. - Role of capital expenditures and published forecasts: - Capital expenditures represent 43 percent of the State budget in 2023. - Capital expenditures (investment subsidies and capital grants) are included in a multiyear forecast published over three years as part of all documents associated with the draft budget law. - Visible strengthening of consistency between multiyear forecast documents and the LFI for the year. - Consistency issues across documents: - Table 6 (Payment Appropriations, CFAF billion) highlights gaps and variances between Execution, PIP, LFI, LFR, DPBEP across years 2018–2025. Selected entries (exact as presented): - Execution: 446 330 622 803 932 - 2018 PIP: 469 - 2019 PIP: 425 - 2019 LFI (variance with PIP): +15 - 2020–2022 PIP: 477 475 481 - 2020 LFI (variance with PIP): +9 - 2020 LFR (variance with LFI): +71 - 2021 PIP: 583 - 2021 LFI (variance with PIP): +12 - 2021 LFR (variance with LFI): +234 - 2022–2024 DPBEP: 825 847 891 - 2022 LFI (variance with PIP): -12 - 2022 LFR (variance with LFI): 102 - 2023–2025 DPBEP: 982 889 1,007 - 2023–2025 PIP (variance with DPBEP): -22 +10 -9 - 2023 LFI (variance with PIP): 0 - Multiyear envelopes and ministry programming: - Multiyear investment ceilings are binding; ministries’ annual investment envelopes are approved based on those ceilings. - Legal framework establishes multiyear public investment programming backed by the DBPEP (Article 56 of the LOLF) and the DPPDs (Article 57 of the LOLF). - PIP and DPPDs provide three-year programming and were noted to be consistent for 2023–2025 figures. Box: 2023–2025 PIP Project Features - Analysis of 333 projects in the 2023–2025 PIP eligibility report: - Average project duration is 6.7 years. - Average project age (as at 2023) is 4.4 years. - Projects include categories labelled “suspended” or “old and renewed.” - Identified shortcoming: - Budget documents remain incomplete in presentation of total project costs (PIP column on total costs not filled), preventing tracing and justification of developments or deviations. - Overall cost is a major decision-making factor for selection and oversight of PIP projects (as highlighted in the 2019 PIM Manual and the study report “Projects eligible for the 2023–2025 PIP” published in August 2022). - Projects are commonly rolled out over two successive PIP generations on average. - Recommended actions (high priority): - DGB to complete information transmitted to Parliament on the total cost of new and ongoing projects (this information is available in the DGB database and is part of sectoral ministries’ annual reviews). - DGB to improve reliability of partially entered data on past project budget execution to enhance completeness of annual CA and PA entries for projects. --- ### 7. Budget comprehensiveness and unity (Institutional design: High; Effectiveness: High; Priority of reform: Low) - Objectives: - Ensure presentation of all capital expenditures in the budget, coordination of investment and operating expenditures, and inclusion of all investment projects regardless of financing source. - Current practices and issues: - Benin’s capital expenditures pass through the State budget, but EPAs (executing agencies or delegated contracting authorities) play an important implementation role. - Flows received by EPAs for investment projects included in the State budget can be traced in budget documents; DGB instruction for the 2023 budget states transfers are subject to a mandate agreement indicating “the cost of the works and the financial programming” (point 46.1). - Uncertainty remains about investment expenses borne by EPAs due to DGPED’s deficient financial reporting (see institution 5). - Disclosure of financing sources: - All investment financing sources must be disclosed in the budget, but PPPs are not always identifiable in practice. - Annex to the study report on PIP eligibility criteria presents a list of projects financed with internal and external resources, excluding PPPs, with start and end dates. - Mission identified slight differences in project counts between this report and the PIP and invited the DGP to ensure consistency and remove completed or closed projects. - Donor funds can exceptionally be paid without passing through the general budget (example: Millennium Challenge Account payments to the SBEE, where only the State counterparty appears in the budget). - Improvements noted: - Consistency between budgeting of operating and investment appropriations improved since 2021 due to centralization of PIP production within the DGB (Decree 2021-586 strengthened MEF and DGB roles). - Priority assessment: - Strengthening budget comprehensiveness and unity is of low priority, conditional on increasing information available on PPPs and SOEs and ensuring effective monitoring of agency investments in execution. --- ### 8. Budgeting for investment (Institutional design: High; Effectiveness: Medium; Priority of reform: High) - Institutional objectives: - Ensure procedures facilitate availability of appropriations throughout project lifecycle, reflect future commitments in budget documents, allow or constrain reallocation from capital to operating budgets, and prioritize ongoing projects to avoid delays and cost overruns. - Identified issues: - Investment envelopes voted by Parliament have a multiyear scope, but CA=PA budgeting persists in multiple ministries: 40 percent of ministries still have CA amounts equal to PA amounts, which appears unrealistic. - The LOLF establishes asymmetrical fungibility favoring investment appropriations (Article 18): investment appropriations can be supplemented by other expense types but cannot be diminished and recycled; a supplementary budget law would be needed to reduce them. - The mission noted an increase in investment appropriations in the last three supplementary budget laws. - Prioritization and composition of the PIP: - 2023–2025 PIP gives clear priority to ongoing projects: out of 333 projects listed, 10 percent (or 34) are presented as new, while over 75 percent (252) are defined as “old” or “ongoing.” - Close to 9 percent of PAs in the 2023–2025 PIP concern “debt” coverage corresponding in part to accrued expenses (invoices to be paid) and expenses related to additional works after official project closure. - Box: Debt Clearance Considerations in the PIP - Situation in Benin: - Accumulation of CFAF 248 billion in CA=PA for expenses related to “debt clearance on completed or outstanding projects” or similar items in the 2023–2025 PIP. - Authorities cited cases such as unused payment appropriations on portfolio projects, disputes concerning State-funded projects (general end-of-work counts), and expenditure requests for reinforcement works, donor-requested or not. - Challenges: - Expense statements in the PIP for completed or closed projects raise programming transparency issues, especially when amounts account for a significant PIP share (9 percent of the total in PA for 2023). - Difficulty in determining amounts in disputes with enterprises may pose a risk to fairness of PIP budgeting. - Possible solutions (in order of increasing difficulty): - (i) Leave corresponding projects in the PIP portfolio but label them as “projects nearing completion” to show real project cost transparently (weighs down the PIP). - (ii) No longer include these expenses in the PIP due to lack of project referencing and cover them out of the general budget outside the PIP (e.g., allocation for incidental and unforeseen expenses). This creates a discrepancy between PIP amount and total investment expenditures. - (iii) Incorporate a “contingency margin” in budgeting of high-risk projects (major infrastructure) so multiyear envelope is sufficient to cover these expenditures; then take them into account in the budget line allocated to each project. - Priority assessment: - Budgeting for investment is a high-priority reform area focused on ensuring realistic CA/PA phasing, stronger project total-cost disclosure, improved data reliability, and clearer treatment of debt-clearance and post-closure expenditures. *Source: 1benea2023003 - 32. Strengthening a legislative and regulatory framework favorable to competition* ### 50. The mission’s recommendations on project budgeting are of high priority and echo ### 1benea2023003 - 50. The mission’s recommendations on project budgeting are of high priority and echo ### Project budgeting — summary at introduction - The mission’s recommendations on project budgeting are of high priority and echo those issued under institution 6 for multiyear budgeting. - Aside from the (i) publication of total project costs, the mission encourages the DGB to: - (ii) simplify the presentation of PIP projects by reducing the number of categories and avoiding overlap between categories. - Remove closed or completed projects from the PIP. - Other suggestions for improving the PIP presentation appear in Annex 3. ### Maintenance funding (Institutional design: Medium; Effectiveness: Low; Priority of reform: High) - Scope of assessment: - Existence of a methodology for determining routine maintenance needs (funded from the operating budget, exceptions noted). - Existence of a methodology for determining capital maintenance needs (major improvements, rehabilitation, reconstruction — in principle included in the investment budget). - Availability of information for determining maintenance funding reflected in national/sectoral plans and the budget. - Key findings: - Standard methodologies exist for estimating routine maintenance needs, but asset values cannot be preserved due to the small allocations. - MEF’s DGML presented a maintenance strategy note dated May 2023; it needs clarification by more operational manuals. - SIRAT described aspects of a road maintenance methodology in an April 2023 note; it could be usefully supplemented based on the November 2019 provisional MIT road maintenance manual. - The ex ante project and program appraisal manual only very briefly mentions assessment of maintenance costs. - Costing by Reference System (Système de Costing par le Référentiel – SYCOREF) is a useful data source but cannot be considered a standardized methodology. - Maintenance planning and allocations are mostly based on mechanical ad hoc approaches (e.g., keeping budget funding at the same level as in the previous year). - Absence of accurate needs estimates leads budget allocations for routine maintenance of main asset classes to be inadequate to preserve asset values. - Lack of reliable material accounting: no information on estimated replacement values of main asset classes. - No specific methodology for evaluating capital maintenance needs within the DGML; rehabilitation/reconstruction is often identified and financed as new separate projects assessed ad hoc. - The mission was unable to quantify the current financing gap impacting infrastructure sustainability. - Maintenance is identifiable in the budget nomenclature (see Decree No. 2014-794 of December 31, 2014), but no standard reports are used regularly for analysis and decision-making on allocations and actual expenditures for routine maintenance and major improvements. - Maintenance data are reasonably transparent owing to published budget documents, but there is no specific example showing data are used for analysis and decision-making to adjust maintenance funding. - Illustrative data points and notes: - SIRAT April 2023 note mentioned an overall need of CFAF 33.4 billion for road maintenance in fiscal year 2015, without separating routine from capital maintenance; the mission was unable to obtain more recent data. - Footnote context: authorities developed financing mechanisms for SIRAT based on earmarked taxes or road tolls to strengthen road maintenance. - Recommendations (high priority): - Create an asset register to facilitate determination of appropriate maintenance levels (see PIMA institution 15). - Make simple guidelines available to ministerial departments for calculating infrastructure maintenance needs. - (i) Specify standardized methodologies for forecasting needs (routine and capital maintenance) for the main classes of high-stake assets, including aspects on climate vulnerabilities. - (ii) Integrate implementation of these methodologies into the budget procedure through an explicit reference to these methodologies in the budget circular. ### Project selection (Institutional design: Low; Effectiveness: Low; Priority of reform: High) - PIMA methodology assesses: - (i) existence of a review of major project appraisal before inclusion in the budget; - (ii) publication and fulfillment of standard selection process and criteria; - (iii) existence of a list of already appraised projects waiting to be included in the annual budget. - Key findings: - The framework provides for a review by the MEF of projects appraised prior to budgeting, without requiring independent experts; documentation of the process is limited in practice. - The 2021 PIM decree establishes the principle that all projects must be reviewed by the MEF before inclusion in the PIP, but does not require contributions from an independent agency or independent experts. - Independent review of preliminary appraisals sometimes involves civil society representatives; authorities want to refine the mechanism by involving independent specialized agencies. - Some summary information is provided in the first study report on projects eligible for the 2023–2025 PIP, published in August 2022. - Authorities indicated that no major project is rejected or returned for further development based on the sample described, though the DGB stated it had rejected a few projects outside the examined sample (mission unable to analyze those). - The selection process lacks transparency; criteria are applied to less than 90 percent of projects. - Legal framework (Article 5 of PIM decree) indicates an annual MEF circular (in principle issued in April) sets PIP eligibility criteria and resource allocation conditions, but the circular is not published ahead of the procedure. - Analysis at the mission’s request reveals less than 90 percent of major projects are selected in compliance with the required process and defined criteria. - Authorities stated 43 out of 51 projects (or 84 percent in number of projects and 80 percent in cumulative financial amount) were selected in keeping with the defined rules. - No formal obligation exists to have a pipeline of appraised projects; the project pipeline support tool is yet to be developed. - MEF updates the public investment portfolio database every year (Article 8 of 2021 decree), but no formal obligation for a pipeline of appraised projects. - A database containing project ideas exists (some 15 project ideas without feasibility studies), accessible in consultation with development partners; it will be rolled out at decentralized level and interfaced with the SIGFP platform. - Recommendations (high priority): - Publish the annual MEF circular establishing PIP project eligibility criteria and resource allocation conditions as of April N for fiscal year N+1. - Describe the project selection process in operational terms in the updated PIM manual expected by end of March 2023. - Annex 5 (for illustration) shows the list of criteria for selecting appraised projects, including additional specific criteria for climate change. ### Procurement (Institutional design: High; Effectiveness: Medium; Priority of reform: Medium) - Scope: evaluates open, competitive, transparent procedures; contract monitoring; fair and diligent appeals review. - Key findings: - The 2020 Procurement Code (Code des marchés publics – CMP) establishes a competition and transparency framework aligned with international standards; open tendering is the preferred method. - Articles 17 to 20 of the CMP create the Public Procurement Regulatory Authority (Autorité de régulation des marchés publics – ARMP) as the regulatory body; it has a dedicated website for posting regulation information. - The public procurement transparency framework strengthened via organization of the Person Responsible for Procurement and the Opening and Evaluation Committee. - Statistics provided: on average, 74.4 percent of contracts awarded over 2020–2022 were part of open tenders; agreements or direct contracts averaged 7.7 percent over the same period. - Occasional shortcomings: non-publication of all procurement plans and statistics on procurement timelines. - National Directorate for Public Procurement Oversight (Direction Nationale du Contrôle des Marchés Publics – DNCMP) has an application (SIGMAP, version 2) for contract management with a database that produces reports and statistics, but these are published with a delay and SIGMAP is not connected to the SIGFP budget and accounting software. - Annual reports are disseminated with delay; most recent DNCMP and ARMP annual reports on the portal date back to 2020; analytical reports are not published; no infra-annual reports available. - Table 7 statistics (received and authenticated by the DNCMP – fiscal years 2021 and 2022) — extracts preserved exactly below as presented: - 2021: Number / Amount (CFAF incl. tax) / Percentage - Direct Agreement 44 / 133,617,521,539 / 5.8% - Open Bidding 566 / 452,608,572,522 / 78.3% - Restricted Bidding 1 / 1,576,691,525 / 0.3% - Call for Expression of Interest 90 / 138,712,331,275 / 6.7% - Request for Information and Prices 136 / 134,614,578,759 / 6.0% - Request for Quotation 11 / 68,731,277,675 / 1.5% - Consultation of Suppliers 13 / 58,005,096,851 / 1.4% - Total 576 / 577,866,070,146 / 100.0% - 2022: Number / Amount (CFAF incl. tax) / Percentage - Direct Agreement 309 / 52,138,662,604 / 7.8% - Open Bidding 534 / 513,063,251,391 / 76.6% - Restricted Bidding 17 / 1,057,496,883 / 0.2% - Call for Expression of Interest 383 / 45,159,214,024 / 6.7% - Request for Information and Prices 164 / 145,449,528,047 / 6.8% - Request for Quotation 120 / 210,998,500,401 / 1.6% - Consultation of Suppliers 50 / 42,064,335,204 / 0.3% - Total 590 / 669,930,988,554 / 100.0% - Complaint review process: - CMP provides for non-judicial appeals before the ARMP within seven business days (Article 117). - Dispute Resolution Board composition ensures fairness (public administration, private sector, civil society); decisions are published on ARMP website and are legally binding. - Verified complaint processing times: average seven-day processing respected in 2019; increased to 12.3 days in 2020 and to 36 days in 2021. Average processing time continues to be less than two months for the most part. Average processing times do not appear in 2022 statistics. - Recommendations (medium priority): - Publish analytical reports and statistics on public procurement monitoring (particularly complaint processing times within the ARMP) more regularly. - Rollout of e-procurement with World Bank support will improve system performance. ### Availability of funding (Institutional design: Medium; Effectiveness: Low; Priority of reform: Medium) - Scope: ensures systems/procedures/tools to guarantee cash availability for timely investment payments; incorporation of external donor funding into TSA. - Key findings: - Predictability of public contract disbursements is haphazard due to uncertainties affecting execution timetables, increasing risk of funds not being available when invoices arrive. - In case of unavailability, money orders issued on basis of invoices become overdue after three months, weighing on government debt and possibly leading to stoppage of investment works. - Since 2021, regulatory framework on commitment plans (CPs) and cash flow organization/management strengthened with weekly and monthly cash flow plans (CFPs), updated through the web-based CFP platform. - Public procurement regulatory framework requires ministerial procurement plan (MPP). - Since 2022, implementation of CAs and PAs for investment expenditures and of annual work plan (AWP) presented quarter-by-quarter has fostered expenditure predictability for sectoral ministries. AWPs and CPs announced at the start of the year are updated at least quarterly. - Budget execution tools (CP, AWP) are installed in SIGFP; periodic follow-up meetings with program managers update them. - Cash flow forecasts are prepared at least monthly and are carried out centrally by the DGTCP based on the CP, but updates to the CFP based on MPPs and CPs are not systematic; forecasts can therefore be insufficiently updated. - Actual disbursements tend to be lower than forecasts, with an average gap of -14 percent in 2022. - Investment expenditure execution rate (data in payments) relative to forecasts is 63.5 percent for fiscal year 2022, a gap of -36.5 percent. *Source: Extracted from content unit 1benea2023003 (PDF chapter/section).* ### 68. Funds for public investment project execution are disbursed regularly, but are only ### 1benea2023003 - 68. Funds for public investment project execution are disbursed regularly, but are only ### Cash flow, disbursement, and Treasury arrangements - Funds for public investment project execution are disbursed regularly, but are only partially documented for investment projects carried out by agencies. - Legal and regulatory references cited: - Article 49 of the LOLF: a month-by-month annual cash flow plan is appended to the budget law for the year. - Decree 2021-441-C establishing the State cash flow management framework and Decree 2021-068-C on the creation, powers and duties, and functioning of the committee responsible for developing and monitoring the provisional and month-by-month government expenditure commitment plan. - Article 24 of the 2020 CMP; Decree No. 2018-231 of June 13, 2018; 2023 Budget execution circular, para. 2.4. - Classification and prioritization: - Government investment expenditures are classified as priority 5 out of 7 in the CFP. - Determinations of the monthly cash flow management committee can delay payment on investment projects in the event of a cash shortage. - Visibility and documentation issues: - Only 24 percent of enterprises in the State-owned enterprise portfolio within the meaning of the 2020 law, of which executing agencies are a part, submitted their 2021 certified financial statements to the DGPED. - This low submission rate undermines visibility on effective payment of investment project expenses to final beneficiaries. - Treatment of external/donor funds: - Article 78 of the decree on the General Regulation on Public Accounting (RGCP) states that all donor funds are to be held in the TSA, opened on the books of the Central Bank of West African States (BCEAO), while allowing MEF authorization to open accounts in commercial banks for donor funds. - In practice, most externally funded project funds are in accounts managed by commercial banks and are outside the TSA consolidation perimeter. - As part of the 2022–2024 TSA consolidation strategy, the MEF envisaged reintegration of these accounts into the TSA and encouraged donors to open correspondent accounts on the books of the Treasury and to close project accounts in commercial banks. - The DGTCP is planning an application to monitor bank accounts that the MEF had authorized to be opened. - Priority for reform: - Enhancing government cash flow management practices and tools is of medium priority for PIM. - Continued efforts needed to improve the quality and consistency of expenditure execution forecast and cash flow management tools (AWP, MPP, CP, and CFP), and to draft timelines related to the public expenditure execution chain. - Ongoing AFW-supported work on TSA consolidation and cash flow management should continue, particularly closing public accounts in banks. ### Portfolio management and oversight (Institutional design: Medium; Effectiveness: Low; Priority of reform: High) - Purpose: - Assess whether execution of the entire public investment portfolio is properly managed and monitored via: (i) mechanism for monitoring physical and financial implementation of major projects; (ii) mechanisms for transfer of appropriations between projects during implementation; (iii) a posteriori reviews of completed projects. - Reporting and monitoring mechanisms: - PIM decree (articles 25 and 26) requires quarterly monitoring reports by sectoral ministers on physical and financial progress of each project, submitted to MEF, MDC, SGPR, and BAI coordinator not later than at the end of the month following the quarter in question. - Consolidated semiannual PIP monitoring report to be produced by the SGPR with the BAI and “made available within 45 days of the end of the six-month period in question and be notified to the Council of Ministers.” - SGPR hosts about a dozen active project, program, and reform implementation monitoring units that conduct monthly meetings with multiple executing agencies (Article 24 of Decree No. 2021-520). - Evidence and gaps: - Documents required under articles 25 and 26 of Decree 2021 could not be provided to the mission; the only document received was a management report dated January 2020 from the 2016–2020 PAG covering projects of agencies attached to the Office of the President. - Given available documents, potential time or cost overruns of portfolio projects seem impossible to measure. - Reallocations and traceability: - Reallocation of appropriations within the investment envelope is possible and arises from program budgeting effective since 2022. - The DGB validated sectoral ministries' orders for reallocations to measure potential impact on project performance frameworks. - Documentation does not permit determination of whether reallocations helped accelerate project implementation; traceability of such reallocations is fragmented. - Ex post evaluations: - Formal requirement for appraisal of all investment projects (articles 28 and 29 of Decree 2021-586), entrusted to the MDC, and an “independent” ex post review for two major projects per year. - No mechanism exists in texts or in practice to adjust implementation policies or procedures based on ex post review results. - 2019 PIM manual (pages 75–81) and 2017 national evaluation guide lack practical recommendations for carrying out ex post assessments. - Management report (January 2020) includes BAI analysis on 62 projects managed by PAG executing agencies attached to the Office of the President, but it covers only 21 out of 62 completed projects and cannot be considered an ex post assessment by international standards. - Apart from externally funded projects, a posteriori review of major self-funded projects appears not to be carried out. - The General Inspectorate of Finance stated it has not carried out any ex post investment project assessments. - Mission recommendations and priority: - Recommendations on project portfolio monitoring are of high priority. - Ensure effectiveness of the 2021 PIM decree monitoring framework and its transparency, particularly for projects implemented by State-owned enterprises (agencies or government corporations). - Recommend including information on physical and financial implementation of investment projects (including within agencies) in the annex to the draft budget law and in the budget execution reports to increase monitoring visibility. - Detailed recommendations are provided in Annex 4 (not reproduced here). ### Management of project implementation (Institutional design: Medium; Effectiveness: Low; Priority of reform: Medium) - Scope: - Covers management and oversight during implementation: (i) existence of effective project management system; (ii) drafting and application of project adjustment rules, procedures, and directives; (iii) performance of ex post external audits. - Project managers and implementation plans: - PIM decree requires project managers to be appointed and implementation documents to be developed six months before project launch, but does not situate this step relative to project inclusion in the budget. - Project implementation and monitoring guide is being adapted to the new legal framework. - In practice, project managers are appointed and implementation plans prepared, but chronology of project documents relative to budget approval is not clearly established. - Project adjustment rules: - No standard rules on adjustments to projects being implemented. - Project adjustments are formally governed only by amendment mechanisms in Article 100 of the CMP. - In practice, adjustments (where they occur) are not based on a standard methodology or objective criteria imposed on project managers, and are not specifically documented. - External oversight and audits: - The legal framework gives the Court of Auditors authority to audit investment projects; the Court is Benin’s supreme audit institution (Law No. 2022-05 of June 27, 2022; Law No. 2022-08 of June 27, 2022). - Duties include conducting ex post audits of investment projects and producing special reports, which it may publish wholly or partially and share with Parliament. - The Court has conducted no ex post audits of investment projects to date. - Agreements on World Bank-funded investment projects provide that external audit reports conducted by private firms are under the responsibility of the Court of Auditors. - Reform priorities: - Strengthening management of project implementation and external oversight is of medium reform priority. - Recommended actions: harmonize project implementation mechanism (including timing of implementation plans relative to budget approval), define a standard project adjustment methodology, and update the guide on investment project monitoring and appraisal. ### Monitoring of public assets (Institutional design: High; Effectiveness: Low; Priority of reform: Medium) - Objectives: - Verify whether public assets are properly monitored and whether their value is correctly recognized and recorded in financial statements via: (i) regular updates of asset registers; (ii) records in government financial accounts of nonfinancial asset values; (iii) recognition in profit/loss statement of asset depreciation. - Accounting framework and progress: - Accrual-based accounting (ABA) and material accounting (MA) framework adopted but not yet in effect. - Regulatory and technical ABA and MA texts consistent with international standards represent significant institutional design progress since the 2018 PIMA. - Texts provide for maintenance of regularly updated asset registers in ministries, consolidated within the DGML. - Work underway to identify and value assets, following the 2022 opening balance sheet strategy adopted by the DGTCP and DGML. - Previous MA mechanism provided for asset registers in ministries, but inventories remain fragmented, not valuated, and concern mainly movable property and cars. - The mission consulted an asset register from current DGML module testing: out of 33 materials accountants to be appointed, 17 are in their positions. - Financial statements and system modules: - The SIGFP integrated computer system has an operational ABA module since 2022; a MA module is currently being tested. - Pending completion of the 2022 opening balance sheet, the value of nonfinancial assets is not recorded in government accounts, and financial statements have yet to be produced. - Financial statements are expected once the 2022 accounts are closed (in principle, March–June 2023). - Depreciation: - Principle and tools for depreciation are available but not yet effective. - Texts on thresholds for fixed asset accounting (seuil de patrimonialisation) and useful lives of fixed assets to calculate depreciation have been validated. - Effectiveness depends on finalization of inventory and asset valuation work linked to the 2022 opening balance sheet. - Reform priority: - Work related to public asset management is of medium priority, notably completing material accounting to determine assets and their actual state, operationalizing depreciation to inform maintenance costs and asset renewal requests, and thereby informing State budget decisions. ### Climate-Public Investment Management Assessment (C-PIMA) — Climate change and public investment in Benin - Climate projections and risks: - Annual temperatures in Benin are expected to increase by 1.0°C to 3.0°C by 2060. - Projected climate impacts include: (i) accelerated desertification in the North; (ii) increased occurrence and intensity of torrential rains and floods in the South; (iii) higher temperatures; (iv) rising sea levels and greater coastal erosion leading to intensified coastal flooding and storm surges. - Benin ranks 147th out of 191 countries on the INFORM Risk Index 2023, which measures exposure to climate risks. - Socioeconomic and infrastructure impacts: - Global warming negatively affects multiple development sectors, especially agriculture, water resource management, and forestry. - Increased frequency of natural disasters raises infrastructure asset depreciation and service disruption risks. - The 2010 floods caused an estimated US$257 million in economic losses (2 percent of GDP). - The 2019 floods were calculated to have caused US$132 million in damages. - Over the past four decades, Benin has been struck by natural events that have affected over 5.4 million people. - An assessment of disasters between 1990 and 2018 estimates each major disaster leads, on average, to: slower growth of -0.23 percent; a 4-percent increase in food prices; and a weaker external balance. - According to the World Risk Report 2021, Benin ranks 31st out of 171 countries in terms of natural disaster risks. - National strategies and financing needs: - Benin’s 2021 Nationally Determined Contribution (NDC) notes a fairly low “adaptation capacity” score and high vulnerability to severe weather events. - Rapid urbanization, informal housing, unplanned development in disaster-prone areas, and coastal population concentration exacerbate vulnerability; building deterioration is linked to incomplete regulatory framework, weak building code enforcement, and poor soil control. - The National Climate Change Adaptation Plan (PNA) identifies eight priority sectors vulnerable to climate change: (i) water resources; (ii) agriculture; (iii) health; (iv) energy; (v) forests; (vi) coastal areas; (vii) tourism; (viii) urban development and infrastructure. - Financing of adaptation measures is estimated at US$4.24 billion. - According to the NDC, total financial resources to be mobilized for mitigation and adaptation measures total approximately US$10.5 billion. *Source: 1benea2023003 - 68. Funds for public investment project execution are disbursed regularly, but are only* ### 90. Benin’s contribution to global greenhouse gas (GHG) emissions is insignificant. This ### 1benea2023003 - 90. Benin’s contribution to global greenhouse gas (GHG) emissions is insignificant. This ### Benin’s GHG emissions and projections - Benin’s contribution represents less than 0.05 percent of total global GHG emissions for 2020 (Chart 16). - The 2021 NDC indicates that, in the absence of measures, the trend increase in global emissions will reach 71 percent over the period 2018–2030 (Chart 17). - Sectoral share of Benin’s emissions (GHG inventories across five sectors): - Energy: 58.1 percent - Agriculture: 28.5 percent - Waste: 5.4 percent - Sectoral projected increases contributing to the 71 percent global trend (from note): - Energy at 63.6 percent - Agriculture at 24.0 percent - Wildfires and hydrofluorocarbon emissions at 6.5 percent - Waste at 4.6 percent - Industrial processes and product use at 1.2 percent ### Low-carbon investment options and energy strategy - The 2021 NDC recognizes the importance of the changing energy mix for affordability and emissions reduction. - Government 2030 energy mix target: - 58 percent gas - 19 percent imports - 11 percent hydroelectric power - 6 percent solar energy - 6 percent heavy fuel oil (HFO) - Required investments: renewable energy and biomass, hydroelectric power plants, biogas, and energy efficiency measures. - Institutional and market context: - International carbon credit markets are still in their infancy without internationally determined prices. - Benin has a 2016–2025 Low-Carbon and Climate-Resilient Development Strategy and a regulatory framework for registering carbon projects. - Decrees No. 2022-698 and 699 of December 7, 2022 establish procedures for registering carbon projects and create the Carbon Project Registration Authority (Beninese Sustainable Development Council). - In 2016, Benin analyzed the forestry sector and land tenure in the context of REDD, leading to a proposal. ### Resilient and green public investments: rationale and practice - Rationale: Investments incorporating climate change (CC) adaptation have a lower overall long-term socioeconomic cost despite higher initial construction costs, due to improved resilience, fewer utility disruptions, reduced exposure to natural risks, and less need for maintenance and reconstruction. - Mitigation focus: investing in renewable energy sectors and exploring carbon market gains to support the low-carbon transition. - Examples and support: - Reforms under the US$391 million MCC contract included off-grid electrification via mini-grids and solar home systems. - Local actions: flood zone maps provided to government property staff in 21 of the 77 communes; carbon footprint pilot study for administrative buildings by MCVDD. - Seven communes were selected to receive funding for climate projects under the Green Fund. - Gaps: - Spatial and urban planning and building permit regulations do not currently take CC-related risks into account (Law No. 2016-06 of May 26, 2016; Decree No. 2020-056 of February 5, 2020 are cited as current frameworks). - New urban planning and building codes are being developed to regulate land exposed to natural risk, improve energy efficiency in buildings, and promote local materials. - Centralized guidance exists for climate-aware planning, but does not cover evaluation of costs associated with public investment strategies. - Vulnerability studies have been carried out in priority sectors (agriculture, water resources, health) and informed the PNA and sectoral strategies. ### C-PIMA climate change module: framework and institutional findings - C-PIMA overview: - Assesses five PIM dimensions from a climate change perspective; similar institutions to PIMA but with some combined dimensions and C5 (risk management) with no PIMA equivalent. - Formally assesses institutional design only (limited long-term practice data). - C-PIMA institution ratings and priorities (as stated): - C1. Climate-aware planning — Institutional design: Medium; Priority of reform: Low - Findings: National and sectoral public investment plans are generally consistent with 2021 NDC objectives for most sectors; multiple CC strategies (2021 NDC, PNA May 2022, National Climate Change Management Policy 2021–2030, 2016–2025 Low-Carbon Strategy) are systematically incorporated into sectoral strategies and aligned with the 2021–2026 PAG. - Gap: 2018–2025 PND is less consistent with 2021 NDC objectives. - Recommendation highlights: Strengthen cross-cutting integration of 2021 NDC objectives in the future PND; complete review of spatial and construction regulations; improve mapping of risk areas and capacity to evaluate costs of CC strategies. - C2. Coordination between entities — Institutional design: Medium; Priority of reform: Medium - Findings: - Multiple coordination mechanisms exist (Law No. 2018-18 of August 6, 2018). CNCC is main entity for coordinating CC policies; five technical commissions address adaptation, mitigation, technology transfer, capacity building, and gender–climate linkages. - The Beninese Sustainable Development Council (CBDD) exists alongside CNCC; irregular CNCC meetings and overlap raise questions on effectiveness. - Budget circulars/directives on the PIP make limited general references to CC, insufficient to establish a robust State-level coordination mechanism for climate aspects of public investment. - Territorial authorities are required to incorporate CC and natural disaster risks into local planning through PDCs; updated guide for PDCs includes CC annex; communes receive assistance from MCVDD, MDC, and ABE decentralized structures. - Information on authorities’ climate-sensitive projects is shared with State administration (prefectures and oversight ministries) but not published. - Regulatory and supervisory framework for State-owned enterprises does not promote compliance with national climate policies; 2020 law governing SOEs does not take CC into account; 2018 CC law requires CC in environmental impact studies but does not explicitly apply to SOEs. - Recommendation highlights: Clearly identify an umbrella structure for CC-related investments with a concrete mandate (assess training needs, develop tools, prioritize climate-aware projects); strengthen planning, budgeting, and monitoring tools across central and territorial authorities; introduce reporting guidelines for SOEs on CC results. - C3. Project appraisal and selection — Institutional design: Low; Priority of reform: High - Scope: Assesses whether project appraisal and selection include climate-related analyses and criteria, whether CC analyses follow a standard methodology, PPP inclusion, and CC aspects in infrastructure selection criteria. *Source: Mission.* ### 105. The legal obligation to conduct environmental impact studies does not state that ### The legal obligation to conduct environmental impact studies does not state that such studies must be carried out according to a standard methodology, defined at the central level ### Environmental assessment legal framework and methodology - The legal framework provides that the implementation of any development project likely to harm the environment is subject to an environmental and social impact study (ESIS), which incorporates climate change, but makes no mention of the standard methodology—defined at the central level—to guide and support these impact studies. - The framework governing the ABE confers on the Agency assessment and ESIS responsibilities, but does not mention climate change and does not entrust it with a mission to develop a standard assessment methodology. - Existing guides on impact studies do not include the CC approach methodology. - The National Fund for the Environment and Climate (FNEC), an arm of the MCVDD accredited by various donors (Green Climate Fund and Adaptation Fund), has guidelines developed in July 2017 to identify environmental and social risks faced by projects that include CC mitigation and adaptation aspects. - In practice, the mission analyzed a few feasibility study reports and ESISs; some include CC considerations. - Example: the feasibility study for the 2021 ruminant herd settlement project in Benin incorporates CC-related aspects, including an analysis of the risks associated with the project and a mitigation plan. - Example: the ESIS conducted by the Beninese Agency for Rural Electrification and Energy Management in May 2019 on the project to electrify 100 rural localities in Benin summarizes climate issues in terms of potential environmental and social impacts. - Examples of environmental compliance certificates issued by the ABE provided to the mission do not explicitly mention the CC impact of the appraised projects. ### Public–private partnerships (PPPs) and project selection - The current law on PPPs does not explicitly consider climate change in risk allocation or contract management. - The framework governing long-term public investment contract management (2016 law) references environmental impacts but does not explicitly mention climate change in connection with risk allocation or contract management. - The current overhaul of the PPP legal framework is an opportunity to incorporate CC considerations. - Project selection criteria: the first study report on projects eligible for the 2023–2025 PIP, published in August 2022, mentions a single criterion in connection with climate change: criterion 5.2.4: “Are the responses regarding adaptation and resilience to climate change clearly defined?” - Publication timing concern: selection criteria in the study report on projects eligible for the 2023–2025 PIP are published ex post, at the end of the project selection process. - Authorities have expressed desire to incorporate more CC-related criteria into the mechanism. - Authorities could draw inspiration from the formulation, eligibility, and selection guide for projects submitted for FNEC funding (January 2020), which sets out project selection procedures and pre-selection criteria for accessibility to the Green Climate Fund. - Recommended actions: - Standard methodology for preliminary project appraisals must include rules and procedures to systematically assess impacts on climate change (GHG emissions and exposure to CC-related disasters) before projects enter the pipeline and are selected for funding. - Future legal PPP framework should explicitly include CC considerations for risk allocation and long-term contract management. - CC-related aspects must be explicitly included in the list of selection criteria used by the government at project selection. ### C4. Budgeting and portfolio management (Institutional design: Low; Priority of reform: High) - Scope of C-PIMA assessment: - (i) identification in the budget and budget documents of specific expenditures and resources in favor of CC-related investments; - (ii) performance of external ex post audits to measure impact in terms of CC adaptation and mitigation; - (iii) consideration of climate change in asset management and maintenance policies. - Climate-focused budgeting progress: - The DGB produced a budget annex to the 2023 draft budget law entitled “Climate-focused State budget analysis report.” - The annex presents the CC reference framework in the budget process, reiterates national CC management policy strategic thrusts and institutional mechanism, and outlines an integration process for CC into the budget cycle. - The annex proposes a climate-focused analysis of the State budget for 2023 and identifies some planned expenditures (see Box 3). - The DGB recognizes the effort is in its infancy, particularly compared to gender-responsive budgeting (GRB). - Box 3 key points (summarized from the analysis): - The analysis highlights tax expenditures favorable to climate action, notably on acquisition and importation of new vehicles presumed to be lower GHG emitters. - The analysis maps leading climate-friendly investments across the eight most vulnerable sectors identified in the PNA: water resources, agriculture, health, energy, forest ecosystems, coastal areas, infrastructure and urban development, and tourism. - The analysis is limited to eight ministries and excludes key ministries in terms of adaptation, particularly the one in charge of infrastructure and transportation. - The analysis is not highly discriminant for some ministries (environment, agriculture, energy, water and mines, and tourism), which have projects presumed to be all, or nearly all, climate friendly. - The DGB is considering a more sophisticated method, such as using a weighting system, to refine the analysis. - Data excerpt (data in CFAF million) presented in the analysis (as shown in the source): - CAPACAPACAPA MDC4,3544,3543,5623,56282%82% - MEF13,7339,1945,0000%54% - Interior11,94511,9452,5002,78021%23% - Agriculture366,68065,430365,33262,530100%96% - Health147,20746,46386,4297,10459%15% - Environment568,168209,537565,068206,43799%99% - Energy112,63285,552109,63280,50297%94% - Water and Mines683,96483,127676,78781,40899%98% - Tourism41,23141,23138,75638,75694%94% - Total 8 Ministries1,949,914556,8331,848,066488,07995%88% - Total 2023 PIP2,582,242959,7491,848,066488,07972%51% - Ex post reviews and audits: - Results of public investment projects in terms of CC adaptation and mitigation are not subject to any external ex post reviews or audits. - No legal obligation or methodology exists for internal audits and reviews of investment projects to assess their contribution to adaptation and mitigation objectives (see institution 13). - Only externally funded projects are subject to external reviews as part of agreements linking the Court of Auditors to some donors, particularly the World Bank. - The Court of Auditors joined an environmental audit of the Niger river basin with eight supreme audit institutions under AFROSAI WGEA; skills developed could be used to create an environmental audit methodology with a CC dimension. - Asset management and maintenance: - No asset management or maintenance policy accounts for exposure of public infrastructure stock to climate risks. - No methodology for estimating maintenance needs exists, so CC is not taken into account in maintenance costs. - Transition to ABA (implementation of material accounting) is in a very preliminary phase and does not yet include climate vulnerability aspects. - Sectoral vulnerability studies from PNA preparation include findings and recommendations on asset management and maintenance (example: water sector study recommends evaluating infrastructure resistance to extreme events, incorporating adaptation into maintenance and replacement, and mapping high-risk areas by analyzing causes of past floods). - Recommended actions (high priority): - DGB to leverage GRB experience to improve identification and monitoring of CC-friendly investments by explicitly covering CC in the budget circular and adapting information systems for effective monitoring. - Gradual build-up of the Court of Auditors to support incorporation of climate issues into ex post assessment of public investments (PIMA institution 14). - Include climate risk analysis in standardized methodologies for forecasting asset maintenance needs (PIMA institutions 9 and 15). - First step: map vulnerable public infrastructure in specific places and sectors. ### C5. Risk management (Institutional design: Medium; Priority of reform: Medium) - Institution focus: how exposure to fiscal risks associated with public investment caused by CC and natural disasters is identified and managed. - Dimensions assessed: - Publication of a national disaster risk management strategy that incorporates public infrastructure exposure to climate disasters. - Existence of financing mechanisms to deal with costs of damage to public infrastructure resulting from CC. - Existence of a fiscal risk analysis that covers climate risks to public infrastructure. - National disaster risk reduction framework: - The 2019–2030 National Disaster Risk Reduction Strategy (SNRRC) is published and outlines climate and natural disaster risks (floods, coastal erosion, landslides, droughts, and bush fires). - SNRRC provides a general overview of investment exposure in sectors such as housing, roads, coastal infrastructure, and energy. - National and communal contingency plans, prepared annually, provide activities to prevent and respond to climate shocks, such as reconstruction, based on identified exposure levels. - National Civil Protection Agency (ANPC) runs the operational disaster response system, based on a national disaster risk reduction platform represented at central and local levels. - A draft law on disaster risk reduction tabled before Parliament in 2020 is not yet passed. - Financing mechanisms and contingency allocations: - The 2023 initial budget law includes an allocation for incidental and unforeseeable expenses with an envelope of CFAF 239 billion; this line of credit can in theory be used for restoration of physical infrastructure but does not seem widely used for that purpose. - Ministerial departments use rehabilitation and maintenance budget resources to address infrastructure damage, used after the fact and often insufficient. - 2019 post-flood needs assessment report estimates infrastructure damage at approximately CFAF 29 billion (or around 6.6 percent of capital expenditures for 2019). - A National Disaster Response Fund (FONCAT) was created in 2020 and placed under MEF oversight; it received around CFAF 3 billion to CFAF 5 billion between 2021 and 2023 (i.e. on average around 0.4% of 2021–2023 expenditures in the respective initial budget laws, excluding the wage bill). - FONCAT is used more for relief operations and public compensation than for responding to disaster impacts on public infrastructure. - Fiscal risk analysis in budget documents: - The fiscal risk analysis appended to the 2023 draft budget law classifies adverse weather events (floods, fires, coastal erosion, droughts) by likelihood and severity. - It highlights the impact of the 2019 floods on infrastructure in the education sector and assesses economic impacts in terms of tax revenue, exports, imports, and GDP. - The analysis describes risk mitigation measures taken but has few details on short- and medium-term quantification of public infrastructure exposure to natural disasters caused by climate change and limited qualitative long-term assessment. - Recommended actions (medium priority): - Strengthen the fiscal risk analysis by conducting a more thorough medium- and long-term assessment of risks to public infrastructure. - Expand scope to include methodologies that assess “transition” risk (e.g., associated with a transition to renewable energy) consistent with commitments to green and low-carbon growth. - Supplement existing ex ante financing mechanisms to ensure more effective responses to climate shocks on infrastructure without undermining maintenance and public investment programs. ### IV. Cross-cutting issues — Legal framework (opening remarks) - The following cross-cutting issues are relevant to all PIM areas: (i) consistency and completeness of the legislative and regulatory framework for effective PIM; (ii) existence of an information system (IS) on projects to facilitate decision-making and follow-up; and (iii) staff capacities. - These issues are discussed across the PIMA and C-PIMA institutions and are addressed here to examine strengths and weaknesses in a cross-cutting manner. *Source: Excerpt from IMF country report content unit 1benea2023003.* ### 120. The PIM legal framework is abundant and, on the whole, very recent. In domestic ### The PIM legal framework is abundant and, on the whole, very recent. ### Legal framework and institutional roles - Cornerstone: Decree No. 2021-586 of November 10, 2021, establishing the general PIM framework; replaces Decree No. 2019-193 of July 17, 2019. - Decree No. 2021-586: - Transfers jurisdiction over investment selection and programming to the DGB. - Confers an enhanced PIM oversight role to the DGB. - Lays down main PIM rules for (i) project preparation and selection, (ii) project programming and development programs, (iii) project implementation, monitoring, and appraisal; and (iv) other accounting and project management rules. - All structures involved in the PIM process are subject to texts specifying their powers, duties, and organization, and assign a key role to planning, administration, and finance directorates within ministries following merger of the planning and forecasting directorate and the financial affairs directorate. - Other relevant decrees and laws cited as defining institutional organization and powers: - Decree No. 2016-366 of June 16, 2016 (creation, powers, duties, organization, and functioning of the BAI within the Office of the President of the Republic). - Decree No. 2021-307 of June 9, 2021 (powers, duties, organization, and functioning of the MEF). - Decree No. 2021-324 of June 30, 2021 (powers, duties, organization, and functioning of the MDC). - Decree No. 2021-401 of July 28, 2021 (establishing the standard ministerial structure). - Decree No. 2021-531 of October 20, 2021 (powers, duties, and organization of units for monitoring projects, programs, and reforms carried out by sectoral ministries and entities attached to the Office of the President of the Republic). ### Pending legislation and complementarities - Texts under development intended to complete the framework: - A framework law on development planning and public policy assessment to clarify powers devolved to the MDC upstream (foresight and planning) and downstream (evaluation) of the PIM cycle. - A draft law on PPPs and its implementing decrees (see PIMA institution 5 referenced in source). - Table 10 (Key PIM Legal Texts) highlights additional instruments: - Organic Law No. 2013-14 of September 27, 2013, on budget laws (LOLF): establishes PFM framework and distinguishes (Article 13) between ordinary and capital expenditures. - Decree No. 2015-035 of January 29, 2015, on the PFM Transparency Code: prescribes general rules on transparency, including (Article 28) the presence of operating and investment expenditures in the same budget with common preparation and adoption procedure. - Law No. 2016-24 of October 24, 2016, regarding PPPs: establishes framework for PPP contracts; noted that this law will be replaced by another currently being developed that will transpose the 2022 WAEMU directive. - Law No. 2020-20 of September 2, 2020, on State-owned enterprises: establishes governance rules for State-owned enterprises (Article 4). - Law No. 2020-26 of September 29, 2020, on the Public Procurement Code (CMP): rules governing preparation, award, execution, oversight, and regulation of public contracts. ### Methodological and operational documents - Methodological/operational documents are generally of good quality and principally address upstream PIM cycle elements (sectoral planning, preliminary appraisal). - The PIM manual is being partly updated to reflect changes introduced by Decree No. 2021-586. ### Climate legislation and integration in PIM - Benin adopted Law No. 2018-18 of August 6, 2018, on climate change, supplementing Law No. 98-030 on the environment (currently being overhauled). - Key provisions of Law No. 2018-18: - Obligation to consider climate change (CC) in national and subnational strategies and plans. - Contains elements on adaptation and mitigation policies. - Emphasis on capacity development and research; creates a national committee on CC (CNCC). - Establishes principle of CC integration into environmental and social impact studies (Article 23). - Operationalization opportunities: - PPP law and its decrees under development will need to specify the requirement to account for CC in assessing PPP risks. - The work underway can strengthen and operationalize CC integration in assessment and selection processes. ### IT system: fragmentation, priorities, and climate tagging - Institutional setup: - Information and Digital Systems Agency responsible for operational implementation of digital projects (Decree No. 2022-324 of June 1, 2022). - Within MEF and MDC, IT function distributed between ministerial Information Systems Directorate (DSI) and IT departments in main directorates general. - Agencies are independent in IT systems. - MEF coordination tools limited to an old IT master plan (2011), later replaced by a strategic plan built around SIGFP developments. - Current shortcomings: - PIM IT support is split among multiple information systems that do not communicate with one another and are spread across ministries, agencies, and the BAI. - With transfer of investment programming from MDC to MEF, the number of PIM information systems decreased; some old MDC systems are no longer operational (SIAPIP, DJRADO, investment management in LOLF mode, Project Portfolio Management (PPM) referenced). - The SIGFP (cornerstone of information on projects included in the PIP) is not interfaced with the SIGMAP. - Climate change monitoring in IT systems: - CC monitoring is not taken into account in information systems. - An initial Excel exercise tagged data for the climate note in the 2023 draft budget law. - Integration of climate tagging into the SIGFP is recommended to ensure monitoring from project inception through implementation to asset recognition, drawing lessons from GRB reporting and the IMS-SDG platform (focal points in 77 communes). - Reform priority and recommendations: - Interfacing applications participating in the PIM cycle and computerizing project monitoring are of medium reform priority. - Need to formalize a consultation framework among stakeholders and define technical interface protocols between information systems. - Rollout under BAI stewardship of a project monitoring application (currently being tested in a few agencies) is likely to strengthen project monitoring. ### Staff capacity and training needs - Central capacities: - Main PIM players at central level: DGB and DGDP. - Transfer of public investment programming to the DGB did not include staff redeployment from former Ministry of Planning; DGB considers the absence of transfers not detrimental due to existing capabilities aligned with ordinary and capital expenditure procedures. - DGB can assess technical quality of preliminary appraisals but generally relies on other government entities or external expertise for assessments beyond strictly financial aspects. - Sector ministries: - Public investment planning, programming, and budgeting work within sectoral ministries is coordinated by DPAFs and program support units. - DPAFs received some transfers from the former Ministry of Planning. - Ministries lack ability to effectively oversee their agencies or State-owned enterprises, which may recruit specialized project management expertise from the private sector. - Recommendation: encourage secondments bridging ministries and agencies (subject to ethical guarantees) to disseminate expertise. - Recent HR initiatives and capacity building: - PAGIPG project (2016–2021), funded by the World Bank (US$30 million), trained approximately 2,000 actors from the expenditure chain. - Government implemented a national job roster for the expenditure chain to support senior official appointments (Decree No. 2016-477 of August 11, 2016). - Organic frameworks and job descriptions have been created within units to track HR needs and clarify tasks. - Training plan recommendations: - Formal design of a PIM training plan could prioritize competencies related to project planning, preliminary appraisal, and monitoring/evaluation. - Climate-related capacity gaps: - Staff capacities on climate-related PIM aspects must be strengthened considerably at all levels. - Current gaps include basic understanding of climate projects and NDC mechanisms, and limited operational expertise for: - Preparation of costed sectoral strategies with a climate dimension. - Preparation or review of preliminary project appraisals, including climate risk assessments. - Integration of climate vulnerabilities into maintenance needs assessments. - Lessons from GRB (training the trainers, establishing gender focal points in sectors) can inform capacity-building design. ### Selected recommendations for PIP improvement (from Annex 3) - PIP content and presentation — project typology: - Simplify project typology and avoid overlap; proposed categories: - Project idea (if studies are financed through the PIP) - Project under study - Project in progress - New project - Project suspended/interrupted - PIP developments — essential summary data to provide: - Total number of projects and breakdown by nature (new, in progress, etc.) - Breakdown of the number of projects by ministry with total associated appropriations - Present the total PIP appropriations according to the nature of the budget nomenclature (investment subsidies, capital grants, purchases of goods and services, etc.) - Consider merging the study report on PIP eligibility criteria and the PIP itself to facilitate PIP data reading - Tables and presentation changes: - Add an overall summary and all ministries combined, by donor - Add the total project cost - Add the start year (first year in which a commitment takes place) and the estimated end year - Add a visual identification for new projects - Complete missing data on PAG alignment - Merge the columns “Completed before N-1” and “Appropriations year N-1” into a single column called “Prior implementation” (specifying the reference year) - Merge the CA columns into a single one, but keep all PA columns by financing source - Delete unnecessary underlining that reduces document readability (e.g., geographic impact area; redundant rows such as “State-executed investment” and “STATE”) - Other tools: - PIP quality depends on information quality provided to the DGB by sectoral ministries and its comparability over time. - The mission provided the DGB with an information sheet template for an investment project to improve quality and comprehensiveness for the next PIP campaign. *Source: Mission (content unit 1benea2023003).* ### Annex 4. Role of Extra-Budgetary Entities in Implementing the ### Annex 4. Role of Extra-Budgetary Entities in Implementing the PIP and Challenges in Monitoring Implementation ### Role of extra-budgetary entities in implementing investment projects - No mission count of public institutions and State-owned enterprises in 2019; they appear to have grown in number. - Legal structure: - State-owned enterprises (now within Law 2020-20) are structured as corporations. - Public institutions have names such as agency, office, center, institute; capital fully State-owned. - Executing agency concept appears reserved for ten agencies (now eight after three in the digital sector were merged) attached to the Office of the President of the Republic; scope remains unclear. - Reported entity counts (vary by source): - Source DGPDE - 2023 (as at December 31, 2022): State-Owned Enterprises 22; Public Institutions 128; Total 150. - Source “EPA” annex to the 2023 draft budget law: Agencies 53; Offices 28; Funds 9; Institutes 3; Centers 4; Total 97 (implied). - Mismatch between State budget “outflow” of investment appropriations and “inflow” identified for public institutions and State-owned enterprises; gap not explained by transfers to territorial authorities (FADeC). - Reported execution of investment expenditures in public institutions for 2021 very low: - Data in CFAF billion: - 2019: Projected 21,088.7; Actual 14,690.5; Rate 69.7% - 2020: Projected 30,669.4; Actual 10,370.9; Rate 33.8% - 2021: Projected 75,998.7; Actual 15,776.8; Rate 20.8% - Source: DGB/DGPED, Table 8 of the EPA analysis note appended to the 2023 draft budget law. - Risk: year-to-year renewal of capital grants/subsidies in excess of actual cash flow needs. ### Legal mechanism for monitoring investment project implementation applied to agencies - Law 2020-20 on creation, organization, and functioning of State-owned enterprises applies broadly (Article 4) and allows State-owned enterprises to take form of public institution/agency/office or corporation. - Law 2020-20 does not explicitly address public investment but structures oversight mainly via Boards of Directors. - Decree 2021-586 on PIM (articles 25 and 26) establishes a monitoring system for all investment projects, including those by agencies. Main components: - Quarterly submission of a report on project implementation by the program manager to the DPAF. - Quarterly submission of a DPAF report on physical and financial project progress according to a predefined outline; submitted to MEF, MDC, SGPR, and BAI. The DPAF “publishes it”. - SGPR to prepare every six months, with BAI, a “consolidated PIP monitoring report” specifying physical and financial progress, resource mobilization level, analysis of implementation-related constraints, and proposed corrective measures; the report “is made available within 45 days of the end of the six-month period in question and is presented during a Council of Ministers meeting.” - Other texts applicable to agency projects: - BAI (Decree 2016-266): technical notes on program design and support; targeted fact-finding missions. - SGPR monitoring units (Decrees 2021-520 and 2021-531): monitoring missions across national territory. ### Effectiveness of the monitoring framework applied to agencies — mission findings and implications - Despite many actors “on paper,” visible results of monitoring and oversight are lacking; reports required by articles 25 and 26 were not published and were not shared with the mission. - Key findings and implications: - Transparency regarding investments entrusted to EPAs and State-owned enterprises: - Finding: No clear list of PIP investment projects entrusted to public institutions or public corporations. - Implications: - Overall performance of agency use not measurable in efficiency or effectiveness terms. - Difficulty actively managing investment projects and reallocating available funds (notably internal financing of best/fastest projects). - Absence of total PIP costs: - Finding: No knowledge of financial volumes managed by public institutions and public corporations. - Implications: - Lack of reliable data on actual investment expenses and their consistency with State-paid funds. - Noncompliance with Article 65 of Law 2020-20 regarding the report dedicated to State-owned enterprises/public institutions: - Findings: - Operating income and expenses (2019–2020–2021) published for just 72 EPAs listed in Annex 2 (out of 97). - Reciprocal financial commitments not clearly tracked. - Technical performance status and outlook on public service delivery not tracked. - Potential capital developments or privatization movements not tracked. - State oversight and monitoring: - Finding: Delays in transmission of financial accounts. - Implications: - Partial and unrepresentative aggregate figures. - State unable to identify possible difficulties or deviations; lack of relevant information for budget preparation. - Possibility for entities to build excessive cash flows relative to execution rate. - Finding: No visibility on unpublished reports under Decree 2021-586 articles 25–26. - Implications: - No visibility on monitoring policy real impact; difficulty for State to define strategy and priorities for steering public institutions and corporations. - Monitoring tool (BAI “PAG Project Executing Agency Management Report (2016–2020),” January 2020) is unpublished and presents physical and financial implementation rates without context (no total project cost, delays, modifications to initial AWP). - Capacities: - There are 10 DGPED portfolio managers who do not specialize by sector. - Implications: - Delays in reviewing transmitted documents due to workload. - Weakening of structure with staff turnover. - Statutory auditors’ opinions do not cover entire scope of oversight (Law 2020-20). - Risk of removing responsibility from ministry staff if they no longer do oversight work. - Use of autonomous entities in PIP implementation: - Predominant use: 60 percent in the 2022 initial budget law and 70 percent in the 2023 initial budget law. - Risk: May pose risks if not coupled with effective monitoring; agency model can weaken administrations, especially program managers, if too removed from operational monitoring. - Mandate agreements are good practice for formalizing ministry-agency relations, but the model shared with the mission lacks a formal section on financial allocations. ### Guidance for improving agency monitoring — main recommendations - Remove ineffective or inefficient agencies; examples of 2022 restructurings/mergers by Council of Ministers decisions: - Creation of the MAEP by merging LCSSA with ABSSA. - Dissolution of seven agencies to create ADPME by merging ANPME, ADEJ, BRMN, CePAG, FAEN, BSC, CPPE. - Merger of four executing agencies to create ASIN (ADN, ASSI, ANSSI, ABSUCEP). - Improve compliance with Article 65 of Law 2020-20 starting from the 2024 draft budget law and ensure full compliance as part of the 2025 draft budget law. - Add a summary table to the 2024 PIP indicating the breakdown of (major) investment projects by implementing entity: ministry, public institution, or public corporation (name the entity). - Add a specific section in ministries’ DPPD-PAP to identify executing agencies for major ministry projects; better formalize link between program managers and projects implemented by EPAs and corporations under sector oversight, in addition to mandate agreements. - Prepare and publish the semiannual report established by SGPR/BAI on monitoring investment project implementation. - Add a summary on the reality of investment expenses undertaken by agencies and State-owned enterprises to the State budget execution report (at least at fiscal year-end). Data for year N, produced at beginning of N+1, must be included in draft budget law N+2 documents pursuant to Article 65 of Law 2020-20. - For persistently noncompliant State-owned enterprises failing to submit annual financial statements, consider incremental sanctions: - Temporarily suspend capital grants. - Proceed with a lump-sum reduction of the operating subsidy. - Financially penalize the agency’s management. - Before recording an agency/enterprise capital grant in the draft budget law, check the entity’s cash flow and reduce the grant if disbursements in the cash flow plan can be covered by existing cash levels. ### Annex 5: Selection Criteria for Projects with Climate Change Components — highlights - The annex provides the amended criteria and grading scale used in Benin to assess PIP eligibility for new projects with climate specifics; total score 100. - Key criteria and grading (selected items with exact scores preserved): - Consistency total: 5 - 1.1 Project intervention logic: 2.0 - 1.2 Compliance of project objectives with SDGs, including those related to climate: 1.0 - 1.3 Compliance with national development guidelines, including climate: 0.5 - 1.4 Compliance with national and sectoral strategies, including climate: 0.5 - 1.5 Project compliance with sector priorities: 0.5 - 1.6 Compliance with PIP directives, including climate: 0.5 - Relevance total: 10 (e.g., 2.1 Was the problem properly identified? 2.0; 2.3 Are direct beneficiaries defined? 2.0) - Efficiency total: 15 (3.1 provisional operationalization plan based on good information: 5.0; 3.2 optimal results with provisional resources: 10.0) - Effectiveness total: 5 (4.1 objectives achievable with planned outcomes: 3.0; 4.2 outcome indicators CREAM+: 2.0) - Feasibility total: 55 with subcomponents: - Technical feasibility 9.0 (sub-items include 5.1.6 preliminary conditions for starting implementation: 1.0; 5.1.7 technical choice optimal from a climate perspective: 2.0) - Environmental and climate feasibility 4.0 (5.2.1 identified risks: 1.0; 5.2.2 management of environmental and climate risks: 1.0; 5.2.3 environmental management plan and climate impact/vulnerability study available: 1.0; 5.2.4 adaptation and resilience responses: 1.0) - Social feasibility 4.0 (5.3.1 effects/impacts identified: 1.0; 5.3.2 classification of changes pros/cons: 1.5; 5.3.3 gender dimension: 0.5; 5.3.4 management of social risks: 1.0) - Economic and financial feasibility 34.0 (5.4.3 ex ante assessment on climate-related aspects using standard methodology: 5.0; 5.4.9 cost evaluation approach in line with ICPD: 5.0; other sub-items with exact scores preserved) - Organizational and institutional feasibility 4.0 (4 sub-items of 1.0 each) - Sustainability total: 5 (6.1 exit strategy: 2.0; 6.2 recurring charges/maintenance and climate exposure: 1.0; 6.3 risk management related to sustainability: 1.0; 6.4 beneficiaries’ ability to take ownership: 1.0) - Monitoring/evaluation and audit total: 5 (7.1 mechanism developed: 1.0; 7.2 periodic reviews and evaluations planned: 2.0; 7.3 external and internal audits planned: 2.0) ### Annex 6: Climate Budget Tagging in Uganda — lessons learned (summary) - Leadership and institutional anchoring: - Ministry of Finance, Planning, and Economic Development spearheaded CBT rollout with Climate Change Department and World Bank, supporting integration of climate into the budget process and encouraging sectoral ministries to undertake tagging. - Pilot approach: - CBT piloted during 2019–2020 budget preparation with limited pilot ministries (energy and mines; water and the environment; public works and transportation; agriculture) and subnational governments, enabling methodological adjustments and capacity awareness. - Use of existing tools: - CBT built on National Climate Change Action Plan and used program classification “outputs” to identify climate spending; an application automates tagging. - Continuous capacity building: - Ongoing external training by the World Bank and a Ministry of Finance support desk sustained CBT rollout. *Source: Annex 4 (and accompanying Annexes 5–6) of the provided IMF content unit.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1benea2023003.pdf_