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Republic of Benin
Investor presentation
July 2021
DISCLAIMER
This presentation and its contents are strictly confidential and are not for general release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States or any jurisdiction in which such
distribution is unlawful. This presentation is not an offer to sell or invitation to buy securities in any jurisdiction. Any offering of the securities that may be related to the subject matter of this communication will be made solely
on the basis of the information contained in the offering circular (Offering Circular) (together with any supplements thereto) published by the Republic of Benin in final form relating to such securities and in such case the
information contained herein will be superseded in its entirety by the Offering Circular in its final form.
The securities discussed herein (hereinafter referred to as the Securities) have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the Securities Act) or with any securities regulatory
authority of any state or other jurisdiction of the United States and may not be offered, sold or delivered within the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Accordingly, the Securities will be offered, sold and delivered (i) outside the United States (within the meaning of Regulation S (Regulation S) under the Securities Act) or (ii) to
qualified institutional buyers (QIBs) in reliance on, and in compliance with, Rule 144A under the Securities Act. By accepting this information, you warrant that you are (i) outside the United States or (ii) a QIB.
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This presentation contains “forward-looking statements”, which are statements related to future developments involving and economic conditions in the Republic of Benin. Such forward-looking statements are based on the
current expectations and certain assumptions of the Republic of Benin, and, therefore, should be evaluated with consideration of the risks and uncertainties inherent in the Republic of Benin and macroeconomic conditions
more generally. A variety of factors, many of which are beyond the Republic of Benin’s control, can materially affect the actual outcomes, and which may differ from the forward-looking statements.
This presentation has been prepared by the Republic of Benin. No representation or warranty, express or implied is given by or on behalf of the Republic of Benin or Citigroup Global Markets Limited, Natixis, Société Générale
(together, the Joint Lead Managers), their respective affiliates or any other person as to the fairness, accuracy or completeness of the information or the opinions contained in this document, the assumptions on which they are
based or the suitability of any investment for your purpose, and none of the foregoing persons accepts any liability for any loss or damage whatsoever arising, directly or indirectly, from this presentation or its contents. The
information and opinions contained in this presentation are provided as at the date of this document and are subject to change without notice. Neither the Republic of Benin nor the Joint Lead Managers undertakes any
obligation to update or revise the information or any forward-looking statements in the presentation to reflect any changes after such date.
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unfulfilled registration requirements or other legal restrictions in the jurisdiction in which they reside or conduct business. There will be no sale of the Securities in any state or jurisdiction in which such offer, sale or solicitation
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jurisdiction.
A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. Similar ratings for different types of issuers and on
different types of notes do not necessarily mean the same thing.
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.2
COUNTRY SNAPSHOT
Niger
Burkina-Faso
Guéné
Kandi
Population • 12.2m (2020) Batia
Natitingou
Pop. growth • 2.9% (CAGR, 2017-2020) Djougou
Parakou
Area • 114,763 sq. km
Togo Nigéria
Ghana
Capital city • Porto Novo Savalou
Abomey
Official language • French
Lokossa
Ouidah PORTO NOVO
Main exports (%
• Cotton (18%), Cashew nuts (2%) Cotonou
Golfe du Bénin
total exports, 2019)
Currency • CFA Franc (XOF) as a member of the WAEMU
Peg • Fixed peg to the Euro (EUR 1 = XOF 655.957)
Nominal GDP • €13.7bn (2020e) (XOF 9,009bn)
GDP per capita • €1,116.4 (2020e) (XOF 732.3k)
Real GDP growth • 6.9% (2019), 3.8% (2020e)
Inflation • -0.9% (2019), 3.0% (2020e)
Institutions • Presidential democracy
Other countries of WAEMU (West
African Economic and Monetary
President • Patrice Talon Union): Burkina Faso, Côte
d'Ivoire, Guinea-Bissau, Mali,
Solicited sovereign • S&P: B+, Stable Outlook Niger, Senegal, and Togo
credit ratings • Moody’s: B1, Stable Outlook
Source Republic of Benin C1 | TITRE DE LA PRÉSENTATION July 2021 | P.3
RECENT DEVELOPMENTS AND ACHIEVEMENTS
Recent achievements
1 • Contained development of the Covid-19 in Benin thanks to a policy of targeted response to the Key achievements
pandemic, allowing to preserve the dynamism of the economy
• The authorities have also introduced a systematic and compulsory quarantine of all individuals
Covid-19
entering Benin, as well as systematic testing at the end of the quarantine, and has adopted a ✓• IMF programme
response implementation was
contingency plan amounting to more than XOF 300 bn (€457m eq.) to face the pandemic
deemed "very
• Benin aims to vaccinate 60% of the population by December 2022, with a strategy focusing on one-
satisfactory" following the
shot vaccines
6th review (April-20) (best
2 possible assessment)
• Prior to Covid-19, GDP growth had accelerated significantly from 1.8% in 2015 to 6.9% in 2019
• The authorities Covid-19 response has allowed to maintain strong economic momentum
Growth
performance o In 2020, Benin recorded real GDP growth rate of 3.8%, among the highest GDP growth rates in ✓• Benin ranked first for
Africa debt transparency
among 76 IDA countries
o The authorities expect Benin’s GDP to grow by 6.0% in 2021
by the World Bank (2020)
3 • Reforms designed to fight fraud and significantly increase the performance of tax collection authorities
o Revenues (excl. grants) have increased by 53% between 2016 and 2020 despite the pandemic,
driven by a rise in non-tax revenues by 86% (e.g. revenue from Treasury administration, from the ✓• Among the "Most
Fiscal Impressive African
performance Caisse Autonome d’Amortissement¹, etc.) and in tax revenues by 48% Issuers” GlobalCapital
• Sharp decrease in budget deficit from 5.9% of GDP in 2015 to 0.5% of GDP in 2019 (incl. grants) awards (2020)
• Due to Covid-19, the fiscal deficit widened to 4.7% in 2020, and should narrow to 2.9%² by 2022
4 ✓• Longest EUR-
• Significant foreign exchange reserves at a WAEMU level3 , covering 6.7 months of imports of denominated Eurobond
goods and services at Q1 2021 (5.9 months at dec-2020, highlighting external resilience in the face in Sub-Saharan Africa,
of the pandemic) issued in Jan-2021 (31-
External
performance • External position has continued to be supported by ample access to external financing sources, from year final maturity)
multilateral, bilateral and commercial lenders
• Full reopening of the border with Nigeria since December 2020
Sources Government of Benin, IMF
Notes 1. Body in charge of financing resource mobilization and sound public debt management; 2. Government forecast vs. 3.0% of GDP as per IMF WEO April 2021 3. July 2021 | P.4
Benin’s foreign exchange reserves are centralized at a regional level by the BCEAO (Central Bank of West African States). See page 28.
MACROECONOMIC IMPACT OF THE COVID-19 CRISIS ON BENIN
Resilient economic growth despite Covid-19, and firm rebound expected from 2021
Comments Top 25 GDP growth forecasts for 2020 (IMF, SSA, %)
6.1
• The strategy of partial lockdowns, targeted 5.2 Government IMF forecasts
estimates¹
quarantines, systematic testing and medical 3.8
protection has allowed Benin to weather the shock 2.3
1.2 1.0 0.9 0.8 0.8 0.7
better than other countries and preserve economic 0.6
-
activity
(0.0)(0.1)(0.1)(0.2)(0.5)(0.5)
(0.6)(0.9)
(1.3) (1.8)
• Macroeconomic performance has been exceptional
Malawi
Rwanda
Mozambique
Guinea
Togo
Ethiopia
Burkina
The Gambia
Kenya
Ghana
Senegal
Burundi
Gabon
Côte d'Ivoire
Niger
Comoros
Tanzania
DR Congo
Eritrea
Chad
Benin
Central Afric. Rep.
in 2020 amid the Covid-19 pandemic and growth is
expected to resume to pre-Covid levels in 2021
onwards
• Benin’s real GDP grew by 3.8% in 2020 as per
government latest estimates¹ Benin historical and forecasted real GDP growth (IMF, %)
Resilient growth Resilient growth despite
• This is among the strongest GDP growth in the face of Covid-19 and Nigeria
Government
estimates / forecasts
estimate in Africa and the first in WAEMU Nigeria recession border closure in 2020
6.7 6.9 6.4
6.4 6.0
5.7
• Benin GDP growth should rebound sharply in
2021, to 6.0% as per government forecasts and 3.3 3.8
5.0% as per IMF April 2021 forecasts 1.8
• The IMF expects strong long-term real GDP
growth, estimated at 6.4% over the period 2022-
2025
Sources IMF (WEO April 2021, 6th Review Press Release), Ministry of Finance
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.5
Note 1 Aligned with the IMF - to be officially reported in the upcoming IMF publication
FISCAL CONSOLIDATION ACHIEVED DESPITE RAMP-UP OF PUBLIC
INVESTMENTS UNDER THE GOVERNMENT ACTION PROGRAMME¹ (‘GAP’)
Fiscal reforms allow Benin to increase public investment while carrying out intense
fiscal consolidation
Intense fiscal consolidation Fiscal balance – Including grants (% of GDP)
1• 2016-2019 period: Benin implemented counter-cyclical fiscal policy, with
a fiscal deficit decreasing from 4.4% of GDP in 2016 to 0.5% of GDP in
2019 (incl. grants), while sustaining a high level of public investment
• Since 2016, the government has conducted several reforms to increase
public revenues, control expenditures and free up resources to support the (0.5)
public investment effort. For instance, the government is launching a
reform to rationalize the wage bill in the education sector and enable (1.2)
direct bank transfers to teachers
• This performance has been acknowledged by the IMF several times
Government
forecast
over recent years: “the fiscal deficit narrowed in 2016, thanks to the
WAEMU 3%
authorities’ strong measures to contain expenditure” (IMF, April 2017).
convergence (2.9) (2.9)
“The authorities have conducted important reforms to mobilize domestic criterion
revenue and improve the efficiency of public investment. Results have
been especially encouraging in the fiscal area” (IMF, July 2019)
• In addition, debt service to government revenues remains contained, at
36.9% at end-2019, highlighting comprehensive fiscal consolidation efforts
(4.3) Finance
(4.4)
2• In 2020, the fiscal deficit widened to 4.7% as per government estimates Large deficit due (4.5) Law 2021
(4.7)
due to Covid-19 to the negative
spillovers of the
Nigerian recession
3• A return to fiscal consolidation is expected as early as 2022, allowing and the fall in 1 2 3
Benin to reach the 3% WAEMU community threshold (2.9% of GDP as per cotton prices (5.9) 2016-2019 period Covid-19 Post-Covid-19
government forecasts and 3.0% as per IMF forecasts)
Consolidation
) Fiscal
policy has been appropriately countercyclical in recent years allowing to create fiscal headroom to weather the
Covid-19 crisis. Benin aims to resume fiscal consolidation going forward
Sources Republic of Benin, WEO April 2021, IMF reports
Note 1. The Government Action Programme (‘GAP’) is Benin’s national economic and social programme for the 2016-2021 period, structured around 3 pillars: (i) strengthening
July 2021 | P.6
democracy, the rule of law and good governance, (ii) structural transformation of the economy and (iii) improvement of the living conditions of the population. The GAP aims to
implement 45 flagship projects (including in the infrastructure, tourism, agriculture and digital sectors), 95 priority projects and 19 institutional reforms.
A WELL-DEFINED GOVERNMENT SUSTAINABILITY ACTION PROGRAM
Implementation of the Agenda 2063 de l’Union Africaine contributes to the realization
of Benin's development vision as outlined in the document Benin Alafia 2025.
The planning adopted by Benin allows the SDGs to be addressed at 4 levels:
Level Description
Planification Embraces the national strategy for achieving the 2030 SDGs within the framework of different strategic plans.
Programmes Defines the policies and objectives to achieve the different strategic plans mentioned.
Municipal Reflects the targets of the Sustainable Development Goals at the communal level with a prioritization.
Budget Defines specific budget lines and specific projects framed by the ministries that are aligned with the PAG and the PND 2018-2025.
Alafia vision instruments Acronym Date Target
Provides for large-scale investments in many areas related to the 2030 Agenda Goals,
The Government's Action 2021-
PAG such as agriculture, tourism, culture, infrastructure, digital economy and information
Program 2026
technology.
Developed in early 2018 before the adoption of the PND is structured around programs
"Leaving no one behind"
/ 2018- linked to the SDGs and 20 projects. These are anchored to the GAP pillars and linked to
initiative
the SDGs.
Achieve sustained, sustainable and inclusive growth of at least 10% by 2025 based on
The National Development 2018-
PND the development of agribusiness, tourism and services. This national and local
Plan 2025
governance framework focuses on improving human capital and infrastructure.
The Sustainable Short-term implementation of the PND that tries to improve economy competitiveness,
2018-
Development Growth PC2D reduce inequalities to basic social services, correct geographic disparities and improve
2021
Program management of public affairs.
In addition to these programs, the sectoral strategic plans of the different ministries and the communal development plans are developed.
Source: Document Vision Bénin-2025 Alafia
July 2021 | P.7
FOCUS ON HIGH-IMPACT PRIORITY SDG
Benin has already determined key objectives inspired by the United Nations SDGs
and computed the expected financing needs associated
Expected SDG financing needs by pillar (€m) 49 priority targets among SDGs totaling 80 indicators
SDG Costing Report (2018) # #
# #
SDG prioritized SDG prioritized
Pillar 2021 2022 2023 2024 2025 Total indicators indicators
targets targets
Industry,
Population 950 844 807 830 876 4,306 No Poverty 3 5 innovation & 3 6
Infrastructure
Prosperity 3,371 2,510 2,513 2,512 2,208 13,114
Reduced
Planet 65 61 65 61 65 316 Zero Hunger 3 6 3 3
inequalities
Peace 48 42 42 42 42 215
Sustainable
Good health &
5 12 cities & 3 5
Total 4,434 3,456 3,426 3,445 3,190 17,952 well-being
communities
Responsible
Quality
3 3 consumption & 4 5
education
production
Expected SDG financing sources (2021-2025, %)
Gender
2 3 Climate action 1 2
Equality
Exclusively National 18%
Budget
41% Clear water & Life below
4 6 2 2
National Budget & Sanitation water
multilateral lenders
jointly €18.0bn Affordable &
1 2 Life on land 3 4
Exclusively multilateral 17% Clean energy
lenders
Decent work & Peace, justice
economic 4 6 & strong 5 10
Other growth institutions
24% TOTAL: 49 80
Sources Report on the prioritization of SDG targets in Benin (2017), SDG Costing Report (2018)
July 2021 | P.8
BENIN SDG USE-OF-PROCEEDS
The use of proceeds are articulated around the four pillars of the National
development plan, all oriented towards the achievement of SDGs
Highlights Eligible Expenditures across the 4 pillars
•
• Benin has defined 4
Development of a sustainable and productive
agriculture
pillars to achieve SDGs
by addressing both social • Access to drinking water and wastewater processing
“Population”
and environmental issues; • Improving health for all
or Social
Population, Prosperity, • Decent housing for the poor
Planet and Peace • Expanding education services and expanding
capacity to take on students
• The expenses cover
different types of
expenditures: • Access to low-carbon, reliable and affordable energy
•
1 Expenditures for the “Prosperity”
• Connectivity and digital inclusion throughout the
territory
acquisition of goods and or Economy
services by the Ministry
• Supporting employment and financial inclusion of the
of Eduction and Minstry youth, women and rural entrepreneurs
of Health
•
2 Current transfers and • Developing living environments and sustainable
subsidies expenditures infrastructure for all
• Conservation of lake and coastal areas, reasonable
• Public investment “Planet”
3 economic exploitation of the coasts
expenditures or Environment
• Conservation of biodiversity, restoration and
reasonable exploitation of the forest cover and
•
4 Personnel expenditures fighting against desertification
for teachers, doctors,
midwives and state “Peace/Partnership” • Promoting heritage sites, educational sites and
nurses* or Governance entertainment infrastructure
Source: Benin SDG bond framework
July 2021 | P.9
* Personnel costs for security and defence forces are excluded
RIGOROUS PROJECT SELECTION, EVALUATION, ALLOCATION
AND IMPACT REPORTING PROCESS
Aligning with international best practices for project selection and reporting
Selection and evaluation of SDG projects Allocation and impact reporting
Project eligibility follows a detailed process involving several levels of Post issuance, investors will receive regular allocation and impact
the administration. Eligible expenses grouped around the four key pillars reports published annually for the life of the bonds
defined by the ICMA’s Green and Social Bond Principles (GBP & SBP). • Allocation reports will be audited by Deloitte
Sectoral exclusions support consistency in the profile of the portfolio
• Impact reports will be provided by the Republic of Benin and will be based
on a mix of measurable domestic indicators and international indicators
1
Budget relating to the Supervised by each Ministry in view of the spending provided by the World Bank and UNDP among others
SDGs lines defined in the national budget 1 Allocation report – Key information covered
2 • The initial date, amount and maturity of the issue
Initial analysis of the
budget to identify
Supervised by the General Directorate for the Economy, • Share of funds allocated as % of total issue
eligible expenditures
in accordance with the issuance framework • Amount and % share of new financing/refinancing (% of projects coinciding with
ICMA's green and social bond principles)
3
Analysis of most Supervised by the GD-SDG-CM with the confirmation • Summary of eligible categories with an indication of which ones have received
impactful projects for and assistance of the Department of Planning and funding
prioritisation Forecasting of each relevant Ministry • Amounts allocated by eligible categories (and % distribution)
4
• Description of major expenditures funded and associated projects or programs
List of eligible Monitoring of projects and reports by the SDG • Remaining amount of funds to be allocated
projects finalised Steering Committee • Type and amount of temporary investments
• Share of co-financing (e.g., projects co-financed with international donors)
2 Impact report – Key information covered
Process supported by a multi-disciplinary SDG bond steering
committee led by the Minister of State in charge of Economy and
• Environmental and/or social benefits of the various projects carried out
Finance • Expected environmental and/or social benefits of projects in progress
• Qualitative performance indicators and, when available, quantitative indicators
• Chairman: Director General of the Economy (DGE), on behalf of the to assess the impact of the project financed or refinanced
MEF, supported by the Director General of the Budget (DGB) • Methodology used to assess the impact of projects financed/refinanced
• Vice-chairman: DGCS-ODD1, on behalf of the Minister in charge of • Impacts by defined eligible category
Development and Coordination of Government Action • The contribution to the various SDGs
• When possible, information on the final beneficiaries of expenditures
Funds to be allocated in a maximum period of 24 months
C1
Note 1. DGCS-ODD: Director General of Coordination and Monitoring of the | TITRE DE LA PRÉSENTATION
SDGs July 2021 | P.10BENIN PARTNERS WITH UNITED NATIONS’ SDSN
The partnership will among other things improve Benin reporting capabilities
Keys considerations on the partnership with SDSN Benin SDG trends according to SDSN1
• In July 2021, Benin partnered with the United Nations’
Sustainable Development Solutions Network (SDSN), chaired
by Jeffrey Sachs, to achieve a more effective monitoring and
evaluation of the progress and efforts made by the Beninese
government to achieve the SDGs Status Major challenge
Significant
SDG acheived
challenge
• The partnership will also include a technical component, by On track or
allowing data production and useful information, to consolidate and Trend Increasing Stagnating
maintaining
Decreasing Information
SDG unavaliable
diversify Benin's financing sources achievement
• In turn, this partnership will improve reporting capabilities on Overview of the methodological approach
the use of SDG funds raised in the capital markets
• The project will be structured around three key areas:
Scope of cooperation
• SDSN will provide an in-depth analysis of Benin's progress towards 1▫ In-depth comparative analysis of Benin’s performance on the
the implementation of the SDGs
SDG indicators and main gaps compared to peers
• This external review will serve as a guideline for the SDG Bond
Steering Committee and feed into the annual reports: 2▫ Mapping of public policies in terms of SDGs, carried out
through a comparison of internationally available “policy
• Allocation report will reflect the prioritization and selection of eligible trackers” and national initiatives
expenditures made during the past year considering the latest
recommendations issued by SDSN
3▫ Dissemination and communication of the project results
• Impact report will aim to illustrate Benin's progress with respect to the during events on the African continent including with
priority SDG targets and the areas for improvement identified by SDSN international donors and investors
Notes 1 SDSN 2021 Sustainable Development Report, 2. SDSN is not a party to the Benin SDG Bond Framework
July 2021 | P.11VIGEO EIRIS SECOND PARTY OPINION
Benin SDG Bond Framework is aligned with GSB principles1 and best practices
Vigeo Eiris’ Cohérence assessment Vigeo Eiris’ framework alignment assessment
Coherence of the Bond Framework Alignment of the framework with GSB principles
Coherent “V.E considers that the Republic of Best practice
Benin’s SDG Bond Framework is “V.E considers that the Republic of Benin’s SDG
coherent with the Republic of Benin’s Aligned Bond Framework is aligned with the four core
Partially coherent Government’s strategic sustainability components of ICMA’s Green Bond Principles 2021
priorities, and that it contributes to the Partially aligned (GBP) and Social Bond Principles 2021 (SBP)
achievement of its sustainability and is in line with best practices identified by V.E”
Not coherent commitments and targets.”
Not aligned
• “The net proceeds of the Bonds will exclusively finance or refinance,
in part or in full, projects falling under twelve Green and Social
Sustainable Eligible Expenditures Categories (“Eligible Categories”)”
Vigeo Eiris’ SDG Contribution assessment
✓
▫ “The Eligible Categories are clearly defined and detailed, the Issuer has
Weak Limited Robust Advanced communicated the nature of the expenditures, the eligibility criteria, and
location of Eligible Expenditures, as well as the target population for the
Expected Social Expenditures”
impacts
Advanced ✓
▫ “The Environmental and Social Objectives are clearly-defined, these are
relevant for all the eligible categories and set in coherence with
ESG risks sustainability objectives defined in international standards”
management
✓
▫ “The Expected Environmental and Social Benefits are clear and precise,
these are considered relevant, measurable, and will be quantified for all
SDG mapping the eligible categories in the reporting“
Advanced Limited
▫
✓ “The Issuer has committed to transparently communicate the estimated
Robust Weak share of refinancing prior to each bond issuance. The look-back period
for refinanced eligible expenditures will be equal or less than 24 months
from the issuance date, in line with good market practices”
Notes 1 Green and Social bond principles
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.12DETAILED SDG FINANCING BREAKDOWN (2019-2021)
SDG financing breakdown by pillar Detailed breakdown by pillar
1 1% 1% Expansion of educational services*
2%
7% 1% Improved health for all
22% Development of a sustainable and
Population €732m productive agriculture
20% Access to drinking water and
wastewater treatment
Decent housing for the poor
€1,016m 78%
2
15% Access to low-carbon, reliable and
72% affordable energy
Prosperity €206m
Supporting employment and financial
inclusion of the youth, women and rural
Population Prosperity Planet Parnerships
entrepreneurs
85%
3 Development of sustainable living
9%
environments and infrastructure for all
2019-2021 SDG financing breakdown
7% Preservation of lake and coastal areas,
Total eligible project Planet €68m rational economic exploitation of Benin's
€1,016,585,464.52 coastal areas
expenses Preservation of biodiversity, restoration
and rational exploitation of Benin's forest
83% cover
2019 budget €218,616,603.58
4
2020 budget €258,013,582.81 Fully dedicated to the valorization of
Partnerships €9m heritage and educational places of memory
and entertainment infrastructures
2021 budget €539,955,278.14
Source: 2019, 2020 and 2021 budget documents C1 | TITRE DE LA PRÉSENTATION July 2021 | P.13EXAMPLE OF SDG PROJECT: ACTION PROGRAM FOR THE
ELECTRIFICATION OF RURAL AREAS
Ministry Allocation in 2021 Allocation in 2020 Pillar Target Impact indicators
Population % :
Populations living in
Ministry of • with access to electricity
3,048,780.49€ 7,339,918.89€ Prosperity informal settlements
Energy • using mainly clean technologies for cooking
and/or rural areas
• using mainly clean fuels for lighting
Access to electricity is an essential or "basic" service with numerous direct and indirect
benefits, including lighting, the operation of various appliances that can be used for cooking
or (tele)communication. This access is deployed and/or encouraged by the State through
various expenditures and investments.
2014 2015 2016 2017 2018 2019 2020
Total available
90.0 6.0 6.0 6.5 38.0 165.0 165.0
capacity (MW)
In mid-2021, 53% of the population has access to electricity, of which only 10% for the rural
population. Average time required to get electricity was 90 days in 2019 (compared to 158 in
2013), according to the World Bank. The Government believes that widening and stabilizing
access to electricity is key to achieving its aim to stimulate economic activity.
Coverage rate* in Benin % of population with electricity access
(%)
55 Eligible Project Category SDG
53 2014 2018
51
49 Urban 49,1% 58,1% Access to low-carbon, reliable and
47 affordable energy
45 Rural 6,0% 8,2%
43
2014 2015 2016 2017 2018 2019 2020
* The coverage rate corresponds to the number of administrative units (i.e. villages and city districts) electrified in relation to the total number of administrative units in the country (5,295).
July 2021 | P.14EXAMPLE OF SDG PROJECT: MODERNIZATION OF HOUSEHOLD SOLID
WASTE MANAGEMENT IN THE GRAND NOKOUE
Ministry Allocation in 2021 Financing Pillar Target
Ministry of the Living Households, municipalities of the
Environment and agglomeration, market users, market
141,768,292.68€ State Prosperity
Sustainable gardeners, collection companies, pre-
Development collection NGOs
Overall objective: Improve the living environment of the inhabitants of Grand Nokoué through an integrated and sustainable process
The greater Nokoué area, composed of the communes of Cotonou, Sèmè-Podji, Abomey-
Calavi, Ouidah and Porto-Novo, is characterized by:
• Insufficient collection points and 98% of the pre-collection NGOs dump the waste in
shallows, gutters, streets, sidewalks, etc;
• Very low subscription rate in the outlying districts of Cotonou and Porto-Novo;
• Almost no pre-collection system in Abomey-Calavi, Sèmè-Podji and Ouidah;
• Only one sanitary landfill site in the western part of the agglomeration;
• Non-functional waste treatment centers in Tohouè and Hêvié
Specific goals Expected Results
• The weight of waste transported to final landfills is
Eligible Project Category SDG
reduced;
• Jobs are created through the recycling and waste
recovery sectors;
• At least 12,000 tons of compost are produced per
• Increase the capacity for pre-collection of solid
year;
waste;
• A sanitary landfill designed as a waste sorting and
• Experiment with selective pre-collection and waste
recovery center is built in the east of the
recovery in pilot districts;
agglomeration;
• Improve the management of bio-medical and port Development of sustainable living environments
• The market gardeners of the peri-urban market
waste in the agglomeration; and infrastructure for all
garden sector have easy access to organic matter;
• Improve the living environment of market users in
• The Tohouè, Hêvié and Ouèssè dumpsites have
Grand Nokoué.
been developed as sorting and recovery/recycling
centers for solid waste;
• Selective waste collection is being tested in 2
districts per commune (10 in total for Grand
Nokoué).
Source: Projet de Modernisation de la gestion des déchets solides ménagers dans le GRAND NOKOUE (PAG2 2021-2026)
July 2021 | P.15EXAMPLE OF SDG PROJECT: VEGETABLE-GROWING (PADMAR) AND
NATIONAL SCHOOL LUNCHES (PNASI) PROGRAMS
Program Allocation Pillar Development goal Launch Closure
To sustainably increase the income
Prosperity / of vegetable farms, while improving
PADMAR 44,024,546.66€ 21/04/2017 30/06/2024
Population their resilience to the effects of
climate change
Overall objective: To contribute to the sustainable improvement of food and nutritional security and the reduction of
rural poverty in the project area. Eligible Project Category SDG
FIDA- ASAP-
Financing FIDA-Loan OFID-Loan State Beneficiaries Development of a
Donations Donations
sustainable and productive
Amount (in M€) 20.92 0.44 4.01 10.68 4.31 3.43 agriculture
Program Allocation Pillar Launch Closure
PNASI 48,374,000.00US$ Prosperity / Population 2017 2021
Overall objective: To strengthen school feeding in Benin by developing a multi-sectoral approach and by favoring
local purchases to improve school performance, food diversity and student nutrition in schools with canteens.
Specific goals Expected Results
• Provide regular school meals to public elementary school • Students in the selected schools receive at least one meal
students to increase their school attendance and a day at school. Subject to the availability of resources, the Eligible Project Category SDG
performance number of 1574 schools in the first year of implementation
could progressively increase over the 4 years of the project
• Use the school as an entry point to converge support for
education, agriculture and health • The proportion of food purchased on the local market for Expanded educational
school canteens progressively increases by 10% each year services and improved
• Invest in the development of the institutional framework to capacity to care for students
improve the steering, coordination and monitoring of the • Sustainable coordination and monitoring bodies are
school feeding program in Benin. established and operational.
Source: Programme Alimentaire Mondial Republique Du Benin Programme National D’alimentation Scolaire Integre (Pnasi); Projet d'Appui au Développement du Maraichage (PADMAR)
July 2021 | P.16EXAMPLE OF SDG PROJECT: 20,000 SOCIAL AND ECONOMIC HOUSING
UNITS PROGRAM
The program provides for the construction of 20,000 housing units in the following cities:
Abomey-Calavi, Porto-Novo, Seme-Kpodji, Parakou, Abomey-Bohicon, Natitingou, Djougou,
Kandi, Malanville, Dassa-Zoumè, Lokossa, Aplahoué-Azovè, Pobè, Ouidah-Pahou and
Allada.
Steps 1 2 3 4 5
Development Management
Acquisition of Site Construction
Process of green of common
sites servicing of housing
spaces areas
The Program will be carried out in 2 phases:
1. (ongoing) Servicing and construction of 10,849 housing units in Ouèdo, 175 housing
Eligible Project Category SDG
units in Porto-Novo and 250 housing units in Parakou;
2. Servicing of sites and the construction of 8726 housing units in the other cities of Benin.
Decent housing for people living in poverty
Abomey-Calavi Porto-Novo Seme-Kpodji Parakou Others
Number of unities 11,500 3,000 2,500 1,000 2,000
Subcontractor Pillar Target
Middle-income, civil
servants, private sector
SImAU Prosperity
employees, craftsmen,
farmers and shopkeepers.
Source: Programme 20 000 Logements Sociaux et Economiques (Societe Immobiliere et d’Amenagement Urbain)
July 2021 | P.17ADDITIONAL
CONSIDERATIONS
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.18KEY CREDIT HIGHLIGHTS
1 Stable institutions underpinning public governance and accountability
2 Reform momentum supporting Benin’s development
3 Open economy gearing towards domestic production and higher value added
4 SDG Bond Framework
5 Well established record of prudent fiscal management across cycles
6 Proactive approach to debt management
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.19KEY CREDIT HIGHLIGHTS
1 Stable institutions underpinning public governance and accountability
2 Reform momentum supporting Benin’s development
3 Open economy gearing towards domestic production and higher value added
4 SDG Bond Framework
5 Well established record of prudent fiscal management across cycles
6 Proactive approach to debt management
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.201 IMPROVEMENT OF THE PERCEPTION OF EXTERNAL OBSERVERS
Recognition from international institutions, financial rating agencies and awards
received
Selection of awards received by Benin
Soundness of the budgetary policy Quality of debt management
Benin ranked first out of 76 for Debt Transparency in IDA countries by
In 2020, Benin was praised by the Budget Transparency Initiative the World Bank (2020), illustrating the high governance standards of
Network (GIFT) and the International Budget Partnership (IBP) for its the Republic
outstanding efforts to promote budget transparency Since July 2020, Benin is classified by the World Bank as a lower
middle-income country (from low income country)
Benin was ranked first in budget transparency in 2019 in Francophone Benin received the 2021 "Most Impressive African Issuer” bond award
Africa by the European Union and the International Monetary Fund by GlobalCapital (3rd position)
Benin’s Minister of Finance received the "Most Impressive African
Funding Official" award in 2021, by GlobalCapital
Reforms implementation
Benin received the 2019 Global Markets Award for Best Public Debt
Consultations under the IMF's 6th review in May 2020 were concluded Management Agency in Sub-Saharan Africa
with a "very satisfactory" rating: the best possible assessment by the
IMF in its assessment scale
Benin achieved the best performance in transposing WAEMU texts at Favourable rating agency decisions
national level in 2019 (over 80%)
Benin stands out with positive rating agency decisions despite Covid-
Benin received the African Development Bank’s “Finance Minister of 19 crisis
the year” award (2019), in recognition of good macroeconomic
management and governance standards. In addition, Benin received
Financial Afrik’s “Minister of Finance of the Year” award (2020) Rating upgrade from B2 to B1, in March 2021
Compact Benin welcomed as member of the G20 “Compact with Africa” initiative
Confirmation of Benin's rating at B 'stable' in June and October
with Africa in 2017, in recognition of its reform commitment and sound
2020, and in April 2021
G20 governance. Only 12 African countries are members to date
Benin selected with only four other countries in the world (Guatemala,
SDG Indonesia, Rwanda, Vietnam) to participate in the IMF program for the
2030 completion of Sustainable Development Goals in 2030
Sources World Bank Governance Indicators Database, Republic of Benin, FMI, GlobalMarkets, BAD, Financial Afrik. July 2021 | P.211 BENIN'S PERFORMANCE IN KEY ECONOMIC GOVERNANCE INDICATORS
Improving business climate perception
Strengthening the business climate Improvement in Benin's CPIA score
•1 Online platform for starting a business
•2 Creation of a website for construction permits with all
• Benin’s CPIA score improved in 2019, rising from 3.5 to 3.6 driven by
the economic management sub-score, which improved from 3.8 to 4.2
the necessary information and ability to monitor
•3 Creation of a website for property registration with the
• This is the second highest CPIA score in Africa for economic
+9 ranks possibility to monitor submissions at the ANDF¹
since 2016 management
•4 Finalizing the professional tax for SMEs
World Bank Governance Indicators1,2 Evolution of Benin’s overall and Economic Management CPIA scores
In percentile (2019)
Sizeable improvement in the economic
Chart Title
Voice and Accountability Political Stability management sub-score in 2019,
allowing an improvement of the overall
50.3 CPIA score
42.1 39.5
32.8 34.3 31.1 4.2
3.8 3.8 3.8
3.7
Benin LMI SSA Benin LMI SSA
3.6
3.5 3.5 3.5
3.4
Government Effectiveness Control of Corruption
42.8 36.9
36.1 34.4 31.2
26.4
2015 2016 2017 2018 2019
Overall CPIA Score Economic Management Cluster Average
Benin LMI SSA Benin LMI SSA
Improving business climate bolstered by ambitious and effective reforms
Sources Republic of Benin, World Bank
Notes 1. Agence Nationale du Domaine et du Foncier ; 2. SSA: Sub-Saharian Africa; 3 LMI: Lower Middle Income countries (World Bank)
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.221 STABLE INSTITUTIONS UNDERPINNING PUBLIC GOVERNANCE AND
ACCOUNTABILITY
A track record of reforms to enhance the accountability of public institutions
2017
February
2011 2013 African Development Bank 2019 2020
October May opens an office in Cotonou February May
Law 2011-20 against Establishment of the National • Ranked 1st in Benin praised
corruption and bribery Authority for the Fight against 2017 French-speaking for its budget
based on United-Nations Corruption (‘ANLC’) March Africa for budget transparency
standards Launch of the German transparency (IMF) from the
Initiative « G20 Compact • Highest reforms International
with Africa » implementation Budget
October Approval of rate according to Partnership
2014 2015 Benin's membership the WAEMU (GIFT)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
2020
World Bank 1st
2004 place for debt
2017 2018
Ratification of ‘United-Nations
October • Digitalization of transparency in
Convention Against Corruption’ 2015 IDA countries
Law 2017-04 regarding public servant
January wage bill
2005 Decree 2015-035 the Code on public
procurement • Online payment
Ratification of the ‘Ecowas protocol establishing the 2019
of taxes
on the Fight Against Corruption’ Code on public AfDB’s Finance
• Establishment
spending of the Court for Minister of the
2007 management and year Award in
the Repression
Ratification of the ‘African Union transparency 2019 and the
of Economic
Convention on Preventing and
and Terrorism WAEMU’s
Combating Corruption’ Finance Minister
Crimes
of the year
Award in 2018
Sources Republic of Benin, IMF C1 | TITRE DE LA PRÉSENTATION July 2021 | P.231 STABLE INSTITUTIONS UNDERPINNING PUBLIC GOVERNANCE AND
ACCOUNTABILITY
Bulging on the success of its IMF programme (2016-2020), Benin is proactively
considering a new program with the IMF
April 2017 Dec-2017-Dec-2019 April-May 2020 December 2020
Approval of the 3-year Conclusion of the 5 • Staff-level agreement • The Executive Board of the IMF approved
arrangement under the reviews and systematic reached on the sixth US$178m under the Rapid Financing
Extended Credit Facility approval of 5 and last review Instrument (RFI) and the Rapid Credit
(ECF) by the IMF disbursements for a total • IMF increased in its Facility (RCF)
(US$151m) of US$114m support of 61.4% of
• The disbursement supplements the
quota (about
augmentation of US$103m approved
US$103m)
under the ECF in May 2020
Ongoing discussions with the IMF on a
Strong performance of Benin under the IMF program possible new programme¹
Structural ⚫ The IMF assessed Benin's performance under the ECF program as "very satisfactory" at the 6th review, the best
6th review
Benchmarks
possible performance
Revenue 100% – A dedicated team has been established by Benin to monitor the implementation of the program
administration completed
– The Managing Director of the IMF, Christine Lagarde, made an official visit to Benin as early as
Public financial 100% December 2017, praising Benin's implementation of reforms as "a partner that keeps its commitments”
management completed
⚫ All quantitative performance criteria and the structural benchmarks under review have been met by Benin.
100% The IMF highlighted, during the last review under the ECF program, in May 2020:
Public investment
completed
– "Benin has made significant progress under the program since 2017"
100%
Debt management – "The fiscal deficit has been reduced considerably over the past three years with a view to ensuring the
completed
country’s macroeconomic stability“
100% – “It has also made it possible to maintain a sustained rate of growth in economic activity, marked by low inflation
Business climate
completed
and a favorable trend over the medium term in the current account balance.”
Sources Republic of Benin, IMF Article IV (December 2019), IMF end-of-mission press release (April 2020)
Note 1. In addition to supporting inclusive growth and improvement in public finance management and domestic resource mobilization, the new programme's priorities would July 2021 | P.24
include improving education and increasing local transformation of agricultural products as to produce higher-value exportsKEY CREDIT HIGHLIGHTS
1 Stable institutions underpinning public governance and accountability
2 Reform momentum supporting Benin’s development
3 Open economy gearing towards domestic production and higher value added
4 SDG Bond Framework
5 Well established record of prudent fiscal management across cycles
6 Proactive approach to debt management
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.252 REFORM MOMENTUM SUPPORTING BENIN’S DEVELOPMENT
The Government Action Programme (2016-2021)
Objectives of the GAP Clear economic policy
• The GAP unifies the government’s •1 Strengthening the agricultural pillar of the economy: Significant
Identifying growth-enhancing growth opportunities lie in agriculture, in which Benin seeks to catch up
agenda to accelerate economic
investments
and social development with peers by enhancing land productivity
• The GAP focuses on key reforms •2 Climbing value chains in existing sectors: Benin aims to retain more
and 45 flagship projects regarding added value in key sectors, such as cotton, with the objective of
Implementing necessary reforms transforming at least 50% of domestic production from 20% currently
Health, Education, Infrastructure, to attract private investment
Energy, Tourism, Agriculture, •3 Diversifying away from existing sectors: Improve the business
Digital Development, Public climate and foster new industries such as Tourism and Digital
Governance and Social Security Developing necessary •4 Focusing on domestic production, reducing re-export activity:
infrastructure to stimulate private Benin has reformed taxes on imports to reduce incentives of re-exports
investment and intensify the domestic content of its exports
Total GAP cost and initial Sustained reform drive to improve business climate
Total amounts mobilized since 2016
financing objective
Over 2017-
• As of Sept-20, total GAP-related 2021 period Public 1 2 3 4
funding mobilized since 2016 financing Creation of Public
(excl. PPP) PPP framework Labor Code
amounted to XOF 6,857bn, fully 27% Special Economic Procurement
39% reform reform
funded by public resources Zones Code revision
XOF 9,039bn
• Total GAP-related disbursements 61%
(€14bn)
8%
amounted to XOF 2,007bn, due to 4% 5 6 7 8
longer-than-expected studies Creation of
Easing of access Property Code Adoption of a
Commercial
to financing reform Digital Code
o This reflects the government's Budget contributions and bond issues Courts
ability to adjust spending to Loans
Grants
meet budgetary targets PPPs
The Authorities are currently discussing a New Government Action Programme, covering the 2021-2026 period
Note 1. Bureau d’Analyses et d’Investigation (Body supervising GAP implementation at Presidency
C1 | TITRE DE LA level)
PRÉSENTATION July 2021 | P.262 REFORM MOMENTUM SUPPORTING BENIN’S DEVELOPMENT
Benin is supported by best-in-class international partners
Selected projects Partners Selected projects Partners
Maria Gleta 127 MW
Debt reprofiling
power plant
Port of Cotonou SBEE restructuring
Highway Establishment of an efficient and
Sémé Kpodji-Porto-Novo modern administration
Project Asphaltage ‘Smart Gouv’
University Health Center of Insurance for Human Capital
Abomey Calavi reform
Project for the development and
Road project
upgrade of the electricity network
(improving access to remote areas)
(PADSBEE)
The government has called upon top international firms or institutions to assist in key projects
Source Republic of Benin
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.27KEY CREDIT HIGHLIGHTS
1 Stable institutions underpinning public governance and accountability
2 Reform momentum supporting Benin’s development
3 Open economy gearing towards domestic production and higher value added
4 SDG Bond Framework
5 Well established record of prudent fiscal management across cycles
6 Proactive approach to debt management
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.283 OPEN ECONOMY GEARING TOWARDS DOMESTIC PRODUCTION AND
HIGHER ADDED VALUE
A clear economic policy
• Significant growth opportunities lie in existing key sectors, including agriculture
1
Strengthening existing
key sectors
• Benin seeks to catch up with peers by enhancing land productivity
• Cashew nut and cotton production have already recorded strong production growth
• Benin aims to retain more added value on the production of its key sectors
• Investments (public, private, PPPs) and privatizations target an increase in the transformation capacity
Climbing value chains in
2
existing sectors • The government plans to transform at least 50% of domestic cotton production
• The national ginning capacity is expected to increase from 717,714 metric tons in 2019 to 857,500 metric tons in
2021 to meet the growth in cotton production by the end of 2021
• Reforms have been passed to improve the business climate and foster new industries
3
Diversifying from • Digital sector will contribute to the development of the tertiary sector, increasing investments, including in fiber
existing sectors optics
• Benin also aims to convert its natural and cultural heritage into a dynamic tourism activity through flagship projects
Focusing on domestic • Re-export has been an important source of revenues historically, yet it is less sustainable than domestic production
4 production, reducing re- • Benin wants to increase the domestic content of its exports and already benefits from trade facilities with Nigeria
export activity for its domestic products. In addition, Benin has reformed taxes on imports to disincentivize re-exports
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.293 OPEN ECONOMY GEARING TOWARDS DOMESTIC PRODUCTION AND
HIGHER VALUE ADDED
Diversified activities supporting high growth across all sectors
Nominal GDP contribution by sector (2020)
Net Taxes and Subsidies
Taxes; 9%
Agriculture; 22%
Other services; 8%
Health and social action; 1% Net taxes
Primary
8.7%
sector
Education; 5%
27.1%
Breeding, hunting; 3%
XOF Syviculture, fishing and
Public administration and forestry; 2%
social security; 7% Tertiary 9,009bn Extractive activities; 0%
Banks and other financial sector Secondary
institutions; 1% 47.9% sector
Food industry; 6%
Posts and Telecoms; 2% 16.3%
Other manufacturing
Industries; 3%
Transport ; 10% Electricity and water; 1%
Construction; 5%
Restaurant and hotels; 3%
Trade; 12%
•1 Primary sector •2 Secondary sector •
3 Tertiary sector
• In 2020, the primary sector grew by +1.8% • In 2020, Benin’s secondary sector grew by • In 2020, the tertiary sector grew +4.9% in
in real terms (+4.6% forecasted in 2021) +5.2% in real terms (+10.2% forecasted in real terms (+4.4% forecasted in 2021)
• The sector is mainly driven by agriculture in
2021)
particular a record breaking year in cotton • The sector was driven mainly by the • This sector, is particularly driven by the Public
production construction and agri-food industry sectors administration and education branches
Benin draws most revenues from trade, in addition to domestic productions where it is targeting higher added value
Source Ministry of Economy and Finance
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.303 OPEN ECONOMY GEARING TOWARD DOMESTIC PRODUCTION AND
HIGHER VALUE ADDED
Moving up the value chain in the cotton industry
Key considerations Cotton production and exports (2014-2020)
• Cotton production has been increasing at a high rate in Benin
• In 2020, production of cotton reached 731 thousand tons,
731
more than 2 times the production registered in 2015 715
678
• Cotton products exports accounted for 57% of official exports
with XOF 325bn in 2019 (18% of total exports) 598
• Cotton fiber constituted 52% of the cotton exports volume,
but it accounted for 85% of the cotton exports value
451
• On average over 2018, a ton of exported cotton fiber sold at
393
XOF 930k while a ton of cotton seeds sold at XOF 170k
• To move up the value chain in the cotton industry, Benin invests 300
325
275
alongside foreign partners 269
244
• Thus, the national ginning capacity is expected to increase from
168
156
717,714 metric tons in 2019 to 857,500 metric tons in 2021 to meet
117
the growth in cotton production
2014 2015 2016 2017 2018 2019 2020e
Cotton exports (XOFbn) Cotton production (thsd tons)
Benin invests to increase the rate of cotton transformation and retain more value added on a key domestic production
Source Republic of Benin
C1 | TITRE DE LA PRÉSENTATION July 2021 | P.313 STRENGTHENING THE ELECTRICITY SECTOR AND INCREASING THE
NATIONAL ELECTRICITY PRODUCTION CAPACITY
Benin has implemented key measures to strengthen the electricity sector
The energy sector under the GAP Evolution of the electricity capacity and production since 2015 (MW, GWh)
• Energy sector projects are at the Benin’s national power production was 40
809.7 • Benin’s electricity capacity
heart of the GAP, with 10% of times higher in 2020 than in 2018, following
new power plant commissioning increased by 84% in 2019,
investments under the programme following the commissioning
attributed to the energy sector 352.1 of the 127MW Maria Gleta 1
211.0 162.9
87.6 power plant
• Main objectives include:
20.3
279 279
• Benin’s Electricity
151 151 152 152
distribution has also
1▪ Energy modernisation and significantly improved with
expansion coverage rate2 increasing
2015 2016 2017 2018 2019 2020 from 43.8% to 54.1%
2▪ Boosting renewable energy Total installed capacity (MW) between 2014 and 2020
Production from SBEE power plants (GWh)
▪ Restructuring the national power
3
provider
Creation of the Société Béninoise de Production d’Electricité (SBPE)
4▪ Set up an efficient energy • The creation of the SBPE in Dec-20¹ is a SBPE’s organisational structure
management system pivotal step in the transformation of the sector
GoB
• A reorganization of the sector's • The new electricity production entity will
governance has been initiated, with initially own and operate 3 power plants 100%
▪ The adoption a new energy code ▪ Maria Gléta 1: 127MW thermal power SBPE
aimed at deregulating the plant commissioned in August 2019
production and distribution of Revenues Financing
▪ Maria Gléta 2: 142MW thermal power
electricity
plant to be commissioned in 2023
Maria Gléta Maria Gléta
▪ The establishment of a 10-year Defissol
▪ Defissol: 36MW photovoltaic power plant 1 2
national energy plan
Source Republic of Benin
Notes 1. Creation of the SBPE decided during the Council of Ministers on 2 December 2020; 2. The coverage rate corresponds to the number of administrative units (i.e. July 2021 | P.32
villages and city districts) electrified in relation to the total number of administrative units in the country (5,295)You can also read
