Core area “Peaceful and inclusive societies” Improving public financial management, increasing government revenue

    Through its development cooperation, Germany is supporting the ambitious reform agenda of the Beninese government, which wants to improve public financial management and increase domestic revenue. The purpose of this support is to enable the people, in particular women, to benefit from improved public services and investments. In the northern part of the country, Germany is providing assistance to Benin in increasing government presence in at-risk communities and fostering social cohesion.

    Meeting in the village of Kotokpa in Benin

    Meeting in the village of Kotokpa in Benin

    The Beninese government is working to increase domestic revenue at the central and municipal levels in order to be able, among other things, to finance social spending, which has been increased. Germany is supporting these efforts through its development cooperation. In order to ensure that government funding is used with maximum efficiency and transparency, Germany is also providing advice, based on cooperation with the EU, to the supreme audit institution and to government entities involved in budget planning.

    The decentralisation process has already made significant progress. The legal framework has been adjusted, as have staffing requirements at local authorities, and a fund has been set up to facilitate national fiscal equalisation – the redistribution of revenue between the central government and the municipalities.


    Financing municipal investment

    On behalf of the German Development Ministry (BMZ), KfW Development Bank supported the establishment of a national municipal development fund (Fonds d'Appui au Développement des Communes, FADeC). It continues to provide financial resources for the fund. Thanks to the funding which FADeC channels to municipalities, their investments have increased significantly, and basic services for the people have improved tangibly. FADeC also provides targeted support to municipalities in the northern part of the country in order to foster social cohesion and prevent conflict in that region. Moreover, KfW Development Bank has supported the provision of equipment for a national data centre.

    Transparency and accountability

    As part of Technical Cooperation, GIZ, acting on behalf of the BMZ, is supporting good financial governance at the central and local levels. The EU is contributing funds of its own to this project.

    Related advisory and training services cover topics such as increased domestic resource mobilisation; gender budgeting; international taxation standards; transparent budget planning and accountability; development-oriented use of public funding; and the improvement of the environment for private investment. For example, GIZ provided advice to the government in 2023 on the drafting of the country's medium-term strategy for increasing domestic resource mobilisation. That strategy was expressly praised in the most recent analysis undertaken by the International Monetary Fund (IMF).

    Support has also been provided for the establishment of a monitoring system for the implementation of national and global development goals. The relevant data can now be found on a digital platform.

    As at: 08/02/2024