World Bank Approves $100 million for Benin to Strengthen and Expand Coverage of Poor Households in Social Safety Net

WASHINGTON, March 24, 2023 – The World Bank today approved $100 million in financing from the International Development Association (IDA)* to strengthen the social protection system and expand the coverage of poor households in the productive social safety net.

The Benin Productive Social Safety Net Program (PSSNP) is aimed specifically at expanding the national Gbessoke safety net program and improve its ability to better support poor households during shocks.

At least 150,000 individuals, representing 61% of the extremely poor households in the social registry, will benefit from the program, which will run until the end of 2027.

“Despite significant economic growth in recent years, poverty remains high in Benin. The ongoing multiple shocks, including due to climate change, COVID-19 and inflation, are disproportionately affecting the most vulnerable,” said Atou Seck, World Bank Country Manager for Benin. “We are committed to supporting the Government of Benin in its efforts to expand social programs and improve their efficiency to achieve greater impact on long term poverty reduction.”

Almost 85% of the country’s labor force works in the informal economy, leaving them highly vulnerable to shocks, while just over half of the population lives below the $3.20 per day poverty line. Despite the efforts, government spending on social assistance programs remains low, at 0.05% of GDP. With its high vulnerability to shocks, including climate-induced ones, Benin needs an adaptive social protection program capable of expanding to improve the resilience of households and supporting them during shocks.

The government is working towards that and the new program will support the goal of increasing access of poor households to the productive social safety net to improve socioeconomic outcomes and reduce poverty and vulnerability in the long term. It will also help to improve the performance of the delivery system, ensure that the investments made are efficient, and that the impact on vulnerable households is sustained.

“The program is a structural initiative, complementing ongoing efforts to reduce poverty and inequalities through the improvement of the most vulnerable households’ productive capacities notably by supporting their income-generating activities,” said Romuald Wadagni, Senior Minister in charge of Economy and Finance for Benin.

The PSSNP is expected to help achieve results in two focus areas:

   i.     Efficiency and adaptivity of the social protection system, by (a) improving the delivery of social services via a reform to integrate them in the local network of social protection single window services throughout the country; (b) building capacities to adapt and respond to shocks, including through cash transfers supporting shock recovery; (c) strengthening the social registry, including through with broader coverage of the population in flood-prone areas, as well as frequent updating of data.

 ii.     Expansion of a productive social safety net through (a) the establishment of key tools to enable a sustainable and successful expansion of the Gbessoke Productive Social Safety Net into an institutionalized government-funded large-scale program; and (ii) the delivery of a productive social safety net program including start-up grants and a training program to promote the development of income-generating activities, with a primary focus on women as direct beneficiaries.

The program will benefit from strong commitment from the Government of Benin, which is expected to spend $128 million on the PSSNP.

*The International Development Association (IDA) is the World Bank’s fund for the poorest. Established in 1960, it provides grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. IDA resources help effect positive change in the lives of the 1.6 billion people living in the countries that are eligible for its assistance. Since its inception, IDA has supported development work in 113 countries. Annual commitments are constantly on the rise and have averaged $21 billion over the past three years, with about 61% going to Africa.

The news was originally published on www.worldbank.org - Link here

PRESS RELEASE NO: 2023/051/AFW