On Thursday June 16, 2011, the Fonds Africain de Garantie et de Coopération Economique and Benin’s Ministry of Economy and Finance signed an interest-rate subsidy agreement relating to a loan of around 15.6 billion FCFA obtained by the Republic of Benin from EXIMBANK of China.
This loan is intended to finance the project to build an administrative tower in Cotonou, which is part of the government’s strategy to develop the city of Cotonou and reduce rental charges for administrative offices, as well as its policy to motivate staff and increase the efficiency of the administrative service.
Despite the strategic interest of this project and the acceptable loan conditions offered by the donor, the process of mobilizing the credit was confronted with the conditionalities of the Bretton Woods Institutions, in particular compliance with the minimum threshold of a 35% grant element acceptable to the group of least developed countries to which all the Fund’s member states, including Benin, currently belong.
Faced with this situation, FAGACE, whose main mission is to contribute to the economic and social development of its member states, was approached by the Beninese authorities.
In line with the mission entrusted to it by its founding fathers, FAGACE agreed to facilitate the mobilization of this loan of around 15.3 billion FCFA to the Republic of Benin for the construction of the administrative tower.
This intervention concerns an amount of 437,580,000 FCFA graciously offered by the Institution to the State of Benin.
In total, FAGACE’s interest-rate subsidy interventions in Benin amount to one billion six hundred million (1,600,000,000) FCFA.
Seven (07) projects in the rural development, energy and infrastructure sectors have benefited from these subsidies.
Completion of the first 06 projects has already enabled Benin’s electricity production levels to be increased, several rural and urban areas to be opened up, and above all, several jobs to be created for Benin’s youth.
Following the example of these projects, the construction of the administrative tower, which is the subject of the signed subsidy agreement, will undoubtedly create new jobs and boost the public and private sectors, with immeasurable positive spin-offs.
Member countries : Benin
