BENIN

Benin is a multiparty republic with a presidential system of government and a separation of the three powers (executive, legislative and judicial). The president, elected by universal suffrage, is both head of state and head of government. The parliament is composed of 83 members elected in 24 constituencies according to a distribution key. There is one level of subnational government made up of 77 communes which are administered autonomously by councils elected for a 5-year term of office under the conditions established by law.

The decentralisation process in Benin began its operational phase in 2003. Communes have legal personality and financial autonomy. Benin has had a National Decentralisation and Deconcentration Policy (PONADEC or Politique nationale de décentralisation et de déconcentration) since 2009. PONADEC is built around 5 strategic orientations which aim to create the institutional and organisational conditions for a sustainable and balanced local and regional development, based on concerted local governance and on the development of the local and regional authorities’ capabilities.

Multi-level dialogue is most often conducted as part of the statutory visits of the prefects, during the communal budget conferences or during the statutory sessions of the National Commission on Local Finance (CONAFIL or Commission nationale des finances locales).

The sectoral ministries and state institutions also have deconcentrated services within the 12 departments. The prefect is responsible for supervising and co-ordinating central government services. The heads of these departmental directorates meet in the departmental administrative conference (CAD or Conférence administrative départementale), which is headed by the prefect. In addition, a coordination body between the State, the communes and development actors has been set up around the prefect, namely the Departmental Council for Consultation and Coordination (CDCC or Conseil départemental de concertation et de coordination).

The communes of Benin are grouped together in a forum called the National Association of Communes of Benin (ANCB or Association nationale des communes du Bénin), which represents the voice of all 77 communes. The ANCB was created in November 2003 to act as an interface between the communes and the public authorities on the one hand, and between the communes and their partners on the other, to represent and defend the interests of its members.

In 2008, Benin established the Support Fund for the Development of Communes (FADeC or Fonds d'appui au développement des communes). This fund, intended to finance development projects at the local level, is administered by the CONAFIL. It is a joint central government-commune body with 18 members, nine of whom are appointed from among the executives of the public administration and 9 from among the associations of communes. The operational arm of the fund is entrusted to a permanent secretariat (PS/CONAFIL).

Law 2019-43 of 15 November 2019 on the Electoral Code in the Republic of Benin establishes an alignment of all elections as of 2026. As a result, the communal councils’ current term of office will last six years (2020-2026) as an exception instead of five years.

A new Code of Local and Regional Government came into force on 1 January 2022 (Law 2021-14 of 20 December 2021). The Code of Local and Regional Government with its 565 articles targets four essential points, namely reorganising bodies, redistributing powers, strengthening accountability and reorganising the way supervision is exercised. A new local development funding system, the Communal Investment Fund (FIC or Fonds d'investissement communal), will replace the current FADeC. The study on the fund and the financing arrangements have not yet been made public.

TERRITORIAL ORGANISATION
MUNICIPAL LEVEL	INTERMEDIATE LEVEL	REGIONAL LEVEL	TOTAL NUMBER OF SNGs (2022)
77 communes
Average municipal size: 162 420 inh.
77			77

OVERALL DESCRIPTION: Since 2003, when the first communal councils were elected and installed, Benin has had only one level of local government, consisting of 77 communes, which are the institutional framework for the exercise of local democracy and citizen participation in the management of local public affairs.

MUNICIPAL LEVEL: Communes are administered by a communal council elected by universal suffrage. The communal council is headed by a mayor elected by the members of the communal council. The mayor is the main political authority of the communes and also represents the State at the communal level. The sub-communal authorities are arrondissements and villages or city neighbourhoods.

With the adoption of the new Code of Local and Regional Government in 2021, the political and administrative organisation of communes in Benin will undergo a profound reorganisation as of January 2022. The main objectives of this reform are (i) to ensure the efficiency of the direction and management of the communal government, (ii) to reduce political interference in the administrative management of communal revenues and (iii) to improve the visibility of public development actions in the communes.

Among the most significant changes are the following: (1) communes are now classified into three categories: communes with special status (Cotonou, Porto-Novo, Parakou and Abomey-Calavi), communes with intermediate status (communes containing a departmental capital and other communes selected according to their historical, demographic and economic importance) and communes with common status, (2) a new political body is created within the mayor's office, the supervisory board, which is responsible for approving administrative management documents, voting on the budget and controlling the management of the executive secretary, among other things; (3) a national file of the main functions of the communal administration is created, from which the main technical executives called upon to assist in the management of local authorities are drawn; and (4) the role of executive secretary is created in place of the current secretary-general, with the main responsibilities being communal administrative management and budget authorisation.

HORIZONTAL COOPERATION: The law on the Code of Local and Regional Government, adopted in December 2021, offers communes the possibility of forming a public body for inter-communal co-operation (EPCI or Établissement Public de Coopération Intercommunale); the first law regulating the establishment of EPCIs in Benin dates from 2009. In fact, several communes may decide to come together to build and manage facilities and create services in the interest of and for the benefit of those communes. They will conclude an agreement that creates an EPCI and determines the rights and obligations of the parties. The creation of the EPCI shall be approved by a decree issued by the Council of Ministers, on the proposal of the Minister responsible for local and regional government.

The revenue of the EPCI is made up of the contributions of the member communes. The budgetary contribution of each member commune is annual and allocated in the form of a grant to the EPCI. The contribution of the member communes is a compulsory expense during the EPCI’s period of activity.

The responsibilities of local and regional authorities are determined by law 2021-14 on the Code of Local and Regional Government. The commune has its own powers as a decentralised local authority. The communes’ own responsibilities are grouped into 7 areas as follows: (1) local development, planning, housing and urbanism, (2) infrastructure, equipment and transport, (3) environment, hygiene and sanitation, (4) nursery and primary education, (5) literacy and adult education, (6) health, social and cultural action, (7) market services and economic investment.

Communes perform their duties in accordance with the sectoral strategies, regulations and national standards in force. In addition, in the execution of operations arising from its responsibilities and under its control, the commune may delegate, be assisted, concede, lease or enter into contracts.

Under the control of the supervisory authority, communes also exercise other powers that fall within the remit of the central government (known as shared powers). Among their shared responsibilities, communes, alongside the State and other local and regional authorities, contribute to the establishment of a public security plan to combat delinquency and crime in the commune and, if necessary, notwithstanding any provisions to the contrary, provide support to the units in charge of security and civil protection.

Main responsibility sectors and sub-sectors
SECTORS AND SUB-SECTORS	Municipal level
1. General public services (administration)	Administrative services and civil status records (births, marriages and deaths); Land records; Public buildings and infrastructure
2. Public order and safety	Administrative police; maintaining public order and ensuring public peace and health
3. Economic affairs/transport	Building equipment, renovating, maintaining and managing markets and slaughterhouses; Promoting local economic development; Developing artisanal and industrial zones; Roads, tracks and engineering structures, urban roads and sewerage networks in built-up areas, road signs and public lighting
4. Environmental protection	Building and developing lowland areas and flood protection; Defining areas where urban development is prohibited; Creating, maintaining and managing cemeteries and funeral services.
5. Housing and community amenities	Implementing the master plan; Communal development plan, urban planning, urban development and subdivision plans; Supply and distribution of drinking water; Collecting and treating solid and liquid waste; Managing the public sewage and rainwater disposal system
6. Health	Building of public health centres, primary health care; Promoting hygienic conditions and public health
7. Culture and leisure	Public cultural infrastructure for youth, sports and leisure (arrondissement, village or city neighbourhood; Conserving the local cultural heritage
8. Education	Building, equipping and renovating public nursery and primary schools; Promoting youth education; Promoting national languages
9. Social welfare	Building social promotion centres; Social aid for the underprivileged and disaster victims

Scope of fiscal data: Communes

SCN 2008

Availability of fiscal data: Low

Quality/reliability of fiscal data: Medium

GENERAL INTRODUCTION: In Benin, communes have their own budget, approved by the communal council and implemented by the executive secretary. The budgetary year runs from 1 January to 31 December. The budget is managed by the executive secretary in his capacity as authorising officer and by the communal treasurer appointed by the minister of finance who acts as public accountant. At the end of the budget year, the authorising officer draws up the administrative account, while the accounting officer draws up the management account.

The communes are limited in the extent to which they can collect internal and external revenue, and their main source of funding for investment is the transfer of resources through the FADeC, which will soon be replaced by the FIC. The distribution of resources between the central government and the communes is not proportional to the responsibilities attributed to them. The share of the overall national budget allocated to Benin's communes is below 4%, contrary to the standards set by the WAEMU (at least 15%).

In 2014, the National Association of Beninese Communes (ANCB or Association nationale des communes du Bénin) initiated an ongoing campaign to advocate for an increase in resource transferred to the communes. As a result, transfers have increased slightly: from CFAF 29 billion in 2014 (USD 11.4 PPP per capita), capital investment transfers increased to CFAF 35.3 billion in 2015 and will amount to CFAF 40.7 billion (USD 14 PPP per capita) in 2020.

Subnational government expenditure by economic classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total spending	29	0.8%	3.2%	100.0%
Current spending	12	0.4%	1.9%	43.2%
Staff spending	5	0.1%	3.0%	16.0%
Intermediate consumption	4	0.1%	10.2%	14.4%
Social spending	1	0.0%	0.9%	2.6%
Subsidies and current transfers	1	0.0%	0.9%	4.4%
Financial charges (including interest)	-	-	-	-
Other current spending	2	0.0%	1.0%	5.8%
Capital spending	16	0.5%	6.7%	56.8%
Capital transfers	1	0.0%	1.2%	4.4%
Direct investment (or GFCF)	15	0.4%	10.7%	52.5%

EXPENDITURE: Over the past five years, total local expenditure has slightly increased from CFAF 68.91 billion in 2016 to CFAF 74.12 billion in 2020. It has nevertheless remained stable at USD 29 PPP per capita, and its share in total public expenditure and as a percentage of GDP has decreased: municipal expenditure represented 6% of total public expenditure and 1.4% of GDP in 2016, compared with 3.2% and 0.8% respectively in 2020.

The amount allocated for staff costs has been steadily increasing over the last 5 years, rising from FCFA 10.9 billion in 2016 to FCFA 11.8 billion in 2020. Communes’ staff expenditure accounts for 3% of total public staff expenditure in 2020. Staff costs account for 16% of total communal spending and 37% of their current spending. It is the most important item of current spending for the communes.

DIRECT INVESTMENT: To support actions to promote the development of their territory, local authorities are required to allocate resources to capital investment spending. The share of capital spending in total communal spending has increased in recent years. In 2020, it represented 54.6% (CFAF 42 billion), compared to 45% in 2016. The cumulative average for the last 5 years is 52%.

The priority sectors are: education, local administration, health and market facilities.

According to the provisional summary report of the 2020 management audit, more than 58% of FADeC resources for investment is devoted to financing new building works, followed by repairs or renovations and finally the acquisition of various facilities. In some communes receiving direct investment from the central government as part of the implementation of the central government's action programme (PAG or programme d'action du gouvernement) for the period 2016-2021 and continuing into 2020, an increase in public investment spending is expected, particularly in key sectors such as transport, energy, urban development, agriculture, sport and tourism.

The asphalting project launched in 9 Beninese cities has resulted in the construction of more than 191 km of urban roads for an estimated budget of more than CFAF 900 billion. In the sports sector, CFAF 77 billion has been invested in the construction of 22 multi-sport stadiums. Across the country, 35 markets are being built to strengthen market facilities, including 9 in the city of Cotonou, at an estimated total cost of more than CFAF 32 billion.

Subnational government expenditure by functional classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total spending by economic function	15	0.4%	-	100.0%
1. General public services (administration)	2	0.05%	0.9%	11.8%
2. Defence	-	-	-	-
3. Public order and safety	-	-	-	-
4. Economic affairs/transport	5	0.1%	4.2%	30.6%
5. Environmental protection	1	0.02%	1.1%	5.7%
6. Housing and community amenities	-	-	-	-
7. Health	2	0.06%	3.6%	13.4%
8. Recreation, culture and religion	0.3	0.01%	1.8%	2.2%
9. Education	5	0.1%	4.5%	30.6%
10. Social welfare	1	0.02%	2.2%	5.8%

The data compiled above from the audit reports of all municipalities only take into account capital investment spending due to the structure of the communal administrative accounts which do not provide any information on the classification of spending by function. In 2020, the main sectors of communal investment are nursery and primary education (30.6%), market facilities, agriculture and rural transport (30.6%), health (13.4%) and local administration (11.8%). The local administration sector includes investments in communal public administrations, notably for the construction of town halls, arrondissement offices and the purchase of various administrative goods and equipment (vehicles and IT equipment).

Most of these investments are made possible thanks to the FADeC’s funding and the contributions of certain partners, notably through decentralised co-operation. According to data from the FILOC 2020 database, the communes’ own-source revenues contributed only about 13.8% of the total.

Subnational government revenue by category
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total revenue	33	0.9%	6.3%	100.0%
Tax revenue	8	0.2%	2.2%	25.3%
Grants and subsidies	19	0.6%	-	59.5%
Tariffs and fees	3	0.1%	-	10.2%
Income from assets	1	0.01%	-	1.4%
Other revenue	1	0.03%	-	3.7%

OVERALL DESCRIPTION: After a sharp rise in 2018 and a fall in 2019, total revenue raised by local authorities increased significantly in 2020, to over USD 33 PPP per capita, which represented 0.9% of GDP and 6.3% of public revenue. The major variations are mainly due to capital investment revenues, a large part of which comes from transfers from the State and financial partners.

Communal budgets are funded by several categories of revenue, including tax and non-tax revenues. Tax revenues account for 25.3% of all local authority revenues and 63% of their own-source revenues, which are supplemented by non-tax revenues (fees and charges) accounting for 10% of total revenues. In 2020, subnational government tax revenues account for only 2.2% of public tax revenues, down from 3.1% in 2016.

Grants and subsidies transferred by the central government to subnational governments (operating and capital investment) account for almost 60% of all subnational government revenue. These transfers include both operating transfers and revenues shared between the State and the communes. Operating transfers from the central government to the communes account for 22% of local revenues and shared revenues for about 6% of subnational governments’ operating revenues. Subnational governments' shared revenues are revenues from which a part of the proceeds is allocated to the subnational governments and the other part is allocated to the national budget, according to a distribution key previously defined by the law.

TAX REVENUE: The proceeds of taxes and duties are collected, for the most part, by the tax and treasury departments, for the benefit of local authorities. The current tax system has two types of taxes: direct local taxes and indirect local taxes. Tax revenues for all 77 communes amounted to CFAF 21.2 billion (USD 8 PPP per capita) at the end of December 2020, or 25% of total local revenues, and 63% of subnational government operating revenues (or 0.2% of GDP). Direct and indirect tax revenues include property taxes and contributions (34%), patentes and licences (22%), local development tax (14%) and other local taxes (7%).

Direct local taxes are mainly made up of the property tax on developed and undeveloped properties, the single land tax, the business tax (patente) and the licence tax, the share of the synthetic business tax, the tax on firearms, the waste collection tax, and other direct taxes.

Recent reforms in the land sector involve the National Land and Property Agency (ANDF or Agence nationale du domaine et du foncier) and standardising services and fees throughout the country. The services provided by local authorities with regard to land ownership are the certificate of customary ownership (the amount of which varies according to the surface area of the land), the one-time subdivision fee, the certificate of resettlement, the affirmation of the sales agreement (1% of the purchase price), certificates of transfer and various registrations including transfer of ownership and change of name. At the central level, the ANDF is mainly concerned with issuing deeds relating to the confirmation of land rights, and the transformation of housing permits into land titles. The various fees payable are contained in a schedule of fees for issuing land deeds.

Apart from direct local taxes, the legal provisions in force on local taxation in Benin include indirect taxes and similar charges. These are mainly: the local development tax, the grazing tax for each animal that comes to graze on the national territory in the name of the owner; the tax on dugout canoes and motorised boats; the tax on shows, games and entertainment; the tax on the sale of home-made fermented beverages; the tax on premises leased as furnished; the tax on advertising; the tax on electricity and water consumption.

The other local taxes are made up of (1) the proceeds of administrative, civil status and legalisation documents, (2) the share of the proceeds of fines pronounced by the courts, (3) fees on commercial services, (4) parking fees, (5) taxes and fees for electricity and water, urban planning and the environment, (6) similar fees and charges.

As far as shared tax revenues are concerned, they represent only 3% of total subnational government revenues and 6% of operating revenues. These mainly include repayments and refunds of taxes and duties collected by State structures to local authorities. These are the tourist tax, VAT and the road tax collected at the customs cordon, the tax on motor vehicles and the tax on the exploitation of quarries and mines.

GRANTS AND SUBSIDIES: The FADeC is funded by transfers from the State and various contributions from financial partners, the most significant of which are (1) the European Union, (2) the German KFW financial cooperation, (3) Swiss co-operation and (4) the World Bank. This fund is managed by the National Commission on Local Finance (CONAFIL).

The revenues allocated to local authorities through this mechanism are essentially capital transfers: (1) non-earmarked transfers, which may be used freely as determined by the various communal councils, and (2) earmarked transfers, set up by the sectoral ministries in the central government with a predefined destination and budget allocated to each project or investment.

The criteria used in the distribution of FADeC revenues focus on an equalising approach consisting of a fixed allocation (identical for all communes) of around 15% of the annual pool and a variable allocation with poverty level, surface area, demography and governance performance as allocation criteria. A manual of procedures organises and specifies the procedures for managing the fund, the monitoring-evaluation and audit mechanism.

In 2020, capital grants and subsidies allocated to communes accounted for almost 49% of local revenues. With these revenues, local authorities build or purchase new assets/facilities, invest in maintaining and repairing existing assets, and contract for feasibility studies of complex or non-standard works and monitoring/control of construction sites. All this is done within the limits of the communal development plans and annual investment plans.

Operating grants account for about 10% of total revenue and are a contribution by the State to the miscellaneous operating costs of subnational governments.

OTHER REVENUE: In communes, some services provided to users are subject to a fee and generate additional revenue for the local authority. These services include the issuing of civil status certificates, land deeds, the legalisation of administrative documents and the collection of household waste. Communes also receive income from assets, mainly from the use of public property and from leasing some of the real estate owned by the commune. In 2020, these revenues account for 3.7% of total subnational government revenues.

ⓘ No detailed data available for this country

FISCAL RULES: Revenue and spending are planned and authorised with reference to the budgetary and accounting nomenclature. The budget must be prepared and voted in perfect balance between the operating and investment sections. In addition, revenue and spending must be assessed truthfully without fictitious mark-ups or mark-downs.

Article 11 of Decree 2008-276 of 19 May 2008 on the creation of the FADeC states that communes and inter-communal structures are “subject to controls by the Inspectorate General of Finance (IGF) and the Inspectorate General of Administrative Affairs (IGAA)”. FADeC audit engagements with joint IGF and IGAA teams and unannounced inspections commissioned by IGAA are two means of auditing the budgetary management of communal authorities.

DEBT: Access to loans by communes is regulated in Benin by Decree 2005-374 of 23 June 2005 establishing the terms of loans and their guarantees. Borrowing is only allowed to finance major investment projects. The decision to go to the financial market is made by a deliberation of the local council and approved by the supervisory authority (the prefect). The request for authorisation must be addressed to the Minister of Economy and Finance and if approved, the latter may act as guarantor. The guarantee may be a mortgage on a private property of the commune or a guarantee granted by a financial institution such as a bank.

To date, only four large municipalities have been able to access a loan from the West African Development Bank (WADB): Cotonou (CFAF 3.2 million), Porto-Novo (5), Parakou (5.4) and Abomey-Calavi (3.6).

TERRITORIAL MANAGEMENT OF THE CRISIS: After the announcement of the first detected case of COVID-19 in Benin on 16 March 2020, the main strategies of the national response against the pandemic were taken and led by the central government with the support of international organisations. In view of the weakness of the health system, the first objectives of the national government were to rapidly consolidate the epidemiological monitoring system and facilities in order to meet the needs of prevention and screening of the population, to care for the sick and to mitigate the economic and social effects of the crisis. In Benin, response measures against COVID-19 were decided in the Council of Ministers and communicated to the population through the press and social networks. As of 30 March 2020, a sanitary cordon around the most exposed cities was put in place for more than three months, isolating ten communes from the rest of the country. Entry to and exit from these cities and towns was forbidden except by special permission of the prefects, the movement of people within these towns was reduced to the bare essentials and public transport was suspended.

The involvement of the National Association of Communes of Benin alongside the government and the institutions of the United Nations system made it possible to advance the COVID-19 vaccination campaign, the first doses of which were distributed in the first quarter of 2021.

EMERGENCY MEASURES TO COPE WITH THE CRISIS AT THE DIFFERENT LEVELS OF GOVERNMENT: At the level of local authorities, the first actions were to relay and support the measures and decisions taken by the central government.

From the second half of 2020, the first steps were taken to set up a special response fund for the communes, FADeC-COVID. As a result, local authorities have been given substantial resources to carry out actions decided at local level. These include (1) acquiring and distributing hand-washing equipment in all public spaces, (2) producing communication media or messages to raise awareness of barrier measures and other actions, (3) acquiring working/hygiene equipment for health centres and public administrations, (4) building additional market stalls and sheds, (5) building patient reception facilities at the entrance to health centres to separate those suffering from COVID-19, (6) repairing public drinking water connections and setting up mobile hand-washing facilities in markets and schools.

IMPACTS OF THE CRISIS ON SUBNATIONAL GOVERNMENT FINANCE: The measures taken by the government to control the spread of the virus have curtailed economic activity and negatively impacted households and small and medium-sized enterprises, especially informal ones...

This crisis situation has affected the mobilisation of financial resources by local authorities. From CFAF 33.2 billion in 2019 (USD 12.7 PPP per capita), the own-source revenues collected by the communes fell to CFAF 29.4 billion in 2020 (USD 11.6 PPP per capita), a loss of over CFAF 4 billion. The biggest decline occurred in the area of business taxes (patentes), with a 46.3% drop from CFAF 9.5 billion in 2019 to CFAF 4.4 billion in 2020.

To cope with this drop in income and the increase in spending, the State established the FADeC-COVID fund for the prevention of and response to COVID-19 in the communes with the support of financial partners, mainly the German co-operation. The allocation of nearly CFAF 3.9 billion (USD 15.7 PPP per capita) obtained and transferred by the State to the communes in 2020 is provided by SP/CONAFIL. In 2021, these revenues continued to be transferred to the communes.

This budget support has allowed local authorities to acquire medical and technical equipment and to build facilities that have helped reduce the pace of the spread of the disease. This has also resulted in the easing of restrictions and the recovery of economic activities, allowing local authorities to increase the collection of taxes and other local charges. The 2021 administrative and management accounts should confirm the recovery of economic activities and a better performance of local finances.

ECONOMIC AND SOCIAL STIMULUS PLANS: In most countries affected by the COVID-19 pandemic, governments have taken steps to limit the health effects, as well as the economic and social setbacks. Benin is committed to implementing medium- and long-term public actions, with the aim of making health and economic systems resilient. The central government has taken action to support affected economic sectors such as tourism, transport and trade. The central government also planned the regeneration of livelihoods, the intensification of income-generating programmes and the activation of social protection programmes, to limit the risk of bankruptcy and setbacks in the modernisation process of enterprises.

To support the affected sectors and encourage a rapid recovery, the government has implemented a programme to encourage entrepreneurs in the secondary and tertiary sectors to retain their workforce in order to sustain the economic fabric. The measure adopted by the Council of Ministers on 10 June 2020 is a programme estimated at over CFAF 74 billion (~USD PPP 350 million). It has three parts: (1) support for formal businesses amounting to CFAF 63 billion, (2) support for artisans amounting to CFAF 4.9 billion and (3) payment of water and electricity bills for citizens, valued at nearly CFAF 5.8 billion. The government has also set up a subsidy fund of CFAF 30 billion, which is intended to enable businesses in the formal private sector to obtain zero-interest loans from banks and microfinance institutions for a total amount of CFAF 100 billion. This programme entered its operational phase in the second half of 2021, during which the first beneficiaries had their accounts credited.

The role played by local authorities in decision-making or discussions for the implementation of the recovery plan is very marginal.