Report No. 23760-BEN

BENIN

REFORMING THE CENTRALISED STATE FOR BETTER SERVICE DELIVERY: STAKES AND CHALLENGES IN BENIN

February 5, 2003

The World BankAFTPR, Africa Region

Document of the World Bank

CURRENCY EQUIVALENTSCurrency Unit = CFA Franc

December 2002 US$1 = 655 CFAF

FISCAL YEARJanuary 1 to December 31

ABBREVIATIONS AND ACRONYMS

CARDER Regional Agriculture Extension Services (centre d’action régionale pour le développement rural)

CC General Auditor (chambre des comptes)CF Financial Comptroller (contrôle financier)CS Civil serviceCU Urban District (communauté urbaine)DD Regional de-concentrated office (direction départementale)DDEHU Environment, Housing and Urbanism Regional Directorate (direction départementale

de l’environnement, l’habitat et l’urbanisme)DDEPS Primary and Secondary Education Regional Directorate (direction départementale de

l’éducation primaire et secondaire)DDSP Health Regional Directorate (direction départementale de la santé publique)DIVI Division of Internal Verification and Inspection (division d’inspection et de

vérification interne)DPP Planning Directorate (direction de la planification et de la prospective)DRF Financial Resources Directorate (direction des ressources financières)DRH Human Resources Directorate (direction des ressources humaines)FSNE National Solidarity Fund for Employment (fonds de solidarité nationale pour

l’emploi)GDP Gross Domestic ProductGER Gross Enrolment RateHDI Human Development IndexIGF General Inspectorate of Finance (inspection générale des finances)IMF International Monetary FundMoCS Ministry of Civil Service, Labour and Administrative Reform (ministère de la fonction

publique, du travail et de la réforme administrative)MEPS Ministry of Primary and Secondary Education (ministère de l’éducation primaire et

secondaire)MoF Ministry of Finance and Economy (ministère des finances et de l’économie)MoP Ministry of Government Action Coordination, Prospective and Development

(ministère de la coordination de l’action gouvernementale, de la prospective et du développement)

MSP Ministry of Public Health (ministère de la santé publique)PERAC Public Expenditure Reform Adjustment CreditPIP Public Investment Program (programme d’investissements publics)PIU Project Implementation UnitPSM Public Sector Management

Vice President : Callisto MadavoCountry Director : Antoinette SayehSector Manager : Brian LevyTask Team Leader : Catherine Laurent

TABLE OF CONTENTS

EXECUTIVE SUMMARY………...…………………………………………….……………i-iii

I. INTRODUCTION.........................................................................................1

A. Background..............................................................................................................1

B. Report Presentation.................................................................................................2

II. CENTRALISATION AND SERVICE DELIVERY PERFORMANCE..........4

A. Centralisation and Decentralisation.......................................................................4

B. Poor Service Delivery Performance........................................................................6

III. WEAK PUBLIC SECTOR AT THE DÉPARTEMENT LEVEL.............12

A. Sector Ministries De-concentration Patterns Differ Widely.................................12

B. Absence of Coordination at the Département Level..............................................14

C. Poor Results in Delegation of Budget Allocations to Regional Directorates.......18

IV. CENTRAL GRIDLOCKS IMPAIR FRONTLINE SERVICE DELIVERY. 22

A. How Central Gridlocks Affect Line Ministries’ Capacity.....................................22

B. How Central Gridlocks Affect Regional Directorates’ Capacity..........................30

V. CURRENT REFORM CHALLENGES.............................................37

A. Recent Public Sector Management Reforms..........................................................37

B. The Challenge Ahead: Implementing Decentralisation........................................44

VI. FURTHER REFORM CHALLENGES..............................................51

A. Deepen the Core Processes Reforms.....................................................................51

B. What Would Be Needed by Communes..................................................................53

C. Reform Options for the Département level............................................................55

D. Realigning the Centre............................................................................................57

ANNEX I. GLOSSARY OF FRENCH TERMS.......................................58

ANNEX II. POLITICAL EVENTS CHRONOLOGY SINCE 1960................59

ANNEX III. DIFFERENT DE-CONCENTRATION STRUCTURES AND BUDGET DELEGATIONS.................................................................61

ANNEX IV. BUDGET DELEGATIONS TO DDS FOR EDUCATION AND HEALTH (CFAF MILLION)...............................................................65

References.....................................................................................................66

Map IBRD 31703

BOXES

Box 1: Field Survey Interviews..........................................................................................12Box 2: How Ministers “Ignore” Préfets............................................................................15Box 3: When a Préfet “Discovers” Public Investments Made in his Département..........16Box 4: How Delegation Money is (Mis)Used by the Centre.............................................20Box 5: Waste Generated by Central Planning of Investment............................................31Box 6: A Powerless DD in Human Resources Management.............................................34Box 7: Are the Contract Employees Actually Paid their Official Wages?........................43Box 8: Three “Archetypes” of Decentralisation...............................................................44Box 9: Areas of Communal Competency..........................................................................48

FIGURES

Figure 1: Health Personnel per Inhabitants.......................................................................8Figure 2: Total and Girls’ Gross Primary Enrolment Rates..............................................10

TABLES

Table 1: Comparison of HDI with other Sub-Saharan African Countries..........................6Table 2: Progress Slowed Down in Health.........................................................................7Table 3: Primary School Gross Enrolment Rates (1992-1999)..........................................9Table 4: Road Network Coverage Rates by Region..........................................................11Table 5: Budget Expenditure Process and Responsibilities..............................................19Table 6: Eligible Expenditures and Actual Delegations to one DD in 2001.....................20Table 7: Spending Rate of Education Budget (%), 1992-1998.........................................24Table 8: Age Structure of Civil Service (December 2001)................................................28Table 9: Civil Servants and Contract Employees in DDs.................................................35Table 10: Short-Term Contract Employees in Social Sectors...........................................42Table 11: Cost and Financing of Contract Employment (1994-2001)..............................42Table 12: Benin Territorial Organisation Before and After Decentralisation..................46Table 13: Projected Local Government Revenue Structure..............................................49

EXECUTIVE SUMMARY

The main challenge for Benin’s public sector has long been to find a way to unlock resources stuck in the centre and funnel them to the frontline. The current option is to create local governments (communes) and devolve to them autonomy in essential services delivery and to reinforce a central government structure at the département level that will be able, in compliance with decentralisation laws, to: (i) provide communes with technical support; and (ii) be the prime locus of interaction between central State and communes. Decentralisation laws have not yet been enforced, but their impact on the way central government and département1 offices are currently organised will be dramatic. Indeed, the laws specify that de-concentration of central government has to parallel decentralisation. The de-concentrated département level of governement should become the primary interlocutor for communes.

Given this agenda, the purpose of this study is to analyse the structures and interactions between the centre, the de-concentrated offices and the future communes, from the point of view of the de-concentrated offices and to propose a reform program that could change the current arrangements in order to help implement the decentralisation agenda.

The principal findings of the study are the following:

The current PSM organisation is at a minimum not congenial to decentralisation and neither the centre nor the de-concentrated offices are ready for this change in PSM settings. Disconnects between aspiration and reality are: (i) cross-cutting PSM systems (programming, budgeting and personnel) at the de-concentrated level; (ii) interaction between de-concentrated offices of line ministries and their central offices; and (iii) other interactions across government offices at the de-concentrated levels.

Generic PSM issues, notably hyper-centralisation and rigidity, have negatively affected the public sector as a whole and service delivery performance in particular, as evidenced in the cases of health, education, and transport.

With the exception of health and to some extent education, de-concentrated offices (at the département level) are mostly empty shells. Even in the case of education and of health, Cotonou is omnipotent and omnipresent, down to the lowest level of service delivery.

The coordination role of the central government’s representative, the préfet, at the département level, is de facto limited to security issues; the rest of the préfet’s theoretical powers remains to be recognised by the local sector directors and the central ministries.

Overall public finance reform has made progress in creating a performance-based budget, with the introduction of a unified budget system and program-budgeting in sectors, linking policy making, programming and budgeting. De-concentration of budget management from the Ministry of Finance to line ministries has also been achieved. This reform has not yet been extended to de-concentrated offices.

1 See Annex I for Glossary of French terms.

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Overall civil service reform has shown little progress over the past decade. The main thrust of the reform, the establishment of a performance based civil service, without automatic advancement, is stalled, and strongly opposed by trade unions.

A “quiet revolution” has resulted from this blockade: civil service statute has been bypassed by hiring non-statute employees, mainly in the social sectors.

Proposed directions for a PSM Reform Program include the following and will require not only political and technical decisions leading to the adoption of a comprehensive public sector reform strategy, but also a comprehensive capacity building program to implement this strategy successfully:

Relations between communes and the central government, including its de-concentrated offices, have to clearly define: (i) financial resources and responsibilities/expenditure assignments to be transferred; and (ii) the préfet’s tutelle and its possible redress. The liberty of citizens to control (and appeal) communes’ decisions also remains unclear.

Depending on the previous clarifications about the communes, and the speed of implementation of the decentralisation agenda, the de-concentrated offices have to be reformed, to give them direct responsibility on frontline service delivery mechanisms and resources. When decentralisation is implemented, the role of the de-concentrated offices in departments will need to be clarified and addressed.

Capacity building within the communes for management and financial resources represents a challenge for the sustainability of decentralisation and needs to be addressed as a specific program by government.

The ultimate objective should be to transfer the contract employees working in sectors transferred to the communes, including hiring authority, wages and management. Since this is a far reaching reform, a progressive implementation is suggested, with as a first step the empowerment of de-concentrated offices in personnel management.

All budget expenditures at the local level should be executed through delegations of budget appropriations at the département level, including investment financed by donors, as a preparation for future transfers of resources to communes.

Auditing and reporting will take on added importance, and will need to be extended to the new bodies in charge of public finance (communes and préfets).

Finally, another big challenge is to transform the central government from a “blue collar” to a “white collar” institution. Functional reviews of central administration are a good instrument to provide insight on the changes needed in light of the new responsibilities of the centre: not implementation, but facilitation of local government activities, policy-making, monitoring and evaluation of activities (setting standards, monitoring outcomes), control systems, capacity building for lower levels. This should result in a revision of professional skills and staffing numbers.

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This report was intended to serve as a basis for in-country dialogue that would focus initially on diagnosis and agreement on issues, then serve as a strating point for internal identification of further reforms; a deliberate attempt has been made to avoid an overly-prescriptive approach. This study forms part of Bank’s dialogue with the government of Benin on structural reforms of public sector and was discussed with Benin officials in July 2002. It has served as input for the new CAS discussions, and has triggered reflection on future reforms linked to decentralisation within Benin’s own administration, as part of the preparation process of Poverty Reduction Support Credits. Currently, two working groups have been created within the Beninese administration to itemise and detail the de-concentration reforms suggested in the present report.

I. INTRODUCTION

A. Background

1. Benin is a small low income West African country, with a population of 6.3 million and a GDP per capita of $345 in 2000. Agriculture is a mainstay of the economy, accounting for over a third of GDP, nearly two thirds of employment and 80% of merchandise exports. The main export crop is cotton. A small industrial sector consists largely of cotton ginning and small enterprises producing basic consumer goods for the local market and accounts for 14% of output. A large share of services partly reflects Benin’s role as a transportation and entrepôt hub.

2. Living standards as measured by the HDI (Human Development Index) have steadily improved, but remain low. Since 1975, Benin’s HDI has improved over time and in comparison to other countries in the region: between 1975 and 1999, Benin HDI improved by 0.134 points and Benin has made the most progress in West Africa. Benin’s comparatively good performance can be explained by gains in three variables used in calculating HDI: real GDP per capita, life expectancy and school enrolment. Nonetheless, in 2000, Benin’s HDI still placed it among the twenty least developed countries in the world (147 out of 162 countries), well below what could have been expected on the basis of its GDP per capita alone, and, despite improvement in the last decade, the level of Benin’s HDI continues to be alarmingly low.

3. Between independence in 1960 and 1972, Dahomey’s political situation has been characterised by high volatility and chronic instability as evidenced by two constitutions, ten Presidents or military leaders, and four military coups. No one stayed in power more than three years. In 1970, a remedy to this instability was sought through… a “rotating” Presidency between three persons2. In 1972, the then Major Kérékou put an end to this unusual and unsustainable arrangement by organising the fifth military coup of Benin’s post-independence history. In 1974, he declared Marxism-Leninism as the ideology governing the country, which translated into a State-controlled economy and established a one-party regime (Party of People’s Revolution of Benin, parti de la révolution populaire du Bénin). The country changed its name and became Benin.

4. Nicknamed “Laxisme (for laxness)-Beninisme” by the Beninese themselves, the regime began to experience serious difficulties in the early 1980s. The State ran into total bankruptcy in 1988, which fatally undermined the legitimacy of the regime. After several months of general strikes led by the regime “beneficiaries”, i.e. civil servants, General Kérékou was forced into political liberalisation in 1989: general amnesty, new cabinet, abandonment of Marxism-Leninism. A National Conference convened in early 1990 and reached national consensus on a new constitution. A presidential regime was thus instituted, and a multi-party democracy restored.

5. Since then, Benin has experienced a somewhat quieter political life, although still reflecting strong internal divisions and delicate balances. Nicéphore Soglo, appointed 2 See Annex II for political events since 1960.

Prime Minister during the transition period, was elected President of the Republic in 1991. In 1996, General Kérékou won the presidential elections. He was re-elected in 2001. Benin has more than a hundred political parties, of which a dozen are represented in the National Assembly. Since 1990, three legislative elections have been organised, with two changes in majority, in 1995 and 1999, resulting each time in a legislative body governed by the opposition to the executive branch.

B. Report Presentation

6. The creation (in 2000) of local governments (communes) entailing devolution of investment responsibilities in main service delivery activities to them (primary education, primary health care, sanitation and water supply, road construction and maintenance) is one of the greatest changes experienced by Benin since independence in its public sector organisation. Decentralisation laws have not yet been enforced (elections were held in December 2002), but their impact on the way central government and département offices are currently organised will be dramatic. The laws specify that de-concentration of central government has to parallel decentralisation. The département level of government should become de-concentrated offices and the primary interlocutor for communes.

7. For the time being, except for health and to some extent education, regional offices are mostly empty shells, to the extent that one could truly question their very existence in some instances. Even in the case of education and of health, Cotonou is omnipotent and omnipresent, down to the lowest level of service delivery, whereas the directions départementales (DDs) were created with the mandate to: (i) be the closest level of service delivery management; and (ii) have a direct impact on service delivery. According to the decentralisation laws, they now should become the only level of interface between central government and future communes.

8. The report argues that neither DDs nor the centre are ready for this new deal. It will also demonstrate that the current PSM organisation is at least not congenial to decentralisation. Key issues are: (i) cross-cutting PSM systems (programming, budgeting and personnel) at the de-concentrated level; (ii) interaction between de-concentrated offices of line ministries and their central offices; and (iii) other interactions across government offices at the de-concentrated levels. The report’s principal conclusion is that PSM systems have yet to be adapted to support the stated vision of decentralisation cum de-concentration and improved service delivery.

9. The present study was prepared by a team comprising Hélène Grandvoinnet, public sector management specialist (AFTPR); Mouhamadou Drame, economist (AFTP3); Mouftaou Laleye, political scientist, and Rhétice Dagba, economist, consultants; and Catherine Laurent, task team leader, public sector management specialist (AFTPR). Peer reviewers for this report were Jennifer Litvack, public sector management specialist (PREM/PSM) and Mike Stevens, public sector management specialist (AFTPR). Brian Levy, sector manager (AFTPR) provided inputs and guidance to the team during all the process. Many others have contributed to this effort, either through previous work for Benin or during the preparation and discussion of this report.

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10. This report is part of a set of economic and sector work on institutional development in Benin, which includes a stock-taking study on decentralisation and an up-coming governance and corruption survey. It is the result of analysis and findings from work already completed by the government, the Bank and other donors3, and in particular is built on the preparation and supervision of the PERAC (Public Expenditure Reform Adjustment Credit, Cr.3479-BEN): sector studies, beneficiary assessments, organisational audits, financial internal audits, surveys, mission aide-mémoires, workshops, implementation completion reports, public expenditure reviews, etc. A field study has been conducted for this report to document the gap between the rules and the actual system regarding: (i) the role of de-concentrated offices in key service delivery sectors, the impact of cross-cutting PSM systems on their operations, their relation with their centre and the préfet, as well as their interaction with service users (communities); and (ii) how the new policy of hiring only contract employees is implemented in the education and health sectors and its impact on service delivery.

11. This report is divided into five sections. The first gives an overview of PSM centralisation and of the poor performance of service delivery systems. The second describes the weaknesses of the département administration resulting from centralisation of PSM systems. The third discusses how PSM gridlocks at the centre impact frontline service delivery. The fourth analyses current reforms on the government’s agenda. Finally, the fifth points at questions that require answers to achieve decentralisation with a real impact on service delivery and proposes directions for future reforms.

12. This study forms part of Bank’s dialogue with the government of Benin on structural reforms of public sector and was discussed with Benin officials in July 2002. It is being used as input for the new CAS discussions as well as the preparation of a Poverty Reduction Support Credit, and has started an internal reflection on future reforms linked to decentralisation within Benin’s administration. Follow-up has now been formalised: national officials have taken the lead to complement this initial endeavour by creating ad hoc working groups in order to identify additional reforms and make proposals for their future implementation.

3 See References.

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II. CENTRALISATION AND SERVICE DELIVERY PERFORMANCE

13. This section describes how general PSM issues, notably hyper-centralisation and rigidity, have negatively affected the public sector as a whole and service delivery performance in particular, and how government has sought to solve these generic problems by instituting decentralisation in the near future. For the time being, generic issues remain unsolved and performance of service delivery is still very low, as evidenced in the cases of health, education, and transport.

A. Centralisation and Decentralisation

14. The public sector in Benin has its basis in two traditions of centralisation and rigidity: the French colonial administration and the Marxist-Leninist regime created after independence. The centre is dysfunctional but still controls frontline services. The decentralisation laws empower communes with major service delivery activities, but under the control of central government, exerted by the préfets. This puts an enormous challenge on the agenda of PSM reform, since it implies a total change of responsibilities in State organisation.

1. A Dysfunctional Centre Controls Frontline Service Delivery

15. Before independence many African staff of the French colonial administration originated from Benin. At the very onset of independence, they became Beninese civil servants and proclaimed themselves the intellectual elite of the country, thus ensuring the privilege of not being accountable. French colonisation bequeathed to Benin an extremely centralised and quasi-military PSM organisation, together with a relative indifference to its operating costs since the colonies were heavily subsidised after 1946.

16. The Marxist-Leninist regime, (1974-1989), left Benin with the legacy of a strong tradition of unionised so-called “workers” (instead of “civil servants”), a collapsed public finance system, parastatals as paramount for industrial and service production, and a total absence of accountability (personal and collective, finance and service delivery) within the public sector. Although privatisation of State-owned companies has been steadily pursued since 1992, government remains the first employer in the formal sector, and trade unions’ constituency is still almost exclusively located in public sector. Trade unions are still very vocal and numerous (five confederations, more than 20 unions for the sole sector of education) and have been subsidised since 1997. The government organised in 1994 a national conference on Civil Service and Public Sector Management Modernisation (Etats Généraux de la fonction publique et de la modernisation de l’administration). In 2000, a National Strategy for PSM Reform was adopted by Government. It has received little support either in-country or from donors; its main achievement remains the preparation of civil service (CS) reform, currently stalled.

17. Benin’s public service system mainly consists of a central administration as opposed to a frontline administration, still a marginal element in the structure of public sector decision-making and management. The central system is currently in command of

every step and resources in service delivery. The conclusion of several decades of failure in efficient service delivery is that the centre has not been able to justify its iron grip on the operation of service delivery. Worse, the centre is actually wasting resources because of its poor current organisation and management, and its lack of accountability. Fragmentation between national administration and project implementation units (PIUs) has worsened these generic dysfunctions. PIUs, created by donors to avoid central gridlocks, have become a parallel State structure with fundings and procedures of their own, while diverting professional skills much needed in public sector.

18. Public sector performance in Benin is also hampered by the absence of a clear mandate for each and every unit in the system, which in turn leads to a low level of accountability at all levels of responsibilities. Service delivery at the frontline is affected by weak and often undefined interaction between: (i) de-concentrated government offices, central ministries and communities; and (ii) line ministries and core ministries: the Ministry of Finance and Economy (MoF, ministère des finances et de l’économie), the Ministry of Plan (MoP, ministère de la coordination de l’action gouvernementale, de la prospective et du développement) and the Ministry of Civil Service (MoCS, ministère de la fonction publique, du travail et de la réforme administrative). The system is extremely centralised in theory, both by core ministries vis a vis line ministries and by the centre vis-à-vis local levels.

2. Decentralisation as a Potential Remedy

19. There is widespread evidence, worldwide, that decentralisation can allow better service delivery (quality and quantity) because it has the potential to improve management and allows a better response to needs and demands by: (i) increasing accountability; (ii) improving efficiency of allocations of human and financial resources; and (iii) better operation of the system. The main challenge for Benin is to find the way to unlock resources stuck into the centre and funnel them to the frontline. The current predicament is to create local governments with autonomy in essential services delivery and to reinforce (or, more accurately, “create”) a central government structure at the département level that will be able to: (i) provide the local governments with technical support; and (ii) be the prime locus of interaction between the central State and the local governments.

20. The set of decentralisation laws was passed, in 1999 and 2000, that create communes as local governments endowed with autonomy, and strengthen the role of de-concentrated government offices at the regional (départements) level. The implementation legislation has yet to be completed by enforcement decrees. The change required in public sector organisation is immense, since it would turn upside-down most of the current arrangements, but also make them more complex. According to these laws, the regional organisation of central government is to be revised drastically, transforming the préfet into coordinator of all regional offices. Responsibilities for investment in some sectors will be devolved to communes, while central government would retain ultimate responsibility (and all recurrent costs) for service delivery. The size of the centre should dramatically decrease, since its role would shift from a “blue collar” to a “white collar” institution, leaving service delivery responsibility to local levels.

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21. In Benin, decentralisation is different from the common use of the term. Even though communes are given important service delivery responsibilities, they continue to remain accountable to the central government, through the tutelle (ex ante control) exerted by the préfet. Therefore, decentralisation in Benin, meaning delegation of some powers, not devolution, would certainly allow for greater flexibility in local development, but will not entail all benefits commonly associated with full decentralisation.

B. Poor Service Delivery Performance

22. Living standards as measured by the human development index (HDI) have steadily improved, but remain low. Since 1975, Benin’s HDI has improved over time and in comparison to other countries in the region: between 1975 and 1999, Benin HDI improved by 0.134 point and, together with Nigeria and Mali, Benin has made the most progress in West Africa. Benin’s comparatively good performance can be explained by gains in three variables used in calculating HDI: real GDP per capita, life expectancy and school enrolment. Nonetheless, in 2000, Benin’s HDI still placed it among the twenty least developed countries in the world (147 out of 162 countries), well below what could have been expected on the basis of its GDP per capita alone, and, despite improvement in the last decade, the level of Benin’s HDI continues to be alarmingly low. Performance of service delivery will be briefly analysed in three key sectors: health, education and transport. Table 1 provides a comparison of Benin with some other African countries.

Table 1: Comparison of HDI with other Sub-Saharan African Countries

Poverty (% of pop. below

poverty line)

Illiterate pop as share of pop 15+ (%)

Gross enrolment

rate, primary, male (%)

Gross enrolment

rate, primary, female

(%)

Life Expectancy at birth

(years)

Infant mortality (deaths

before age one per

1000 live births)

Child malnutrition (% children under five)

Access to an

Improved water

source (% population)

Sub-Saharan Africa .. 38 85 71 47 92 .. 55Low

income .. 38 102 86 59 77 .. 76Benin 33 58.3 98.1 57.1 53 87 29 63Ghana .. 27.3 83.6 73.7 58 57 25 64Guinea 48 .. 74.31 49.16 44 98 .. 49Kenya 16.6 87.1 86.6 57 23

Maurita-nia 47 57.2 83.6 74.5 53 106 48 76

Nigeria .. 34.6 109.4 86.6 47 83 .. 57Senegal .. 61.7 75.1 52.5 52 68 22 51

Togo .. 41.5 139.6 99.4 49 78 25 ..Source: World Bank, Data Base Tables, 2002.

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1. Health

23. The results of the last two Demographic and Health Surveys conducted respectively in 1996 and 2001 show that over the past decade health indicators in Benin have substantially improved (Table 2). Since 1990 infant mortality has substantially dropped from 104 to 88 deaths per thousand live births. The survey also show that immunisation and prenatal rates are rising significantly, with an increase in outreach and social mobilisation activities. Interventions to improve neonatal care (i.e. presence of a skilled attendant at birth) have expanded. Access to and utilisation of effective interventions, for instance oral rehydration therapy, have been improved. Other key outcomes, though, have received insufficient attention. Malnutrition is increasing, with 30% of children stunted. Reproductive health shows high levels of fertility (7.3 percent for the poorest quintile, 3.8 for the richest). Use of modern contraception remains very low (1.3 percent for the poorest quintile, nine percent for the richest). Finally, maternal mortality rate is still high, 500 for 100,000 births.

Table 2: Progress Slowed Down in Health

1996 2001 Infant Mortality Rate 103.5 89.1Under five Mortality Rate 183.9 160.0Children Stunted (%) 25.0 30.7Children Underweight (% moderate) 29.2 22.9Children Underweight (% severe) 7.4 5.0Total Fertility Rate 6.0 5.6Diphteria-Tetanos-Poliomyelitis Coverage Rate 66.9 72.5Measles Coverage Rate 64.3 68.0Antenatal Care Visits to a Nurse or Trained Midwife 74.5 75.2Delivery Attendance by a Nurse or Trained Midwife 58.3 61.0Use of Modern Contraception, Females 3.4 5.7Source: USAID, Demographic and Health Survey, 1996 and 2001.

24. From the point of view of public sector management, key issues relate to adequacy between supply and demand, access, availability and quality of services. Health services supply varies widely within the country. Figure 1 shows regional imbalances in numbers of doctors or nurses per population. Départements of Littoral and Atlantique, the most urbanized, are not surprisingly much better endowed than others, such as Atacora or Donga, rural and isolated. Moreover, since population densities between communes vary greatly, in some areas existence of a commune health Centre will have little direct impact on the supply of services for a large portion of the population

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Figure 1: Health Personnel per Inhabitants

Source: UNDP 2001.

25. Over the last decade, there has been an improvement in quantitative health supply. However, use of basic curative services remains low at less than 0.4 visits per person and per year. And it is estimated that only 35 to 40% of public health capacity is actually used. Paradoxically, for the two illnesses surveyed (diarrhea and acute respiratory infection), among people medically treated if ill, those belonging to the richest quintile are more likely to be seen in a public health facility than those belonging to the poorest quintile. One reason is that poorer areas have less facilities.

26. According to beneficiary interviews, for basic curative services, people turn preferably (and in that order) to: auto-medication, traditional doctors, religious or association’s health centre, and as last resort, to a public health centre. These preferences may reflect personal choices (strength of traditional forms of medicine), as well as inadequate supply of services, for instance absence of public health facility in the vicinity.

27. During the Poverty Reduction Strategy Paper discussions, major problems identified by the population in the health sector were:

lack of qualified personnel, and inefficient posting of existing ones; bad management of “essential medication” stocks, and parallel or illegal sales of

stock; high cost of cure; difficult access to health structures; and poor equipment of health facilities.

28. The public health system appears unable to meet public demand for services. Problems identified by the population relate to major public sector management deficiencies: personnel management (inadequacy of skills and staffing, linked to working conditions and salary levels), inadequate control of public resources use, inefficient planning for infrastructure creation. Some4 also mention health employees’ “attitudes” towards their public as a constraining factor. The presence – or absence - of female employees is also identified as a factor in women’s demand for health services in many areas.4 Bokpe, 1999.

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29. In 1990, government spending on health represented 1.1 percent of GDP. However, community participation and external funding were estimated at, respectively, 1.7 percent and 1.6 percent of GDP that same year. Community participation generates substantial resources for health, due to the emphasis put on cost recovery through co-financing. Community participation through management committees, at the district and commune levels has been generalized since 1999, in compliance with the Bamako initiative. Community involvement in management of health facilities could help solve the imbalance between supply and demand. However, real participation remains limited. Community involvement in discussions of funding from the centre is limited to an assessment, and not extended to programming. Community representatives do not receive training in planning or budgeting, and therefore contribute little to the discussions during meetings that they often perceive as a bureaucratic formality.

30. Development of private (profit and non-profit) health care facilities is an element of response to weaknesses of the public sector, since there is a rising demand from the population for better quality health services. Other factors accounting for the development of the private sector are: (i) freeze in recruitment in the public service, which led young graduates in health to look for jobs in the private sector; and (ii) increase in the number of community health centres financed by foreign sources.

31. This diverse financing may help solve part of the problem. The real situation could therefore be different from the one suggested by public service numbers. Most official statistics only capture data collected in public health centres, which cover only 35% of the population, and there are no statistics on private providers or alternative health providers. Still, deeper issues of adequacy between supply and demand and efficient use of resources remain to be solved in the public sector.

2. Primary Education

32. Despite high population growth (2.8 percent on average from 1994 to 2000), primary school gross enrolment rates (GER) have increased steadily since 1992 (Table 3) and have reached 83% in 2001. This positive trend is due to progress in public education and to a strong and steady development of private sector institutions at all levels of the system. However, these aggregate numbers hide high disparities and worrying features.

Table 3: Primary School Gross Enrolment Rates (1992-1999)

1992-1993 94-95 96-97 97-98 98-99

60.92 66.76 72.53 75.78 76.51Source: MEPS (DPP), 2002.

9

33. During the Poverty Reduction Strategy Paper discussions, the following major issues were raised: (i) lowering of education quality; (ii) inadaptation of education to market needs; and (iii) lack of infrastructure and equipment. Primary education is plagued by several weaknesses, regarding:

Access: disparities between urban and rural areas, as well as limited or poor school supply characterised by the existence of 24% of “incomplete” schools (i.e. lacking the full six grades of primary);

Equity: disparities between boys and girls remain high (Figure 2); and Quality: the level of retention in primary schooling is very low. Although 87%

of a particular age group has access to the first grade, only 40% (70% of urban boys, 14% of rural girls) will reach the sixth grade. Finally, at 25%, repetition throughout the system is high.

Figure 2: Total and Girls’ Gross Primary Enrolment Rates

Source: World Bank 2002.

34. Under-utilisation of resources is a recurrent problem for the Education Ministry (see Table 7 in IV-A). This, as we will see, may be explained by numerous dysfunctions of the public expenditure system. It takes place in a context where the proportion of State budget allocated to the education sector decreased in the early 90s, then increased to 13.1% in 1996, and 14.8% on average from 1996 to 2000.

35. The role played by the private sector should be seen not only as an indicator of weaknesses, in terms of quality and quantity of services, of the public sector, but also of the fact that a portion of the population is able to pay for education services (private schools do not receive subsidies).

3. Transport

36. There are six transport zones, which do not match the départements. A new road strategy started to be implemented in 1992, with a new institutional setting taking into account perceived weaknesses of former institutional arrangements. Key changes include measures towards cost recovery, involvement of beneficiaries in decision-making processes for roads financing and management, collaboration between different actors to

10

improve financing (public sector, Non Government Organisations (NGOs), private sector, multi- and bi-lateral aid) and transfer of some activities to the private sector.

37. Regarding rural roads, the principle is to improve the network, and transfer management to beneficiaries through their involvement at all stages of the process. This system will take time to be put in place, and interviews done in 1999 did not show much evidence of community’s participation in road location (it even showed example of counter-productive rehabilitation), nor of any involvement of communities in monitoring or management.

38. Overlap of responsibilities between the de-concentrated services of the Ministry of Transport and the Rural Development services (centres d’action régionale pour le développement rural, CARDER) creates confusion and inefficiencies. These structures do not have formal communication channels with the beneficiaries, and may sometimes be geographically very distant from the target communities. Central government is still seen as the ultimate provider and functions without input from the frontline. This leads to situations where choice of road location is not adapted to local realities, and maintenance is consistently poor. This needs to be improved to face the challenging task ahead: the coverage rate of the road network is estimated at one-third of the needs (Table 4). And coverage rates, vary from one département to another, from 25 to 53%, another illustration of serious regional imbalances.

Table 4: Road Network Coverage Rates by Region

DépartementArea (sq.

km) Pop. Needs ExistingCoverage rate (%)

Total density kmratio km/sq.

km) kmratio

km/sq. kmAtacora 31,625 755,292 24 3,596 0.11 908.9 0.03 25.28Atlantique 3,312 1,253,943 379 1,038 0.31 455 0.14 43.83Borgou 52,098 990,262 19 3,562 0.07 1087 0.02 30.52Mono 4,009 803,269 200 1,864 0.46 774.3 0.19 41.54Ouémé 4,545 1,027,829 226 1,326 0.29 713.8 0.16 53.83Zou 19,174 960,069 50 4,115 0.21 1184.9 0.06 28.79Benin 114763 5790664 50 15501 0.14 5123.9 0.04 33.06

Source: Hounhoui, 1999.

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III. WEAK PUBLIC SECTOR AT THE DÉPARTEMENT LEVEL

39. This section is based on findings from specific field studies5 conducted in the départements through individual interviews (Box 1). It analyses in detail the disconnect between formal rules and the actual system, using the magnifying glass of regional administration. It intends to demonstrate that current arrangements at the département level reflect the centralisation of PSM, although attempts have been made to remedy this situation in some instances. It also analyses why the structure of public sector in départements cannot respond to service delivery needs. Finally, it argues that there is no such thing as a real de-concentrated administration in place at the département level, whereas decentralisation laws explicitly provide that de-concentrated offices will provide support to the future communes.

Box 1: Field Survey Interviews

A. Sector Ministries De-concentration Patterns Differ Widely

40. Benin replicated the metropolitan French system of territorial administration at the end of the “internal autonomy” period, in December 1959: the country was divided into départements headed by a préfet and progressively, technical regional offices (directions départementales, DDs) were put in place for each and every ministry.

1. Diversity of Structures and Levels of Administration in Départements

41. Legally, DDs are implementing agencies of what has been decided at the centre. When there is a transfer of responsibility, it is partial and strictly limited. DDs do not have the power to initiate or to decide an activity. They may only adapt to local circumstances activities decided from Cotonou, and report. Therefore they cannot, in most instances, answer to local demand. All directors interviewed during the field survey

5 Laleye and Dagba, 2002.

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Interviews were conducted mainly in the two (future four) Northern départements, in January and February, 2002. Time constraints conflicted with the set objective of interviewing all DD Directors, in the context of a general strike that was intermittent for weeks, and the absenteeism of this category of personnel in their département. Questionnaires were used for all interviews, tailored to the positions, but always comprising four sets of questions: institutions, budget, personnel and specific individual data.All départements were covered, except for the Littoral (Cotonou). 25 individuals in DDs were interviewed, belonging to the following: ex-MoP; MoF; CARDER; Family, Social Protection and Solidarity; DDEHU; MoCS; DDSP; Culture, handicraft and Tourism; DDEPS. Eight members of the territorial administration corps (préfets and sous-préfets) were interviewed, in the départements of Borgou/Aligori and Zou/Collines. 14 heads of units were interviewed in Cotonou within central administrations: DRH, Budget, DIVI, DPP, Technical Directors, in the following ministries: Interior, Security and Decentralisation; MoF; MoCS; MSP; MEPS. Finally, six local representatives of civil society in the départements of Borgou/Aligori and Zou/Collines (Pupils’ parents associations, Health centre management committees).

confess that their structure does not meet local needs, because of the very small amount of responsibilities delegated to them and the corresponding lack of resources.

42. The legal framework that regulates the responsibilities of de-concentrated offices (DDs) is extremely different from one ministry to another. For instance, the Minister of Interior cannot modify the responsibilities of the préfet, since they are determined by the law. Other ministries and even directorates within ministries have more leeway in organising their de-concentration in the département. In a few instances, the decree organising a ministry does not include the département level. In most instances, the decree organising the ministry also instates DDs and defines in broad terms their responsibilities. The detailed organisation is afterwards defined by ministerial acts, prepared by the central directorates. Annex III details de-concentration arrangements in most ministries. To add to the current confusion, the decentralisation laws have also created six new départements, but no new DD has been created: all DDs are now responsible for two départements each.

43. De-concentrated offices are organised along extremely different lines. There are at least four patterns:

The most frequent is that DDs are representatives of a ministry; A de-concentrated office of one general directorate (Treasury), represents

the entire ministry of Finance but coexists with de-concentrated offices of other MoF central directorates (Revenue and Customs);

A de-concentrated office of a directorate at the regional or département level (Hydraulics) represents only one directorate and other directorates have their own de-concentrated offices, without any hierarchy between them; and

A single DD can represent two ministries, because of changes in the composition of the Cabinet, and of the lack of means to reflect them at the département. For instance, Trade, Handicraft and Tourism DDs, are now reporting to two ministries: Culture, Handicraft and Tourism and Industry, Trade and Employment Promotion.

44. In general only one level of de-concentrated services is in place: the DD. But some have two tiers, the sous-préfecture and the département level. The DDs themselves usually are composed of several divisions related to the corresponding technical directorates in the central administration (i.e., the financial affairs division , DD unit of the Financial Affairs Directorate in the ministry). The director is the chief of all these divisions and coordination is ensured on a hierarchical basis. In the case of further de-concentration, relations between the two or more local levels are also hierarchical, based on transmission of orders and instructions from the centre to the lowest level, and upwards on transmission of reports to the ministry through the intermediate level. Activities implementation follow the same pattern. DDs hold information and coordination meetings between all tiers of their DD, but on an informal basis, and for a consultative purpose. No DD director delegates part of his/her responsibilities to the lower level, except in the case of primary education where staff posting within a sous-préfecture is the direct responsibility of the head of education office.

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2. Education and Health DDs Enjoy Some Substantive De-Concentration

45. In some instances, service delivery has imposed more de-concentration levels: this is the case of education, health, security and registrar’s offices, where service delivery is ensured at the sous-préfecture, village and city wards levels. Primary and Secondary Education DDs, (directions départementales de l’éducation primaire et secondaire, DDEPSs) and Public Health DDs, (directions départementales de la santé publique, DDPSs) have the possibility to really influence the allocation of resources (human and financial) to the service delivery frontline, schools and health centres. They also contribute to the design and implementation of national policies. Finally, they also have activities of control, monitoring and evaluation. This apparently large scope of responsibilities is not matched by resources and powers de-concentrated to their level as discussed in III-B. Yet, their relatively favourable position on the de-concentration scale is recognised as one of the elements that account for the improvement of service delivery in départements.

46. Coordination of sub-departmental levels by DDs is intense in the case of Education and Health. One of their major roles is to coordinate activities between lower levels (education districts and health districts, which in turn coordinate the activities of the frontline delivery facilities). These levels are related to the DD through a hierarchical system, but enjoy full delegation in service delivery management and provide inputs and feedback to the DD for national policy implementation as well. They are in charge of implementing DD activities in their own territory, which ensures a management of service delivery extremely close to the beneficiaries.

B. Absence of Coordination at the Département Level

47. Public sector arrangements since the creation of départements have completed a full circle, from no regional offices (omnipotent central administration beginning in 1959) to a powerful préfet assisted by sector DDs during the Marxist-Leninist regime (1974-1990) and now back to a powerful central administration and a préfet unable to perform his responsibility to coordinate government activities at the département level.

1. The Préfet’s Role

(a) A Poor Inter-Ministerial Coordination Capacity

48. The préfet is de jure head of the département administration. He6 is the State representative, and represents all ministers individually and collectively. He is appointed by a Presidential decree after a Cabinet decision, following a proposal by the Minister of Interior. He reports directly to the Ministry of Interior.

49. De facto, the préfet has little to no real means to impose his authority. His direct subordination to the Ministry of Interior undermines his inter-ministerial function. The préfet has little resources, and usually depends on the CARDER (agriculture extension services at the département level), or local office of the parastatal for agriculture

6 As of today, no woman has ever been appointed préfet.

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production, for his travel needs – cars, gas or even per diems. He has no official influence on the directors’ careers (neither appointment nor promotion). Hence, DD directors, even if they do not openly challenge the préfet’s authority, do not report to him but to their respective ministry, and take initiatives without telling the préfet (business trips out of the département are a common example).

50. This kind of attitude is also a reflection of Ministers’ attitudes towards préfets: most Ministers do not consider the préfet as the head of the de-concentrated administration, and often ignore him in their relations with the départements, even at the expense of protocol, which is very important in Benin (Box 2). A common excuse for a DD director not to answer a préfet’s call is that he is “with his Minister”. Even though the director may send someone instead of himself to an event or a meeting organised by the préfet, this person would not be allowed by his director to take decisions. However, this is not really an issue in day-to-day life, since very few decisions are taken in the préfecture. It will become one when de-concentration is put in place.

Box 2: How Ministers “Ignore” Préfets

51. In fact, the only cases where the co-ordinating role of the préfet is visible, are crises (natural disasters) or official celebrations (launch of national policy for instance). The préfet is also the main actor for public security, and he may play a co-ordinating role for this as well. However, field interviews give examples of situations where, even in a time of crisis, some sector directorates refused to collaborate with the préfecture.

52. The only concrete préfet’s power is linked to delegation of budget allocations, since he is sole ordonnateur (authority to give orders of payment) of DDs budgets (cf. C below). The préfet’s influence is not always that limited, and its role actually may vary. However, most of the factors influencing his authority are not institutional: proximity of the capital (the role of the préfet being likely to increase the furthest away he is), the personality of the actors involved, previous experiences of département management, strength of various DDs. Préfets posted in the North during the revolutionary period were prominent politicians. The fame associated with these positions is still reflected today in the respect they yield.

53. Vis-à-vis administrations below the département level (sous-préfectures, urban circumscriptions, CU), the préfet’s role is stronger, and closer to its legal mandate. He is the hierarchical authority, responsible for public order, inspection, and monitoring. It is worth noting that in these cases, the préfet is exerting his authority within his own ministerial structure (the sous-préfets are also agents of the Ministry of Interior). The sous-préfet is responsible for coordination of sector administrations below préfecture level. In this role, he encounters the same kind of difficulties as the préfet.

15

A préfet went to greet a visiting Minister at the border of the département. He waited in vain for hours, then headed back to the préfecture, only to find that the Minister had arrived earlier than planned and proceeded directly to the meeting he had come for, without any further protocol. When the préfet tried to make up for this mishap and join the meeting, he did not even have a reserved seat at the table…Source: Laleye and Dagba, 2002.

(b) A Limited Budget Authority

54. The préfecture is the only département office to have an actual investment capacity of its own. Sous-préfectures prepare an investment program through “micro-projects” requested by their communities. These small programs are aggregated at the préfecture level by the financial service in the préfecture into a département public investment program (PIP). A commission chaired by the head of the Treasury département office (receveur départemental des finances) and including the DD directors prepares a proposal to MoP. The amounts are small: in the Mono département for 2000, the approved program was CFAF150 million, of which CFAF39 million were for works on houses and offices of the préfecture.

55. When the département PIP has been approved, the PIP commission, chaired by the Treasury representative, implements the program. The bidding process favours the local companies and is the responsibility of the public tender departmental commission, also chaired by the Treasury representative. A committee of monitoring, chaired by the DD of MoP and including Treasury and the DD for Environment, Housing and Urbanism (DDEHU) controls the expenditure and implementation process. Its report to the préfet commands the issuance or not of an order of payment for the works. As evidenced in Box 3, the préfet is not even informed of other investments when these are commandeered from Cotonou.

Box 3: When a Préfet “Discovers” Public Investments Made in his Département

2. Between Regional Offices: no Collaboration and Little Communication

56. The only forum for discussion and collaboration at the département level is the Consultative Council, chaired by the préfet in his capacity as co-ordinator of all département activities. The fact that it is only consultative prevents this council from being a focal point for interaction between different actors. Council meetings were established to be the main communication source and exchange forum at the département level. Their role as such has not materialised, and the meeting’s conclusions (if any) are not even recorded. DD directors do not consider the Council as a useful institution, and in some cases, the préfet does not even call the Council on a regular basis.

57. Collaboration between DDs may occur, but it is rare. Département development is not promoted nor decided locally which undermines the need for collaboration. Moreover, since DDs are organised to report to the centre, not to collaborate horizontally, and since there is little inter-sectoral collaboration at the centre, DD directors have no incentive to engage with other sectors at their level. Actually, the central administrations are perceived as competing against each other. This does not mean that DDs feel in

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The weak influence of the préfet on investments is illustrated by numerous anecdotes where he is informed of the operation when… he is asked to come for its inauguration after works have been completed. This ignorance goes beyond instances where investment is managed from Cotonou by sector ministries (or projects). They are found also in the case of “social expenditures” used in association with parents’ association’s funding to rehabilitate a school.Source: Laleye and Dagba, 2002.

competition – the only tensions are with the MoF representative (see below, C). But they will be hesitant to establish strong ties with other sectors. Hence, if good relations are established between DD directors, they rarely go beyond courteous and informal exchanges, and in any case depend on – changing – personalities. In fact, DDs responsibilities are defined in a way that reinforces the stovepipe approach.

58. Only MoP and MoF DDs attempt to coordinate several sectors. However, these offices can only do so on their own initiative, since they have no such mandate, and they have a powerful leverage: financial resources are at stake. However, since départements have neither their own budget, nor their own planning tool, everything is decided and elaborated at the centre, and the financial leverage at the département level is really weak.

3. Interactions between Département Administration and Communities

59. Formally, DDs are not supposed to be in direct contact with the public. In reality, they are: civil society comes to the DDs to express needs and expects them to respond to them. If the DD cannot, it has to forward the request to the centre. The population is a major partner of DDs in implementing national policies, through mobilisation of resources, information campaigns etc. They also help a lot in solving local problems, through their contribution, in kind or in cash. Education, health and water supply are the best examples of beneficiaries’ active participation in service delivery improvement through provision of additional resources and services management.

60. There are no institutionalised relations between the DDs and the public. The interaction is based on informality; meetings are organised on an ad hoc basis. The field survey has evidenced that demand for coordination comes more from the public than from DDs, and that could be explained only in part by the lack of commitment on the DDs’ part: given the limits of resources and authority and the immensity of the task, the DD directors often feel it is not worth starting anything. There is also evidence that the partnership is not balanced: the DDs are more interested in mobilising financial resources than in seeking the population’s support for policies or in trying to solve crises raised by central decisions. In the latter instances, the préfet and the sous-préfet are more on the frontline. The préfet has to be in contact with the population on a regular basis, given his responsibilities in security and matters of public order. He has to seek the population’s support for his initiatives, and he is the final defender of State credibility at the local level.

61. Although DDs are not formally in charge of contacts with the population, central administrations tend to re-direct demands from communities to their DD and to evaluate the director’s performance against his ability to manage local crises. Another evolution is the growing role of the private sector in service delivery. For instance, the Cotton Interprofessional Association, regrouping cotton producers, finances training for their extension agents by the CARDERs.

62. Currently, the only elected representatives are the members of the National Assembly, the députés. They usually have direct contact with DDs that enjoy some degree of autonomy: Education, Health and Public Works. For other matters, they go

17

directly to the Ministers’ level, or the central directorates where resources can be found. If they belong to the parliamentary opposition, they will tap on the DD, they will not approach the central administration. This political bias is also reflected in their relations with the préfet: if they belong to the “wrong” political party, they will have no real interaction.

C. Poor Results in Delegation of Budget Allocations to Regional Directorates

63. Since the early 90s, extreme centralisation of PSM has led to strong donor pressure to de-concentrate some budget funding at the DDs level for the main social sectors (health and education) to give these units some means to address pressing service delivery requirements. Beginning in 1992, a new budget implementation system has been put in place: delegation of part of some budget appropriations (only non-wage recurrent expenditures) to some DDs, thus allowing them to directly manage some budget items, in most instances their own operating costs, without the liberty to reallocate between the items. The first beneficiaries were the prisons, within the Ministry of Justice, then the system was extended progressively to other administrations. Until fiscal year 2000, the départements of Atlantique and Ouémé were excluded, on the ground that they were close to the centre. Since 2001, the situation has been evolving, with the MoF advocating strongly delegations to these DDs, since the new computerised budget management system only allows for DD expenditures to be under the item “Delegations”.

64. Only the DD receive delegations: the DD is supposed to provide the lower tiers with goods etc. through its own delegations. The préfet, and only him, has the delegated authority to make orders of payment for all budget expenditures incurred in the département, by the préfecture as well as any DD benefiting from budget delegations. The system was put in place to expedite budget implementation, but only 61% of delegations were spent in 2001 on average. Annex III lists the DDs benefiting from the delegations. All interviewed individuals do commend the intent of this system. A closer analysis of the system shows that there is room for major improvement.

1. A Variable and Highly Unpredictable Budget Delegation System

65. The procedure is in principle quite simple. The central administration delegates budget appropriations every semester; the delegation is then notified to the DD director and to the département office of Treasury and of the Financial Comptroller (CF). Each step takes place at the département level: the DD proceeds with the expenditure, the CF’s delegate gives his agreement by visa7, the préfet signs the order of payment and the Treasury pays the contractor. Table 5 illustrates the processing of expenditure in the Benin system, which is exactly replicated at the département level.

7 For details on visas and payments, see Bouley et al, 2002.

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Table 5: Budget Expenditure Process and Responsibilities

Administrative phase Accounting phase

Real Operations (line ministries)

Contract/Purchase order

Delivery of goods/services

Bill Received

Accounting operations (id.)

Accounting commitment

Verification

Financial comptroller’s operations (MoF)

Ex ante visa Keep record of commitments

Visa of conformity

Treasury (MoF) Payment

66. In reality, the procedure can be extremely cumbersome and often counterproductive. And whereas most of the DD directors are satisfied with the procedure in general, they usually become embarrassed when asked about precise steps and other specifics: they are not cognisant of the system. The budget nomenclature is precise and detailed, but interviews demonstrated that the degree of knowledge at the DD director level is extremely variable. Interviews provided evidence of the extreme confusion in the operation, beginning with the periodicity of delegations which can vary from one ministry to the other, from three months to one year. Variations exist not only between ministries but also within ministries, since DDs do not necessarily get the same kind of delegations in one ministry. For instance the Ministry of Commerce has begun with monthly delegations and now delegates once a year. The list of expenditures can also vary considerably not only in denomination and amounts but also in the actual nature of what is or is not included.

67. The second main source of confusion and delays is the notification of delegations. The existing procedure being extremely slow, DD directors try their best to know when the delegation is available by personal contacts, or through their own central Finance Directorate, or through the local Treasury. Many a DD spends a lot of time going from one office to another in Cotonou trying to spot the delegation. Moreover, delegations are never sent in due time. The funding is rarely available before April, for the first semester. For fiscal year 2001, delegations were put in place only in November, one month before the closing of the fiscal year. As a result, some DDs did not use their allocations, others had proceeded to the expenditure and remained in debt. Finally, interviews confirmed that others spent in haste and violated every rule of budget orthodoxy, abetted by the three authorities supposed to exert control: the préfet and the two Finance representatives.

68. Delegations are extremely limited in terms of eligible expenditures and in terms of amounts. Table 6 gives the standard list of eligible expenditures, and the actual amounts delegated to one DD for 2001. Delegations were made available in three times (August 3, August 22, November 22) and through eight orders («mandats»), for a total amount of CFAF822,900, or the equivalent of US$1,1508.

8 For details on budget delegations for education and health, and their respective share in the overall budget, see Annex IV.

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Table 6: Eligible Expenditures and Actual Delegations to one DD in 2001

ELIGIBLE EXPENDITURES AMOUNTS (CFAF) Goods 36,150 Consumable goods 180,750 Petrol 189,000

Maintenance Maintenance works 405,000 Services 12,000Source: Laleye and Dagba, 2002.

2. A Disputable Implementation

69. Since the procedure can be more complex than originally designed and DD directors do not master the procedure, improvisation and misuse of allocations is broadly acknowledged, even by the parties themselves. Close deadlines are an excuse to pressure the préfet’s office for prompt delivery of orders of payments, thereby to shun proper examination of the expenditure procedures. They also favour non-bidding purchase methods. They even give a leverage to the préfet to extort part of DDs delegations for his préfecture operating costs by threatening not to sign the order of payment in due time. Fiscal year 2001 seems to have been the worst instance, according to interviews.

70. Another aspect of misuse of budget delegations is the holding up of resources by central administrations, which is illegal. According to interviews, a central directorate contracts for supplies that are paid against the DDs budget delegations without telling the director, or by telling her/him to freeze the corresponding amount. In other instances, the director will be sent goods purchased on her/his delegations by the central financial directorate, without consulting her/him on the adequacy of the purchase with DD needs. Stories abound on the misuse of delegation money by the centre (Box 4). But there is even worse: DDs receive notification of delegations of appropriations they never actually get, and cannot tell where the money is and who actually used it, at the centre or in the département.

Box 4: How Delegation Money is (Mis)Used by the Centre

3. Inefficient Control

71. Ex ante controls are numerous and cumbersome (see Table 5 in III-C). Ex post controls are rare, limited in scope and broadly inefficient (see III-A). In general, DD directors cannot answer questions about the control of their budget management. Generally speaking, DDs are not where embezzlements take place: delegated amounts are too small. It should also be noted that most ex post controls by Divisions of Internal

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One example is the purchase of computer science books for a school with no computers. In another instance, a DDEPS received scales without the weighs, which had to be purchased by the DD on its budget delegation for the same price as the scales themselves. But at least, these proved to be useful. Another DD director showed our consultants his storerooms full of goods he did not need, purchased by the centre at an abnormally high price.Source: Laleye and Dagba, 2002.

Verification and Inspection (Division de vérification et d’inspection interne, DIVI) are conducted on the use of extra-budgetary money, which is sometimes the only resource DDs actually get to make things happen at the département level. Therefore, when DD directors know something about the controls, they consider them as harassment by the centre. One DD director confessed he was keeping every document at hand for a future possible control, not knowing which he was supposed to keep. At the same time, very few reports on the use of delegations, although they are mandatory before replenishment after one semester, are ever produced and sent to the centre.

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IV. CENTRAL GRIDLOCKS IMPAIR FRONTLINE SERVICE DELIVERY

72. This section describes how central systems of public finance and CS management are rigid and centralised, and how they adversely affect whatever capacity could be in place at the DD level: as a result of these central gridlocks, DDs (even DDEPSs and DDSPs) are void of any power to influence budget preparation or implementation, and personnel management.

A. How Central Gridlocks Affect Line Ministries’ Capacity

73. Budget and personnel are basic requirements for management of service delivery. Until 2001, budget management was quasi-monopolised by MoF and MoP, in preparation as well as in implementation, and allowed little room to actually reflect policy changes at the sector levels, or performance of agencies in delivering services. Reforms supported by the Public Expenditure Reform Adjustment Credit (PERAC, discussed in IV-A) have begun to address some of the gridlocks and weaknesses described below. But many remain, requiring further reforms. Conversely, CS management is non-existent, the statute commands the careers. Overall monitoring of CS careers and statutes is retained by MoCS, together with the few personnel management functions allowed by the rigidity of the settings.

1. A Dual and Centralised Budget Preparation

74. Over more than a decade, the legal and institutional framework9 has concentrated the budget management responsibilities within MoF and MoP. MoF coordinated the preparation of current expenditures and capital budget was MoP’s responsibility. The preparation of these two main components of the budget was poorly coordinated. A significant consequence of this dual budgeting was that recurrent costs of investment were poorly reflected in the recurrent budget.

75. Early in April, MoF released a budget letter which initiated the budget cycle. This preparation started sufficiently early to allow a timely budget preparation. Line ministries prepared their requests during the second quarter of the year, without being informed on the amounts of resources which would be allocated to their sector. This did not allow preparation of realistic programs nor intra-sectoral trade-offs. As a result, MoF and MoP were the only ones to have the final say in intra-sectoral trade-offs, when they prepared the preliminary budget.

76. The budgeting system consisted of listing line ministries’ expenditures according to objects of spending. This line budgeting system provides information on authorized spending of the units of ministries in terms of wages, non-wage current expenditures, domestically funded investment. It does not indicate the reason why resources are used. Furthermore, line ministries had limited room in budgeting personnel because of pre-set quantitative ceilings on the wage bill. Additionally centralised trade-offs tended to 9 Organic law of 1986, Constitution of 1990 and decrees relative to the rules and regulations of public accounting.

constrain sectors in formulating non-wages current expenditures. Consequently line ministries tended to be more interested in preparing the PIP.

77. Under MoP’s coordination, the PIP was prepared on a rolling three-year basis with proposals from sector ministries. In conceptual terms, the PIP was supposed to include only capital expenditures whether they were domestically or externally funded. In practice, sectors tended to include in the PIP current expenditures which they could not include in the recurrent budget. The other main feature of the PIP was that ongoing activities had priority in allocating resources. New projects were in theory selected according to a multi-criteria basis including the consistency of the project with sector strategies, the effects on the country public debt, the impact on external debt, the fixed capital formation, the recurrent costs generated and finally employment creation. Sector ministries were not equipped to perform such a selection, since MoP is still the only ministry to have the tools to conduct this analysis. Therefore new projects were actually driven by donor supply rather than by government demand.

2. Budget Management System

(a) Centralised Responsibilities in Budget Execution

78. The main feature of budget execution is the still high centralisation of authority to spend by MoF as primary ordonnateur. Although commitments are delegated to line ministries, CF delegates (from MoF) perform ex ante controls at each step of the procedure (commitment, verification of delivered service, payment order to Treasury). This leads to delays, inefficiency and dilution of responsibilities among actors involved in budget management, together with relatively low spending, as documented by Table 7. sService delivery by sector ministries has been hampered be the following:

The Budget Directorate issues orders of payment for all expenditures, including those committed by line ministries. Having no incentive to expedite expenditures, this step had become a major bottleneck in the process, resulting in delayed payments which discouraged suppliers (now corrected by the PERAC reforms);

A large amount of budget appropriations related to sector operations is not yet at the relevant sector ministry level, but unallocated (dépenses non réparties) and managed by MoF. The Budget Director commits appropriations and issues orders of payment. Consequently, real costs of the sectors budget operations are underestimated and use of these appropriations all but transparent;

The Budget Directorate considers delegated expenditures to DDs, once put in place, as being spent whether they have been actually disbursed or not;

Complex and lengthy disbursement mechanisms have led to the creation of cash advance accounts (“régies d’avances”). Expenditures on these accounts are paid without ex ante controls. But ex post justifications are required for replenishment of the accounts. These were initially created for domestically funded investments but were extended to non-wages current expenditures. If this exceptional procedure has expedited disbursements, it was at the expense of basic fiduciary safeguards. Consequently, misuses of public resources are reported in spending through these accounts; and

Externally funded investments are managed by PIUs which are usually distinct units within ministries, sometimes even free-standing. PIUs captured an

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important amount of the line ministries financial resources as well as qualified civil servants.

(b) Sector Ministries Budget Management: Lack of Integrated Vision

79. Since historically sector appropriations were released sometimes as late as June or July, budget formulation mostly consisted of rolling over non-wage recurrent expenditures by taking into account inflation rates and past increases in the budget. The fact that each central directorate has its own financial unit further reinforces the fragmentation of the sectoral vision. The staffing plan, which in any case mostly concerns hiring of contract employees, is not based on a real discussion of expansion needs (school and health rehabilitation and construction).

80. Investments remain driven by donors’ interventions. The estimates of the counterpart funds are based on approximations and in practice are balancing items at the time of the last trade-offs. PIUs are responsible for bidding preparation. Related signing decisions follow normal procedures which can last several months, explaining partially the low level of disbursements.

81. The persistence of unallocated expenditures managed by MoF, although they are directly related to sector operations, also hinders sector policy implementation. Seventy-five percent of unallocated non-wage expenditures for education is managed by the Ministry of Education. The remaining 25% is still retained by MoF. For instance, teaching kits for primary education or all transfers for education (scholarships and transfers to specialized institutes) are unallocated expenditures.

82. Budget management within line ministries is limited to non-wage current expenditures. Tracking of actual spending on capital expenditures can hardly be performed by technical directorates since, in most cases, PIUs manage investments without reporting to them. Programming directorates plan and sometimes supervise project implementation, without informing technical directorates. The budgets of the central directorates, in their current presentation, do not include capital expenditures. Budget execution can be improved, particularly investment expenditures. For instance in education, a priority sector, only 82.5% of overall appropriations are actually spent, mainly on wages and operating expenditures, while investment performance remains weak.

Table 7: Spending Rate of Education Budget (%), 1992-1998

1992 1993 1994 1995 1996 1997 1998Overall government budget

80 69 78 108 75 83 80

Public Education 76 89 84 84 88 80 80Source: World Bank 2002.

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3. Weak Control and Auditing Systems and Lack of Accountability

(a) Organisational Structure of Financial Controls and Auditing Systems: Theory…

83. Financial control systems are designed to ensure effective management and presentation of reliable accounts. Financial control is performed ex ante on government budget operations at each step of budget execution: (i) at the time of commitment of expenditures, (ii) at delivery of goods and services, (iii) when payments are issued by Treasury (see Table 5 in III-C).

84. The responsibilities for ex ante controls are with different CF levels: CF’s delegates assigned to line ministries for expenditures directly committed by

those ministries, namely non-wage current expenditures; CF’s delegate assigned to MoF for expenditures committed by MoF: unallocated

expenditures, equipment budget and some capital expenditures under the national resources; and

CF in the case of expenditures regulated by procurement procedures.

85. Responsibilities for ex post control are with: The Finance General Inspectorate (inspection générale des finances, IGF) is in

charge of ex post control on public accountants and civil servants of MoF for revenue and expenditure operations; and

The Auditor General (chambre des comptes, CC) controls public accountants and accounts. It also has to audit annual accounts presented by Treasury and prepare the draft Budget Execution Report Law. Finally, it may perform thematic controls, on its own initiative.

86. The DIVIs are the lowest level of government audit. Located in each ministry, they are responsible for ex post fiduciary controls over financial and budget operations. However their financial resources are limited, as well as their autonomy. This situation hinders their auditing capacities leading to a widely spread lack of accountability in public resource utilisation.

(b) …and Reality

87. Controls performed by the CF and the Treasury are redundant. In addition, the CF does not carry out reconciliation between controlled items with the budget execution, which is monitored by the Budget Directorate. Treasury is late in transmitting government’s accounts to CC (1999 so far).

88. Ex post controls performed by the IGF on government’s revenues and expenditures are limited due to the other activities of this unit. IGF devotes 75% of its time to specific controls based on requests from the Minister of Finance, following denunciations. The reports prepared by the IGF very often remain without any follow up in spite of many problems and irregularities noted. In fact, there has not been sufficient training for IGF staff and the procedures manual is very incomplete. IGF resources are still inadequate, in personnel, operating budget and equipment. IGF budget appropriations are also available with delays, which further contrains its operations.

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89. The CC is beginning to play its principal role which is to clear government’s accounts according to the Constitution. Efforts have been made over the past few years to catch up with the backlog of non audited public accounts. A capacity building program has been put in place to strengthen the human and material resources of the CC. Following pressures from the National Assembly and in conformity with West Africa Economic and Monetary Union (union économique et monétaire de l’Afrique de l’ouest) directives on public accounting, government accounts for 1998 were submitted for clearance in September 1999. They were cleared by November 1999 and a draft of the Budget Execution Report Law (loi de règlement) was submitted to the National Assembly before December 31, 1999. Because of inadequate grasp of the whole auditing procedure, the National Assembly declined to pass the bill. However, the procedure for clearing the accounts related to 1999 budget is almost completed on the CC’s side.

4. A Rigid Civil Service Management System10

90. Benin’s CS is hampered by the double legacy of French colonial administration and Marxism-Leninism. The first can be traced in the CS career design, salary structure and scales, hence CS high wages. The second is reflected by automatic promotion, the extremely high proportion of civil servants in the wage-earning population, and the strong grip of trade unions on government and politicians. The political history of Benin also weighs heavily on civil service tradition and management, by: (i) imposing regional balances; (ii) allowing individual power to be used without internal counter-balances; and (iii) by becoming the locus of divisions and feuds between different political groups.

91. The main features of the CS structure have changed little over time and are still largely based on the system put in place at Benin’s independence, based on the French system of colonial civil service. Reforming the CS and wage policy has been a major policy issue in Benin since the 1960s. Results were limited until the end of the 1980s, largely because of a lack of continuity in policy implementation due to non-existent political will. Besides the fragile progress in controlling the wage bill, the system is totally frozen. The trade unions’ constant opposition to any change has finally resulted, since 1989, in a total freeze of civil servant recruitment and a currently aged CS population, with little prospects of being replaced by skilled successors.

92. Institutions responsible for managing the CS are weak and not coordinated, resulting in incomplete and out-of-date administrative files, not to mention a total lack of career management and long-term planning of staff requirements. MoF has recently had to conduct a physical census of employees, to verify their existence, their posting, and their dependants, to update their files for the payroll, only two years after a general census had been conducted under the aegis of MoCS, which is still updating its own files based on the results of 1997.

93. The CS system in Benin still operates on principles that are very foreign to the requirements of a modern CS. It is still characterised by: (i) rigidity, lack of transparency and low skills; (ii) difficulty in controlling an unsustainable wage bill; and (iii) inability to undertake reform.

10 Briançon et al., 1996, has provided findings for this sub-section.

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(a) A Career and a Salary in Theory Carved in Stone

94. From independence until 1974, civil servants were hired based on their academic titles and on the passing of a competitive exam. Between 1974 and 1987, any graduate from high school was “entitled” to a CS position. The orientation criteria of graduates within different ministries were not necessarily based on the curriculum of the newly hired.

95. The CS career system has not changed over the post-independence period: four categories each divided into ladders (grade) in turn divided in several steps. To each step is attached a wage index, which increases from step to step within a ladder, from one ladder to the next, and from one category to the next, although there is some overlapping. Base salary is calculated by attaching a value to the wage index unit. Since 1986, civil servants are entitled to move one step up on their ladders every two years. This promotion is automatic regardless of performance: over a 24 year career, a civil servant can expect to climb all steps of the ladder and get a salary increase at each step.

96. Once at the top of a grade, a promotion is required to move to the upper grade. In principle, it is granted to civil servants selected on the basis of time in grade (a minimum of two years at the highest step of grade) and criteria such as general knowledge, punctuality, efficiency, etc. that vary according to categories. Performance is not a specific criterion. A Promotion Commission selects civil servants to be promoted on proposals made by Ministers. Promotions take place every three years and are limited by pre-determined percentages (from 40% to 10% for the intermediary to the outstanding grade). When a selected civil servant cannot be promoted in a given year because of insufficient availability of relevant positions, he or she will be automatically promoted the following year without another evaluation.

97. In addition to base salary, civil servants are entitled to fringe benefits, which can vary according to position and ladder. Overall, the system of non wage benefits can increase base salary by as much as 50%. Benefits calculated as a fixed percentage of base salary and, hence, increasing every two years include: residency allowance (10% of base salary), special allowances to professors (40%), and to assistant professors, and doctors (20-30%), performance bonuses for civil servants of Revenue and Treasury Directorates (up to 14%), incentive bonus for magistrates in the Appeal Court (up to 14%). Benefits set in nominal terms include child allowance and a housing allowance granted to teachers and some personnel in health, justice, and defence. In addition, government contributes 14% and employees six percent of base salary to the civil servants’ pension fund, which is independent from the general social security system.

(b) Actual Careers are Determined by Parallel Criteria

98. Appointments to management positions are mainly based on political links. The most obviously politicised are positions of: (i) préfets and sous-préfets who represent central government, therefore the political coalition in power, in départements; and (ii) Ministers’ chiefs of staff. Others, which could be based on technical and managerial skills, such as central administration directors, or DD directors, are also based on political

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patronage. Even training abroad (under donors’ funding) is granted following non-professional criteria.

99. As a rule, for lesser positions, an appointment out of the capital city, Cotonou, is considered as a sanction or a beginners’ “privilege”. Redeployments have regularly been implemented, notably in education and health, from the capital to the regions. Nonetheless, rural zones are under-staffed and urban ones crowded with civil servants without an actual task. Given the weakness of personnel management, line ministries cannot tell where any of their employees actually resides and works if he or she is supposed to be in a region. They will know his or her location as of two years earlier only.

100. This kind of weakness severely impairs ministries, mainly Education and Health, in their service delivery capacity. For instance, in the education sector, there is no strict correlation between the number of students and the number of teachers in a given school. Teachers’ posting does not follow transparent and homogenous criteria, resulting in lack of teachers in rural areas compared to urban areas, and in high inequalities between regions (Atlantique versus Atacora, Borgou or Mono).

(c) An Aging Civil Service with Low Professional Skills and no Accountability

101. Since recruitment was frozen from 1987 to 1995, the proportion of civil servants having reached the end of their advancement scale is estimated to be 40% of overall staff. This does not encourage motivation. Retirement age is 55, but those who have served for 30 years may also retire. This rule will lead to a potential implosion: the next generation is not there to take over given the ten-year freeze of recruitment. As shown in Table 8, within the next ten years more than 43% of existing CS workforce will have retired.

Table 8: Age Structure of Civil Service (December 2001)

Age Numbers PercentageUnder 20 3 0.00920-24 96 0.3225-29 661 2.230-34 846 2.8135-39 4694 15.6440-44 10640 35.4645-49 8178 27.2550-55 4768 15.89No birth date 6 0.02Source: MFPTRA, 2001.

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102. Although Benin boasted during the colonial times -- and after – of being the “Latin Quarter of West Africa”, Benin’s National University has a poor quality record. Moreover, its graduates do not exceed the level of a Masters Degree. To get a Doctorate degree students have always had to go abroad, even if they now have the possibility to defend their dissertation in Cotonou. A worsening factor for the level of professional skills in Benin’s CS is that professional development is not part of the culture: once the diploma has been obtained, training is deemed completed for a lifetime. Donors have provided financing for some professional training abroad, but the government has not shown real interest except in the clientele opportunities this aid provided.

103. Although legal provisions are in place, almost no civil servant has ever been condemned for misdemeanour or embezzlement, or simply for not doing his or her job properly. Absenteeism plagues the CS. Managers being politically appointed, they do not last long in their position, therefore do not take the trouble to actually exert their hierarchical power on their employees. Moreover, some of these may be protected by a powerful group, therefore out of reach. In any case, the extreme centralisation of personnel management by MoCS, the fact that most personnel units are located within the ministers’ personal political staff instead of being a free standing directorate, added to the rigidity of automatic advancement, would deter any direct managers from assuming any responsibility vis-à-vis their staff, had they wanted to.

(d) Unsustainable and Uncontrolled Wage Bill until 1996

104. Since Benin’s independence, CS cost has always been considered excessive, unsustainable, and an impediment to economic development. In addition, the government was often unable to pay salaries on time. In response, authorities took measures to contain the size and cost of CS, as well as to improve its management and strengthen the efficiency of public administration. Among these measures were: (i) freeze on recruitment in 1966 and 1985; (ii) freeze on the financial impact of advancement in 1966 then in 1987; and (iii) elimination of some fringe benefits. These measures had limited effect, as government was compelled to take countervailing actions soon afterwards under social pressure.

105. In the wake of the 1989 crisis, the authorities initiated a voluntary departure program for civil servants, military personnel, and contract employees. Under the first phase of the program (1990-91), all employees were eligible for the program, provided they had five to 25 years of service. Under the second phase of the program (1992-96), eligibility criteria were tightened to safeguard the quality and level of productivity of the administration: (i) audits of ministries identified positions deemed redundant; and (ii) teachers and health personnel were not eligible anymore. The program, which was extended until end-1996, succeeded in reducing the CS size, by about 10% since 1989 (6,270). The impact on wage bill was, however, more modest, because mostly civil servants in the lowest categories took advantage of the program. The benefit package cost CFAF1.7 million per employee, a total of CFAF4.5 billion, over the period 1992-96.

106. The economic situation improved in the early 1990s, and government progressively relaxed its wage policy from 1992 to 1997, while recruitment was dramatically altered by the following measures: (i) the end of the automatic hiring by the

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public service (January 1, 1987); (ii) a new hiring policy based on selection tests; and (iii) a progressive downsizing by allowing only a portion of retirees’ positions to be refilled (one out of three in 1994, two out of three in 1997, 100% in 2002). Overall, the measures were successful in containing the wage bill, which by 1997 had declined to 39% of government tax revenue and 44% of primary spending. In particular, relative to GDP, the wage bill fell from 7.7 percent in 1989 to five percent in 1997. Relative to per capita GDP, salary ranges are on average similar in Benin and other West Africa Economic and Monetary Union countries. CS size (excluding military personnel) fell by 10% and amounts to only 0.5 percent of the population, compared with an average in Africa of about one percent.

107. Nevertheless, the improvement is still very fragile. Since it was achieved through administrative means and without resolving some of the underlying problems, social tensions have led to numerous strikes in CS, beginning in 1992. The compensation system has been kept unchanged, even though it generates automatic salary increases averaging 10% every other year. Actual salaries are less than the amount indicated by the wage scale, because actual salaries but not theoretical advancement were blocked from 1986 to 1992. Negotiations with trade unions have led to a partial de-freeze of salaries, brought back to the 2001 index.

B. How Central Gridlocks Affect Regional Directorates’ Capacity

108. The perception of the DDs’ role is primarily bureaucratic: they do not have specific mandates or responsibilities, they are merely relaying the centre’s policies, on which they had no or little influence. Their function is to monitor the implementation of central policies. Usually, they are not responsible for any outputs, and are not accountable for the results of their action - or inaction - in the field. Their function is reduced to mere hierarchical controlling, and reporting to the centre, within the limits of their capacity. With the notable exception of DDEPSs and DDSPs, they are usually empty shells as far as service delivery is concerned, with no influence either on their central administration. Even DDEPSs and DDSPs get very little actual delegation of power from their centre and cannot use powers that even sector ministries at the centre do not possess, mainly on personnel.

1. Strategic Planning

109. In a nutshell, the role of DDs in strategic planning is close to nil. As a rule, DDs are only there to circulate information sent from the centre and to implement policies decided in Cotonou. The logic governing the current organisation is definitely centralisation, where DDs are mere relays of central government, not the reverse. Although they do send information to their central administration, this is not determinant in policy making, therefore in strategic planning. Besides sending data and information to their centre, DD directors are associated with central administration through meetings in Cotonou, seminars and workshops held to prepare for decisions. Being directors, they usually are members of the Directors’ Committee in their ministry. But their influence in this environment depends on their personal clout within their central administration, not on the role assigned to them as regional directors. The field survey has established that

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DDs have more often than not to face a fait accompli from the centre, although these decisions are totally disconnected from the frontline reality, resulting more often than not in waste of public money.

Box 5: Waste Generated by Central Planning of Investment

110. Finally, given the importance of external financing for frontline service delivery, is the total absence of institutionalised relation between DDs and the donor community. The centre is the only point of entry for most of external aid agencies and the only actor in donor coordination. At best, DDs are informed of what is planned, and again without a say about the intervention planned. The only exception is the relationship with international non-government organisations, specialised in education and health development, usually qualified as good by DD directors and préfets.

111. This demonstrates the total absence of influence of DDs on the centre for planning. They cannot reverse a decision once made in Cotonou. In the best scenario, they can only implement and report to their central administration. Their responsibility is engaged only if they differ from the central instructions. Moreover, contrary to what one might think, it is often the centre that yields to local populations’ pressures, thus making decisions that can defy rationalisation, for instance facility creations without further consultation of the DD. When advice is given by the DD it is often ignored in these instances.

2. Budget Management

112. Very few DD directors have had budget management training or even have basic budget knowledge of any kind when first appointed director, as documented by their résumés. They get some experience on the ground. This lack of professional skills is not mitigated by the staff in financial divisions of préfectures and DDs, where there are usually no professional accountants or financial management specialists. The majority of the DD directors interviewed are ignorant of the cost of their office, of the département State administration and of other DDs. They sometimes get some budget documents, but are not able to actually read and understand them. There is also no information between DDs within the same département. When it comes to their own ministry’s budget, their ignorance adds up to total lack of involvement in the process.

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A director was invited, without prior notice, to the inauguration of an anti-desertification campaign in a sub-region not affected by this problem, whereas another sub-region would have needed this campaign in the same area. Infrastructures are a general problem, since their location is decided by Cotonou without any consultation. Instances are numerous where a school is built where there is not sufficient demand at the expense of other places in dire need of new infrastructure to meet increasing demand. They can reach the level of absurdity, like this case where a fourth high school is built in a span of five kilometers where in another part of the commune there is no high school within reach at less than fifteen kilometers.Source: Laleye and Dagba, 2002.

(a) Budget Preparation

113. Budget decisions are made at the centre. In general, DDs are asked, at best, to provide the central Financial Directorate with estimates of their needs, only for non-wage recurrent expenditures, for next fiscal year. DDs are not kept informed of internal trade-offs made by the Minister, because in the end MoF does not accept all the ministry’s requests. Internal adjustment at the ministry level are made at the expense, among other items, of DDs, the last to be served when the budget is finally agreed. DDs then revise their own operating budget according to the actual funding available. Although budget documents adopted by the National Assembly do earmark appropriations for DDs, they are often left at the discretion of their central administration. The investment budget is beyond DDs’ reach: they are usually not even consulted by their centre.

114. Three patterns of recurrent non-wage budget preparation at the département level emerge:

The first pattern is no participation at all: MEHU; MFPTRA; Family, Social Protection and Solidarity;

The second pattern consists of DDs being asked to express their needs, nothing further: Commerce, Handicraft and Tourism; MoP. The outcome is usually discouraging for both the centre and the periphery: the latter expresses needs without any sense of what is reasonable, and the centre has every excuse to slash down the DDs requests. For instance, in the case of one DD, for its Commerce activities, it asked for more than CFAF18 million, and got 1.2 million; for its Handicraft and Tourism activities, it asked for CFAF13.5 million and got 1.6 million, for fiscal year 2001; and

The third pattern is active involvement of DDs in the budget making process, as determined by decrees organising MEPS and MSP. In principle, DDEPSs and DDSPs are widely consulted and they play an active part in all the budget preparatory activities. Their central Financial Affairs Directorate prepares budget requests for all expenditures, including investment, a process in which the DDs are as present as the central directorates. In reality, there is a gap between a minimal actual involvement of the DDEPSs and a total involvement in the case of DDSPs.

(b) Budget Implementation: Absence of DDs Involvement in Investment Operations

115. Government staff at the département level are entirely ignorant of the investment budget in their département besides micro-projects of the préfecture. Most DD directors do not know how the decisions are made, and what they consist of. They only know they come from the centre. In one instance, during the field survey, a DD expressed surprise when asked about investments, that there were investments in his sector. As a rule, there is no information circulating from the centre to the DDs. The bidding process is in general conducted by the centre in Cotonou and the contractor usually begins to work without informing the DD directors.

116. In most instances, the DD is only associated with an investment operation when there is a suspected mishap in the operation and the centre needs urgent corrective action. In some cases, DDs are closely associated in the implementation and monitoring of

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works, but they are exceptions. The only DD to be institutionally involved in public works monitoring is the DDEHU (in compliance with the transversal role of their central ministry, which is theoretically in charge of monitoring all budget investment in public building operations). But in some départements, all building operations are under the responsibility of national implementing agencies.

3. Non-Budget Revenues and Expenditures

117. The field survey has drawn to light the existence of significant non-budget revenue at the préfecture and sous-préfecture levels. Fines, special taxes, services of all kinds generate revenue that is not included in the national nor département budgets. The préfecture gets 13% of all revenue collected by sous-préfectures and 10% of their subsidies from central government. Communities are associated with the management of the sous-préfecture revenue.

118. Another instance is the collection by DDEHUs of a three percent fee on every contract with public works companies in the département, whatever the source of funding. The primary education offices at the sous-préfecture level do not get any funding from the centre besides the salary of the only staff of this “office”, the primary school inspector. Parents’ associations, through a percentage of tuition fees, finance this office’s operating costs and are part of a management committee at the sous-préfecture level. Overall, since these extra-budget revenues are often the only means that some offices ever get to fulfil their obligations, their heads are extremely resistant to any integration of these revenues (and the corresponding expenditures) in the formal budgeting process. Therefore, the door is open to any kind of use, including misuse, of these funds. It is understandable that the control bodies tend to focus on these extra-budget revenues when exerting their ex post control responsibilities in the départements.

4. Personnel Management

119. The only DD directors to have some real authority on their personnel are those of DDEPSs. They have a say when preparing the next school-year: they have the power to post any teacher within the département and have the possibility to express their needs for additional personnel during the annual meetings set in July. But they cannot, for instance, sanction a primary school teacher who refuses his/her posting or simply does not show (Box 6). The only authority to evaluate personnel’s performance within the département, and influence their career, was the inspector for primary schooling, who used to be in charge of the confirmation of new teachers, after one year of on-the-job probation. Since recruitment has been frozen, their only personnel management responsibility is to coordinate training activities within their constituency and re-deploy existing teachers within their own sous-préfecture. They also check on the contract teachers.

120. Box 6: A Powerless DD in Human Resources Management

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121. Some DDs do have great numbers of staff under their aegis, as shown in Table 9, the biggest being education and health. Given the extreme rigidity built by automatic promotion, DD directors have no real influence on staff careers, although some (notably DDEPSs) do formally evaluate their personnel. Neither the préfet nor DD directors have a say in the appointment of staff in their offices. The préfet has no power on appointment of the DD directors either. It is interesting to note the importance of non-statute personnel in DDs. Contract employees are the only government agents on whom direct control can be exerted. The caveat is that there is no institutionalised control on how DD directors manage this category of staff, and abuses have been reported on actual salaries paid (see Box 7, in V-A).

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All DDs complain about their total absence of power on the civil servants who work in their département. Even if the civil servant is away for months, they can do nothing about it, including not being able to have their wages suspended. In one of the Northern départements, renowned for civil servants’ chronic absenteeism, one DD did succeed, after many difficulties, in having 28 civil servants sacked. Of course, he has had even greater difficulties to replace them. That DD declared he much preferred to have contract employees, much easier to control. The same reasoning guided a community leader, confronted with, at the time of the interview, a general strike of the civil service in Benin. He was strongly advocating decentralisation, where the civil servants would be paid by the communes, much less than “these strikers”, and would do their job because they would be checked upon…“If the worker will not listen, we will dare and ask the community to thrash him to get him back on the right track”.Source: Laleye and Dagba, 2002.

Table 9: Civil Servants and Contract Employees in DDsDDs Total

Government Employees

Of which Civil

Servants

Of which Contract

Employees(% in

brackets)

OBSERVATIONS

DDEPS/OUEME-PLATEAU

4,075 3,133 872 (21)

100% of contracts are teaching force.

DDEPS/MONO-COUFFO

3,135 2,175 960 (30.5)

856 of contracts are teaching force.

DDEHU/ZOU-COLLINES

14 6 8(57)

Six contracts are hired and paid by the DDEHU itself.

PREFECTURE/ZOU-COLLINES

673 670 3(.5)

58 at the préfecture itself, the rest are at the sous-préfectures and urban communities levels.

DDEPS/ZOU-COLLINES

2,692 1,716 976(36)

CARDER/ZOU-COLLINES

383 dont 58 femmes

324 59(15)

383 agents are at the département centre, the others at the “sector” level.

CARDER/BORGOU-ALIBORI

327 249 76(23)

DDSP:BORGOU-ALIBORI

328 239 89(27)

Add to these 378 contracts paid for by the communities or the “social expenditures” extra-budget.

DEPS/BORGOU-ALIBORI

1,808 975 833(46)

1635 are teaching force (including all contracts). The remaining 173 are in the DD offices.

DDPD/ZOU-COLLINES

19 16 3(16)

DEPS/ATACORA-DONGA

2,234 1,318 916(41)

CARDER/ATACORA 360 320 40(11)

Source: Laleye and Dagba, 2002.

4. Nature and Quality of Relationships with the Centre

122. Préfets, and DD directors, do not have the option, their relation with their respective central authority has to be excellent, since these positions are highly political. Their respective Ministers handpick préfets and directors, and their ties are clientelistic by nature. This explains why complying with the Minister’s request, even at the risk of contradicting the préfet, is the rule of thumb for DDs.

123. De facto, préfets as well as DDs have a certain degree of autonomy, since central authorities trust them to use whatever means at their disposal (legal, political, financial), to deal with any situation. Préfets and DDs know better than to ask for more resources or decline a request, however difficult it will be to do it. The centre has to be spared problems or troubles, since it is from there that promotions or postings back to the capital will come. Postings in Cotonou are sought after at any cost, in part because most of DD directors’ families live there.

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124. On average, DD Directors visit Cotonou twice a month. This may represent quite a number of days outside their département, especially for those coming from the Northern part of the country, in which case the estimate is that they can spend the equivalent of a third of business days away. They need to be available any time their ministry requests their presence in Cotonou, and their trips can follow each other closely. In some ministries, DD directors have suggested regrouping the meetings which request their presence in the capital to save time, to no avail. Still, these trips are deemed useful by DD directors, because they provide opportunities for information exchange and resource mobilisation. Trips can be justified technically (meetings, workshops, policy discussions) or administratively (resource mobilization and negotiations, reception of periodic allocations of material bought by the centre and kept in Cotonou for them to come and bring them back to their DD). DD directors travel much more to Cotonou than they travel within their départements (except for the DDSP and DDEPS). Interestingly, DD’s access to telephones is severely restricted, which is an indicator of the little value given to their immediate feedback or information, and probably multiplies the reasons for trips to Cotonou. Operational travel, even within the département, is limited by the absence of a good vehicle, and scarcity of gas or travel budget.

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V. CURRENT REFORM CHALLENGES

125. This section describes the current PSM reforms being either actually implemented or planned in the near future. Public sector reform in Benin has been a companion to the re-institution of a democratic political system since 1990. It was initiated through adjustment programs supported by donors, following the collapse of the Marxist-Leninist regime. The change of Presidential and government majority after the 1996 elections has not altered this course. The lesson from the past decade is that progress in re-instituting standard public management has essentially happened only at the centre of the system, and at a very slow pace, because of organisational problems, lack of human resources, systemic corruption, but also for socio-political reasons: those with vested interests in the status quo form the influential part of any political majority in Benin.

A. Recent Public Sector Management Reforms

126. Some progress has been achieved in reforming the formal and legal framework in public finance management at the central level. CS reform is currently at a standstill. At the service delivery frontline, a quiet revolution has been achieved, by substituting contract employees for civil servants and regionalising the recruitment of such personnel. The two reforms, budget and personnel, are on-going and their completion will take time.

1. Public Finance: the PERAC Reforms

127. The PERAC reforms, begun in fiscal year 2001, aim at transforming government services in such a way that they will shift from bureaucracy and input-based management to a modern concept of public administration based on achieving results. In other words, PSM systems are expected to be based on effective action, cost-effective activities and saving public resources. Corresponding financial control requires a preparation of accounts that allows actual accountability in the use of public resources and informs decisions on the allocation of public resources. Benin has now a consolidated budget, though not yet presented as such to the National Assembly, including external financing, and sector program-budgets. Most major donors have agreed to stop supporting separate projects, and instead to support the budget itself, organised by programs with performance indicators. This reform was supported by an IDA credit, the PERAC.

128. But this reform has for the moment mainly affected the central government only, not its regional offices nor the flow of resources to frontline service delivery. PIUs still exist (most of them in Cotonou) and play a major role in investment financing. Dual budget management remains in reality, with a recurrent budget (MoF) and an investment budget (MoP).

(a) Budget Formulation

129. Budget preparation is being transformed from input-based budgeting to performance-based budgeting. Thus, sector strategic planning is streamlined with the adoption of the program budgeting approach which provides a sound basis for remedying the disconnect between policy making, planning and budgeting. This approach contributes significantly to the improvement of intra-sector resource allocation by linking resources to sector priorities. To date, seven sectors (nine ministries)11, accounting in total for 60% of overall public expenditures, have a three year program-budget. These sectors were selected on the basis of their contribution to long-term growth and poverty reduction. Their strategies have been reviewed in the light of poverty reduction strategies under preparation. A limited number of objectives, which are linked to key strategies, were set-up over a three-year period. Programs have been designed based on these objectives and were used to align current and capital expenditures with sector priorities. A log frame clarifies the objectives of each program and identifies causal links between inputs, processes, physical outputs, outcome and impacts.

(b) Budget Execution

130. The legal framework of current budget reforms is expected to be completed with the preparation of a new Organic Law (second to the Constitution, to regulate Budget Laws and Public Finance Accounting). Key features of the reforms of the budget execution process are the following: A single budget system unifies current and investment expenditures and other budgets

items, including foreign debt service which previously had been accounted separately by the Debt Management Agency. This should contribute to remedy partially the shortcomings noted on the monitoring of externally financed operations. Roles of the several actors involved in the management of external resources (commitment, ordonnateur and accountant) will also be clarified. Accordingly, spending procedures are also being unified and will apply to all expenditures, including project expenditures;

A revised budget and accounting nomenclature is expected to bring greater efficiency and transparency in budget management. It includes three main budget classifications according to the function, the administrative destination and the nature of expenditure. However, the codification system under the new nomenclature has not yet been revised in order to allow an integration of program-budgets with the general budget; and

Authority to make commitments, and to issue orders of payment, once services and goods are delivered, has been de-concentrated to sector ministries and are passed through a computerized budget management system. This should expedite the spending procedures, promote accountability in line ministries, and improve monitoring arrangements. The computerisation of the expenditure process will contribute to reducing manual tasks formerly involved in budget execution. It will also introduce more reliable and centralised information tracking at the various stages of the spending process.

11 Health; Education; Transports and Public Works; Environment and Urbanism; Agriculture, Livestock and Fisheries; Industry and Commerce; and Mining, Energy and Hydraulics.

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(c) Financial Controls and Audit Systems: Important Reforms Ahead

131. The financial control system is a critical function in sound budget management. Any reform in the latter necessarily entails a corresponding change in financial control. The preparation and now the implementation of the PERAC reforms has included several changes in the control systems. For the time being, the only reform completed is that of CF.

132. In the context of a de-concentrated budget authority to line ministries, CF now has delegates within ministries and in each of the six départements, in order to be as close as possible to the ordonnateur to ensure efficient and speedy ex ante controls in the expenditure process.

133. DIVIs of line ministries are expected to detect misuse of public resources, as well as defective application of the financial regulations. As a concrete task, they should verify the reconciliation between the budget’s financial execution and the corresponding physical outputs presented by line ministries in monitoring and evaluation reports. This will serve as a base for external audit that will be conducted by CC. Furthermore, DIVIs should inform IGF of any serious concern about budget operations or situations they are unable to clarify or elucidate themselves for varied reasons.

134. IGF’s role is being revised to shift from ad-hoc controls triggered by individual allegations to a more systemic budget auditing function. IGF is supposed to be the keystone of the internal auditing system. A systematic bi-annual review of ministries’ accounts is accordingly planned to be performed by IGF.

135. CC has to report on the accounts of government, public enterprises, and other public bodies as well as local governments. Its mission is currently being revised to include evaluation of procurement and disbursement procedures as well as value for money considerations. CC should audit financial execution as well as physical execution of the budget against planned output (performance audit). Performance audits will be based on the monitoring and evaluation reports prepared by line ministries.

2. Civil Service: Stalled Reform Still on Government’s Agenda

(a) From 1989 to 1997

136. The 1989-90 crisis compelled the authorities to prepare a CS reform, as part of the structural adjustment program. Measures included: (i) the restructuring of agriculture services in the Ministry of Rural Development, including the testing of a performance-based remuneration system, similar to the one currently contemplated for the whole civil service; (ii) the training of personnel in the Ministry of Justice; and (iii) the strengthening of services in charge of administrative reforms, in MoCS.

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(b) Weak Capacity and Lack of Actual Will for Reform Implementation

137. A large number of bilateral and multilateral institutions have strongly supported public administration reform, contributing an estimated US$50 million over the period 1990-98. Nevertheless, the agenda detailed in the next paragraphs has been delayed ever since its onset in 1996, in part due to the close interrelation between trade unions’ leaders, public officials who are themselves union members or ex-leaders of a union, and the National Assembly, where the majority of députés are “civil servants” or, following the national terminology, “workers”. As a result, four years after reform design was completed, none has been initiated, except the transfer of payroll management and actual payment of salaries from a specific directorate to Treasury. The legal framework has not even been altered in order to allow for the reforms, although laws have been drafted to modify the General Civil Service Statute, and one actually voted by the National Assembly in September 1998 but later annulled by the Supreme Court, on purely formal (but highly predictable) grounds.

(c) Official Planned Reform Agenda

138. The new compensation system which was to be implemented over the period 2000-2003 was aimed at ensuring that wage policy is consistent with the economy’s productivity, and that wage increases reflect performance. It involved replacing the current automatic advancement system by a performance-based system, simplifying and making more transparent fringe benefits, and reducing large wage disparities between the lowest and the highest steps of the ladders. In addition, the wage index grid has been revised in order to re-establish the link with salaries actually paid. Career streams reflected in the ladders will be lengthened from 20 to 30 years by increasing the number of steps.

139. The new advancement system will be based on performance, evaluated against objectives set annually with civil servants’ participation, which will imply a decentralisation of personnel management to the level of each ministry and each unit within an administration. Performance evaluation will give rise to a salary increase through two channels: (i) an annual bonus will be granted on the basis of performance rating and availability of resources; and (ii) promotion will be granted on the basis of vacancies, performance, professional tests, or the earning of a tertiary education degree. Recourse mechanisms will be available in case of disagreement, and the system will be regularly audited by MoCS.

140. Links between administrative files maintained by MoCS and the database used by the Treasury are planned but not created yet. When this is achieved, it should significantly improve personnel management, ease the conduct of wage policy, and help avoid recurrent problems of wage arrears resulting from delays in updating civil service administrative files. Interestingly, giving line managers, at the frontline, direct authority on their staff is not part of the official CS reform agenda, maybe because de facto the replacement of civil servants with contract employees solves the problem of public agents’ lack of accountability.

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3. The “Quiet Revolution” at the Frontline: Contract Employees in Public Sector

141. While CS reform initiated in 1996 is stalled at the core of the system, line ministries in charge of the two main social sectors (education and health) have achieved a quiet revolution by hiring contract employees instead of civil servants since 1991. Started as an ad-hoc initiative, this system has become over the past 10 years a significant phenomenon in the country. These new employees, approximately a thousand new hires a year, sign a two-year contract with government to serve in specified locations. Even if the sustainability is not guaranteed (opposition from the CS trade unions may jeopardise the process), it certainly has had an impact on the CS structure.

(a) Origin and Development

142. The first iteration of the initiative occurred for the start of the school year in October 1991, when an amount of pre-devaluation CFAF111 million, coming from the French budget support to the Structural Adjustment Program, was earmarked by the Centre for Promotion of Small Enterprises to hire unemployed young graduates. Most of them held a Master degree, and upon satisfactory review of their files, were hired as secondary school teachers under a one-year contract. The contract was not renewable, since the objective was to provide work experience to as many young graduates as possible, and to hire new individuals every year.

143. The second iteration followed discussions with various stakeholders within CS and trade unions on the use of the 10% cut on civil servants’ wages as a consequence of structural adjustment. A public agency was established in 1992, the National Solidarity Fund for Employment (fonds de solidarité nationale pour l’emploi, FSNE), to promote employment in the country by giving young graduates job experience and providing them with various training opportunities.

144. The average salary of young graduates under contract through the FSNE is CFAF40,000. Duration of contract was 11 months in the beginning and was increased to 12 months in 1997. At first a one-time opportunity, these contracts became renewable, particularly in some teaching disciplines such as sciences. The employees’ average age is 25. Natives from all parts of the country, they have been posted in all départements, the largest numbers working in départements of Borgou and Ouémé. This specific geographical program is being dismantled.

145. From September 1996, this initiative became the direct responsibility of MoCS. Since then, recruitment has been made through competitive examination, with one exam centre in each département. Relevant DDs recruits their own contract employees to serve locally. The fact that there is an exam per département encourages natives to apply for jobs in their own region, and simplifies in many cases the logistics (hence, lodging problem are less of an issue, and actual presence at work increases). Short-term contracts remain the rule, each contract is for a two-year period, but renewable. Length and number of short-term contracts are regulated12, which contrived government to grant open-ended contracts to the first promotion of contract employees, after their second 12 Labour Code, Law 98-004 of January 27, 1998: short term appointments are limited to a total duration of four years.

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short-term appointment. They are 28 years old on average, come from all districts and are posted everywhere in Benin and are mainly employed in social sectors (see Table 10). They represent one sixth of total government employees.

Table 10: Short-Term Contract Employees in Social Sectors

Promotion Number of Staff In education Sector In health Sector % Extended1997-1999 3,436 2,974 462 88.041998-2000 1,696 1,198 498 63.741999-2001 1,190 669 521 91.682000-2002 730 712 18 N/A2001-2003 239 230 9 N/ASource: MFPTRA, 2001.

(b) Financing Mechanisms

146. Financing of these new contracts, previously mainly relying on budget support from the aid community, has progressively been replaced by direct financing through the National Budget. The total from 1994 to 2001 amounted to CFAF9.6 billion, for 15,838 young graduates, of whom 14,819 worked in the public service (see Table 11).

Table 11: Cost and Financing of Contract Employment (1994-2001)

Year Number of contracts Total Amount % National Budget1994 n.a. 3,695,665,525 01995 2653 1,332,838,375 6.941996 4116 1,510,010,000 5.231997 7012 1,982,375,000 75.791998 477 219,200,000 8.761999 94 380,000,000 28.952000 247 300,000,000 100.002001 220 230,000,000 100.00Source: Laleye and Dagba, 2002.

147. Today, wages of employees under contract match civil servants wages with similar qualifications. However, the wages are not following the index system. And salaries can only be received upon presentation of a certification of attendance from the direct employer (school principal, head of health centre). The current system however needs more oversight, since there is suspicion that some contract employees may not get their official wages (Box 7): even though the following is only an item in the local press, and deserves the reader’s caution, the fact that they could print such information suggests that this is no novelty for the Beninese reader.

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Box 7: Are the Contract Employees Actually Paid their Official Wages?

(c) Pros and Cons

148. The current contract system has several advantages: open recruitment process with some flexibility for renewal, contract with specific location – contrary to civil servants hiring – no uncertainty in wages (no index), some link between performance and salary (or at the very least between attendance and payment of salaries). There are two main weaknesses. First, the difficult insertion in an administration with open-ended contracts, of a workforce which does not receive this security (“two-speed administration”). This is particularly visible – maybe because in these positions they represent a small minority - for contract employees hired in administrative jobs: they are not integrated in the normal functioning of their administration. Another major weakness relates to the level of qualification of these contract employees. These two weaknesses could be addressed through the establishment of a career development system and a solid training program, notably for teachers.

149. The lack of professional skills is affecting education. Although the hiring began in 1996, these new employees only began receiving basic and short teacher training in 2000. This consists of four to six weeks prior to their start, completed with some workshops headed by teachers from their discipline. This very basic teacher training cannot replace a more comprehensive program. There have not been studies on contract employees’ performance, but one may think that the belated and relatively short training period will have a negative impact on education quality. However, interviewed school principals and Parents’ associations considered their work satisfactory.13

(d) Non-Government Contract Employees in Service Delivery

150. It is important to mention another development in public service employment: spontaneous hiring, directly by communities, of health or education staff, who can work in a private (non-profit) structure, but also within public structures, although under private financing. For instance, community-financed teachers often work in public schools that do not have the required number of teachers. The total number is estimated at 3,500, of which 70% work in education. They are also highly represented in health. For instance, total health staff in the Borgou département is 696: 339 civil servants and 357 contract employees, of whom 197 are hired by government and 260 by communities.

13 Laleye and Dagba, 2002.

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“Teachers went on strike for two days, April 16-17, 2002, because of alleged racket by the heads of secondary schools. Although they actually get the right budget allocation, they pay the contracted teachers (paid by the hour, at a rate of CFAF1,500, of CFAF1,800 in remote areas) half the official amount (CFAF800 or 1,000). The suspicion is that the “savings” are used to pay under-statute teachers their overtime, or, even worse, that the money just “disappears”. The total amount of public money misused could reach hundreds of CFAF millions.”Source: Le Matin, n°2314, April 17, 2002.

151. Qualifications of these contract employees vary, depending on local labour market supply, as do wages, which depend on communities’ capacities. However services expected from these contract employees are similar to those expected from civil servants. Actually, it may be higher since payment depends on results (admission rates for instance). Generally, their wages are inferior to public sector wages, which probably favours turnover.

B. The Challenge Ahead: Implementing Decentralisation14

152. It is important to state up-front that the word decentralisation is used to describe the ongoing reforms in Benin, as opposed to de-concentration (a redistribution of decision making authority and financial and management responsibilities among different levels of the central government). In the new setting, central government will transfer responsibility for a defined set of decision-making and administration of public functions to elected communal councils ultimately accountable to, although not wholly controlled by, the central government. The communes will still be under the préfet’s tutelle for the financial and legal ex post control and ex ante budget control. Benin’s administrative system today fits none of the three “archetypes” of decentralisation (Box 8). It is more a hybrid of de-concentration with a tinge of delegation (existence of elected local councils with specific mandates and resources but not completely autonomous from the centre). Decentralisation in Benin is therefore a delegation of power, not a devolution.

Box 8: Three “Archetypes” of Decentralisation

De-concentration --which is often considered to be the weakest form of decentralisation and is used most frequently in unitary States-- redistributes decision making authority and management responsibilities among different levels of the central government. In this PSM arrangement, a strong local administration is created by transferring responsibilities from central government ministries in the capital city to branch offices in regions, provinces or districts. Central government ministries retain the responsibility for supervision, control and monitoring as well as policy making.

Delegation. Delegation is a more extensive form of decentralisation, in which central governments transfer responsibility for decision-making and administration of public functions to elected local governments not wholly controlled by the central government, but ultimately accountable to it. Usually local governments enjoy a great deal of discretion in decision-making.

Devolution is the transfer from central government to autonomous local governments of responsibilities for services to municipalities that elect their own mayors and councils, raise their own revenues, and have independent authority to make investment decisions. In a devolution system, local governments have clear and legally recognised geographical boundaries over which they exercise authority and within which they perform public functions.

1. Origin and Main Characteristics

153. Since its independence in 1960, Benin has had several experiences of local government creation, but the various models were not sustained, partly because of the short lives of successive regimes, partly because of resistance within the political or administrative sphere. The most far-reaching reform before 2000 was the creation of local governments with administrative and financial powers in 1974, thus increasing local government tiers from one to three: département, sous-préfecture and commune. 14 This section reflects findings from a stock-taking note on decentralisation (World Bank, 2002).

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However, financial and administrative powers were never actually granted, and the centre remained in the driver’s seat.

154. Elected bodies, consisting of counsellors, have existed since 1972, at the village and ward levels. In the three communes now called “with special status”, elected counsellors elected delegates who in turn elected mayors. Void of any substantial power, these bodies were essentially the local arm of the party. Elections were organised in 1990, after the recommendation of the National Conference, for village and ward “chiefs” as well as mayors. These are the last local elections organised in Benin. Since then, some representatives have been dismissed by préfets, and replaced administratively.

155. In 1990, the National Conference put decentralisation, perceived as the way forward to deepen democracy, on the reform agenda. The 1990 Constitution, in line with the recommendations of the National Conference, recognised the fundamental principle of free administration of territorial collectivities by elected councils. In 1993, the Ministry of Interior organised far-reaching debates during the “Etats Généraux de l’administration territoriale”, to restructure and reform the territorial administration. The legal framework of decentralisation is based on the conclusions and recommendations of these meetings. In 1999, following several years of debates within Parliament as well as several decisions from the Supreme Court, five laws15 were passed.

156. Interestingly, through these laws, Benin not only created a single level of decentralisation, 77 new communes (including three communes with a special statute, Cotonou, Parakou and Porto Novo) and six additional départements, but also retained a single level of tutelle, the département level. Communes cover the administrative areas of former sous-préfectures, which thereby disappear as a level of territorial administration. The préfectures remain the only sub-national level exercising central government’s tutelle over communes and DDs. To facilitate this role, their number rose from six to twelve. Communes cover the entire territory. They are legal entities with administrative and financial autonomy, and are governed by a directly elected council who elects a mayor. Table 12 details new institutional arrangements according to the 1999 laws.

15 Law No. 97-028 of January 15, 1999, on the organisation of local administration of the Republic of Benin; Law No. 97-029 of January 15, 1999, on the organisation of the communes (local governments) in the Republic of Benin; Law No. 98-005 of January 15, 1999, on the organisation of the communes with special status; Law No. 98-0006 of March 9, 1999, on the electoral system for local governments and municipal councils of the Republic of Benin; Law No. 98-007 of January 15, 1999 on the financial system of the communes in the Republic of Benin.

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Table 12: Benin Territorial Organisation Before and After Decentralisation

StructuresCurrent

After Implementation of Decentralisation Laws

DECONCENTRATED LEVELStructures DDs. DDs; but needs to be clarified.Roles/Responsibilities Administrative and operational

responsibilities de-concentrated by line ministries.

Administrative & and technical support to local governments (but not yet defined/clarified).

Funding Central resources (ministries budget). Central resources (ministries budget).

Coordination with local governments None. Not yet defined.TERRITORIAL ADMINISTRATIONStructures Six préfectures. 12 préfectures.Roles/Responsibilities Administrative and security

functions; local development coordination & supervision of ministries regional directorates.

Administrative and security functions; local development coordination & supervision of ministries regional directorates.

Funding Central government (Ministry of Interior). Central government (Ministry of Interior).

Relationship with local governments

Supervision/tutelle.

Strong tutelle over communes (legality control; budget control; )/ Inter-sectoral coordination (modalities yet to be defined).

LOCAL GOVERNMENTSStructures CU (Urban circumscriptions);

urban and rural towns.Three special status communes and 74 other communes.

Roles/Responsibilities Vary by size; but most common for CUs, include: maintenance of commercial & roads infrastructure; social, cultural & administrative services; for most rural towns: very limited service provision; and minimum administrative functions (under the sous-préfets’ tutelle).

Six new areas of responsibilities, including: - local development, planning, housing and urbanism; infrastructures, equipment and transport; environment & sanitation; primary education; health, social and cultural infrastructure; economic and commercial services provision.

FundingLocal revenues (from fiscal and non fiscal sources) & Government transfers from national taxes.

Local revenues; start-up and “budget-balancing allocations (dotations d’équilibre)”; new local development tax; new funding mechanism (fonds de solidarité intercommunale).

Coordination with territorial and de-concentrated administration

Report to the tutelle for all administrative matters especially communal budgets approval.

Unclear with DDs.

Suppression of one layer of the tutelle: the sous-préfectures; legality (not opportunity) control by the tutelle; budget control by tutelle.

Unclear yet with DDs (to be clarified when de-concentration reform is formulated).

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157. The decentralisation laws also provide for means to deepen local democracy through a series of elected councils. Arrondissements (districts) are an integral part of the new communes, and have no legal existence or financial autonomy of their own. However, they still have their own elected councils. They are administered by a “mayor of arrondissement”. Each mayor of arrondissement, elected by the arrondissement council, is also appointed member of the commune municipal council. Villages’ or wards’ elected chiefs compose the arrondissement council. Below arrondissements, villages in rural areas and wards in urban areas are the smallest units of the new architecture. They also have an elected council. They provide advice on matters brought to their attention by the arrondissement council. This is an attempt by the legislature to strengthen grassroots democracy and to guarantee a minimum of representation for these two tiers of the new local government system, in spite of the fact that they are simple administrative units of new communes.

158. Decentralisation has not been implemented yet. If decentralisation laws have been – with many difficulties – passed, only part of the required implementation legislation has been prepared and even less has been passed. Local government elections have been postponed several times, but were finally held on December 15, 2002. Only with the elections of the municipal councils will decentralisation start in Benin. And as long as the regulatory framework is not completed, concrete operational modalities of the transfers of powers remain uncertain and vague. Communes’ responsibilities require that they be endowed with commensurate management, personnel and financial capacity to adequately meet their responsibilities. Operational implications and feasibility issues have not all been solved and thought through.

2. Are the new Responsibilities Matched with Commensurate Management, Personnel and Financial Capacity?

(a) Broad Competencies but…

159. Areas transferred to communes cover almost every single aspect of local development, which used to be the responsibility of préfectures, CUs and sous-préfectures. Transfer of competencies is very broad in scope. It is thereby consistent with the strong drive towards decentralisation expressed by the 1990 National Conference. However, as is often the case in Francophone countries, responsibility for actual service delivery for health, education, and partly for water, remains with central government.

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Box 9: Areas of Communal Competency

Local Development, Planning, Housing and Urbanism: within the areas under their jurisdictions, communes have full authority to prepare local development plans including development of urban master plans, economic and social development plans, delivery of building permits, and construction controls; Infrastructures and Transport: communes are responsible for their urban development through: (i) the planning, building and operation of public transport infrastructure and services as well as street lighting; (ii) bus-station construction and maintenance and other similar equipment; (iii) construction of hydraulic infrastructure, and local telecommunication lines; and (iv) power and infrastructure regulations; Environment and Sanitation: communes are responsible for water supply and distribution, waste collection and management; drainage system; public health safety; cemetery and public areas maintenance; Education: primary responsibilities of the communes in this sector are limited to kindergarten and primary schools construction, operation and maintenance; Health, Social and Cultural Sectors: transferred responsibilities include construction operation and maintenance of public health, Cultural and Social Promotion Centres, as well as Youth and Sports Centres; social assistance to the poor within the commune; Economic and Commercial Services: communes are specifically responsible for the construction, equipment, and maintenance of local markets and slaughterhouses facilities; but broadly, communes can initiate any activity and undertake investment to promote local development, tourism and industrial zones creation.

160. With the exception of the three largest communes (that have a special statute), most of the 74 other communes (especially the vast majority of small communes in rural areas) will have authority over very large geographical zones where structural rural poverty and heavy dependence on agriculture are the main characteristics of local economies. This will undoubtedly put a tremendous burden on their already weak capacity considering the scope of the new responsibilities transferred to them by the 1999 reform, and this from a fiscal, human and technical capacity perspective.

(b)… A Weak Financial Resource Base…

161. While the legal framework organising the transfer of mandates is complete, the transfer of corresponding resources has not been the object of careful feasibility studies to determine communes’ future financial needs. Figures available for fiscal years 1997 and 1998 indicate that future communes’ total ordinary revenues represent only 3.2 percent of government total revenues and only 0.4 percent of total GDP. Most communes will have a very weak fiscal base and depend heavily on central government transfers. Decisions on transfer amounts per commune will be difficult since there is no clear knowledge of the current resources allocated to each.

162. Communes’ resource base will come mainly from fiscal revenues – taxes will continue to be collected by MoF’s tax authorities on behalf of the communes – , and central government transfers, as well as payment for services and grants or loans (see details in Table 13). On top of the resources previously allocated to the sous-préfectures, some new resources will feed into the communal budget:

Additional tax resources (in particular, increase of the proportion of VAT re-transferred to communes, and tax on roadway system);

The new “local development tax” will be based on agricultural production – and thus favours rich communes. Two problems may rise: (i) what would be a tolerable level in a context of tough international competition for cotton exports; and (ii) tax collection difficulties in the case of dispersed population;

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The new “Fonds de Solidarité Intercommunale” (Inter-communal Solidarity Fund) is the implementation of the principle of solidarity between communes. Neither adequate resources of this Fund, nor precise modalities for its distribution have been decided yet;

A start-up grant by central government to help the communes balance their budgets for three years. According to Law 97-029, this start-up grant will be transferred to communes that can not have a balanced budget with their other resources. Interestingly, the only disposition mentioning what would happen after this initial period states that, after two years following the termination of this grant, a commune who would not be able to have a balance budget could merge with another one; and

Annual transfers for financing new responsibilities in health, primary education, social and cultural affairs, which will be transferred from either national budget or projects. This would be a breakthrough, but needs to be tightly monitored, given the well-known resistance of ministries to de-concentrate their operations and resources.

Table 13: Projected Local Government Revenue Structure

Sources With Decentralisation Issues/ Problems

Local Taxes123

Non- fiscal Taxes45

6

Central Transfers7

8

9

10

Local Development Funding1112

- Business tax;- Property tax;- Professional and business fees;

- Municipal license fees;- User charges for services rendered;- Local Development Tax;

- Salaries for LG staff and elected/appointed mayors;- Short-term grants for three years;( dotations d’équilibre) ; - Local share of import tax/VAT;

- Annual sector transfers for new responsibilities in health, education, social and cultural services;

- Municipal Partnership Fund;- Local Government Finance Institution.

Favours larger communes/ Difficult to implement (scattered production/ heightened competition in the cotton market).

Need to be based on clear formula; risk of acting as a disincentive.Mechanisms not defined; risk of resistance from the centre.

Not defined in terms of source of funds, financing for its operating costs, management structure and eligibility criteria for commune access; uncertainty on communes financial needs makes it difficult to estimate the correct capitalization for fund.

Not defined.

N.B.: new resource mechanisms are underlined in the middle column.

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(c) … and Lack of Skilled Staff

163. In addition to a weak financial resources base, even existing communes in Benin lack the minimum required in technical and managerial human capacity. According to a recent study on the feasibility of the creation of new communes16 , it is estimated that local government’s personnel total 3,300 (4,066 including contract employees). Compared to central administration this is a relatively small number. Most of these, of whom 95% are already on the commune payroll, are only graduates from elementary school, therefore have very low professional skills.

164. A serious restructuring of current human resources by future communes will undoubtedly be required. It will represent a tremendous challenge for the implementation of the reform by government, as technical and managerial capacity at the local level does not exist with the obvious exception of Cotonou and the two other large cities, Parakou and Porto Novo. In a context of limited resources, most communes will have difficulties to hire qualified personnel with appropriate profiles in all of the new areas transferred to them, or the resources required for a substantial capacity building effort targeting existing personnel.

165. Personnel transfer will be restricted to the current sous-préfectures and CUs. Transfer of personnel from de-concentrated offices to the newly elected communes is not mentioned in the laws, despite the transfer of some of their current competencies. But communes can “if required, ask the de-concentrated services to provide them with support”. The modalities of this support will be decided with the centre, and could be secondment of civil servants to the communes. The nature, scope and concrete modalities of these partnerships or secondments need to be articulated. Projecting the number of agents that will be necessary to ensure a sound functioning of each commune may prove difficult, since the CS database does not provide information on agents posting per sub region.

16 SERHAU 2000.

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VI. FURTHER REFORM CHALLENGES

166. In previous sections, this report has analysed the current State settings in Benin, using the département level as a magnifying glass of the central government and the service delivery performance. It has also analysed reforms currently implemented at the centre as well as the planned decentralisation. Reforms described previously are important and need to be continued and completed. However, the absence of reforms in some key areas may prevent any substantive progress in PSM and therefore impede needed improvements in service delivery. This section will identify questions that need to be answered to achieve decentralisation with a real impact on service delivery performance, and propose answers, sometimes more than one to one question or issue, acknowledging that to implement this comprehensive and ambitious reform agenda can require a decade for some, can be initiated immediately for others. It is nevertheless necessary to contemplate the overall agenda now, and from there draw a precise roadmap for the coming years.

167. Decentralisation, even limited to partial devolution, puts communes at the service delivery frontline. This implies that needs and roles of all State levels need to be identified and mechanisms must be set up to enable the different levels to fulfil their respective mandates. The principle of subsidiarity (only what cannot be done by the frontline tier has to be transferred up to the next) suggests the review to begin with the communes, then the département, then the centre. The main challenge of decentralisation is therefore building capacity. And the main question is: where to build this needed capacity? Communes? DDs? Préfectures?

A. Deepen the Core Processes Reforms

168. Given the ambitious agenda set by decentralisation, it is reasonable to consider a long transition period will be necessary. In the meantime, core reforms of budget and personnel management systems have to be deepened and extended to all tiers, in order to avoid exporting current gridlocks and rigidities to the communes when they reach the stage of full autonomy and capacity. Only this reform of core PSM systems will actually improve frontline service delivery capacity and performance, and prepare a fully effective decentralisation.

1. Personnel Management

(a) Generalise Contract Employment in Key Service Delivery Sectors and prepare for Decentralisation

169. By taking advantage of the high attrition rate in CS due to imbalanced age pyramid, contract employment should be generalised in key service delivery sectors (education, health, infrastructure, sanitation…) Benefits would be: (i) increased flexibility; (ii) less difficulties to fill positions outside the capital; and (iii) increased direct management and accountability.

170. The current contract system provides room for improvement. Contract employees should have an initial professional training. Contract employees’ performance should be regularly checked by their manager as a condition to remain employed. Sanction for low performance should continue, under transparent and clear conditions – including a compensation package - , to cause termination of contract.

171. The ultimate objective should be that contract employees working in sectors transferred to the communes will be devolved to the communes, including hiring authority, wages and career management. Since this is a far reaching reform, there could be several steps in its implementation:

First step: delegate wages to DDs as part of a greater delegation of budget (see below), while ensuring proper control on appropriation use;

Second step: delegate management of personnel to the communes (employment contract, performance evaluation, postings etc.); and

Final step: transfer of wages to the communes’ budgets.

(b) Promote Performance and De-concentrate Personnel Management

172. CS reform initiatives in Benin plan to transform it into a meritocratic and performance-oriented system. It will be crucial, whatever the final arrangements between the three tiers of government will be for personnel transfers, to succeed in changing the way personnel is managed in Benin. The reform should consist of: (i) passing the legislation allowing a merit-based career management system; (ii) putting in place tools for performance evaluation; and (iii) de-concentrate career management from the MoCS to line ministries, then from central offices to branch offices.

173. This reform of human resource management would facilitate de-concentration, by setting clear responsibilities to each individual, thus allowing for an actual accountability. Audits of some ministries in the early 90s indicated that human resources utilisation was less than optimal. Many teachers and health personnel continue to hold administrative positions while government is seeking new recruits for those areas. De-concentrating personnel management would also help solve the permanent problem of inadequate staffing. At the end of the de-concentration process, central units would be in charge of setting standards (initial and in-service training, organisation of competitive examinations for recruitment, etc.) while managers at the frontline (school principals and heads of health centres for instance) would be given direct authority over all their personnel.

2. Budget Management

(a) Performance, Programming, and Accountability

174. Building on the PERAC reforms at the centre, budget reform priorities should address the challenge of funnelling more (and better) budget funding to the frontline, via the following:

Systematically use inputs from sub-national levels as the basis for program-budgets;

Regionalise the unified budget (i.e. specify by département budget appropriations including currently donor-funded investments operations);

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Prepare for a real coordination between the national program-budgets and communes local development plan; and

Strengthen internal and external audit.

(b) Delegations of Budget Appropriations at the DDs Level

175. Actors at the de-concentrated services level think highly of budget delegations, as a potential solution to both their dearth of resources, and the requirements of efficient and effective management. DD directors vividly wish that budget delegations be extended to all resources given the actual limitations at the centre. It is thus suggested that all budget be executed through budget delegations, including investment financed by donors, as a preparation (including strengthening capacity at the département level) to future transfers of resources to communes. While reasons for this option are evident, those for resisting such a change are no less clear: money transfers from the centre mean power shifts to branch offices.

176. This option is consistent with the proposals outlined below to build the new State architecture in Benin implied by the decentralisation process. It needs a drastic revision of current staffing between centre, DDs and PIUs, with a strong emphasis on budget management skills (including procurement for big works) at the département level. Since it is quite a radical change in the government organisation, again several steps should be considered as necessary, each requiring close monitoring and systematic audit. The readiness for transfer of financial resources to communes would be reached after the fourth step is completed:

First step: capacity building in DDs (restructuring, staffing, training, equipment); Second step: revision of the budget preparation process: (i) preparation at the DD

level; and (ii) actual inter-ministerial coordination by the préfet (according to his new role as defined by the decentralisation laws);

Third step: automatic delegation of current appropriations (as detailed in budget law) beginning day one of fiscal year;

Fourth step: delegation of all recurrent costs at the département level, including contract employees wages; and

Fifth step: delegation of investment appropriations.

B. What Would Be Needed by Communes

177. Communes’ responsibilities are stated by the law, but much needs to be clarified, notably transfer of financial resources and personnel responsibilities. Others are no less crucial: roles, therefore responsibilities, between the three tiers of State, have yet to be analysed and decided upon, even in the current legal setting of decentralisation.

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178. Political Arrangements: the new relations with central government and citizens imply clarification of the following points:

Transfers: exactly what responsibilities will be transferred? How much of the corresponding financial resources?

Tutelle: mechanisms of the préfet’s tutelle must be clarified, to comply with the spirit of the law without creating opportunities for abuses. Coordination mechanisms between existing or remaining DDs must also be institutionalised.

Redress: redress mechanisms must be specified, from the communes vis-à-vis the préfet’s decision, or from citizens vis-à-vis a communes actions. These redress mechanisms must be prompt, transparent and easily accessible.

Citizen participation: besides regular elections, information channels between the communes and its constituencies, as well as more participation channels in decision-making and monitoring of the communes actions must be organised, well-advertised from the beginning.

179. Administrative Personnel: available human resources in the country, macro-economic balance considerations, and past experience with the statutory civil service, all speak against the creation of what francophone countries call a “territorial civil service”: administrative (not service delivery) personnel working only for local governments with a statute extremely similar to that of central government CS, i.e. guaranteed employment for the whole career, salary scales etc. 17 Instead, the following options can be proposed: (i) secondment of former sous-préfectures personnel; and (ii) “availability” (mise à disposition, they would remain DD personnel but work on request for the communes) of de-concentrated offices personnel to the communes. Should the communes be asked to contribute financially in exchange for the support of de-concentrated offices, they should also be given the right to choose who works for them in the DDs.

180. Service Delivery Personnel: communes have been granted responsibility in investment and operation of key service delivery sectors, but not the responsibility for the personnel delivering those services (primary school teachers, nurses, doctors). The generalisation of contract employment should ease the process of transferring personnel with the corresponding responsibilities.

181. Fiscal decentralisation: a thorough identification of financial requirements needs to be conducted to prepare transfer of powers to the communes: laws stipulate that no transfer will be done without the corresponding resources. Current donors’ funding should be included in this calculation, to avoid mishaps observed in neighbouring countries where powers were devolved without the real corresponding resources, thus annihilating any positive effect of decentralisation on service delivery performance. Once the level of resources needed for each commune is established, clear and transparent fiscal decentralisation mechanisms must be set up to transfer the funds, i.e. formula based annual or semi-annual transfers, and efficient control mechanisms established. Regarding further input from the donor community, this could either be organised directly through the central budget, and therefore follow similar formula

17 This personnel, currently under statute, is to be automatically transferred to the communes. This explains why government is considering a draft statute for territorial administration, to prevent opposition from them to their transfer to communes without the guarantee that they will retain their current statute.

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mechanisms, or donors could provide direct support to communes, in which case a decentralised cooperation legal framework needs to be designed. Clear fiduciary arrangements must be put in place, ex ante and ex post.

182. Capacity building: communes will “inherit” from sous-préfectures a personnel not trained or qualified for the new roles given to the local governments. Therefore, a comprehensive and long-term capacity building program must be put in place, that targets administrative personnel as well as members of the various elected councils. This program could be organised nationally or commune by commune. Identification of a responsible institution is necessary, as well as funding sources. Besides providing training, such a program should also propose incentives to work outside the capital, and in particular in remote areas.

C. Reform Options for the Département level

183. Future communes, which replace the sous-préfectures, will have a prominent role in local development. However, they will be under the préfet’s tutelle, who is also explicitly given the role of co-ordination between sectors. And they will need to collaborate closely with central government administrations responsible for service delivery in sectors where the communes are responsible for investment. As of today, many issues have to be raised to get to this new institutional structure. Many answers depend on the extent to which resources will actually be transferred to communes, and therefore what will be left to the de-concentrated offices, in their capacity as central government offices, and in their capacity of technical support to communes.

1. What Will De-concentrated Administration Become at the Département Level?

(a) Will DDs Still Be Necessary?

184. The existence of DDs in sectors for which responsibilities will be transferred to communes is a central issue: in the case of education and health, currently the laws transfer all responsibilities for infrastructure construction, operation and maintenance, but not the actual service delivery nor the personnel (although this point is not clear) to communes. Whatever transfer will finally be decided, it is probably not palatable to central and de-concentrated administrations, who will experience the greatest difficulties in letting communes assume all responsibilities in service delivery.

185. So the question is: what will be the role of a DD as a de-concentrated office in these sectors? Could it be the coordination of development plans from communes under the aegis of the préfet? It will probably include the normative function (examination for education, standards for construction, etc.) and monitoring implementation of national policies. In the case of sectors where no transfer is planned, there is certainly room for rationalisation and streamlining, especially in a context where resources and qualified staff are scarce. It could even be envisaged that these DDs would disappear, and become units of the préfecture.

186. Decentralisation laws state that communes can ask de-concentrated services to provide them with support. There are at least two options to achieve this: (i) DDs could

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also become syndicated technical services for communes in one département; and (ii) organise and encourage direct inter-sectoral collaboration by communes - or several communes in association. The option of creating technical units in every single commune will not be possible for two reasons: cost and availability of qualified staff. Modalities of such partnerships need to be clearly spelled out. At least one point is clear today: DDs, in their current condition, would not be able to assist the communes. Most of the tasks that will become the communes’ responsibilities are unknown to DDs: planning, programming, budgeting, procurement, management of investment. And DDs have few technical and professional staff.

187. The experience of the creation of six new préfectures should suggest extreme caution, since it demonstrates the difficulties encountered in building new administrative services. Despite the legal creation of six new départements, for political reasons (location of the préfecture), as well as capacity reasons, the new administrations have not been created yet. Which means that there will be few units to ensure coordination between the DDs and 74 communes…

(b) What will the Préfet’s Role Be?

188. The challenge of government coordination is to create, at the département level, a dialogue between ministries which does not actually exist today at the centre, although institutional arrangements provide instances of coordination at the Cabinet level. Currently, the préfecture mandate of coordinating government at the département level is not fulfilled. And its technical capacity is weak. Actually, the only uncontested authority of the préfet is in the police and security areas. Transforming the préfet into a facilitator of discussions and collaborations might not be easy.

189. Beyond the rhetoric of decentralisation laws, the issue here is what the préfet will be asked to do and, when this is clarified, how he will be equipped for his assigned role of government coordination (as stipulated by Law 97-029). Since key sectors are to be transferred to communes, the coordination of government by préfets will probably be limited to ensuring that: (i) the required support to communes is supplied by DDs; and (ii) national policies are implemented in the département, including therefore communes.

190. Implementing decentralisation requires a clarification of the new role of territorial administration in its tutelle capacity. The tutelle on communes will cover: (i) “assistance and advice to communes, support to the communes’ actions, and harmonise them with those of the State”; and (ii) “legality control of communal council’s and mayor’s decisions as well as of communal budget”18. The current condition of territorial administration is at least as poor as that of DDs. If the developmental and coordinating role of the tutelle is to become a reality, préfectures must be reformed so that they are able to hold this role. The procedures for harmonising communal development plans and national development plan have yet to be specified. Département coordination requires technical skills to control, but also to assist. If préfectures do not acquire proper technical capacity, their tutelle will be inefficient and/or abusive.

18 Loi 97-029,Titre V, Chapitre 1, Article 142.

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D. Realigning the Centre

191. Previous sub-sections have outlined the changes needed to meet the challenges of decentralisation. All have a direct impact on the central administration, on cross-cutting systems as well as on line ministries. The new role of local governments in main sectors will pull the implementation responsibility out of Cotonou down to the communes and, depending on the sector, to de-concentrated offices of central government in the départements. One big challenge is to transform the central government from a “blue collar” to a “white collar” institution, which reinforces the importance of personnel management reform.

192. The centre (core and line ministries) will be responsible for setting national policies that are amenable to the new local governments’ accountability, and to remove the gridlocks generated by the current systems of public finance and personnel management which represent an obstacle to an efficient de-concentrated administration and do not allow real local governments autonomy. Management and control processes geared to support a monolithic hierarchy will need to be transformed to support local administrations and local governments. Auditing and reporting will remain essential, and will need to be extended to the new bodies in charge of public finance (communes and préfets).

193. Functional reviews of central administration are a good instrument to provide insight on the changes needed in light of the new responsibilities of the centre: not implementation, but facilitation of local government activities, policy-making, monitoring and evaluation of activities (setting standards, monitoring outcomes), control systems, capacity building for lower levels. This should result in a revision of professional skills and staffing numbers, with a probable re-conversion of some employees through training programs and replacement of retiring civil servants by new recruits with different qualifications.

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ANNEX I. GLOSSARY OF FRENCH TERMS

Comptable: accountant. The comptable’s role is passive relative to that of the ordonnateur. He/she controls the regularity of the operations made by the ordonnateur and handles the funds without being entitled to make decisions regarding the use or management of these funds by the ordonnateur, except if rules are violated.

Département: administrative division headed by a préfet. Benin territory is divided in twelve départements since the 2000 decentralisation reform.

Député: Member of Benin’s Parliament (National Assembly).

Grade: ladder in a civil service category.

Ordonnateur: authority for orders of payment. Used to be the Minister of Finance in person, now delegated to the line ministries at the centre. Different from the commitment authority, the CF and the accounting authority, at the département level.

Préfecture: a) refers to the administrative services under the authority of the préfet; b) by extension, refers to the city where the préfet is based, and to his offices.

Préfet: the préfet is de jure the head of departmental administration. He is the State’s representative outside the capital, and represents all ministers individually and collectively. He is appointed by a Presidential decree after a Cabinet decision, following a proposal from the Ministry of Interior. He reports directly to the Ministry of Interior. He is also in charge of safety and security issues.

Sous-préfecture: territorial division of a préfecture, headed by as sous-préfet reporting directly to the préfet.

Sous-préfet: head of the sous-préfecture.

Tutelle: control means of the central government (or its delegates) on local governments. The “autorité de tutelle” (tutelle authority) in the département is the préfet.

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ANNEX II. POLITICAL EVENTS CHRONOLOGY SINCE 1960

1960 (August 1) Independence of the Republic of Dahomey. Hubert Maga is the first President of the Republic (elected by Parliament).

1960 (November 25) Adoption of a Constitution.1960 (December 11) Legislative elections. Victory of the Dahomean Unity Party

formed by merging Sourou Migan Apithy’s and Hubert Maga’s parties.

1963 (October) Strikes and demonstrations.1963 (October 28) Military coup. Hubert Maga is overthrown. Power is given to

Colonel Christophe Soglo.1963 (December) Sourou Migan Apithy becomes President of the Republic, Justin

Ahomadebgé Prime Minister and Vice-President.1964 (January 5) Adoption by referendum of a new Constitution.1965 (November 29) Resignation of Sourou Migan Apithy. The formation of a new

cabinet is entrusted to the President of the National Assembly, Tahirou Congacou.

1965 (December 22) Military coup brings General Soglo at the head of the country.1967 (December 17) Military coup led by Major Kouandété. A government led by

lieutenant-colonel Alley is formed.1968 (June 26) Following the boycott of the elections, the revolutionary military

Committee (CMR) invests Dr. Emile Derlin Zinsou President of the Republic.

1969 (December 10) Military coup by Lieutenant-Colonel Kouandété overthrows Dr. Zinsou. A triumvirate military takes control of the country.

1970 (May 7) Creation of a Presidential Council with three members, Apithy, Maga and Ahomadebgé, whose tenure of the Presidency will be revolving. Maga inaugurates the system for two years, followed by Ahomadebgé.

1972 (October 26) Military coup led by Major Mathieu Kérékou.1973 (December) Creation of the National Council of the Revolution (CNR).1974 (November 30) Official declaration of adoption of Marxism-Leninism.1975 (November 30) Proclamation of the People’s Republic of Benin. Introduction of

a single party system, with the Party of the Popular Revolution Beninese (PRPB).

1977 (August 26) Adoption of a Fundamental Law.1979 (November) Legislative elections. Strong majority in favour of the PRPB

candidates.1980 (February 6) Mr. Mathieu Kérékou is elected President of the Republic by the

National Revolutionary Assembly.1984 (August 31) Re-election of Mr. Mathieu Kérékou to the Presidency.1987 Economic crisis, students unrest, army disorder.1988 (March-June) Two military plots are thwarted.1989 (August 2) Re-election of Mr. Mathieu Kérékou to the Presidency.1989 (November) General strike.1989 (December) Benin abandons Marxism-Leninism.1990 (February) The Constitution is suspended.

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1990 (February 19-28) The national conference held in Cotonou (488 members, Mgr. De Souza chairman) poses the principles of the future Constitution.

1990 (9 mars) Creation of the High Council for the Republic which comprises four former presidents of the Republic: Hubert Maga, Justin Ahomadebgé, Emile Derlin Zinsou, Tahirou Congacou. The High Council for the Republic holds the legislative power.

1990 (12 mars) The High Council for the Republic appoints Mr. Nicéphore Soglo Prime Minister.

1990 (December 2) Adoption by referendum of the project of Constitution founding a presidential mode, multipartism.

1991 (February 2) Legislative elections.1991 (March 24) Mr. Nicéphore Soglo is elected president of the Republic.1995 (March 28) Legislative elections. Victory of the opposition to Nicéphore

Soglo.1996 (March 3-18) Presidential election. General Mathieu Kérékou is elected after a

runoff with Mr. Nicéphore Soglo.1996 (April 9) Formation of the cabinet. Mr. Adrien Houngbédji is appointed

Prime Minister (position not in the Constitution).1998 (May 15) Formation of the second Kérékou cabinet, without Prime

Minister.1999 (March 30) Legislative elections. The opposition wins 42 seats out of 83.1999 (June 22) President Kérékou forms a new cabinet.2001 (March 4-18) Presidential election, the incumbent President is re-elected after a

runoff with Mr. Bruno Amoussou.2001 Formation of a new cabinet.

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ANNEX III. DIFFERENT DE-CONCENTRATION STRUCTURES AND BUDGET DELEGATIONS

MINISTRIES DE-CONCENTRATED OFFICES

RESPONSIBILITIES OBSERVATIONS BUDGET DELEGATION

Ex-MoP (MECCAG-PD)

DD - Assist local communities

- Implement national policy for communities development.

Last definition in 2001. Functioning.

Yes, since 2001.

Ministry of Interior, Security and Decentralisation

- Préfecture

- Sous-préfecture

- District (arrondissement)

- Commune

- City or Village Ward

The préfet, the sous-préfets under his authority, represent the entire central government and the President of the Republic.

Last definition in 1999. Functioning.

No.

MoF Treasury :

- Département Treasury Office

(Recette départementale des

finances)

- Sous-préfecture Treasury Offices (Recette perception des Finances)

- Pays all département budget

expenditures and keeps the accounting

books.

- Pays all the sous-préfecture budget expenditures and keeps the accounting books.

Ministerial decrees (arrêtés)

No.

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Annex III. different de-concentration structures and budget delegations (Continued)

MINISTRIES DE-CONCENTRATED OFFICES

RESPONSIBILITIES OBSERVATIONS BUDGET DELEGATION

MoF Customs :

- Regional Directorate

- Customs Offices (Recette des douanes)

- Implements national policies and

coordinates activities of regional

customs offices and ensures

coordination with other Regional

Directorates.

- Collects customs.

Ministerial decrees (arrêtés)

No.

MoF Taxes :

- DD

- Taxation Bureau (Recette des Impôts)

- coordinates all offices within its

département for taxes; represents the

Central Directorate of Taxes.

- sets taxes and collects them.

Ministerial decrees (arrêtés)

No.

Ministry of Agriculture, Livestock and Fisheries

- CARDER

- Sectors

- Support rural development

- Coordinate non-government organisations in rural development

Last definition in 1991. Functioning.

Yes, since 2000.

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Annex III. different de-concentration structures and budget delegations (Continued)

MINISTRIES DE-CONCENTRATED OFFICES

RESPONSIBILITIES OBSERVATIONS BUDGET DELEGATION

Ministry of Family, Social Protection and Solidarity

-DD

- Centres of Social Promotion at the

sous-préfecture levels

- Specialised Social Services within other public institutions

- Implement ministry’s activities in the

département and the communities;

- Relay the DD at their level;

- Relay the Ministry at their level.

Last definition in 2001. Functioning.

Yes, since 1996.

Ministry of Mining, Energy and Water

DD

Water and Electricity Parastatal:

- Regional antennas

- Sector level antennas

- Implement policy from the Ministry in

water management (water resources and

drinking water)

- Produce and distribute water and electricity

Last definition in 1999. Functioning.

No.

Ministry of Public Works and Transports

- DD for Ground Transportation

- Public Works Regional Offices

Not included in the decree of 2001 defining the organisation of the Ministry. Functioning.

No.

Ministry of Environment, Housing and Urbanism (MEHU)

DD Support the préfet and the communities in the MEHU’s areas of competence.

Last definition in 2001. Functioning.

Yes, since 2001.

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Annex III. different de-concentration structures and budget delegations (Continued)

MINISTRIES DE-CONCENTRATED OFFICES

RESPONSIBILITIES OBSERVATIONS BUDGET DELEGATION

MoCS DD Represent the Minister; enforce labour legislation.

Last definition in 1996. Functioning.

Yes, since 2001.

MoH (Public Health)

- DD

- Health districts (one or more per

sous-préfecture)

- Health centres (sous-préfectures or communes)

- Public Health services Last definition in 2001. Functioning.

- Yes, since

1992.

- No.

- NoMinistry of Culture, Handicraft and Tourism

- DD

- Département Culture and Arts Office

Yes, since 1996.

Ministry of Industry, Commerce and Employment Promotion

- Ex- DD of previous ministry in this list.

- Yes, since 1996.

MEPS - DD

- School districts (circonscriptions scolaires, sous-préfectures level)

- Implement primary and secondary

education policies.

- Pedagogy animation and control, teachers’ training, preparation of the DD director’s decisions in these areas

Last definition in 2001. Functioning.

Yes, since 1992.

- No.

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ANNEX IV. BUDGET DELEGATIONS TO DDS FOR EDUCATION AND HEALTH (CFAF MILLION)

DDsAllocations

2001

Orders of Payment

2001Allocations

2002

Commitments 2002 (as of

March, 31, 2002)

DDEPSs

Atacora 512 477 2,159 143Atlantique 1,872 787 6,765 23Borgou 455 445 3,123 142Mono 544 527 3,551 138Oueme 1,327 950 5,619 128Zou 1,036 601 4,732 165Total 5,746 3,787 25,949 738

DDSPs

Atacora 1,109 691 1,042 118Atlantique 1,567 886 2,245 226Borgou 1,155 667 1,171 134Mono 963 639 1,010 83Oueme 1,602 775 1,453 177Zou 1,309 777 1,400 140Total 7,706 4,434 8,320 878

Total budget delegations for both sectors (CFAF billion); including new separate Vocational Education and Training DDs for 2002 13.5 8.2 34.9 1.6As a percentage of overall public spending (not including debt and pension) 3.9 3.1 9.3 Total budget delegations for all sectors (CFAF billion) 13.9 8.5 45.1 3.0As a percentage of overall public spending (not including debt and pension) 4.0 3.2 12.1Share of education and health in total budget delegation (%) 96.8 96.7 77.5 53.5

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