AfDB Approves €117 Million to Drive Local Economic Growth in Benin
The African Development Bank Group (AfDB) has approved €117 million in financing to support Benin’s efforts to strengthen local economic development, digital transformation, and climate resilience across its 77 municipalities.
The funding, endorsed by the Bank’s Board of Directors on 24 October, will finance the Support Programme for the Economic Development of Local Authorities (PADECT), which aims to transform all municipalities into vibrant hubs of private investment and job creation between 2026 and 2031.
The package includes two components: a €110 million loan from the African Development Bank and a €7 million concessional loan from the African Development Fund. The Ministry of Economy and Finance will implement the initiative through its Economic and Financial Programme Monitoring Unit.
According to AfDB Country Manager for Benin, Robert Masumbuko, this marks the Bank’s first sub-national financing in Benin. “We congratulate the national authorities for this remarkable innovation. The Bank is proud to have supported Benin in advancing its development agenda,” he said.
The programme seeks to strengthen the financial and institutional capacity of municipalities to execute annual investment plans effectively. It will also improve access to finance for small and medium-sized enterprises (SMEs) through partnerships with the Small and Medium-sized Enterprise Development Agency and the Investment and Guarantee Fund for SMEs.
A key component of the initiative is digital transformation. Telecommunications infrastructure will be rolled out across 89 public institutions, including schools, universities, hospitals, and town halls. Mobile network coverage will be extended to 114 localities currently without service, while 65 community digital access points will offer affordable internet and digital services in municipal centres.
The PADECT programme also promotes climate resilience by supporting the National Disaster Response Fund and the National Environment and Climate Fund. These will finance local climate adaptation and environmental protection projects, with a strong emphasis on women-led initiatives. At least 30 percent of programme beneficiaries are expected to be women.
The initiative adopts a results-based financing model, linking disbursements to nine performance indicators. “This programme marks a strategic shift in the Bank’s support to Benin — from activity-based to performance-based financing,” said Ammar Kessab, Principal Programme Officer at the African Development Bank.
PADECT aligns with Benin’s National Decentralisation and Devolution Policy (2024–2033) and its long-term development vision, ‘Benin 2060 ALAFIA’, which seeks to promote inclusive growth, empower local authorities, and strengthen economic resilience across all regions.
