Benin Compact

In February 2006, the Millennium Challenge Corporation signed a five-year, $307 million compact with the Government of Benin aimed to increase investments and private sector activity through the implementation of four projects. These projects will increase access to land through more secure and useful land tenure; expand access to financial services through grants given to micro, small, and medium enterprises; provide access to justice by bringing courts closer to rural populations; and improve access to markets by eliminating physical and procedural constraints currently hindering the flow of goods through the Port of Cotonou. The MCC compact in Benin entered into force (EIF) in October 2006, formally initiating the five-year timeline for project implementation.

  • Original Amount at Compact Signing:
    $307,298,040
  • Amount spent:
    $301,810,356
  • Signed:
     February 22, 2006
  • Entry Into Force:
     October 7, 2006
  • Closed:
     October 6, 2011

Project Results

Access to Financial Services Project

  • $19,650,000Original Compact Project Amount

Estimated Benefits

Estimated Benefits for the Access to Financial Services Project
Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
Not specified Not yet available

N/A - The Access to Financial Services Project will provide operational and technical support to microfinance institutions, which should translate into better services and additional loans to their clients. Because it is difficult to quantify how many clients will benefit from this project, beneficiaries are not estimated.

 $21,100,000

Project Description

This project aims to improve the efficiency of micro, small and medium-sized enterprises (MSMEs) to respond to opportunities by reducing costs and improving access to financial services. The Project will improve financial services provided to MSMEs, increase microfinance institutions’ (MFIs’) self-sufficiency, decrease MFIs’ portfolio at risk, and increase loans guaranteed with land titles.

  • Create a grant facility to support MSMEs and to expand financial services;
  • Strengthen supervision of microfinance institutions;
  • Arrange stakeholder forums on expanding financial services;
  • Improve the financial sector regulatory environment;
  • Improve the microfinance credit information bureau; and
  • Help financial institutions increase lending based on land as collateral.

Access to Justice

  • $34,270,000Original Compact Project Amount

Estimated Benefits

Estimated Benefits for the Access to Justice
Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
Not specified Not yet available 2,240,000 $76,100,000

Project Description

This project aims to strengthen the institutional environment for business and investment in Benin by improving the ability of the judicial system to resolve claims. This Project is expected to increase the number of cases resolved per year, increase the number of cases treated by the Arbitration Center, and decrease the time required to register an enterprise.

  • Expand the Arbitration Center of the Chamber of Commerce and Industry;
  • Improve the Business Registration Center;
  • Train judges and court personnel and strengthen the Inspector General Office;
  • Build a Legal Information Center accessible to the public;
  • Provide legal aid to poor litigants through NGOs; and
  • Construct eight new courts of first instance and one court of appeal.

Access to Land Project

  • $36,020,000Original Compact Project Amount

Estimated Benefits

Estimated Benefits for the Access to Land Project
Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
Not specified Not yet available 307,000 $50,100,000

Project Description

This Project aims to create secure land tenure for the poor and non-poor alike and to create effective, transparent governance of land and property issues. This Project is expected to reduce the time and cost to obtain a title and to increase land security.

  • Improve land administration and management;
  • Formalize property rights in rural and urban areas;
  • Decentralize land registration by establishing regional offices; and
  • Provide education on land policy.

Access to Markets Project

  • $169,447,000Original Compact Project Amount

Estimated Benefits

Estimated Benefits for the Access to Markets Project
Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
Not specified Not yet available 14,059,000 $262,300,000

Project Description

This project aims to improve the performance and security, expand capacity, and reduce costs of the Port of Cotonou. A modernized Port will be more efficient and reduce time for shippers. Increased volume and reduced costs will benefit the entire Beninese economy.

  • Construct a new south wharf;
  • Upgrade roads and gates and install new fire protection and security systems;
  • Construct new bulk handling facilities
  • Establish a fish/seafood inspection-handling facility; and
  • Modernize customs, improve port procedures and train personnel.

As of October 9, 2020