Analysis of the functioning of local authorities in Benin: what possibilities of external financing?
DOI:
https://doi.org/10.18559/rielf.2025.1.2326Keywords:
local finances, basic social services, local governmentAbstract
Purpose: The aim of this article is to assess the borrowing capacity of Benin's local authorities after more than two decades of decentralisation implementation.
Design/methodology/approach: The approach adopted consisted in analysing the quantitative and qualitative data collected from the 25 municipalities, including 3 with special status, over the period 2004 to 2022, using specific financial indicators. An impact analysis based on hypotheses was also carried out, and the following implications were identified
Findings: The results show that some of Benin's communes, particularly those with special status and those with intermediate status, can take market share provided that they review their structure and adapt to the conditions of the financial markets, but also and above all build infrastructures that could produce the wealth needed to meet debt servicing costs. The analysis also showed that continuous and permanent loans have a real impact on the balance of goods and services than one-off and very short-term loans.
Originality/value: The originality of this article lies in it’s exploration of the borrowing possibilities for Benin's local authorities, distinguishing between Communes with special status (conditional borrowing facilities) and Intermediate and Ordinary Communes (overhaul of their operations). The article also suggests ways in which Benin's local authorities can borrow through the bond market and development banks, which are more advantageous than other debt financing institutions.
JEL Classification
State and Local Budget and Expenditures (H72)
State and Local Government: Health • Education • Welfare • Public Pensions (H75)
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