Notice of Entering Into a Compact With the Government of the Republic of Benin, 12934-12986 [06-2252]
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12934
Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 / Notices
MILLENNIUM CHALLENGE
CORPORATION
[MCC FR 06–05]
Notice of Entering Into a Compact With
the Government of the Republic of
Benin
Millennium Challenge
Corporation.
ACTION: Notice.
AGENCY:
SUMMARY: In accordance with Section
610(b)(2) of the Millennium Challenge
Act of 2003 (Pub. L. 108–199, Division
D), the Millennium Challenge
Corporation (MCC) is publishing a
summary and the complete text of the
Millennium Challenge Compact
between the United States of America,
acting through the Millennium
Challenge Corporation, and the
Government of the Republic of Benin.
Representatives of the United States
Government and the Government of the
Republic of Benin executed the
Compact documents on February 22,
2006.
Dated: March 6, 2006.
Jon A. Dyck,
Vice President & General Counsel,
Millennium Challenge Corporation.
Summary of Millennium Challenge
Compact With the Government of the
Republic of Benin
I. Introduction
Situated in West Africa, between
Nigeria and Togo in the Gulf of Guinea,
Benin is a very poor country with a
population of nearly seven million, a
third of which live in poverty. Progress
in development is attributed to reforms
initiated in the early 1990s as Benin
transitioned from a Marxist-Leninist
state towards a pluralistic democracy
and market economy.
Despite growth rates averaging 5
percent per year in the past decade,
rapid population growth has offset
much of these gains and poverty
remains widespread. Per capita income
in Benin remains below the sub-Sahara
African average and rural poverty has
increased in recent years. Benin’s
economy is narrowly dependent on
cotton production, subsistence
agriculture and regional trade through
the Port of Cotonou. Key impediments
to sustainable economic growth and
poverty reduction are a poor investment
climate and a lack of dynamic private
sector activity. These are hindered by
land insecurity, lack of access to capital,
an inefficient judicial system, and an
increasingly uncompetitive Port of
Cotonou.
The five year, approximately $307
million Millennium Challenge Compact
with the Government of Benin (GOB)
aims to increase investment and private
sector activity in Benin. The program to
be funded under the Compact (Program)
seeks to remove key constraints to
growth and supports improvements in
physical and institutional
infrastructures. The projects included in
the Program reinforce each other and
MCC estimates they will together
contribute to an economic rate of return
(ERR) of 24 percent.
II. Program Overview and Budget
Benin’s MCA Program is a series of
strategic investments designed to
improve core physical and institutional
infrastructure and increase investment
and private sector activity. The Program
comprises four Projects: ‘‘Access to
Land,’’ ‘‘Access to Financial Services,’’
‘‘Access to Justice,’’ and ‘‘Access to
Markets.’’
1. Access to Land (‘‘Land Project’’)
(approximately $36 million): Investment
climate studies list land access among
the top constraints to business
development in Benin. 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. MCC anticipates
this Project will reduce the time and
cost to obtain a title, reduce the number
of land disputes, and increase the
perception of land security.
2. Access to Financial Services
(‘‘Financial Services Project’’)
(approximately $20 million): Due to the
high cost or unavailability of credit and
other financial services, small
businesses in Benin are unable to
expand production and employment.
This Project aims to improve the ability
of micro, small and medium-sized
enterprises (MSMEs) to respond to
opportunities by expanding access to
financial services. The Project is
designed to expand the financial
services provided to MSMEs, improve
supervision of microfinance institutions
(MFIs), increase MFI operational selfsufficiency, decrease MFI portfolio at
risk, and increase the number of loans
guaranteed with land titles.
3. Access to Justice (‘‘Justice Project’’)
(approximately $34 million): A major
obstacle to investment and economic
growth in Benin is the inefficiency of
the judicial system. Only 8 percent of
commercial cases filed are resolved
within a year. Benin was recently rated
by the World Bank as among the most
difficult places in the world to enforce
a contract. 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. The Project is
expected to increase the number of
cases resolved per year by the Courts of
First Instance, increase the number of
cases handled by the Arbitration Center,
and increase the number of registered
enterprises.
4. Access to Markets (‘‘Markets
Project’’) (approximately $169 million):
The importance of the Port of Cotonou
to Benin’s economy has been increasing,
while its competitiveness has been
steadily decreasing. This Project is
designed to promote access to markets
by improving Port operations and
infrastructure. Specifically, it aims to
improve Port performance and security,
expand capacity, and reduce costs. MCC
anticipates the Project will reduce
delays at the Port and increase the
volume of imports and exports.
The following table outlines the
estimated MCC contribution to the
Program by year and category for term
of the Compact.
Timeline
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Description
Compact
YI
($US mil)
Compact
YI
($US mil)
Compact
Y2
($US mil)
Compact
Y3
($US mil)
Compact
Y4
($US mil)
Compact
Y5
($US mil)
Access to Land ........................................
Access to Financial Services ...................
Access to Justice .....................................
Access to Markets ...................................
Program Administration & Audits .............
Monitoring & Evaluation ...........................
4.56
3.15
3.83
9.45
8.21
3.19
10.43
5.42
7.85
30.13
7.61
1.69
8.55
5.41
9.06
66.29
7.75
1.24
7.37
4.71
6.97
62.36
7.73
1.24
5.11
0.96
6.56
1.22
7.83
1.42
36.02
19.65
34.27
169.45
39.13
8.78
Estimated Total .................................
32.39
63.13
98.30
90.38
23.10
307.30
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III. Impact
The Program is expected to impact up
to five million beneficiaries and lift an
estimated 250,000 Beninese out of
poverty by the year 2015. Specifically,
the Land Project is expected to assist an
estimated 115,000 rural and urban
households with more secure and useful
tenure; contribute to a 50 percent
reduction in court cases related to land
disputes; and result in a 10 percent
increase in investment in rural land and
a 20 percent increase in investment in
urban property. The Financial Services
Project is expected to expand financial
services to MSMEs by nearly $60
million (a multiple of three times the
Project’s funding), thereby increasing
MSME value added and incomes of the
poor that own, are employed by, or do
business with those enterprises. The
Justice Project is anticipated to benefit
approximately 2.38 million Beninese by
bringing courts closer to rural
populations and making them more
responsive and effective. Finally, a more
efficient Port will contribute to importer
and exporter value-added by reducing
transportation costs and increasing the
level of Port operations. It is likely that
the anticipated reduction in shipping
costs will be passed on to wholesalers
and traders, and ultimately be reflected
in lower consumer prices. Additional
added value in jobs from fish processing
and Port operations are expected from
improvements in several infrastructure
components.
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IV. Program Management
GOB will create a legal entity (MCABenin) to manage and oversee the
implementation of the Program. This
entity will be comprised of an elevenmember Board of Directors and a
management team. The Board of
Directors will make certain strategic
decisions and recommendations,
provide oversight of the Program
implementation and ensure the success
of the Program. MCA-Benin’s
management will be responsible for the
implementation of the Program,
including contracting, program
management, certain financial
management functions, and
coordination of monitoring and
evaluation. In addition, an eightmember Advisory Council will be
established to provide recommendations
and feedback to the MCA-Benin Board
of Directors.
Independent fiscal and procurement
agents, selected through international
competitive search processes, will be
engaged to provide fiscal management
and procurement services respectively.
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Other Highlights
A. Consultative Process: This Program
has undergone one of the most robust
consultative processes to date in an
MCA-eligible country. Benin’s proposal
is the product of a genuine, meaningful
and participatory consultative process.
Guided by the Poverty Reduction
Strategy Paper (PRSP), GOB’s
consultative process included a wide
cross-section of private sector and civil
society groups in the formulation of
Benin’s MCA priorities. Benin held
several consultative meetings with
representatives from various stakeholder
groups as well as radio and television
events to broadly present the outlines of
the proposal and garner feedback from
intended beneficiaries. The consultative
process was guided by the Benin
National Committee (BNC), whose
members were elected or delegated by
their respective constituencies.
Representation on the BNC includes six
representatives of GOB, three
representatives of civil society, three
representatives of the Chamber of
Commerce, three representatives of
national labor unions, two
representatives of the Agricultural
Chamber, and one representative of
artisan associations.
B. Government Commitment and
Effectiveness: The Program has received
considerable attention during the
Compact development process. GOB
allocated $680,000 for the preparation of
the proposal and has committed as part
of the Compact to contribute an
additional 5 billion CFA ($9.2 million)
to the Program during the Compact
Term. One fourth of this contribution
has already been included in the
national budget for 2006 and will be
available immediately following
Compact signing. GOB has also
expressed its commitment to the
Program by its willingness to condition
key activities upon requirements for
institutional change and policy reform.
C. Sustainability: Sustainability will
be ensured through training, capacity
building, policy reforms and
institutional changes. The Land and
Justice Projects contain core training,
information and education campaigns
that will build public knowledge on
land and justice issues, respectively. A
key objective of the Financial Services
Project is to enhance the sustainability
of existing commercial actors that
service MSMEs. Beneficiaries of the
Challenge Facility can be expected to
continue to implement improvements in
financial technologies and institutional
capacities after Program support ends.
The Markets Project includes greater
private management of operations, more
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efficient land usage, and streamlining of
customs processing.
D. Environment and Social Impacts:
The Land and Financial Services
Projects are expected to have few or no
adverse environmental and social
impacts. They have been placed in
screening category ‘‘C’’ under the MCC
Environmental Guidelines. The Land
Project is anticipated to have positive
social effects as well as to foster land
stewardship. The Financial Services
Project will incorporate training,
technical assistance, and services,
where appropriate, on strategies to
avoid environmental and social risks
and enhance the sustained impact of
access to financial services. Both of
these projects have specific
commitments to take into account
gender concerns.
The Justice Project has the potential
for modest, adverse environmental and
social impacts because of construction
of a legal information center and
courthouses. The Justice Project has
been placed in screening category ‘‘B’’
under the MCC Environmental
Guidelines. A framework environmental
and social assessment will be required
to screen sites once they are proposed
and provide guidance for site-specific
Environmental Management Plans
(EMPs) and Resettlement Action Plans
(RAPs) consistent with international
best practices. To enhance the social
impacts of this project, outreach will be
designed to incorporate gender
considerations as well as access by
vulnerable segments of society.
The Markets Project has been placed
in screening category ‘‘A’’ under the
MCC Environmental Guidelines and
will require a comprehensive
Environmental and Social Impact
Assessment (ESIA), conducted in
phases. As a critical first step, technical,
environmental, engineering and
economic studies are required to
evaluate alternatives and select the
preferred design to reduce
sedimentation of the harbor access and
not adversely impact coastal erosion
east of the Port; studies must also
analyze disposal of potentially
contaminated dredged material, for the
selected alternative and new wharf
construction. Based on these studies, an
ESIA and EMP will be required to
address impacts of increased Port
activity and new infrastructure and
compliance with international marine
conventions. An ESIA (combined or
separate, according to schedule needs)
will be required for landside
improvements, including an
environmental audit of the existing
operations, an Environmental
Management Plan/System, and an
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overall EMP. Verification is required to
determine if economic or physical
displacement will occur and a RAP is
needed.
E. Donor Coordination: MCC’s
investment would position the United
States Government as the largest bilateral donor to the country. Other major
donors to Benin are the Netherlands,
Denmark, France, Belgium and
Germany.
GOB and MCC have convened various
discussions and meetings with donor
partners to ensure complementarity.
The German development agency,
Deutsche Gesellschaft fur Technische
Zusammenarbeit (GTZ), financed a pilot
phase of the Rural Land Plans upon
which sections of GOB’s proposal are
based. A recent International Finance
Corporation Foreign Investment
Advisory Service (FIAS) investigation of
the investment climate in Benin will
recommend a reform agenda very
similar to what is proposed for MCC
funding. A number of multilateral and
bilateral donors, including the World
Bank, France, Denmark, and the
Netherlands, have been involved in
activities and studies aimed at
improving the performance of the Port
of Cotonou.
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Millennium Challenge Compact
Between the United States of America
Acting Through the Millennium
Challenge Corporation and the
Government of the Republic of Benin
Table of Contents
Article I. Purpose and Term
Section 1.1 Objectives
Section 1.2 Projects
Section 1.3 Entry into Force; Compact
Term
Article II. Funding and Resources
Section 2.1 MCC Funding
Section 2.2 Government Resources
Section 2.3 Limitation on the Use or
Treatment of MCC Funding
Section 2.4 Incorporation; Notice;
Clarification
Section 2.5 Refunds: Violation
Section 2.6 Bilateral Agreement
Article III. Implementation
Section 3.1 Implementation Framework
Section 3.2 Government Responsibilities
Section 3.3 Government Deliveries
Section 3.4 Government Assurances
Section 3.5 Implementation Letters;
Supplemental Agreements
Section 3.6 Procurement; Awards of
Assistance
Section 3.7 Policy Performance; Policy
Reforms
Section 3.8 Records and Information;
Access; Audits; Reviews
Section 3.9 Insurance; Performance
Guarantees
Section 3.10 Domestic Requirements
Section 3.11 No Conflict
Section 3.12 Reports
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Article IV. Conditions Precedent; Deliveries
Section 4.1 Conditions Prior to the Entry
into Force and Deliveries
Section 4.2 Conditions Precedent to MCC
Disbursements or Re-Disbursements
Article V. Final Clauses
Section 5.1 Communications
Section 5.2 Representatives
Section 5.3 Amendments
Section 5.4 Termination; Suspension
Section 5.5 Privileges and Immunities
Section 5.6 Attachments
Section 5.7 Inconsistencies
Section 5.8 Indemnification
Section 5.9 Headings
Section 5.10 Interpretation; Definitions
Section 5.11 Signatures
Section 5.12 Designation
Section 5.13 Survival
Section 5.14 Consultation
Section 5.15 MCC Status
Section 5.16 Language
Section 5.17 Publicity; Information and
Marking
Exhibit A: Definitions
Exhibit B: List of Certain Supplemental
Agreements
Schedule 2.1(a)(iii): Description of Compact
Implementation Funding
Annex I: Program Description
Schedule 1: Land Project
Schedule 2: Financial Services Project
Schedule 3: Justice Project
Schedule 4: Markets Project
Annex II: Summary of Multi-Year Financial
Plan
Annex III: Description of the M&E Plan
Millennium Challenge Compact
This Millennium Challenge Compact
(the ‘‘Compact’’) is made between the
United States of America, acting
through the Millennium Challenge
Corporation, a United States
Government corporation (‘‘MCC’’), and
the Government of the Republic of
Benin (the ‘‘Government’’) (referred to
herein individually as a ‘‘Party’’ and
collectively, the ‘‘Parties’’). A
compendium of capitalized terms
defined herein is included, for
convenience only, in Exhibit A attached
hereto.
Recitals
Whereas, MCC, acting through its
Board of Directors, has selected the
Republic of Benin as eligible to present
to MCC a proposal for the use of
Millennium Challenge Account
(‘‘MCA’’) assistance to help facilitate the
advance of economic growth and
poverty reduction in Benin;
Whereas, the Government has carried
out a consultative process with the
country’s private sector and civil society
to outline the country’s priorities for the
use of MCA assistance and developed a
proposal, which final proposal was
submitted to MCC on September 5, 2005
(the ‘‘Proposal’’);
Whereas, the Proposal focused on,
among other things, improving core
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physical and institutional infrastructure
to increase investment and private
sector activity;
Whereas, MCC has evaluated the
Proposal and related documents to
determine whether the Proposal is
consistent with core MCA principles
and includes proposed activities and
projects that will advance the progress
of Benin towards achieving economic
growth and poverty reduction; and
Whereas, based on MCC’s evaluation
of the Proposal and related documents
and subsequent discussions and
negotiations between the Parties, the
Government and MCC determined to
enter into this Compact to implement a
program using MCC Funding to advance
Benin’s progress towards economic
growth and poverty reduction (the
‘‘Program’’);
Now, Therefore, in consideration of
the foregoing and the mutual covenants
and agreements set forth herein, the
Parties hereby agree as follows:
Article I. Purpose and Term
Section 1.1 Objectives. The overall
objective of this Compact is to increase
investment and private sector activity in
Benin (‘‘Program Objective’’), which is
key to advancing the goal of economic
growth and poverty reduction in Benin
(the ‘‘Compact Goal’’). The Parties have
identified the following project-level
objectives (each, a ‘‘Project Objective’’
and together, the ‘‘Project Objectives’’)
of this Compact to advance the Program
Objective and Compact Goal, each of
which is described in more detail in the
Annexes attached hereto:
(a) Strengthen property rights and
investment (the ‘‘Land Objective’’);
(b) Expand access to financial services
(the ‘‘Financial Services Objective’’);
(c) Improve ability of the justice
system to enforce contracts and
reconcile claims (the ‘‘Justice
Objective’’); and
(d) Improve access to markets through
improvements to the Port of Cotonou
(‘‘Markets Objective’’).
The Government expects to achieve,
and shall use its best efforts to ensure
the achievement of, the Compact Goal,
Program Objective and Project
Objectives during the Compact Term.
The Program Objective and the
individual Project Objectives
collectively referred to herein as
‘‘Objectives’’ and each individually as
an ‘‘Objective.’’
Section 1.2 Projects. The Annexes
attached hereto describe the specific
projects and the policy reforms and
other activities related thereto (each, a
‘‘Project’’) that the Government will
carry out, or cause to be carried out, in
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furtherance of this Compact to achieve
the Objectives and the Compact Goal.
Section 1.3 Entry into Force;
Compact Term. This Compact shall
enter into force on the date of the last
letter in an exchange of letters between
the Principal Representatives of each
Party confirming that each Party has
completed its domestic requirements for
entry into force of this Compact
(including as set forth in Section 3.10)
and that all conditions set forth in
Section 4.1 have been satisfied by the
Government and MCC (the ‘‘Entry into
Force’’). This Compact shall remain in
force for five (5) years from the Entry
into Force, unless earlier terminated in
accordance with Section 5.4 (the
‘‘Compact Term’’).
Article II. Funding and Resources
Section 2.1 MCC Funding.
(a) MCC’s Contribution. MCC hereby
grants to the Government, subject to the
terms and conditions of this Compact,
an amount not to exceed Three Hundred
Seven Million Two Hundred and Ninety
Eight Thousand and Forty United States
Dollars (USD $307,298,040) (‘‘MCC
Funding’’) during the Compact Term to
enable the Government to implement
the Program and achieve the Objectives.
(i) Subject to Sections 2.1(a)(ii), 2.2(b)
and 5.4(b), the allocation of the MCC
Funding within the Program and among
and within the Projects shall be as
generally described in Annex II or as
otherwise agreed upon by the Parties
from time to time.
(ii) If at any time MCC determines that
a condition precedent to an MCC
Disbursement has not been satisfied,
MCC may, upon written notice to the
Government, reduce the total amount of
MCC Funding by an amount equal to the
amount estimated in the applicable
Detailed Financial Plan for the Program,
Project or Project Activity or subactivity for which such condition
precedent has not been met. Upon the
expiration or termination of this
Compact, (A) any amounts of MCC
Funding not disbursed by MCC to the
Government shall be automatically
released from any obligation in
connection with this Compact and (B)
any amounts of MCC Funding disbursed
by MCC to the Government as provided
in Section 2.1(b)(i), but not re-disbursed
as provided in Section 2.1(b)(ii) or
otherwise incurred as permitted
pursuant to Section 5.4(e) prior to the
expiration or termination of this
Compact, shall be returned to MCC in
accordance with Section 2.5(a)(ii).
(iii) Notwithstanding any other
provision of this Compact and pursuant
to the authority of Section 609(g) of the
Millennium Challenge Act of 2003, as
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amended (the ‘‘Act’’), upon the
conclusion of this Compact (and
without regard to the satisfaction of all
of the conditions for Entry into Force
required under Section 1.3), MCC shall
make available One Million Five
Hundred Thirty Six Thousand Four
Hundred and Ninety United States
Dollars (USD $1,536,490) (‘‘Compact
Implementation Funding’’) to facilitate
certain aspects of Compact
implementation as described in
Schedule 2.1(a)(iii) attached hereto;
provided, such Compact
Implementation Funding shall be
subject to (A) the limitations on the use
or treatment of MCC Funding set forth
in Section 2.3, as if such provision were
in full force and effect, and (B) any other
requirements for, and limitations on the
use of, such Compact Implementation
Funding as may be required by MCC in
writing; provided, further, that any
Compact Implementation Funding
granted in accordance with this Section
2.1(a)(iii) shall be included in, and not
additional to, the total amount of MCC
Funding; and provided further, any
obligation to provide such Compact
Implementation Funding shall expire
upon the expiration or termination of
this Compact or five (5) years from the
conclusion of this Compact, whichever
occurs sooner. Notwithstanding
anything to the contrary in this
Compact, this Section 2.1(a)(iii) shall
provisionally apply prior to Entry into
Force.
(b) Disbursements.
(i) Disbursements of MCC Funding.
MCC shall from time to time make
disbursements of MCC Funding (each
such disbursement, an ‘‘MCC
Disbursement’’) to a Permitted Account
or through such other mechanism
agreed by the Parties under and in
accordance with the procedures and
requirements set forth in Annex I, the
Disbursement Agreement or as
otherwise provided in any other
relevant Supplemental Agreement.
(ii) Re-Disbursements of MCC
Funding. The release of MCC Funding
from a Permitted Account (each such
release, a ‘‘Re-Disbursement’’), shall be
made in accordance with the procedures
and requirements set forth in Annex I,
the Disbursement Agreement or as
otherwise provided in any other
relevant Supplemental Agreement.
(c) Interest. Unless the Parties agree
otherwise in writing, any interest or
other earnings on MCC Funding that
accrue (collectively, ‘‘Accrued Interest’’)
shall be held in a Permitted Account
and accrue in accordance with the
requirements for the accrual and
treatment of Accrued Interest as
specified in Annex I or any relevant
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Supplemental Agreement. On a
quarterly basis and upon the
termination or expiration of this
Compact, the Government shall return,
or ensure the return of, all Accrued
Interest to any United States
Government account designated by
MCC.
(d) Conversion; Exchange Rate. The
Government shall ensure that all MCC
Funding that is held in the Permitted
Account(s) shall be denominated in the
currency of the United States of
America (‘‘United States Dollars’’) prior
to Re-Disbursement; provided, that a
certain portion of MCC Funding may be
transferred to a Local Account and may
be held in such Local Account in the
currency of the Republic of Benin prior
to Re-Disbursement in accordance with
the requirements of Annex I and any
relevant Supplemental Agreement. To
the extent that any amount of MCC
Funding held in United States Dollars
must be converted into the currency of
the Republic of Benin for any purpose,
including for any Re-Disbursement or
any transfer of MCC Funding into a
Local Account, the Government shall
ensure that such amount is converted
consistent with Annex I, including the
rate and manner set forth in Annex I,
and the requirements of the
Disbursement Agreement or any other
Supplemental Agreement between the
Parties.
(e) Guidance. From time to time, MCC
may provide guidance to the
Government through Implementation
Letters on the frequency, form and
content of requests for MCC
Disbursements and Re-Disbursements or
any other matter relating to MCC
Funding. The Government shall apply
such guidance in implementing this
Compact.
Section 2.2 Government Resources.
(a) The Government shall provide or
cause to be provided such Government
funds and other resources, including
any Government contributions set out
forth on Annex II attached hereto, and
shall take or cause to be taken such
actions, including obtaining all
necessary approvals and consents, as are
specified in this Compact or in any
Supplemental Agreement to which the
Government is a party or as are
otherwise necessary and appropriate to
effectively carry out the Government
Responsibilities or other responsibilities
or obligations of the Government under
or in furtherance of this Compact during
the Compact Term and through the
completion of any post-Compact Term
activities, audits or other
responsibilities. The Government shall
submit to the Parliament on an annual
basis the amount of the upcoming year’s
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Government contribution for inclusion
in the applicable finance law of Benin
and such amount shall be committed in
the national budget for that year for
purposes of the Program, such
contribution to be allocated within and
in furtherance of the Program as agreed
by the Parties. The Government shall
disburse funds on a quarterly basis from
this committed amount into an account,
held at a bank acceptable to MCC,
designated solely for this purpose.
(b) If at any time during the Compact
Term, the Government materially
reallocates or reduces the allocation in
its national budget or any other
Beninese governmental authority at a
departmental, municipal, regional or
other jurisdictional level materially
reallocates or reduces the allocation of
its respective budget of the normal and
expected resources that the Government
or such other governmental authority, as
applicable, would have otherwise
received or budgeted, from external or
domestic sources, for the activities
contemplated herein, the Government
shall notify MCC in writing within
fifteen (15) days of such reallocation or
reduction, such notification to contain
information regarding the amount of the
reallocation or reduction, the affected
activities, and an explanation for the
reallocation or reduction. In the event
that MCC independently determines,
upon review of the executed national
annual budget that such a material
reallocation or reduction of resources
has occurred, MCC shall notify the
Government and, following such
notification, the Government shall
provide a written explanation for such
reallocation or reduction and MCC may
(i) reduce, in its sole discretion, the total
amount of MCC Funding or any MCC
Disbursement by an amount equal to the
amount estimated in the applicable
Detailed Financial Plan for the activity
for which funds were reduced or
reallocated or (ii) otherwise suspend or
terminate MCC Funding in accordance
with Section 5.4(b).
(c) The Government shall use its best
efforts to ensure that all MCC Funding
is fully reflected and accounted for in
the annual budget of the Republic of
Benin on a multi-year basis.
Section 2.3 Limitations on the Use
or Treatment of MCC Funding.
(a) Abortions and Involuntary
Sterilizations. The Government shall
ensure that MCC Funding shall not be
used to undertake, fund or otherwise
support any activity that is subject to
prohibitions on use of funds contained
in (i) paragraphs (1) through (3) of
section 104(f) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2151b(f)(1)–(3), a
United States statute, which
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prohibitions shall apply to the same
extent and in the same manner as such
prohibitions apply to funds made
available to carry out Part I of such Act;
or (ii) any provision of law comparable
to the eleventh and fourteenth provisos
under the heading ‘‘Child Survival and
Health Programs Fund’’ of division E of
Public Law 108–7 (117 Stat. 162), a
United States statute.
(b) United States Job Loss or
Displacement of Production. The
Government shall ensure that MCC
Funding shall not be used to undertake,
fund or otherwise support any activity
that is likely to cause a substantial loss
of United States jobs or a substantial
displacement of United States
production, including:
(i) Providing financial incentives to
relocate a substantial number of United
States jobs or cause a substantial
displacement of production outside the
United States;
(ii) Supporting investment promotion
missions or other travel to the United
States with the intention of inducing
United States firms to relocate a
substantial number of United States jobs
or a substantial amount of production
outside the United States;
(iii) Conducting feasibility studies,
research services, studies, travel to or
from the United States, or providing
insurance or technical and management
assistance, with the intention of
inducing United States firms to relocate
a substantial number of United States
jobs or cause a substantial displacement
of production outside the United States;
(iv) Advertising in the United States
to encourage United States firms to
relocate a substantial number of United
States jobs or cause a substantial
displacement of production outside the
United States;
(v) Training workers for firms that
intend to relocate a substantial number
of United States jobs or cause a
substantial displacement of production
outside the United States;
(vi) Supporting a United States office
of an organization that offers incentives
for United States firms to relocate a
substantial number of United States jobs
or cause a substantial displacement of
production outside the United States; or
(vii) Providing general budget support
for an organization that engages in any
activity prohibited above.
(c) Military Assistance and Training.
The Government shall ensure that MCC
Funding shall not be used to undertake,
fund or otherwise support the purchase
or use of goods or services for military
purposes, including military training, or
to provide any assistance to the military,
police, militia, national guard or other
quasi-military organization or unit.
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(d) Prohibition of Assistance Relating
to Environmental, Health or Safety
Hazards. The Government shall ensure
that MCC Funding shall not be used to
undertake, fund or otherwise support
any activity that is likely to cause a
significant environmental, health, or
safety hazard. Unless MCC and the
Government agree otherwise in writing,
the Government shall ensure that
activities undertaken, funded or
otherwise supported in whole or in part
(directly or indirectly) by MCC Funding
comply with environmental guidelines
delivered by MCC to the Government or
posted by MCC on its Web site or
otherwise publicly made available, as
such guidelines may be amended from
time to time (the ‘‘Environmental
Guidelines’’), including any definition
of ‘‘likely to cause a significant
environmental, health, or safety hazard’’
as may be set forth in such
Environmental Guidelines.
(e) Taxation.
(i) Taxes. The Government shall
ensure that the Program, any Program
Assets, MCC Funding and Accrued
Interest shall be free from any taxes
imposed under the laws currently or
hereafter in effect in the Republic of
Benin during the Compact Term. This
exemption shall apply to any use of any
Program Asset, MCC Funding and
Accrued Interest, including any Exempt
Uses, and to any work performed under
or activities undertaken in furtherance
of this Compact by any person or entity
(including contractors and grantees)
funded by MCC Funding, and shall
apply to all taxes, tariffs, duties, and
other levies (each a ‘‘Tax’’ and
collectively, ‘‘Taxes’’), including:
(1) To the extent attributable to MCC
Funding, income taxes and other taxes
on profit or businesses imposed on
organizations or entities, other than
nationals of the Republic of Benin,
receiving MCC Funding, including taxes
on the acquisition, ownership, rental,
disposition or other use of real or
personal property, taxes on investment
or deposit requirements and currency
controls in the Republic of Benin, or any
other tax, duty, charge or fee of
whatever nature, except fees for specific
services rendered; for purposes of this
Section 2.3(e), the term ‘‘national’’ refers
to organizations established under the
laws currently or hereafter in effect in
the Republic of Benin, other than MCABenin or any other entity established
solely for purposes of managing or
overseeing the implementation of the
Program or any wholly-owned
subsidiaries, divisions, or Affiliates of
entities not registered or established
under the laws currently or hereafter in
effect in the Republic of Benin;
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(2) Customs duties, tariffs, import and
export taxes, or other levies on the
importation, use and re-exportation of
goods, services, or the personal
belongings and effects, including
personally-owned automobiles, for
Program use or the personal use of
individuals who are neither citizens nor
permanent residents of the Republic of
Benin and who are present in the
Republic of Benin for purposes of
carrying out the Program or their family
members, including all charges based on
the value of such imported goods;
(3) Taxes on the income or personal
property of all individuals who are
neither citizens nor permanent residents
of the Republic of Benin, including
income and social security taxes of all
types and all taxes on the personal
property owned by such individuals, to
the extent such income or property are
attributable to MCC Funding; and
(4) Taxes or duties levied on the last
transaction for the purchase of goods or
services funded by MCC Funding,
including sales taxes, tourism taxes,
value-added taxes (VAT), or other
similar charges. The term ‘‘last
transaction’’ refers to the last transaction
by which the goods or services were
purchased for use in the activities
funded by MCC Funding.
(ii) This Section 2.3(e) shall apply, but
is not limited to (A) any transaction,
service, activity, contract, grant or other
implementing agreement funded in
whole or in part by MCC Funding; (B)
any supplies, equipment, materials,
property or other goods (referred to
herein collectively as ‘‘goods’’) or funds
introduced into, acquired in, used or
disposed of in, or imported into or
exported from, the Republic of Benin by
MCC, or by any person or entity
(including contractors and grantees) as
part of, or in conjunction with, MCC
Funding or the Program; (C) any
contractor, grantee, or other
organization carrying out activities
funded in whole or in part by MCC
Funding; and (D) any employee of such
organizations (the uses set forth in
clauses (A) through (D) are collectively
referred to herein as ‘‘Exempt Uses’’).
(iii) If a Tax has been levied and paid
contrary to the requirements of this
Section 2.3(e), whether inadvertently,
due to the impracticality of
implementation of this provision with
respect to certain types or amounts of
taxes, or otherwise, the Government
shall refund promptly to MCC to an
account designated by MCC the amount
of such Tax in the currency of the
Republic of Benin, within thirty (30)
days (or such other period as may be
agreed in writing by the Parties) after
the Government is notified in writing of
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such levy and tax payment, in
accordance with procedures agreed by
the Parties, whether by MCC or
otherwise; provided, however, the
Government shall apply national funds
to satisfy its obligations under this
paragraph and no MCC Funding,
Accrued Interest, or any assets, goods,
or property (real, tangible, or intangible)
purchased or financed in whole or in
part (directly or indirectly) by MCC
Funding (‘‘Program Assets’’) may be
applied by the Government in
satisfaction of its obligations under this
paragraph.
(iv) The Parties shall memorialize in
a mutually acceptable Supplemental
Agreement or Implementation Letter or
other suitable document the
mechanisms for implementing this
Section 2.3(e), including (A) a formula
for determining refunds for Taxes paid,
the amount of which is not susceptible
to precise determination, (B) a
mechanism for ensuring the tax-free
importation, use, and re-exportation of
goods, services, or the personal
belongings of individuals (including all
Providers) described in paragraph (i)(2)
of this Section 2.3(e), (C) a requirement
for the provision by the Government of
a tax-exemption certificate which
expressly includes, inter alia, the thirty
(30) day refund requirement of Section
2.3(e)(iii), and (D) any other appropriate
Government action to facilitate the
administration of this Section 2.3(e).
(f) Alteration. The Government shall
ensure that no MCC Funding, Accrued
Interest nor Program Assets shall be
subject to any impoundment, rescission,
sequestration or any provision of law
now or hereafter in effect in the
Republic of Benin that would have the
effect of requiring or allowing any
impoundment, rescission or
sequestration of any MCC Funding,
Accrued Interest or Program Asset.
(g) Liens or Encumbrances. The
Government shall ensure that no MCC
Funding, Accrued Interest, or Program
Assets shall be subject to any lien,
attachment, enforcement of judgment,
pledge, or encumbrance of any kind
(each a ‘‘Lien’’), except with the prior
approval of MCC in accordance with
Section 3(c) of Annex I, and in the event
of the imposition of any Lien not so
approved, the Government shall
promptly seek the release of such Lien
and if required by final non-appealable
order, shall pay any amounts owed to
obtain such release; provided, however,
the Government shall apply national
funds to satisfy its obligations under
this Section 2.3(g) and no MCC
Funding, Accrued Interest, or Program
Assets may be applied by the
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Government in satisfaction of its
obligations under this Section 2.3(g).
(h) Other Limitations. The
Government shall ensure that the use or
treatment of MCC Funding, Accrued
Interest, and Program Assets shall be
subject to and in conformity with such
other limitations (i) as required by the
applicable law of the United States of
America now or hereafter in effect
during the Compact Term, (ii) as
advisable under or required by
applicable United States Government
policies now or hereafter in effect
during the Compact Term, or (iii) to
which the Parties may otherwise agree
in writing.
(i) Utilization of Goods, Services and
Works. The Government shall ensure
that any Program Assets, services,
facilities or works funded in whole or in
part (directly or indirectly) by MCC
Funding, unless otherwise agreed by the
Parties in writing, shall be used solely
in furtherance of this Compact.
(j) Notification of Applicable Laws
and Policies. MCC shall notify the
Government of any applicable United
States law or policy affecting the use or
treatment of MCC Funding, whether or
not specifically identified in this
Section 2.3, and shall provide to the
Government a copy of the text of any
such applicable law and a written
explanation of any such applicable
policy.
Section 2.4 Incorporation; Notice;
Clarification.
(a) The Government shall include, or
ensure the inclusion of, all of the
requirements set forth in Section 2.3 in
all Supplemental Agreements to which
MCC is not a party and shall use its best
efforts to ensure that no such
Supplemental Agreement is
implemented in violation of the
prohibitions set forth in Section 2.3.
(b) The Government shall ensure
notification of all of the requirements
set forth in Section 2.3 to any Provider
and all relevant officers, directors,
employees, agents, representatives,
Affiliates, contractors, sub-contractors,
grantees and sub-grantees of any
Provider. The term ‘‘Provider’’ shall
mean (i) MCA-Benin and any
Government Affiliate or Permitted
Designee involved in any activities in
furtherance of this Compact or (ii) any
third party who receives at least USD
$50,000 in the aggregate of MCC
Funding (other than employees of MCABenin) during the Compact Term or
such other amount as the Parties may
agree in writing, whether directly from
MCC, indirectly through ReDisbursements, or otherwise.
(c) In the event the Government or
any Provider requires clarification from
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MCC as to whether an activity
contemplated to be undertaken in
furtherance of this Compact violates or
may violate any provision of Section
2.3, the Government shall notify, or
ensure that such Provider notifies, MCC
in writing and provide in such
notification a detailed description of the
activity in question. In such event, the
Government shall not proceed, and shall
use its best efforts to ensure that no
relevant Provider proceeds, with such
activity, and the Government shall
ensure that no Re-Disbursements shall
be made for such activity, until MCC
advises the Government or such
Provider in writing that the activity is
permissible.
Section 2.5 Refunds; Violation.
(a) Notwithstanding the availability to
MCC, or exercise by MCC of, any other
remedies, including under international
law, this Compact, or any Supplemental
Agreement:
(i) If any amount of MCC Funding or
Accrued Interest, or any Program Asset,
is used for any purpose prohibited
under this Article II or otherwise in
violation of any of the terms and
conditions of this Compact, any
guidance in any Implementation Letter,
or any Supplemental Agreement
between the Parties, MCC may, upon
written notice, require the Government
to repay promptly to MCC to an account
designated by MCC or to others as MCC
may direct the amount of such misused
MCC Funding or Accrued Interest, or
the cash equivalent of the value of any
misused Program Asset, in United States
Dollars, plus any interest that accrued or
would have accrued thereon, within
thirty (30) days after the Government is
notified, whether by MCC or other duly
authorized representative of the United
States Government, of such prohibited
use; provided, however, the
Government shall apply national funds
to satisfy its obligations under this
Section 2.5(a)(i) and no MCC Funding,
Accrued Interest, nor Program Assets
may be applied by the Government in
satisfaction of its obligations under this
Section 2.5(a)(i); and
(ii) If all or any portion of this
Compact is terminated or suspended
and upon the expiration of this
Compact, the Government shall, subject
to the requirements of Sections 5.4(e)
and 5.4(f), refund, or ensure the refund,
to MCC to such account(s) designated by
MCC the amount of any MCC Funding,
plus any Accrued Interest, promptly,
but in no event later than thirty (30)
days after the Government receives
MCC’s request for such refund;
provided, that if this Compact is
terminated or suspended in part, MCC
may request a refund for only the
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amount of MCC Funding, plus any
Accrued Interest, then allocated to the
terminated or suspended portion;
provided, further, that any refund of
MCC Funding or Accrued Interest shall
be to such account(s) as designated by
MCC.
(b) Notwithstanding any other
provision in this Compact or any other
agreement to the contrary, MCC’s right
under this Section 2.5 for a refund shall
continue during the Compact Term and
for a period of (i) five (5) years thereafter
or (ii) one (1) year after MCC receives
actual knowledge of such violation,
whichever is later.
(c) If MCC determines that any
activity or failure to act violates, or may
violate, any Section in this Article II,
MCC may refuse any further MCC
Disbursements for or conditioned upon
such activity, and may take any action
to prevent any Re-Disbursement related
to such activity.
Section 2.6 Bilateral Agreement. All
MCC Funding shall be considered
United States assistance under the
Economic, Technical and Related
Assistance Agreement by and between
the Government of the United States of
America and the Government of the
Republic of Benin, dated May 27, 1961,
as amended from time to time (the
‘‘Bilateral Agreement’’). If there are
conflicts or inconsistencies between any
parts of this Compact and the Bilateral
Agreement, as either may be amended
from time to time, the provisions of this
Compact shall prevail over those of the
Bilateral Agreement.
Article III. Implementation
Section 3.1 Implementation
Framework. This Compact shall be
implemented by the Parties in
accordance with this Article III and as
further specified in the Annexes and in
relevant Supplemental Agreements.
Section 3.2 Government
Responsibilities.
(a) The Government shall have
principal responsibility for oversight
and management of the implementation
of the Program (i) in accordance with
the terms and conditions specified in
this Compact and relevant
Supplemental Agreements, (ii) in
accordance with all applicable laws
then in effect in Benin, and (iii) in a
timely and cost-effective manner and in
conformity with sound technical,
financial and management practices
(collectively, the ‘‘Government
Responsibilities’’). Unless otherwise
expressly provided, any reference to the
Government Responsibilities or any
other responsibilities or obligations of
the Government herein shall be deemed
to apply to any Government Affiliate
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and any of their respective directors,
officers, employees, contractors, subcontractors, grantees, sub-grantees,
agents or representatives.
(b) The Government shall ensure that
no person or entity shall participate in
the selection, award, administration, or
oversight of a contract, grant or other
benefit or transaction funded in whole
or in part (directly or indirectly) by
MCC Funding, in which (i) the entity,
the person, members of the person’s
immediate family or household or his or
her business partners, or organizations
controlled by or substantially involving
such person or entity, has or have a
direct or indirect financial or other
interest or (ii) the person or entity is
negotiating or has any arrangement
concerning prospective employment,
unless such person or entity has first
disclosed in writing to the Government
the conflict of interest and, following
such disclosure, the Parties agree in
writing to proceed notwithstanding
such conflict. The Government shall
ensure that no person or entity involved
in the selection, award, administration,
oversight or implementation of any
contract, grant or other benefit or
transaction funded in whole or in part
(directly or indirectly) by MCC Funding
shall solicit or accept from or offer to a
third party or seek or be promised
directly or indirectly for itself or for
another person or entity any gift,
gratuity, favor or benefit, other than
items of de minimis value and otherwise
consistent with such guidance as MCC
may provide from time to time.
(c) The Government shall not
designate any person or entity,
including any Government Affiliate, to
implement, in whole or in part, this
Compact or any Supplemental
Agreement between the Parties
(including any Government
Responsibilities or any other
responsibilities or obligations of the
Government under this Compact or any
Supplemental Agreement between the
Parties) or to exercise any rights of the
Government under this Compact or any
Supplemental Agreement between the
Parties, except as expressly provided
herein or with the prior written consent
of MCC; provided, however, the
Government may designate MCA-Benin
or, with the prior written consent of
MCC, such other mutually acceptable
persons or entities, (each, a ‘‘Permitted
Designee’’) to implement some or all of
the Government Responsibilities or any
other responsibilities or obligations of
the Government or to exercise any rights
of the Government under this Compact
or any Supplemental Agreement
between the Parties each in accordance
with the terms and conditions set forth
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in this Compact or such Supplemental
Agreement (referred to herein
collectively as ‘‘Designated Rights and
Responsibilities’’). Notwithstanding any
provision herein or any other agreement
to the contrary, no such designation
shall relieve the Government of such
Designated Rights and Responsibilities,
for which the Government shall retain
ultimate responsibility. In the event that
the Government designates any person
or entity, including any Government
Affiliate, to implement any portion of
the Government Responsibilities or
other responsibilities or obligations of
the Government, or to exercise any
rights of the Government under this
Compact or any Supplemental
Agreement between the Parties, in
accordance with this Section 3.2(c),
then the Government shall (i) cause
such person or entity to perform such
Designated Rights and Responsibilities
in the same manner and to the full
extent to which the Government is
obligated to perform such Designated
Rights and Responsibilities, (ii) ensure
that such person or entity does not
assign, delegate or contract (or
otherwise transfer) any of such
Designated Rights and Responsibilities
to any person or entity and (iii) cause
such person or entity to certify to MCC
in writing that it will so perform such
Designated Rights and Responsibilities
and will not assign, delegate, or contract
(or otherwise transfer) any of such
Designated Rights and Responsibilities
to any person or entity without the prior
written consent of MCC.
(d) The Government shall, upon a
request from MCC, execute, or ensure
the execution of, an assignment to MCC
of any cause of action which may accrue
to the benefit of the Government, a
Government Affiliate or any Permitted
Designee, including MCA-Benin, in
connection with or arising out of any
activities funded in whole or in part
(directly or indirectly) by MCC Funding.
(e) The Government shall ensure that
(i) no decision of MCA-Benin is
modified, supplemented, unduly
influenced or rescinded by any
governmental authority, except by a
non-appealable judicial decision, and
(ii) the authority of MCA-Benin shall
not be expanded, restricted, or
otherwise modified, except in
accordance with this Compact, the
Governance Agreement, the Governing
Documents or any other Supplemental
Agreement between the Parties.
(f) The Government shall ensure that
all persons and individuals that enter
into agreements to provide goods,
services or works under the Program or
in furtherance of this Compact shall do
so in accordance with the Procurement
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Guidelines and shall obtain all
necessary immigration, business and
other permits, licenses, consents and
approvals to enable them and their
personnel to fully perform under such
agreements.
Section 3.3 Government Deliveries.
The Government shall proceed, and
cause others to proceed, in a timely
manner to deliver to MCC all reports,
notices, certificates, documents or other
deliveries required to be delivered by
the Government under this Compact or
any Supplemental Agreement between
the Parties, in form and substance as set
forth in this Compact or in any such
Supplemental Agreement.
Section 3.4 Government Assurances.
The Government hereby provides the
following assurances to MCC that as of
the date this Compact is signed:
(a) The information contained in the
Proposal and any agreement, report,
statement, communication, document or
otherwise delivered or otherwise
communicated to MCC by or on behalf
of the Government on or after the date
of the submission of the Proposal (i) are
true, correct and complete in all
material respects and (ii) do not omit
any fact known to the Government that
if disclosed would (A) alter in any
material respect the information
delivered, (B) likely have a material
adverse effect on the Government’s
ability to effectively implement, or
ensure the effective implementation of,
the Program or any Project or to
otherwise carry out its responsibilities
or obligations under or in furtherance of
this Compact, or (C) have likely
adversely affected MCC’s determination
to enter into this Compact or any
Supplemental Agreement between the
Parties.
(b) Unless otherwise disclosed in
writing to MCC, the MCC Funding made
available hereunder is in addition to the
normal and expected resources that the
Government usually receives or budgets
for the activities contemplated herein
from external or domestic sources.
(c) This Compact does not conflict
and will not conflict with any
international agreement or obligation to
which the Government is a party or by
which it is bound.
(d) No payments have been (i)
received by any official of the
Government or any other government
body in connection with the
procurement of goods, services or works
to be undertaken or funded in whole or
in part (directly or indirectly) by MCC
Funding, except fees, taxes, or similar
payments legally established in the
Republic of Benin (subject to Section
2.3(e)) and consistent with the
applicable requirement of Beninese law
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or (ii) made to any third party, in
connection with or in furtherance of this
Compact, in violation of the United
States Foreign Corrupt Practices Act of
1977, as amended (15 U.S.C. 78a et
seq.).
Section 3.5 Implementation Letters;
Supplemental Agreements.
(a) MCC may, from time to time, issue
one or more letters to furnish additional
information or guidance to assist the
Government in the implementation of
this Compact (each, an ‘‘Implementation
Letter’’). The Government shall apply
such guidance in implementing this
Compact.
(b) The details of any funding,
implementing and other arrangements
in furtherance of this Compact may be
memorialized in one or more
agreements between (A) the Government
(or any Government Affiliate or
Permitted Designee) and MCC, (B) MCC
and/or the Government (or any
Government Affiliate or Permitted
Designee) and any third party, including
any of the Providers or Permitted
Designee or (C) any third parties where
neither MCC nor the Government is a
party, before, on or after the Entry into
Force (each, a ‘‘Supplemental
Agreement’’). The Government shall
deliver, or cause to be delivered, to MCC
within five (5) days of its execution a
copy of any Supplemental Agreement to
which MCC is not a party.
Section 3.6 Procurement; Awards of
Assistance.
(a) The Government shall ensure that
the procurement of all goods, services
and works by the Government or any
Provider in furtherance of this Compact
shall be consistent with the
procurement guidelines (the
‘‘Procurement Guidelines’’) reflected in
a Supplemental Agreement between the
Government (and/or a mutually
acceptable Government Affiliate or
MCA-Benin) and MCC (the
‘‘Procurement Agreement’’), which
Procurement Guidelines shall include
the following requirements:
(i) Internationally accepted
procurement rules with open, fair and
competitive procedures are used in a
transparent manner to solicit, award and
administer contracts, grants, and other
agreements and to procure goods,
services and works;
(ii) Solicitations for goods, services,
and works shall be based upon a clear
and accurate description of the goods,
services or works to be acquired;
(iii) Contracts shall be awarded only
to qualified and capable contractors that
have the capability and willingness to
perform the contracts in accordance
with the terms and conditions of the
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applicable contracts and on a cost
effective and timely basis; and
(iv) No more than a commercially
reasonable price, as determined, for
example, by a comparison of price
quotations and market prices, shall be
paid to procure goods, services, and
works.
(b) The Government shall maintain,
and shall use its best efforts to ensure
that all Providers maintain, records
regarding the receipt and use of goods,
services and works acquired in
furtherance of this Compact, the nature
and extent of solicitations of prospective
suppliers of goods, services and works
acquired in furtherance of this Compact,
and the basis of award of contracts,
grants and other agreements in
furtherance of this Compact.
(c) The Government shall use its best
efforts to ensure that information,
including solicitations, regarding
procurement, grant and other agreement
actions funded (or to be funded) in
whole or in part (directly or indirectly)
by MCC Funding shall be made publicly
available in the manner outlined in the
Procurement Guidelines or in any other
manner agreed upon by the Parties in
writing.
(d) The Government shall ensure that
no goods, services or works may be
funded in whole or in part (directly or
indirectly) by MCC Funding which are
procured pursuant to orders or contracts
firmly placed or entered into prior to the
Entry into Force, except as the Parties
may otherwise agree in writing.
(e) The Government shall ensure that
MCA-Benin and any other Permitted
Designee follows, and uses its best
efforts to ensure that all Providers
follow, the Procurement Guidelines in
procuring (including soliciting) goods,
services and works and in awarding and
administering contracts, grants and
other agreements in furtherance of this
Compact, and shall furnish MCC
evidence of the adoption of the
Procurement Guidelines by MCA-Benin
no later than the time specified in the
Disbursement Agreement.
(f) The Government shall include, or
ensure the inclusion of, the
requirements of this Section 3.6 into all
Supplemental Agreements between the
Government, any Government Affiliate
or Permitted Designee or any of their
respective directors, officers, employees,
Affiliates, contractors, sub-contractors,
grantees, sub-grantees, representatives
or agents, on the one hand, and a
Provider, on the other hand.
Section 3.7 Policy Performance;
Policy Reforms. In addition to the
specific policy and legal reform
commitments identified in Annex I and
the Schedules thereto, the Government
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shall seek to maintain and to improve
its level of performance under the
policy criteria identified in Section 607
of the Act, and the MCA selection
criteria and methodology published by
MCC pursuant to Section 607 of the Act
from time to time (‘‘MCA Eligibility
Criteria’’).
Section 3.8 Records and
Information; Access; Audits; Reviews.
(a) Reports and Information. The
Government shall furnish to MCC, and
shall use its best efforts to ensure that
all Providers and any other third party
receiving MCC Funding, as appropriate,
furnish to the Government (and the
Government shall provide to MCC), any
records and other information required
to be maintained under this Section 3.8
and such other information, documents
and reports as may be necessary or
appropriate for the Government to
effectively carry out its obligations
under this Compact, including under
Section 3.12.
(b) Government Books and Records.
The Government shall maintain, and
shall use its best efforts to ensure that
all Providers maintain, accounting
books, records, documents and other
evidence relating to this Compact
adequate to show, to the satisfaction of
MCC, without limitation, the use of all
MCC Funding, including all costs
incurred by the Government and the
Providers in furtherance of this
Compact, the receipt, acceptance and
use of goods, services and works
acquired in furtherance of this Compact
by the Government and the Providers,
agreed-upon cost sharing requirements,
the nature and extent of solicitations of
prospective suppliers of goods, services
and works acquired by the Government
and the Providers in furtherance of this
Compact, the basis of award of
Government and other contracts and
orders in furtherance of this Compact,
the overall progress of the
implementation of the Program, and any
documents required by this Compact or
any Supplemental Agreement between
the Parties or reasonably requested by
MCC upon reasonable notice (‘‘Compact
Records’’). The Government shall
maintain, and shall use its best efforts
to ensure that all Covered Providers
maintain, Compact Records in
accordance with generally accepted
accounting principles prevailing in the
United States, or at the Government’s
option and with the prior written
approval by MCC, other accounting
principles, such as those (1) prescribed
by the International Accounting
Standards Committee (an affiliate of the
International Federation of
Accountants) or (2) then prevailing in
Benin. Compact Records shall be
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maintained for at least five (5) years
after the end of the Compact Term or for
such longer period, if any, required to
resolve any litigation, claims or audit
findings or any statutory requirements.
(c) Access. Upon the request of MCC,
the Government, at all reasonable times,
shall permit, or cause to be permitted,
authorized representatives of MCC, the
Inspector General, the United States
Government Accountability Office, any
auditor responsible for an audit
contemplated herein or otherwise
conducted in furtherance of this
Compact, and any agents or
representatives engaged by MCC or a
Permitted Designee to conduct any
assessment, review or evaluation of the
Program, at all reasonable times the
opportunity to audit, review, evaluate or
inspect activities funded in whole or in
part (directly or indirectly) by MCC
Funding or undertaken in connection
with the Program, the utilization of
goods and services purchased or funded
in whole or in part (directly or
indirectly) by MCC Funding, and
Compact Records, including of the
Government or any Provider, relating to
activities funded or undertaken in
furtherance of, or otherwise relating to,
this Compact, and shall use its best
efforts to ensure access by MCC, the
Inspector General, the United States
Government Accountability Office or
relevant auditor, reviewer or evaluator
or their respective representatives or
agents to all relevant directors, officers,
employees, Affiliates, contractors,
representatives and agents of the
Government or any Provider.
(d) Audits.
(i) Government Audits. The
Government shall, on at least an annual
basis and as the Parties may otherwise
agree in writing, conduct, or cause to be
conducted, financial audits of all MCC
Disbursements and Re-Disbursements
during the year since the Entry into
Force or since the prior anniversary of
the Entry into Force in accordance with
the following terms, except as the
Parties may otherwise agree in writing.
As requested by MCC in writing, the
Government shall use, or cause to be
used, or select or cause to be selected,
an auditor named on the approved list
of auditors in accordance with the
‘‘Guidelines for Financial Audits
Contracted by Foreign Recipients’’ (the
‘‘Audit Guidelines’’) issued by the
Inspector General of the United States
Agency for International Development
(the ‘‘Inspector General’’), and as
approved by MCC, to conduct such
annual audits. Such audits shall be
performed in accordance with such
Audit Guidelines and be subject to
quality assurance oversight by the
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Inspector General in accordance with
such Audit Guidelines. An audit shall
be completed and delivered to MCC no
later than 90 days after the first period
to be audited and no later than 90 days
after each anniversary of the Entry into
Force thereafter, or such other period as
the Parties may otherwise agree in
writing.
(ii) Audits of U.S. Entities. The
Government shall ensure that
Supplemental Agreements between the
Government or any Provider, on the one
hand, and a United States non-profit
organization, on the other hand, state
that the United States organization is
subject to the applicable audit
requirements contained in OMB
Circular A–133, notwithstanding any
other provision of this Compact to the
contrary. The Government shall ensure
that Supplemental Agreements between
the Government or any Provider, on the
one hand, and a United States for-profit
Covered Provider, on the other hand,
state that the United States organization
is subject to audit by the cognizant
United States Government agency,
unless the Government and MCC agree
otherwise in writing.
(iii) Audit Plan. The Government
shall submit, or cause to be submitted,
to MCC no later than 20 days prior to
the date of its adoption a plan, in
accordance with the Audit Guidelines,
for the audit of the expenditures of any
Covered Providers, which audit plan, in
the form and substance as approved by
MCC, the Government shall adopt, or
cause to be adopted, no later than sixty
(60) days prior to the end of the first
period to be audited (such plan, the
‘‘Audit Plan’’).
(iv) Covered Provider. A ‘‘Covered
Provider’’ is (A) a non-United States
Provider that receives (other than
pursuant to a direct contract or
agreement with MCC) USD $300,000 or
more of MCC Funding in any MCABenin fiscal year or any other nonUnited States person or entity that
receives, directly or indirectly, USD
$300,000 or more of MCC Funding from
any Provider in such fiscal year or (B)
any United States Provider that receives
(other than pursuant to a direct contract
or agreement with MCC) USD $500,000
or more of MCC Funding in any MCABenin fiscal year or any other United
States person or entity that receives,
directly or indirectly, USD $500,000 or
more of MCC Funding from any
Provider in such fiscal year.
(v) Corrective Actions. The
Government shall use its best efforts to
ensure that Covered Providers take,
where necessary, appropriate and timely
corrective actions in response to audits,
consider whether a Covered Provider’s
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audit necessitates adjustment of its own
records, and require each such Covered
Provider to permit independent auditors
to have access to its records and
financial statements as necessary.
(vi) Audit Reports. The Government
shall furnish, or use its best efforts to
cause to be furnished, to MCC an audit
report in a form satisfactory to MCC for
each audit required by this Section 3.8,
other than audits arranged for by MCC,
no later than 90 days after the end of the
period under audit, or such other time
as may be agreed by the Parties from
time to time.
(vii) Other Providers. For Providers
who receive MCC Funding under this
Compact pursuant to direct contracts or
agreements with MCC, MCC shall
include appropriate audit requirements
in such contracts or agreements and
shall, on behalf of the Government,
unless otherwise agreed by the Parties,
conduct the follow-up activities with
regard to the audit reports furnished
pursuant to such requirements.
(viii) Audit by MCC. MCC retains the
right to perform, or cause to be
performed, the audits required under
this Section 3.8 by utilizing MCC
Funding or other resources available to
MCC for this purpose, and to audit,
conduct a financial review, or otherwise
ensure accountability of any Provider or
any other third party receiving MCC
Funding, regardless of the requirements
of this Section 3.8.
(e) Application to Providers. The
Government shall include, or ensure the
inclusion of, at a minimum, the
requirements of:
(i) Paragraphs (a), (b), (c), (d)(ii),
(d)(iii), (d)(v), (d)(vi), and (d)(viii) of this
Section 3.8 into all Supplemental
Agreements between the Government,
any Government Affiliate, any Permitted
Designee or any of their respective
directors, officers, employees, Affiliates,
contractors, sub-contractors, grantees,
sub-grantees, representatives or agents
(each, a ‘‘Government Party’’), on the
one hand, and a Covered Provider that
is not a non-profit organization
domiciled in the United States, on the
other hand;
(ii) Paragraphs (a), (b), (c), (d)(ii), and
(d)(viii) of this Section 3.8 into all
Supplemental Agreements between a
Government Party and a Provider that
does not meet the definition of a
Covered Provider; and
(iii) Paragraphs (a), (b), (c), (d)(ii),
(d)(v) and (d)(viii) of this Section 3.8
into all Supplemental Agreements
between a Government Party and a
Covered Provider that is a non-profit
organization domiciled in the United
States.
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(f) Reviews or Evaluations. The
Government shall conduct, or cause to
be conducted, such performance
reviews, data quality reviews,
environmental and social audits, or
program evaluations during the
Compact Term or otherwise and in
accordance with the M&E Plan or as
otherwise agreed in writing by the
Parties.
(g) Cost of Audits, Reviews or
Evaluations. MCC Funding may be used
to fund the costs of any Audits, reviews
or evaluations required under this
Compact, including as reflected on
Exhibit A to Annex II, and in no event
shall the Government be responsible for
the costs of any such Audits, reviews or
evaluations from financial sources other
than MCC Funding.
Section 3.9 Insurance; Performance
Guarantees. The Government shall, to
MCC’s satisfaction, insure or cause to be
insured all Program Assets and shall
obtain or cause to be obtained such
other appropriate insurance and other
protections to cover against risks or
liabilities associated with the operations
of the Program, including by requiring
Providers to obtain adequate insurance
and post adequate performance bonds or
other guarantees. MCA-Benin or the
Implementing Entity, as applicable,
shall be named as the payee on any such
insurance and the beneficiary of any
such guarantee, including performance
bonds. MCC, and to the extent it is not
named as the insured party, MCA-Benin
shall be named as additional insureds
on any such insurance or other
guarantee, to the extent permissible
under applicable laws. The Government
shall ensure that any proceeds from
claims paid under such insurance or
any other form of guarantee shall be
used to replace or repair any loss of
Program Assets or to pursue the
procurement of the covered goods,
services, works, or otherwise; provided,
however, at MCC’s election, such
proceeds shall be deposited in a
Permitted Account as designated by
MCA-Benin and acceptable to MCC or
as otherwise directed by MCC. To the
extent MCA-Benin is held liable under
any indemnification or other similar
provision of any agreement between
MCA-Benin, on the one hand, and any
other Provider or other third party, on
the other hand, the Government shall
pay in full on behalf of MCA-Benin any
such obligation; provided, further, the
Government shall apply national funds
to satisfy its obligations under this
Section 3.9 and no MCC Funding,
Accrued Interest, or Program Asset may
be applied by the Government in
satisfaction of its obligations under this
Section 3.9.
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Section 3.10 Domestic
Requirements. The Government shall
proceed in a timely manner to seek
ratification of this Compact, as
necessary or required by the laws of the
Republic of Benin, or similar domestic
requirement, in order that (i) this
Compact shall be given the status of an
international agreement, (ii) this
Compact shall take precedence and
prevail over the domestic laws of Benin
now or hereafter in effect and (iii) each
of the provisions of this Compact is
valid, binding and in full force and
effect under Beninese law. The
Government shall initiate such process
promptly after the conclusion of this
Compact. Notwithstanding anything to
the contrary in this Compact, this
Section 3.10 shall provisionally apply
prior to Entry into Force.
Section 3.11 No Conflict. The
Government shall undertake not to enter
into any agreement in conflict with this
Compact or any Supplemental
Agreement during the Compact Term.
Section 3.12 Reports. The
Government shall provide, or cause to
be provided, to MCC at least on each
anniversary of the Entry into Force (or
such other anniversary agreed by the
Parties in writing) and otherwise within
thirty (30) days of any written request
by MCC, or as otherwise agreed in
writing by the Parties, the following
information:
(a) The name of each entity to which
MCC Funding has been provided;
(b) The amount of MCC Funding
provided to such entity;
(c) A description of the Program and
each Project funded in furtherance of
this Compact, including:
(i) A statement of whether the
Program or any Project was solicited or
unsolicited; and
(ii) A detailed description of the
objectives and measures for results of
the Program or Project;
(d) The progress made by Benin
toward achieving the Compact Goal and
Objectives;
(e) A description of the extent to
which MCC Funding has been effective
in helping Benin to achieve the
Compact Goal and Objectives;
(f) A description of the coordination
of MCC Funding with other United
States foreign assistance and other
related trade policies;
(g) A description of the coordination
of MCC Funding with assistance
provided by other donor countries;
(h) Any report, document or filing
that the Government, any Government
Affiliate or any Permitted Designee
submits to any government body in
connection with this Compact;
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(i) Any report or document required
to be delivered to MCC under the
Environmental Guidelines, any Audit
Plan, or any component of the
Implementation Plan; and
(j) Any other report, document or
information requested by MCC or
required by this Compact or any
Supplemental Agreement between the
Parties.
Article IV. Conditions Precedent;
Deliveries
Section 4.1 Conditions Prior to the
Entry into Force and Deliveries. As
conditions precedent to the Entry into
Force, the Parties shall satisfy the
conditions set forth in this Section 4.1.
(a) The Government (or a mutually
acceptable Government Affiliate) and
MCC shall execute a Disbursement
Agreement, which agreement shall be in
full force and effect as of the Entry into
Force.
(b) (i) The Government shall deliver
one or more of the Supplemental
Agreements or other document
identified on Exhibit B attached hereto,
which agreements or other documents
shall be fully executed by the parties
thereto and in full force and effect, or
(ii) the Government (or a mutually
acceptable Government Affiliate) and
MCC execute one or more term sheets
that set forth the material and principal
terms and conditions that will be
included in any such Supplemental
Agreement or document that has not
been entered into or effective as of the
Entry into Force (the ‘‘Supplemental
Agreement Term Sheets’’).
(c) The Government (or a mutually
acceptable Government Affiliate) and
MCC shall execute a Procurement
Agreement, which agreement shall be in
full force and effect as of the Entry into
Force.
(d) The Government shall deliver a
written statement as to the incumbency
and specimen signature of the Principal
Representative and each Additional
Representative of the Government
executing any document under this
Compact, such written statement to be
signed by a duly authorized official of
the Government other than the Principal
Representative or any such Additional
Representative.
(e) The Government shall deliver a
certificate signed and dated by the
Principal Representative of the
Government, or such other duly
authorized representative of the
Government acceptable to MCC, that:
(i) Certifies the Government has
completed all of its domestic
requirements for (1) this Compact to be
given the status of an international
agreement, (2) this Compact to take
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precedence and prevail over the
domestic laws of Benin now or hereafter
in effect and (3) each of the provisions
of this Compact to be valid, binding and
in full force and effect under Beninese
law; and
(ii) Attaches thereto, and certifies that
such attachments are, true, correct and
complete copies of all decrees,
legislation, regulations or other
governmental documents relating to its
domestic requirements for this Compact
to enter into force and the satisfaction
of Section 3.10, which MCC may post
on its Web site or otherwise make
publicly available.
(f) MCC shall deliver a written
statement as to the incumbency and
specimen signature of the Principal
Representative and each Additional
Representative of MCC executing any
document under this Compact such
written statement to be signed by a duly
authorized official of MCC other than
the Principal Representative or any such
Additional Representative.
(g) The Government has not engaged
subsequent to the conclusion of this
Compact in any action or omission
inconsistent with the MCA Eligibility
Criteria, as determined by MCC in its
sole discretion.
Section 4.2 Conditions Precedent to
MCC Disbursements or ReDisbursements. Prior to, and as
condition precedent to, any MCC
Disbursement or Re-Disbursement, the
Government shall satisfy, or ensure the
satisfaction of, all applicable conditions
precedent in the Disbursement
Agreement.
Article V. Final Clauses
Section 5.1 Communications. Unless
otherwise expressly stated in this
Compact or otherwise agreed in writing
by the Parties, any notice, certificate,
request, report, document or other
communication required, permitted, or
submitted by either Party to the other
under this Compact shall be (a) in
writing, (b) in English and (c) deemed
duly given: (i) Upon personal delivery
to the Party to be notified; (ii) when sent
by confirmed facsimile or electronic
mail, if sent during normal business
hours of the recipient Party, if not, then
on the next business day; or (iii) three
(3) business days after deposit with an
internationally recognized overnight
courier, specifying next day delivery,
with written verification of receipt to
the Party to be notified at the address
indicated below, or at such other
address as such Party may designate:
To MCC: Millennium Challenge
Corporation, Attention: Vice President
of Operations (with a copy to the Vice
President and General Counsel), 875
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Fifteenth Street, NW., Washington, DC
20005, United States of America,
Facsimile: (202) 521–3700, Phone: (202)
521–3600, e-mail:
VPOperations@mcc.gov (Vice President
of Operations);
VPGeneralCounsel@mcc.gov (Vice
President and General Counsel).
To the Government: Ministry of
Finance and Economy, Attention:
Minister of Finance and Economy,
´
Route de l’Aeroport, P.O. Box 302,
Cotonou, Republic of Benin, Facsimile:
229 21 30 18 51, Phone: 229 21 30 69
38.
With a copy to: Office of the Head of
State, Attention: Chief of Staff,
´
Presidence de la Republique, Avenue de
la Marina, Cotonou, Republic of Benin,
Facsimile: 229 21 30 00 90, Phone: 229
21 30 06 36, MCA-Benin (to be formed),
Attention: National Coordinator,
Immeuble Espace Dina, 6th Floor,
Boulevard Saint Michel, Cotonou,
Republic of Benin, Facsimile: 229 21 32
83 22, Phone: 229 21 32 83 19, e-mail:
mcabenin@yahoo.com.
Notwithstanding the foregoing, any
audit report delivered pursuant to
Section 3.8, if delivered by facsimile or
electronic mail, shall be followed by an
original in overnight express mail. This
Section 5.1 shall not apply to the
exchange of letters contemplated in
Section 1.3 or any amendments under
Section 5.3.
Section 5.2 Representatives. Unless
otherwise agreed in writing by the
Parties, for all purposes relevant to this
Compact, the Government shall be
represented by the individual holding
the position of, or acting as, Minister of
Finance and Economy of the Republic of
Benin, and MCC shall be represented by
the individual holding the position of,
or acting as, Vice President for
Operations (each, a ‘‘Principal
Representative’’), each of whom, by
written notice to the other Party, may
designate one or more additional
representatives (each, an ‘‘Additional
Representative’’) for all purposes other
than signing amendments to this
Compact. The names of the Principal
Representative and any Additional
Representative of each of the Parties
shall be provided, with specimen
signatures, to the other Party, and the
Parties may accept as duly authorized
any instrument signed by such
representatives relating to the
implementation of this Compact, until
receipt of written notice of revocation of
their authority. A Party may change its
Principal Representative to a new
representative of equivalent or higher
rank upon written notice to the other
Party, which notice shall include the
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specimen signature of the new Principal
Representative.
Section 5.3 Amendments. The
Parties may amend this Compact only
by a written agreement signed by the
Principal Representatives of the Parties
and subject to the respective domestic
approval requirements to which this
Compact was subject.
Section 5.4 Termination;
Suspension.
(a) Subject to Section 2.5, either Party
may terminate this Compact in its
entirety by giving the other Party thirty
(30) days’ written notice.
(b) Notwithstanding any other
provision of this Compact, including
Section 2.1, or any Supplemental
Agreement between the Parties, subject
to Section 2.5, MCC may suspend or
terminate this Compact or MCC
Funding, in whole or in part, and any
obligation or sub-obligation related
thereto, upon giving the Government
written notice, if MCC determines, in its
sole discretion, that:
(i) Any use or proposed use of MCC
Funding or Program Assets or continued
implementation of the Compact would
be in violation of applicable law or
United States Government policy,
whether now or hereafter in effect;
(ii) The Government, any Provider, or
any other third party receiving MCC
Funding or using Program Assets is
engaged in activities that are contrary to
the national security interests of the
United States;
(iii) The Government or any Permitted
Designee has committed an act or
omission or an event has occurred that
would render the Republic of Benin
ineligible to receive United States
economic assistance under Part I of the
Foreign Assistance Act of 1961, as
amended (22 U.S.C. 2151 et seq.), by
reason of the application of any
provision of the Foreign Assistance Act
of 1961 or any other provision of law;
(iv) The Government or any Permitted
Designee has engaged in a pattern of
actions or omissions inconsistent with
the MCA Eligibility Criteria, or there has
occurred a significant decline in the
performance of the Republic of Benin on
one or more of the eligibility indicators
contained therein;
(v) The Government or any Provider
has materially breached one or more of
its assurances or any covenants,
obligations or responsibilities under this
Compact or any Supplemental
Agreement;
(vi) An audit, review, report or any
other document delivered in furtherance
of the Compact or any Supplemental
Agreement or any other evidence
reveals that actual expenditures for the
Program or any Project or Project
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Activity were greater than the projected
expenditure for such activities
identified in the applicable Detailed
Financial Plan or are projected to be
greater than projected expenditures for
such activities;
(vii) If the Government (A) materially
reallocates or reduces the allocation in
its national budget or any other
Government budget of the normal and
expected resources that the Government
would have otherwise received or
budgeted, from external or domestic
sources, for the activities contemplated
herein, (B) fails to contribute or provide
the amount, level, type and quality of
resources required to effectively carry
out the Government Responsibilities or
any other responsibilities or obligations
of the Government under or in
furtherance of this Compact, or (C) fails
to pay any of its obligations as required
under this Compact or any
Supplemental Agreement, including
such obligations which shall be paid
solely out of national funds;
(viii) If the Government, any Provider,
or any other third party receiving MCC
Funding or using Program Assets, or any
of their respective directors, officers,
employees, Affiliates, contractors, subcontractors, grantee, sub-grantee,
representatives or agents, is found to
have been convicted of a narcotics
offense or to have been engaged in drug
trafficking;
(ix) Any MCC Funding or Program
Assets are applied, directly or
indirectly, to the provision of resources
and support to, individuals and
organizations associated with terrorism,
sex trafficking or prostitution;
(x) An event or condition of any
character has occurred that: (A)
Materially and adversely affects, or is
likely to materially and adversely affect,
the ability of the Government or any
other party to effectively implement, or
ensure the effective implementation of,
the Program or any Project or to
otherwise carry out its responsibilities
or obligations under or in furtherance of
this Compact or any Supplemental
Agreement or to perform its obligations
under or in furtherance of this Compact
or any Supplemental Agreement or to
exercise its rights thereunder; (B) makes
it improbable that the Objectives will be
achieved during the Compact Term; (C)
materially and adversely affects the
Program Assets or any Permitted
Account or (D) constitutes misconduct
injurious to MCC, or constitutes a fraud
or a felony, by the Government, any
Government Affiliate, Permitted
Designee or Provider, or any officer,
director, employee, agent,
representative, Affiliate, contractor,
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grantee, subcontractor or sub-grantee of
any of the foregoing;
(xi) The Government or any Permitted
Designee or Provider has taken any
action or omission or engaged in any
activity in violation of, or inconsistent
with, the requirements of this Compact
or any Supplemental Agreement to
which the Government or any Permitted
Designee or Provider is a party;
(xii) There has occurred a failure to
meet a condition precedent or series of
conditions precedent or any other
requirements or conditions in
connection with MCC Disbursement as
set out in and in accordance with any
Supplemental Agreement between the
Parties; or
(xiii) Any MCC Funding, Accrued
Interest or Program Asset becomes
subject to a Lien without the prior
approval of MCC, and the Government
fails to obtain the release of such Lien
(at its own expense and not with MCC
Funding, Accrued Interest, or Program
Assets) within thirty (30) days after the
imposition of such Lien.
(c) MCC may reinstate any suspended
or terminated MCC Funding under this
Compact or any Supplemental
Agreement if MCC determines, in its
sole discretion, that the Government or
other relevant party has demonstrated a
commitment to correcting each
condition for which MCC Funding was
suspended or terminated.
(d) The authority to suspend or
terminate this Compact or any MCC
Funding under this Section 5.4 includes
the authority to suspend or terminate
any obligations or sub-obligations
relating to MCC Funding under any
Supplemental Agreement without any
liability to MCC whatsoever.
(e) All MCC Disbursements and ReDisbursements shall cease upon
expiration, suspension, or termination
of this Compact; provided, however, (i)
reasonable expenditures for goods,
services and works that are properly
incurred under or in furtherance of this
Compact before expiration, suspension
or termination of this Compact and (ii)
reasonable expenditures for goods and
services (including certain
administrative expenses) properly
incurred within one hundred and
twenty (120) days after the expiration,
suspension or termination of the
Compact in connection with the
winding up of the Program may be paid
from MCC Funding, provided that in the
case of clauses (i) and (ii) the request for
such payment is (A) properly submitted
within ninety (90) days after the
expiration, suspension or termination of
the Compact and (B) subject to the prior
written consent of MCC.
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(f) Other than payments permitted
pursuant to Section 5.4(e), in the event
of the suspension or termination of this
Compact or any Supplemental
Agreement, in whole or in part, the
Party, at MCC’s sole discretion, shall
suspend, for the period of the
suspension, or terminate, or ensure the
suspension or termination of, as
applicable, any obligation or subobligation of the Parties to provide
financial or other resources under this
Compact or any Supplemental
Agreement, or to the suspended or
terminated portion of this Compact or
such Supplemental Agreement, as
applicable. In the event of such
suspension or termination, the
Government shall use its best efforts to
suspend or terminate, or ensure the
suspension or termination of, as
applicable, all such noncancelable
commitments related to the suspended
or terminated MCC Funding. Any
portion of this Compact or any such
Supplemental Agreement that is not
suspended or terminated shall remain in
full force and effect.
(g) Upon the full or partial suspension
or termination of this Compact or any
MCC Funding, MCC may, at its expense,
direct that title to Program Assets be
transferred to MCC if such Program
Assets are in a deliverable state;
provided, for any Program Asset(s)
partially purchased or funded (directly
or indirectly) by MCC Funding, the
Government shall reimburse to a United
States Government account designated
by MCC the cash equivalent of the
portion of the value of such Program
Asset(s), such value as determined by
MCC.
(h) Prior to the expiration of this
Compact or upon termination of this
Compact, the Parties shall consult in
good faith with a view to reaching an
agreement in writing on (i) the postCompact Term treatment of MCA-Benin,
(ii) the process for ensuring the refunds
of MCC Disbursements that have not yet
been released from a Permitted Account
through a valid Re-Disbursement or
otherwise committed in accordance
with Section 5.4(e), or (iii) any other
matter related to the winding up of the
Program and this Compact.
Section 5.5 Privileges and
Immunities. MCC is an agency of the
Government of the United States of
America and its personnel assigned to
the Republic of Benin will be notified
pursuant to the Vienna Convention on
Diplomatic Relations as members of the
mission of the Embassy of the United
States of America. The Government
shall ensure that any personnel of MCC
so notified, including individuals
detailed to or contracted by MCC, and
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the members of the families of such
personnel, while such personnel are
performing duties in the Republic of
Benin, shall enjoy the privileges and
immunities that are enjoyed by a
member of the United States Foreign
Service, or the family of a member of the
United States Foreign Service so
notified, as appropriate, of comparable
rank and salary of such personnel, if
such personnel or the members of the
families of such personnel are not a
national of, or permanently resident in,
the Republic of Benin.
Section 5.6 Attachments. Any
annex, schedule, exhibit, table,
appendix or other attachment expressly
attached hereto (collectively, the
‘‘Attachments’’) is incorporated herein
by reference and shall constitute an
integral part of this Compact.
Section 5.7 Inconsistencies.
(a) Conflicts or inconsistencies
between any parts of this Compact shall
be resolved by applying the following
descending order of precedence:
(i) Articles I through V and
(ii) Any Attachments.
(b) In the event of any conflict or
inconsistency between this Compact
and any Supplemental Agreement
between the Parties, the terms of this
Compact shall prevail. In the event of
any conflict or inconsistency between
any Supplemental Agreement between
the Parties and any other Supplemental
Agreement, the terms of the
Supplemental Agreement between the
Parties shall prevail. In the event of any
conflict or inconsistency between
Supplemental Agreements between any
parties, the terms of a more recently
executed Supplemental Agreement
between such parties shall take
precedence over a previously executed
Supplemental Agreement between such
parties. In the event of any
inconsistency between a Supplemental
Agreement between the Parties and any
component of the Implementation Plan,
the terms of the relevant Supplemental
Agreement shall prevail.
Section 5.8 Indemnification. The
Government shall indemnify and hold
MCC and any MCC officer, director,
employee, Affiliate, contractor, agent or
representative (each of MCC and any
such persons, an ‘‘MCC Indemnified
Party’’) harmless from and against, and
shall compensate, reimburse and pay
such MCC Indemnified Party for, any
liability or other damages which (i) are
directly or indirectly suffered or
incurred by such MCC Indemnified
Party, or to which any MCC Indemnified
Party may otherwise become subject,
regardless of whether or not such
damages relate to any third-party claim,
and (ii) arise from or as a result of the
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negligence or willful misconduct of the
Government, any Government Affiliate,
MCA-Benin or any Permitted Designee,
directly or indirectly connected with,
any activities (including acts or
omissions) undertaken in furtherance of
this Compact; provided, however, the
Government shall apply national funds
to satisfy its obligations under this
Section 5.8 and no MCC Funding,
Accrued Interest, or Program Asset may
be applied by the Government in
satisfaction of its obligations under this
Section 5.8.
Section 5.9 Headings. The Section
and Subsection headings used in this
Compact are included for convenience
only and are not to be considered in
construing or interpreting this Compact.
Section 5.10 Interpretation;
Definitions.
(a) Any reference to the term
‘‘including’’ in this Compact shall be
deemed to mean ‘‘including without
limitation’’ except as expressly provided
otherwise.
(b) Any reference to activities
undertaken ‘‘in furtherance of this
Compact’’ or similar language shall
include activities undertaken by the
Government, any Government Affiliate,
any Permitted Designee, any Provider or
any other third party receiving MCC
Funding involved in carrying out the
purposes of this Compact or any
Supplemental Agreement, including
their respective directors, officers,
employees, Affiliates, contractors, subcontractors, grantees, sub-grantees,
representatives or agents, whether
pursuant to the terms of this Compact,
any Supplemental Agreement or
otherwise.
(c) References to ‘‘day’’ or ‘‘days’’
shall be calendar days unless provided
otherwise.
(d) The term ‘‘United States
Government’’ shall, for the purposes of
this Compact, mean any branch, agency,
bureau, government corporation,
government chartered entity or other
body of the Federal government of the
United States.
(e) The term ‘‘Affiliate’’ of a party is
a person or entity that controls, is
controlled by, or is under the same
control as the party in question, whether
by ownership or by voting, financial or
other power or means of influence.
(f) The term ‘‘Government Affiliate’’ is
an Affiliate, ministry, bureau,
department, agency, government
corporation or any other entity
chartered or established by the
Government.
(g) References to any Affiliate or
Government Affiliate herein shall
include any of their respective directors,
officers, employees, affiliates,
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contractors, sub-contractors, grantees,
sub-grantees, representatives, and
agents.
(h) Any references to ‘‘Supplemental
Agreement between the Parties’’ shall
mean any agreement between MCC on
the one hand, and the Government or
any Government Affiliate or Permitted
Designee on the other hand.
(i) A compendium of capitalized
terms defined herein is included, for
convenience only, in Exhibit A attached
hereto.
Section 5.11 Signatures. A signature
to this Compact or an amendment to
this Compact pursuant to Section 5.3
shall be delivered only as an original
signature. With respect to all other
signatures, a signature delivered by
facsimile or electronic mail in
accordance with Section 5.1 shall be
deemed an original signature, and the
Parties hereby waive any objection to
such signature or to the validity of the
underlying document, certificate,
notice, instrument or agreement on the
basis of the signature’s legal effect,
validity or enforceability solely because
it is in facsimile or electronic form;
without limiting the foregoing, a
signature on an audit report or a
signature evidencing any modification
identified in Sections 2(b) and (4)(a)(iv)
of Annex I, Section 4 of Annex II or
Section 5(c) Annex III shall be followed
by an original in overnight express mail.
Such signature shall be accepted by the
receiving Party as an original signature
and shall be binding on the Party
delivering such signature.
Section 5.12 Designation. MCC may
designate any Affiliate, agent, or
representative to implement, in whole
or in part, its obligations, and exercise
any of its rights, under this Compact or
any Supplemental Agreement between
the Parties. MCC shall inform the
Government of any such designation.
Section 5.13 Survival. Any
Government Responsibilities,
covenants, or obligations or other
responsibilities to be performed by the
Government after the Compact Term
shall survive the termination or
expiration of this Compact and expire in
accordance with their respective terms.
Notwithstanding the termination or
expiration of this Compact, the
following provisions shall remain in
force: Sections 2.2, 2.3, 2.5, 3.2, 3.3, 3.4,
3.5, 3.8, 3.9 (for one year), 3.12, 5.1, 5.2,
5.4(d), 5.4(e) (for one hundred and
twenty days), 5.4(f), 5.4(g), 5.4(h), 5.5,
5.6, 5.7, 5.8, 5.9, 5.10, 5.11, 5.12, this
Section 5.13, 5.14, and 5.15.
Section 5.14 Consultation. Either
Party may, at any time, request
consultations relating to the
interpretation or implementation of this
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12947
Compact or any Supplemental
Agreement between the Parties. Such
consultations shall begin at the earliest
possible date. The request for
consultations shall designate a
representative for the requesting Party
with the authority to enter consultations
and the other Party shall endeavor to
designate a representative of equal or
comparable rank. If such representatives
are unable to resolve the matter within
20 days from the commencement of the
consultations then each Party shall
forward the consultation to the
Principal Representative or such other
representative of comparable or higher
rank. The consultations shall last no
longer than 45 days from date of
commencement. If the matter is not
resolved within such time period, either
Party may terminate this Compact
pursuant to Section 5.4(a). The Parties
shall enter any such consultations
guided by the principle of achieving the
Compact Goal in a timely and costeffective manner and by the principles
of international law. Any dispute arising
under or related to this Compact shall
be determined exclusively through the
consultation mechanism set forth in this
Section 5.14.
Section 5.15 MCC Status. MCC is a
United States government corporation
acting on behalf of the United States
Government in the implementation of
this Compact. As such, MCC has no
liability under this Compact, is immune
from any action or proceeding arising
under or relating to this Compact and
the Government hereby waives and
releases all claims related to any such
liability. In matters arising under or
relating to this Compact, MCC is not
subject to the jurisdiction of the courts
or other body of Benin or any other
jurisdiction and all disputes arising
under or relating to this Compact shall
be determined in accordance with
Section 5.14.
Section 5.16 Language. This
Compact is prepared in English and in
the event of any ambiguity or conflict
between this official English version
and any other version translated into
any language for the convenience of the
Parties, this official English version
shall prevail.
Section 5.17 Publicity; Information
and Marking. The Government shall
give appropriate publicity to this
Compact as a program to which the
United States, through MCC, has
contributed, including by posting this
Compact, and any amendments thereto,
on the Web site operated by MCA-Benin
(‘‘MCA-Benin Website’’), identifying
Program activity sites, and marking
Program Assets; provided, any
announcement, press release or
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statement regarding MCC or the fact that
MCC is funding the Program or any
other publicity materials referencing
MCC, including the publicity described
in this Section 5.17, shall be subject to
prior approval by MCC and shall be
consistent with any instructions
provided by MCC from time to time in
relevant Implementation Letters. Upon
the termination or expiration of this
Compact, MCC may request the removal
of, and the Government shall, upon
such request, remove, or cause the
removal of, any such markings and any
references to MCC in any publicity
materials or on the MCA-Benin Website.
MCC may post this Compact, and any
amendments thereto, on the Web site of
MCC. MCC shall have the right to use
any information or data provided in any
report or document provided to MCC for
the purpose of satisfying MCC reporting
requirements or in any other manner.
In Witness Whereof, the undersigned,
duly authorized by their respective
governments, have signed this Compact
this 22nd day of February, 2006 and this
Compact shall enter into force in
accordance with Section 1.3.
Done at Washington, DC in English.
For the United States of America,
acting through the Millennium
Challenge Corporation, Name: John J.
Danilovich, Title: Chief Executive
Officer.
For the Government of the Republic of
Benin, Name: Cosme Sehlin, Title:
Minister of Finance and Economy.
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Exhibit A—Definitions
The following compendium of
capitalized terms that are used herein is
provided for the convenience of the
reader. To the extent that there is a
conflict or inconsistency between the
definitions in this Exhibit A and the
definitions elsewhere in the text of this
Compact, the definition elsewhere in
this Compact shall prevail over the
definition in this Exhibit A.
2006 Baseline Data Survey shall have
the meaning set forth in Section 2(a)(i)
of Annex III.
Accrued Interest is any interest or
other earnings on MCC Funding that
accrues as specified in Section 2.1(c).
Act means the Millennium Challenge
Act of 2003, as amended.
Additional Representative is a
representative as may be designated by
a Principal Representative, by written
notice, for all purposes other than
signing amendments to this Compact.
ADR means alternative dispute
resolution.
AFD means the Agence Francaise de
¸
´
Developpement.
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Advisory Council shall have the
meaning set forth in Section 3(e)(i) of
Annex I.
Affiliate means the affiliate of a party,
which is a person or entity that controls,
is controlled by, or is under the same
control as the party in question, whether
by ownership or by voting, financial or
other power or means of influence.
References to Affiliate herein shall
include any of their respective directors,
officers, employees, affiliates,
contractors, sub-contractors, grantees,
sub-grantees, representatives, and
agents.
Arbitration Center Activity is the
Project Activity related to expansion of
the arbitration center under the Justice
Project described in Section 2(a) of
Schedule 3 to Annex I.
Attachments are any annex, schedule,
exhibit, table, appendix or other
attachment expressly attached to this
Compact.
Audit Guidelines means the
‘‘Guidelines for Financial Audits
Contracted by Foreign Recipients’’
issued by the Inspector General of the
United States Agency for International
Development.
Audit Plan means a plan, in
accordance with the Audit Guidelines,
for the audit of the expenditures of any
Covered Providers, which audit plan, in
the form and substance as approved by
MCC, the Government shall adopt, or
cause to be adopted, no later than sixty
(60) days prior to the end of the first
period to be audited.
Auditor means the auditor(s) as
defined in, and engaged pursuant to,
Section 3(h) of Annex I and as required
by Section 3.8(d) of the Compact.
Auditor/Reviewer Agreement is an
agreement between MCA-Benin and
each Auditor or Reviewer, in form and
substance satisfactory to MCC, that sets
forth the roles and responsibilities of the
Auditor or Reviewer with respect to the
audit, review or evaluation, including
access rights, required form and content
of the applicable audit, review or
evaluation and other terms and
conditions such as payment of the
Auditor or Reviewer.
Bank(s) means each individually and
collectively, any bank holding an
account referenced in Section 4(d) of
Annex I.
Bank Agreement means an agreement
between MCA-Benin and a Bank,
satisfactory to MCC, that sets forth the
signatory authority, access rights, antimoney laundering and anti-terrorist
financing provisions, and other terms
related to the Permitted Account.
BDS means business development
services.
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Beneficiaries means the intended
beneficiaries identified in accordance
with Annex I.
Bilateral Agreement means the
Economic, Technical and Related
Assistance Agreement by and between
the Government of the United States of
America and the Government of the
Republic of Benin, dated May 27, 1961,
as amended from time to time.
BNC means Benin National
Committee.
Board means the independent board
of directors of MCA-Benin to oversee
MCA-Benin’s responsibilities and
obligations under this Compact.
BOC means the fish/seafood
inspection handling facility at the Port.
Business Registration Activity is the
Project Activity related to the business
registration center under the Justice
Project described in Section 2(b) of
Schedule 3 to Annex I.
CAMeC means the Centre d’Arbitrage,
Mediation et Conciliation.
Capacity Building Activity is the
Project Activity related to financial
institution and borrower capacity
building under the Financial Services
Project described in Section 2(a) of
Schedule 2 of Annex I.
Cellule means the Cellule de
Microfinance.
Chair means the Chair of the Board of
Directors.
Challenge Facility means a financial
innovation and expansion challenge
facility or FINECF described in Section
2(a) of Schedule 2 to Annex I.
Chamber means the Chamber of
Commerce.
Civil Member(s) means the
representatives for the positions
identified in Sections 3(d)(ii)(2)(A)(vii)(xi) of Annex I designated to serve as
voting members on the Board for a oneyear period.
Compact means the Millennium
Challenge Compact made between the
United States of America, acting
through the Millennium Challenge
Corporation, and the Government of the
Republic of Benin.
Compact Goal means advancing
economic growth and poverty reduction
in Benin.
Compact Goal Indicator(s) means the
Indicators that will measure the results
for the overall Program on the intended
Beneficiaries, as set out in the table at
Section 2(a)(i) of Annex III.
Compact Implementation Funding
shall have the meaning set forth in
Section 2.1(a)(iii).
Compact Records shall have the
meaning set forth in Section 3.8(b).
Compact Reports are any documents
or reports delivered to MCC in
satisfaction of the Government’s
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reporting requirements under this
Compact or any Supplemental
Agreement between the Parties.
Compact Term means the term for
which this Compact shall remain in
force, which shall be the five (5) year
period from the Entry into Force, unless
earlier terminated in accordance with
Section 5.4.
Component shall have the meaning
set forth in Section 2(a)(ii)(7) in
Schedule 2 of Annex I.
Courts Activity is the Project Activity
related to improved services of courts
under the Justice Project described in
Section 2(c) of Schedule 1 to Annex I.
Covered Provider shall have the
meaning set forth in Section 3.8(d)(iv).
Designated Rights and
Responsibilities shall have the meaning
set forth in Section 3.2(c).
Detailed Financial Plan means the
financial plans that specify respectively
the annual and quarterly detailed
budget and projected cash requirements
for the Program (including monitoring
and evaluation and administrative costs)
and each Project, projected both on a
commitment and cash requirement
basis.
Disbursement Agreement is a
Supplemental Agreement that MCC, the
Government (or a mutually acceptable
Government Affiliate and MCA-Benin
shall enter into that (i) further specifies
the terms and conditions of any MCC
Disbursements and Re-Disbursements,
(ii) is in a form and substance mutually
satisfactory to the Parties, and (iii) is
signed by the Principal Representative
of each Party (or in the case of the
Government, the principal
representative of the applicable
Government Affiliate) and of MCABenin.
EMICoV means Benin’s national
household living standards
ˆ
measurement survey (L’Enquete
´
Modulaire Integree sur les Conditions
de Vie).
EMPs means Environmental
Management Plans.
Entry into Force shall have the
meaning set forth in Section 1.3.
Environmental Guidelines means the
environmental guidelines delivered by
MCC to the Government or posted by
MCC on its website or otherwise
publicly made available, as such
guidelines may be amended from time
to time.
ESI Officer means the Environmental
and Social Assessment Director, an
Officer of MCA-Benin.
ESIAs means environmental and
social impact assessments.
EU means the European Union.
Evaluation Component means the
component of the M&E Plan that
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specifies a methodology, process and
timeline for the evaluation of planned,
ongoing, or completed Project Activities
to determine their impact and likely
sustainability.
Exempt Uses shall have the meaning
set forth in Section 2.3(e)(ii).
Facility Manager means the qualified
independent management entity or
entities that shall manage and
implement the Challenge Facility.
Final Evaluation shall have the
meaning set forth in Section 3(a) of
Annex III.
Financial Advisory Committee is a
stakeholders group that will provide
feedback and input to the Financial
Services Project Division.
Financial Enabling Environment
Activity is the Project Activity related to
financial enabling environment under
the Financial Services Project described
in Section 2(b) of Schedule 2 to Annex
I.
Financial Plan means collectively, the
Multi-Year Financial Plan, each
Detailed Financial Plan, and each
amendment, supplement or other
change thereto.
Financial Plan Annex means Annex II
of this Compact, which summarizes the
Multi-Year Financial Plan for the
Program.
Financial Services Objective is a
Project Objective of this Compact and
means to expand access to financial
services.
Financial Services Project is the
Access to Financial Services Project,
and the Project described in Schedule 2
to Annex I, that the Parties intend to
implement in furtherance of the
Financial Services Objective.
FINECF means a financial innovation
and expansion challenge facility or the
Challenge Facility described in Section
2(a) of Schedule 2 of Annex I.
Fiscal Accountability Plan shall have
the meaning set forth in Section 4(c) of
Annex I.
Fiscal Agent shall have the mean set
forth in Section 3(g) of Annex I.
Fiscal Agent Agreement is an
agreement between MCA-Benin and
each Fiscal Agent, in form and
substance satisfactory to MCC, that sets
forth the roles and responsibilities of the
Fiscal Agent and other appropriate
terms and conditions, such as payment
of the Fiscal Agent. ‘‘goods’’ refers to
any supplies, equipment, materials,
property or other goods.
Governing Document means any
decree, legislation, regulation,
contractual arrangement (including a
governance agreement by and among the
Government (or a mutually acceptable
Government Affiliate), MCA-Benin and
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12949
MCC), or other charter document
establishing or governing MCA-Benin.
Government means the Government
of the Republic of Benin.
Government Affiliate is an Affiliate,
ministry, bureau, department, agency,
government, corporation or any other
entity chartered or established by the
Government. References to Government
Affiliate shall include any of their
respective directors, officers, employees,
affiliates, contractors, sub-contractors,
grantees, sub-grantees, representatives,
and agents.
Government Members are the
government members identified in
Section 3(d)(ii)(2)(A)(i)–(vi) of Annex I
serving as voting members on the Board,
and any replacements thereof in
accordance with Section 3(d)(ii)(2)(A) of
Annex I.
Government Party means the
Government, any Government Affiliate,
any Permitted Designee or any of their
respective directors, officers, employees,
Affiliates, contractors, sub-contractors,
grantees, sub-grantees, representatives
or agents.
Government Responsibilities shall
have the meaning set forth in Section
3.2(a).
GTZ means Deutsche Gessellschaft
¨
Fur Technische Zusammenarbeit,
GmbH.
IEC means information, education and
communication campaign.
IEC Activity is the Project Activity
related to information, education, and
communication Project Activity under
the Land Project described in Section
2(d) of Schedule 1 of Annex I.
IFC means the International Finance
Corporation.
Implementation Letter is a letter that
may be issued by MCC from time to
time to furnish additional information
or guidance to assist the Government in
the implementation of this Compact.
Implementation Plan is a detailed
plan for the implementation of the
Program and each Project, which will be
memorialized in one or more documents
and shall consist of: (i) A Multi-Year
Financial Plan; (ii) Detailed Financial
Plans; (iii) Fiscal Accountability Plan;
(iv) Procurement Plan; (v) Program and
Project Work Plans; and (vi) M&E Plan.
Implementing Entity means a
Government Affiliate, nongovernmental
organization or other public- or privatesector entity or persons to which MCABenin may provide MCC funding,
directly or indirectly, through an
Outside Project Manager, to implement
and carry out the Projects or any other
activities to be carried out in
furtherance of this Compact.
Implementing Entity Agreement is an
agreement between MCA-Benin (or the
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appropriate Outside Project Manager)
and an Implementing Entity, in form
and substance satisfactory to MCC, that
sets forth the roles and responsibilities
of such Implementing Entity and other
appropriate terms and conditions, such
as payment of the Implementing Entity.
Indicators shall mean the quantitative,
objective and reliable data that the M&E
Plan will use to measure the results of
the Program.
Initial Technical Studies means the
initial technical studies (engineering
pre-feasibilty, environmental and
economic) related to the Markets Project
described in Section 2(a) of Schedule 4
of Annex I.
Inspector General means the Inspector
General of the United States Agency for
International Development.
ISPS means the International Ship
and Port Security Code.
Justice Advisory Committee is a
stakeholders group that will provide
feedback and input to the Justice Project
Division.
Justice Objective is a Project Objective
of this Compact and means to improve
the ability of the judicial system to
enforce contracts and resolve claims.
Justice Project is the Access to Justice
Project, and the Project described in
Schedule 3 of Annex I, that the Parties
intend to implement in furtherance of
the Justice Objective.
Land Objective is a Project Objective
of this Compact and means to
strengthen property rights and
investment.
Land Project is the Access to Land
Project, and the Project described in
Schedule 1 to Annex I, that the Parties
intend to implement in furtherance of
the Land Project Objective.
Land Project Steering Group is a
stakeholders group that will provide
feedback and input to the Land Project
Division.
Lien means any lien, attachment,
enforcement of judgment, pledge, or
encumbrance of any kind.
Local Account is an interest-bearing
local currency of Benin bank account at
a commercial bank, subject to MCC
approval, to which the Fiscal Agent may
authorize transfer from any U.S. Dollar
Permitted Account for the purpose of
making Re-Disbursements payable in
local currency.
M&E Annex means Annex III of this
Compact, which generally describes the
components of the M&E Plan for the
Program.
M&E Plan means the plan to measure
and evaluate progress toward
achievement of the Compact Goal and
Objectives of this Compact.
Management means the management
team or national program coordination
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team of MCA-Benin to have overall
management responsibility for the
implementation of this Compact.
Markets Objective is a Project
Objective of this Compact and means to
improve the Port of Cotonou.
Markets Project is the Access to
Markets Project, and the Project
described in Schedule 4 of Annex I, that
the Parties intend to implement in
furtherance of the Markets Objective.
Material Agreement shall have the
meaning set forth in Section3(c)(i)(5) of
Annex I.
Material Re-Disbursement means any
Re-Disbursement that requires MCC
approval under applicable law, the
Procurement Agreement, any Governing
Document, or any Supplemental
Agreement.
Material Terms of Reference means
any terms of reference for the
procurement of goods, services or works
that requires MCC approval under
applicable law, the Procurement
Agreement, any Governing Document,
or any Supplemental Agreement.
MCA means the Millennium
Challenge Account.
MCA-Benin shall have the meaning
set forth in Section 3(b) of Annex I and
as is further described in Section 3(d) of
Annex I.
MCA-Benin Website means the
website operated by MCA-Benin.
MCA Eligibility Criteria means the
MCA selection criteria and methodology
published by MCC pursuant to Section
607 of the Act from time to time.
MCA National Coordinator means the
National Coordinator of the Millennium
Challenge Account under the Benin
National Committee, as described in
Section 1(b) of Annex I.
MCC means the Millennium
Challenge Corporation.
MCC Disbursement means the
disbursement of MCC Funding by MCC
from time to time to a Permitted
Account or through such other
mechanism agreed by the Parties as
defined in and in accordance with
Section 2.1(b)(i).
MCC Disbursement Request means
the applicable request that the
Government and MCA-Benin will
jointly submit for an MCC Disbursement
as may be specified in the Disbursement
Agreement.
MCC Funding shall have the meaning
set forth in Section 2.1(a).
MCC Indemnified Party means MCC
and any MCC officer, director,
employee, Affiliate, contractor, agent or
representative.
MCC Representative is a
representative designated by MCC to
serve as an Observer on the Board.
MFIs means micro-finance
institutions.
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Monitoring Component means the
component of the M&E Plan that
specifies how the implementation of the
Program and progress toward the
Compact Goal and Objectives will be
monitored.
MSMEs means micro and small- and
medium-scale enterprises.
Multi-Year Financial Plan means the
multi-year financial plan for the
Program and for each Project, which is
summarized in Annex II to this
Compact.
Multi-Year Financial Plan Summary
means a multi-year Financial plan
summary attached to this Compact as
Exhibit A of Annex II.
‘‘national’’ means, for purposes of
Section 2.3(e), organizations established
under the laws currently or hereafter in
effect in the Republic of Benin, other
than MCA-Benin or any other entity
established solely for purposes of
managing or overseeing the
implementation of the Program or any
wholly-owned subsidiaries, divisions,
or Affiliates of entities not registered or
established under the laws currently or
hereafter in effect in the Republic of
Benin.
National Coordinator means the
National Coordinator of MCA-Benin as
defined in Section 3(c)(i) of Annex I.
NGOs means non-governmental
organizations.
Objective(s) are the Program Objective
together with the following project-level
objectives of this Compact that have
been identified by the Parties, each of
which is (i) key to advancing the
Compact Goal and (ii) described in more
detail in the Annexes attached hereto:
(a) the Land Objective, (b) the Financial
Services Objective (c) the Justice
Objective and (d) the Markets Objective.
Objective Indicator means the
Indicator for each Objective that will
measure the ultimate result for each of
the individual Projects. A table of
Objective Indicator definitions is set
forth at Section 2(a)(ii) of Annex III.
Observer(s) means the non-voting
members of the Board as identified in
Section 3(d)(ii)(2)(B) of Annex I.
Officers shall have the meaning set
forth in 3(d)(iii)(3) of Annex I.
OHADA means Organization for the
Harmonization of Business Law in
Africa.
Outcome Indicator means the
Indicator in the M&E Plan that will
measure the intermediate results
achieved under each of the Project
Activities in order to provide early
measures of progress towards the
accomplishment of the Project
Objective. A table of Outcome Indicator
definitions is set forth at Section 2(a)(ii)
of Annex III.
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Output Indicator means the Indicator
in the M&E Plan to measure the direct
outputs of the Project Activities.
Outside Project Manager means the
qualified persons or entities engaged by
Management, on behalf of MCA-Benin,
to serve as outside project managers in
accordance with Section 3(d)(iii)(5) of
Annex I.
PAC means the Port Autonome de
Cotonou.
Panel shall have the meaning set forth
in Section 2(a)(ii)(3) of Schedule 2 to
Annex I.
Parties means the United States of
America, acting through MCC, and the
Government.
Party means (i) the United States of
America, acting through MCC or (ii) the
Government.
Permitted Account(s) shall have the
meaning set forth in Section 4(d) of
Annex I.
Permitted Designee shall have the
meaning set forth in Section 3.2(c).
PFR means Plan Foncier Rural.
Pledge means any pledge of any MCC
Funding or any Program Assets, or any
guarantee directly or indirectly of any
indebtedness.
Policy Activity is the Project Activity
related to policy and legal reform under
the Land Project described in Section
2(a) of Schedule 1 of Annex I.
Port means the Port of Cotonou.
Port Advisory Committee is a
stakeholders group representing the
Markets Project beneficiaries that will
provide feedback and input to the
Markets Project Division.
Port Institutional Activity means the
port institutional and systems
improvements Project Activity of the
Markets Project as described in Section
2(b) of Schedule 4 to Annex I.
Port Security and Landside
Improvements Activity means the port
security and landside improvements
Project Activity of the Markets Project as
described in Section 2(c) of Schedule 4
to Annex I.
Principal Representative means (i) for
the Government, the individual holding
the position of, or acting as the Minister
of State in Charge of Planning and
Development of the Republic of Benin,
and (ii) for MCC, the individual holding
the position of, or acting as, the Vice
President for Operations.
Procedural Code shall have the
meaning set forth in Section 2(c)(v)(1) of
Schedule 3 to Annex I.
Procurement Agent shall have the
meaning set forth in Section 3(i) of
Annex I.
Procurement Agent Agreement is an
agreement between MCA-Benin and
each Procurement Agent, in form and
substance satisfactory to MCC, that sets
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forth the roles and responsibilities of the
Procurement Agent with respect to the
conduct, monitoring, and review of
procurements and other appropriate
terms and conditions, such as payment
of the Procurement Agent.
Procurement Agreement is a
Supplemental Agreement between the
Government (and/or a mutually
accepted Government Affiliate or MCABenin) and MCC, which includes the
Procurement Guidelines, and governs
the procurement of all goods, services
and works by the Government or any
Provider in furtherance of this Compact.
Procurement Guidelines shall have
the meaning set forth in Section 3.6(a).
Procurement Plan means a
procurement plan adopted by MCABenin as set forth in Section 3(i) of
Annex I.
Program means a program, to be
implemented under this Compact, using
MCC Funding to advance Benin’s
progress towards economic growth and
poverty reduction.
Program Annex means Annex I to this
Compact, which generally describes the
Program that MCC Funding will support
in Benin during the Compact Term and
the results to be achieved from the
investment of MCC Funding.
Program Assets means (i) MCC
Funding, (ii) Accrued Interest, or (iii)
any assets, goods, or property (real,
tangible, or intangible) purchased or
financed in whole or in part by MCC
Funding.
Program Objective means the overall
objective of the Program to which the
Project Objectives contribute and means
to increase investment and private
sector activity in Benin, which is key to
advancing the Compact Goal.
Project(s) are the specific projects and
the policy reforms, and other activities
related thereto that the Government will
carry out, or cause to be carried out in
furtherance of this Compact to achieve
the Objectives and the Compact Goal,
specifically the Land Project, the
Financial Services Project, the Justice
Project and the Markets Project.
Project Activity means the activities
that will be undertaken in furtherance of
each Project.
Project Director shall have the
meaning set forth in Section 3(d)(iii)(3)
of Annex I.
Project Division means the divisions
that manage the implementation of each
Project.
Project Objective(s) means the projectlevel objectives that will advance the
Program Objective and Compact Goal,
each of which is described in more
detail in the Annexes of this Compact.
Proposal is the proposal for use of
MCA assistance submitted to MCC, as
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revised, by the Government on
September 5, 2005.
Provider shall have the meaning set
forth in Section 2.4(b).
PRSP means the Poverty Reduction
Strategy Paper.
RAPs means Resettlement Action
Plans.
Re-Disbursement is the release of
MCC Funding from a Permitted
Account.
Registration Activity is the Project
Activity related to achieving formal
property rights under the Land Project
described in Section 2(b) of Schedule 1
of Annex I.
Reviewer shall have the meaning set
forth in Section 3(h) of Annex I.
Services and Information Activity is
the Project Activity related to improving
land registration services and land
information management under the
Land Project described in Section 2(c) of
Schedule 1 of Annex I.
Special Account means a single,
completely separate U.S. Dollar interestbearing account at a commercial bank,
acceptable to MCC, to receive MCC
Disbursements.
Studies Activity means the feasibility
studies and assessments Project Activity
of the Markets Project described in
Section 2(a) of Schedule 4 to Annex I.
Supplemental Agreement shall have
the meaning set forth in Section 3.5(b).
Supplemental Agreement between the
Parties means any agreement between
MCC on the one hand, and the
Government or any Government
Affiliate or Permitted Designee on the
other hand.
Supplemental Agreement Term
Sheets means one or more term sheets
that the Government (or mutually
acceptable Government Affiliate) and
MCC shall execute that set forth the
material and principal terms and
conditions of each of the Supplemental
Agreements identified in Exhibit B
attached hereto.
Support Strategy Activity is the
Project Activity related to strategy and
programmatic coordination under the
Land Project described in Section 2(e) of
Schedule 1 of Annex I.
Target means each Indicator will have
one or more targets that quantifies the
result and the expected time by which
that result will be achieved.
Tax(es) shall have the meaning set
forth in Section 2.3(e)(i).
TEU means twenty-foot equivalent
unit, in Euro.
TPI shall have the meaning set forth
in Section 2(c)(v) of Schedule 3 to
Annex I.
United States Dollars (USD) means
the currency of the United States of
America.
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United States Government shall mean
any branch, agency, bureau, government
corporation, government chartered
entity or other body of the Federal
government of the United States.
WAEMU means the West African
Economic and Monetary Union.
Waterside Improvements Activity
means the waterside improvements
Project Activity described in Section
2(d) of Schedule 4 to Annex I.
Work Plans means work plans for the
overall administration of the Program
and for each Project.
Exhibit B—List of Certain Supplemental
Agreements
1. Governing Document Principles.
2. Fiscal Agent Agreement.
3. Procurement Agent Agreement.
4. Form of Implementing Entity
Agreement.
5. Form of Bank Agreement.
Schedule 2.1(a)(iii)—Description of
Compact Implementation Funding
Compact Implementation Funding
The Compact Implementation
Funding provided pursuant to Section
2.1(a)(iii) shall support the following
activities and expenditures in an
amount not to exceed the amounts
specified below:
(a) Conduct some or all Initial
Technical Studies as described in
Section 2(a)(i) of Schedule 4 of Annex
I, in an amount not to exceed USD
$800,000.a*
(b) Conduct the activities related to
the 2006 Baseline Data Survey as
described in Section 2(a)(i) of Annex III,
including: communication and
transportation of survey staff,
supervision and quality assurance, and
data management, in an amount not to
exceed USD $600,000.*
(c) Conduct fiscal and procurement
administration activities, in an amount
not to exceed USD $500,000.*
(d) Payments for reasonable and
normal staff salaries and administrative
expenses of MCA-Benin (or mutually
acceptable Government Affiliate) such
as rent, computers, and other
information technology equipment, in
an amount not to exceed USD
$500,000.*
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Annex I—Program Description
This Annex I to the Compact (the
‘‘Program Annex’’) generally describes
the Program that MCC Funding will
support in Benin during the Compact
a* Notwithstanding the amount specified for this
activity or payment, the total amount of funds
disbursed in accordance with Section 2.1(a)(iii)
shall not exceed the amount set forth in Section
2.1(a)(iii).
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Term and the results to be achieved
from the investment of MCC Funding.
Prior to any MCC Disbursement or ReDisbursement, including for the Projects
described herein, MCC, the Government
(or a mutually acceptable Government
Affiliate) and MCA-Benin shall enter
into a Supplemental Agreement that (i)
further specifies the terms and
conditions of such MCC Disbursements
and Re-Disbursements, (ii) is in a form
and substance mutually satisfactory to
the Parties, and (iii) is signed by the
Principal Representative of each Party
(or in the case of the Government, the
principal representative of the
applicable Government Affiliate) and of
MCA-Benin (the ‘‘Disbursement
Agreement’’). Except as specifically
provided herein, the Parties may amend
this Program Annex only by written
agreement signed by the Principal
Representative of each Party. Each
capitalized term in this Program Annex
shall have the same meaning given such
term elsewhere in this Compact. Unless
otherwise expressly stated, each Section
reference herein is to the relevant
Section of the main body of the
Compact.
1. Background and Benin Development
Strategy; Consultative Process
(a) Background and Benin Development
Strategy
Situated in West Africa, between
Nigeria and Togo in the Gulf of Guinea,
Benin is a small and very poor country
with a population of nearly seven
million, a third of which live in poverty.
Progress in development is largely a
result of reforms initiated in the early
1990s as Benin transitioned from a
Marxist-Leninist state towards a
pluralistic democracy and market
economy.
Despite growth rates averaging 5% per
year in the past decade, per capita
income in Benin remains below the subSahara African average and rural
poverty has increased in recent years.
Private sector activity and broad-based
investment that would lead to
sustainable growth and poverty
reduction are hindered by land
insecurity, lack of access to capital, an
inefficient judicial system, and an
uncompetitive Port of Cotonou.
The Program is a series of strategic
investments designed to increase
investment and private sector activity
by improving core physical and
institutional infrastructure. The
objectives of the Compact are fully
consistent with, and directly support,
the priority areas identified by the
Government in the Poverty Reduction
Strategy Paper (‘‘PRSP’’). Benin’s PRSP
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was developed in 2002 with broad
participation from Beninese society. Its
development plan is based on four
pillars: (i) Strengthening the
macroeconomic framework over the
medium-term; (ii) developing human
capital and environmental management;
(iii) strengthening good governance and
institutional capacity; and (iv)
promoting employment and
strengthening the ability of the poor to
participate in decision-making and
production processes. The Program is
focused primarily on supporting the
fourth pillar of the PRSP.
(b) Consultative Process
The Proposal was the product of a
genuine, meaningful and participatory
consultative process. By decree, the
Government designated the National
Coordinator of the Millennium
Challenge Account (‘‘MCA National
Coordinator’’), empowered the Benin
National Committee (‘‘BNC’’) to oversee
the Proposal development and charged
a Technical Team with shaping the
Proposal. The MCA National
Coordinator sought the participation of
various stakeholders through
workshops, meetings, and radio and
television events. Initially a vision for
the Program was presented to
representatives from the government
(both central and municipal), the private
sector, civil society, labor unions,
artisans, and the agricultural sector.
Among these groups, members were
elected or delegated by their respective
constituencies to form the BNC. This
MCA working group consists of six
government Ministers, three Chamber of
Commerce representatives, three civil
society representatives (elected), three
labor union representatives, two
representatives of the Agricultural
Chamber (elected), and one
representative of the artisan community.
Included in the working group are two
women, the Vice President of the
Chamber of Commerce and another who
was elected by NGOs promoting
women’s rights.
Working sessions were held based on
the PRSP to discuss the major
constraints to growth. Several iterations
of the Proposal’s projects were vetted by
a broad audience through nationally
broadcast radio programs to garner
feedback from the targeted beneficiaries.
In September the MCA National
Coordinator convened a stakeholder
meeting in which mayors from all 77
communes, and representatives of
microfinance institutions, the donor
community and the central government
gathered to discuss the land tenure, and
financial services components of the
Proposal. Continuing consultation
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throughout the proposal development
process has resulted in widespread
endorsement by potential beneficiaries.
On-going consultations with
stakeholders and beneficiaries are
planned during the Compact Term,
including at the Project-level.
Following MCC’s review of the
Proposal and discussions and
negotiations of the Parties, the Parties
have identified certain mutually
acceptable components of the Proposal
and other components developed
through the discussions of the Parties
that together shall constitute the
Program. The Program is fully
consistent with, and directly supports
PRSP, in particular the promoting
employment and strengthening the
ability of the poor to participate in
decision-making and production
processes as noted above.
2. Overview
(a) Program Objectives. The Program
Goal and Objectives of the Compact are
expected to have a substantial impact on
increasing economic growth and
reducing poverty in Benin. The Program
will accelerate economic growth and
reduce poverty by removing constraints
to investment in key sectors of the
Beninese economy. The Program aims to
increase investment and private sector
activity by improving key institutional
and physical infrastructures through
four Projects: Access to Land, Access to
Financial Services, Access to Justice,
and Access to Markets. Respectively, the
Projects will address: Insecure land
tenure rights; insufficient access to
financial services for micro, small and
medium-enterprises (MSMEs); an
inefficient and under-equipped judicial
system; and the degrading
competitiveness of the Port. The
Projects are complementary and support
each other. The Land Project and
Financial Services Project will enhance
the use of land titles as collateral for
loans or refinancing. The Justice Project
will support this relationship by
increasing the confidence in the judicial
system to enforce contracts and
collateral interests. The Markets Project
will increase the flow of goods through
the Port of Cotonou. In turn,
improvements to the physical
infrastructure will enhance the success
of Projects focusing on the institutional
environment. The sequencing and
geographic selection criteria for
activities undertaken in Projects will be
influenced by each of the other Projects.
(b) Projects. The Parties have
identified, for each Objective, Projects
that the Government will implement, or
cause to be implemented, using MCC
Funding. Each Project is described in
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the Schedules to this Program Annex.
The Schedules to this Program Annex
identify the activities that will be
undertaken in furtherance of each
Project (each, a ‘‘Project Activity’’) as
well as the various activities within a
Project Activity. Notwithstanding
anything to the contrary in this
Compact, the Parties may agree to
modify, amend, terminate or suspend
these Projects or to create a new project
by written agreement signed by the
Principal Representative of each Party
without amending this Compact;
provided, however, any such
modification or amendment of a Project
or creation of a new project is (i)
consistent with the Objectives; (ii) does
not cause the amount of MCC Funding
to exceed the aggregate amount
specified in Section 2.1(a) of this
Compact; (iii) does not cause the
Government’s responsibilities or
contribution of resources to be less than
specified in Section 2.2 of this Compact
or elsewhere in this Compact; and (iv)
does not extend the Compact Term.
Certain Project Activities of the Program
such as the policy reforms, the
extension of financial services and court
services, and improvements to the Port,
will have an impact at the national
level. The Land Project will be
undertaken in targeted geographic areas
of Benin, which are yet to be
determined, but will be selected based
on the criteria set forth in the applicable
Schedule.
(c) Beneficiaries. The intended
beneficiaries of each Project are
described in the respective Schedule to
this Program Annex and Annex III to the
extent identified as of the date hereof.
The intended beneficiaries shall be
identified more precisely during the
initial phases of implementation of the
Program. The Government shall provide
to MCC information on the population
of the areas in which the Projects will
be active, disaggregated by gender,
income level and age. The Parties shall
agree upon the description of the
intended beneficiaries and the Parties
will make publicly available a more
detailed description of the intended
beneficiaries of the Program, including
publishing such description on the
MCA-Benin Website. For each Project,
the Government shall ensure that MCABenin presents to the Advisory Council
(i) a detailed description of the intended
beneficiaries and (ii) the methodology
used to determine the intended
beneficiaries within sixty (60) days after
the commencement of the Project
implementation and completion of the
analysis of the intended beneficiaries
therein, disaggregated, to the maximum
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extent practicable, by income level,
gender, and age. The Land Project is
expected to assist an estimated 115,000
rural and urban households with more
secure and useful tenure, contribute to
a 50% reduction in court cases related
to land disputes, and result in a 10%
increase in investment in rural land and
a 20% increase in investment in urban
property. The Financial Services Project
is expected to increase MSME value
added and incomes of the poor that
own, are employed by, or do business
with those enterprises. The expected
result is that by the end of the Compact
Term, financial services to MSMEs will
have expanded by nearly $60 million,
which represents a multiple of three
times the Project’s funding. A more
efficient Port will contribute to importer
and exporter value-added through
reducing transportation costs. Moreover,
because Benin’s road transport industry
is relatively competitive, it is likely that
the anticipated reduction in shipping
costs will be passed on to wholesalers
and traders, and ultimately be reflected
in consumer prices. The Justice Project
is expected to benefit land occupants,
title holders, businesses and legal
professionals in the jurisdictions where
the Project will be active.
Overall, the Program is expected to
impact an estimated five million
beneficiaries and raise one quarter of a
million Beninese out of poverty by
2015.
(d) Civil Society. Civil Society shall
participate in overseeing the
implementation of the program through
its representation on the Board of
Directors and the Advisory Council
(which will include representatives
from non-governmental organizations
and private sector entities), as provided
in Section 3(d) and Section 3(e),
respectively, of this Program Annex.
Stakeholders will be able to weigh in by
a Land Project steering group and
discussion groups for studies, the White
Paper, and related legislative drafting.
The Financial Services Project and the
Markets Project will also incorporate the
input of Stakeholders in advisory
committees comprising nongovernmental organizations and private
sector entities. Finally, members of civil
society may be recipients of training,
technical assistance, or other public
awareness programs that are integral to
the Projects. In addition, the Work Plans
or Procurement Plans for each Project
shall note the extent to which civil
society will have a role in the
implementation of or participation in a
particular Project or Project Activity.
(e) Monitoring and Evaluation
(‘‘M&E’’). Annex III of this Compact
generally describes the plan to measure
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and evaluate progress toward
achievement of the Compact Goal and
Objectives of this Compact (the ‘‘M&E
Plan’’). As outlined in the Disbursement
Agreement and other Supplemental
Agreements, continued disbursement of
MCC Funding under this Compact
(whether as MCC Disbursements and
Re-Disbursements) shall be contingent,
among other things, on successful
achievement of targets set forth in the
M&E Plan.
3. Implementation Framework
The implementation framework and
the plan for ensuring adequate
governance, oversight, management,
monitoring, evaluation and fiscal
accountability for the use of MCC
Funding is summarized below and in
the Schedules attached to this Program
Annex, or as may otherwise be agreed
in writing by the Parties.
(a) General. The elements of the
implementation framework will be
further described in relevant
Supplemental Agreements and in a
detailed plan for the implementation of
the Program and each Project, which
will be memorialized in one or more
documents and shall consist of a MultiYear Financial Plan, Detailed Financial
Plans, a Fiscal Accountability Plan, a
Procurement Plan, Program and Project
Work Plans, and an M&E Plan (the
‘‘Implementation Plan’’). MCA-Benin
shall adopt each component of the
Implementation Plan in accordance
with the requirements and timeframe as
may be specified in this Program Annex,
the Disbursement Agreement or as may
otherwise be agreed by the Parties from
time to time. MCA-Benin may amend
the Implementation Plan or any
component thereof without amending
this Compact, provided any material
amendment of the Implementation Plan
or any component thereof has been
approved by MCC and is otherwise
consistent with the requirements of this
Compact and any relevant
Supplemental Agreement between the
Parties. By such time as may be
specified in the Disbursement
Agreement or as may otherwise be
agreed by the Parties from time to time,
MCA-Benin shall adopt one or more
work plans for the overall
administration of the Program and for
each Project (collectively, the ‘‘Work
Plans’’). The Work Plan(s) shall set forth
the details of each activity to be
undertaken or funded by MCC Funding
as well as the allocation of roles and
responsibilities for specific Project
activities, or other programmatic
guidelines, performance requirements,
targets, or other expectations for a
Project.
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(b) Government.
(i) The Government shall promptly
take all necessary and appropriate
actions to carry out the Government
Responsibilities and other obligations or
responsibilities of the Government
under and in furtherance of this
Compact, including undertaking or
pursuing such legal, legislative or
regulatory actions or procedural changes
and contractual arrangements as may be
necessary or appropriate to achieve the
Objectives, to successfully implement
the Program, to designate any rights or
responsibilities to any Permitted
Designee, and to establish a legal entity,
in a form mutually agreeable to the
Parties, the form, structure and other
features of such legal entity to be
determined and agreed upon by the
Parties on or before the time specified
in the Disbursement Agreement (‘‘MCABenin’’), which shall be a Permitted
Designee and shall be responsible for
the oversight and management of the
implementation of this Compact on
behalf of the Government. The
Government shall promptly deliver to
MCC certified copies of any documents,
orders, decrees, laws or regulations
evidencing such legal, legislative,
regulatory, procedural, contractual or
other actions.
(ii) The Government shall ensure that
MCA-Benin is duly authorized and
organized, sufficiently staffed and
empowered to fully carry out the
Designated Rights and Responsibilities.
Without limiting the generality of the
preceding sentence, MCA-Benin shall be
organized, and have such roles and
responsibilities, as described in Section
3(d) of this Program Annex and as
provided in any Governing Documents;
provided, however, the Government or
another Permitted Designee may, subject
to MCC approval, carry out any of the
roles and responsibilities designated to
be carried out by MCA-Benin and
described in Section 3(d) of this
Program Annex or elsewhere in this
Program Annex, any Governing
Document, or any other Supplemental
Agreement prior to and during the
initial period of the establishment and
staffing and operational formation of
MCA-Benin, but in no event longer than
the earlier of (1) the formation and
convening of organizational meetings of
the Steering Committee, formation and
operational establishment of MCABenin (including the selection and
engagement of Officers and key
employees), and engagement of the
Officers and (2) six months from the
Entry into Force, unless otherwise
agreed by the Parties in writing.
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(iii) Various ministries, bureaus and
agencies of the Government may serve
as Implementing Entities.
(c) MCC.
(i) Notwithstanding Section 3.1 of this
Compact or any provision in this
Program Annex to the contrary, and
except as may be otherwise agreed upon
by the Parties from time to time, MCC
must approve in writing each of the
following transactions, activities,
agreements and documents prior to the
execution or carrying out of such
transaction, activity, agreement or
document and prior to MCC
Disbursements or Re-Disbursements in
connection therewith:
(1) MCC Disbursements;
(2) Each Detailed Financial Plan, and
any amendments thereto;
(3) The Multi-Year Financial Plan and
any amendments and annual
supplements thereto;
(4) Any Audit Plan;
(5) Agreements (i) between the
Government and MCA-Benin, (ii)
between the Government, a Government
Affiliate, MCA-Benin or any other
Permitted Designee on the one hand,
and any Provider or Affiliate of a
Provider, on the other hand, which
require such MCC approval under
applicable law, the Procurement
Agreement, any Governing Document,
or any other Supplemental Agreement
or (iii) in which the Government, a
Government Affiliate, MCA-Benin or
any other Permitted Designee appoints,
hires, or engages any of the following in
furtherance of this Compact:
(A) Auditor;
(B) Reviewer;
(C) Fiscal Agent;
(D) Procurement Agent;
(E) Each Bank;
(F) Outside Project Manager;
(G) Implementing Entity; and
(H) Board of Directors member,
Observer, Officer, and other key
employee of MCA-Benin (including any
compensation for such person).
(Any agreement described in clause (i)
through (iii) of this Section 3(c)(i)(5) and
any amendments and supplements
thereto, each, a ‘‘Material Agreement’’);
(6) Any modification, termination or
suspension of a Material Agreement, or
any action that would have the effect of
such a modification, termination or
suspension of a Material Agreement;
(7) Any agreement that is (A) not at
arm’s length or (B) with a party related
to the Government or MCA-Benin or any
of their respective Affiliates;
(8) Any Re-Disbursement (each, a
‘‘Material Re-Disbursement’’) that
requires such MCC approval under
applicable law, the Procurement
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Agreement, any Governing Document,
or any Supplemental Agreement;
(9) Any terms of reference (each, a
‘‘Material Terms of Reference’’) for the
procurement of goods, services or works
that requires such MCC approval under
applicable law, the Procurement
Agreement, any Governing Document,
or any Supplemental Agreement;
(10) The Implementation Plan,
including each component plan thereto,
and any material amendments and
supplements to the Implementation
Plan or any component thereto;
(11) Any pledge of any MCC Funding
or any Program Assets or any guarantee
directly or indirectly of any
indebtedness (each, a ‘‘Pledge’’);
(12) Any decree, legislation,
regulation, contractual arrangement
(including a governance agreement by
and among the Government (or a
mutually acceptable Government
Affiliate), MCA-Benin and MCC), or
other charter document establishing or
governing MCA-Benin (‘‘Governing
Document’’);
(13) Any disposition (in whole or in
part), liquidation, dissolution, winding
up, reorganization or other change of (A)
MCA-Benin, including any revocation
or modification of or supplement to any
Governing Document related thereto, or
(B) any subsidiary or Affiliate of MCABenin;
(14) Any change in character or
location of any Permitted Account;
(15) Formation or acquisition of any
subsidiary (direct or indirect) or other
Affiliate of MCA-Benin;
(16) Any (A) change of a Board of
Directors member, Observer, Officer or
other key employee or contractor of
MCA-Benin, or change in the
composition of the Board of Directors of
MCA-Benin, including approval of the
nominee for Chair, (B) filling of any
vacant seat of the Chair, Board of
Directors member, or an Observer or
vacant position of an Officer, key
employee or contractor of MCA-Benin,
(C) filling of the seats designated as
representatives nominated by the
Advisory Council, if any, to the Board
of Directors, and (D) filling any vacant
seat on the Advisory Council;
(17) The management information
system to be developed and maintained
by the Management of MCA-Benin, and
any material modifications to such
system;
(18) Any decision to amend,
supplement, replace, terminate, or
otherwise change any of the foregoing;
and
(19) Any other activity, agreement,
document or transaction requiring the
approval of MCC in this Compact,
applicable law, any Governing
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Document, the Procurement Agreement,
the Disbursement Agreement, or any
other Supplemental Agreement between
the Parties. The Chair of the Board of
Directors (the ‘‘Chair’’) and/or the
National Coordinator of MCA-Benin (the
‘‘National Coordinator’’) or other
designated Officer, as provided in
applicable Governing Document, shall
certify any documents or reports
delivered to MCC in satisfaction of the
Government’s reporting requirements
under this Compact or any
Supplemental Agreement between the
Parties (the ‘‘Compact Reports’’).
(ii) MCC shall have the authority to
exercise its approval rights set forth in
this Section 3(c) in its sole discretion
and independent of any participation or
position taken by the MCC
Representative at a meeting of the Board
of Directors. MCC retains the right to
revoke its approval of any matter,
agreement, or action if MCC concludes,
in its sole discretion, that its approval
was issued on the basis of incomplete,
inaccurate or misleading information
furnished by the Government, MCABenin, or any Government Affiliate or
Permitted Designee. Notwithstanding
any provision in this Compact or any
Supplemental Agreement to the
contrary, the exercise by MCC of its
approval rights under this Compact or
any Supplemental Agreement shall not
(1) diminish or otherwise affect the
Government Responsibilities or any
other obligations or responsibilities of
the Government under this Compact or
any Supplemental Agreement, (2)
transfer any such obligations or
responsibilities of the Government, or
(3) otherwise subject MCC to any
liability.
(d) MCA-Benin.
(i) General. Unless otherwise agreed
by the Parties in writing, MCA-Benin
shall, as a Permitted Designee, be
responsible for the oversight and
management of the implementation of
this Compact. MCA-Benin shall be
governed by applicable law and any
Governing Documents, each such
Governing Document to be in a form
and substance satisfactory to MCC and
effective on or before the time specified
in the Disbursement Agreement, and
based on the following principles:
(1) The Government shall ensure that
MCA-Benin shall not assign, delegate or
contract any of the Designated Rights
and Responsibilities without the prior
written consent of the Government and
MCC. MCA-Benin shall not establish
any Affiliates or subsidiaries (direct or
indirect) without the prior written
consent of the Government and MCC.
(2) Unless otherwise agreed by the
Parties in writing, MCA-Benin shall
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12955
consist of (a) an independent board of
directors (the ‘‘Board’’) to oversee MCABenin’s responsibilities and obligations
under this Compact (including any
Designated Rights and Responsibilities)
and (b) a management team or national
program coordination team
(‘‘Management’’) to have overall
management responsibility for the
implementation of this Compact.
(ii) Board.
(1) Formation. The Government shall
ensure that the Board shall be formed,
constituted, governed and operated in
accordance with the terms and
conditions set forth in the applicable
Governing Document and any other
relevant Supplemental Agreement.
(2) Composition. Unless otherwise
agreed by the Parties in writing, the
Board shall consist of at least nine (9)
and no more than eleven (11) voting
members, one of whom shall be
appointed as the Chair as provided in
applicable law, any Governing
Document and subject to MCC approval,
and the non-voting observers identified
below.
(A) The Board shall initially be
composed of eleven voting members as
follows, provided that the Government
members identified in subsections (i)—
(vi) below (the ‘‘Government Members’’)
may be replaced by another government
official of comparable rank from a
ministry or other government body
relevant to the Program activities,
subject to approval by the Government
and MCC (such replacement to be
referred to thereafter as a Government
Member):
(i) Chief of Staff of the Office of the
Presidency of the Republic of Benin;
(ii) Chief of Staff of the Ministry of
Economy and Finance;
(iii) Chief of Staff of the Ministry of
Planning and Development;
(iv) Chief of Staff of the Ministry of
Agriculture;
(v) Chief of Staff of the Ministry of
Public Works and Transportation;
(vi) Chief of Staff of the Ministry of
the Environment, Housing and Urban
Planning;
(vii) Representative from civil society
(selected following a national assembly
of the non-governmental organizations
and civil society and based upon
selection criteria to be agreed by the
Parties, including the capacity and
expertise of the individual to hold such
position);
(viii) President of the Chamber of
Commerce and Industry;
(ix) The Chairman of the Chamber of
Agriculture;
(x) Representative from the Mayors’
Council (which shall be the public
official holding the relevant office as
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such office is selected following a
national assembly of the mayors
throughout Benin); and
(xi) A member of the Board of the
National Assembly as designated by the
National Assembly.
(B) The non-voting observers (each, an
‘‘Observer’’) shall be:
(i) A representative designated by
MCC (the ‘‘MCC Representative’’);
(ii) A representative from the
Advisory Council; and
(iii) Representatives-elect for Civil
Members (defined below), who will be
non-voting observers for a one-year
period.
(C) Each Government Member
position shall be filled by the
individual, during the Compact Term,
holding the office identified and such
individuals shall serve in their capacity
as the applicable Government official
and not in their personal capacity; in
the event that such member is unable to
participate in a meeting of the Board
such member’s principal deputy may
participate in the member’s stead.
(D) The positions identified in Section
3(d)(ii)(2)(A)(vii)–(xi) of this Program
Annex shall be each individually
referred to as a ‘‘Civil Member’’ and
collectively as ‘‘Civil Members.’’ Each
Civil Member position shall be filled by
the individual, during the Compact
Term, holding the office or position
identified in, or selected pursuant to,
Section 3(d)(ii)(2)(A)(viii)—(xi) and
such individuals shall serve in their
capacity as the incumbent in such office
or position and not in their personal
capacity; in the event that such member
is unable to participate in a meeting of
the Board such member’s principal
deputy may participate in the member’s
stead, provided, however, any action
shall be taken only by a proxy signed by
the Civil Member. The Civil Member
identified in Section 3(d)(ii)(2)(A)(vii)
shall serve in their personal capacity
and if such member is unable to
participate in a meeting of the Board,
such member may only send a
substitute as permitted in the applicable
Governing Document, provided, any
action shall be taken only by a proxy
signed by the Civil Member. The term
of each Civil Member’s appointment to
the Board shall be thirty (30) months;
other than the Civil Member identified
in Section 3(d)(2)(ii)(A)(viii) and (ix)
which position shall be filled by the
individual holding such position during
the Compact Term; provided, further if
the Civil Member designated pursuant
to Section 3(d)(ii)(2)(A)(xi) resigns or is
removed from the Board of the National
Assembly, the National Assembly shall
designate another member of the Board
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of the National Assembly to fill this seat
on the Board.
(E) The voting members identified in
Section 3(d)(ii)(2)(A) by majority vote
may alter the size of the Board in
accordance with the applicable
Governing Document, so long as the
total does not exceed eleven members;
in the event that such action is taken,
any change in the composition of the
voting seats shall be subject to the
approval of the Government and MCC.
(F) Subject to the Governing
Documents, the Parties contemplate that
the Chief of Staff of the Office of the
Presidency shall initially fill the seat of
Chair.
(G) Each Observer shall have rights to
attend all meetings of the Board,
participate in the discussions of the
Board, and receive all information and
documents provided to the Board,
together with any other rights of access
to records, employees or facilities as
would be granted to a member of the
Board under any Governing Document.
(H) The voting members identified in
Section 3(d)(ii)(2)(A) shall exercise their
duties solely in accordance with the
best interests of MCA-Benin and the
Program and its Objectives and may not
undertake any action that is contrary to
those interests or would result in
personal gain or a conflict of interest.
(3) Roles and Responsibilities.
(A) The Board shall oversee the
Management, the overall
implementation of the Program, and the
performance of the Designated Rights
and Responsibilities.
(B) Certain actions may be taken and
certain agreements, documents or
instruments executed and delivered, as
the case may be, by MCA-Benin only
upon the approval and authorization of
the Board provided under applicable
law or as set forth in any Governing
Document, including each MCC
Disbursement Request, selection or
termination of certain Providers, any
component of the Implementation Plan,
certain Re-Disbursements and certain
terms of reference.
(C) The Chair shall certify the
approval by the Board of all Compact
Reports or any other documents or
reports from time to time delivered to
MCC by MCA-Benin (whether or not
such documents or reports are required
to be delivered to MCC), and that such
documents or reports are true, correct
and complete.
(D) Without limiting the generality of
the Designated Rights and
Responsibilities that the Government
may designate to MCA-Benin, and
subject to MCC’s contractual rights of
approval as set forth in Section 3(c) of
this Program Annex or elsewhere in this
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Compact or any relevant Supplemental
Agreement, the Board shall have the
exclusive authority as between the
Board and the Management for all
actions defined for the Board in any
Governing Document and which are
expressly designated therein as
responsibilities that cannot be delegated
further.
(4) Indemnification of Civil Members;
Observers; and Officers. The
Government shall ensure, at the
Government’s sole cost and expense,
that appropriate insurance is obtained
and appropriate indemnifications and
other protections are provided,
acceptable to MCC and to the fullest
extent permitted under the laws of the
Republic of Benin, to ensure that (A) as
Civil Members and Observers shall not
be held personally liable for the actions
or omissions of the Board or MCA-Benin
and (B) as Officers shall not be held
personally liable for the actions or
omissions of the Board, MCA-Benin or
actions or omissions of the Officer so
long as properly within the scope of
Officer’s authority. Pursuant to Section
5.5 and Section 5.8 of this Compact, the
Government and MCA-Benin shall hold
harmless the MCC Representative for
any liability or action arising out of the
MCC Representative’s role as a nonvoting observer on the Board. The
Government hereby waives and releases
all claims related to any such liability
and acknowledges that the MCC
Representative has no fiduciary duty to
MCA-Benin. In matters arising under or
relating to the Compact, the MCC
Representative is not subject to the
jurisdiction of the courts or any other
body of Benin. MCA-Benin shall
provide a written waiver and
acknowledgement that no fiduciary duty
to MCA-Benin is owed by the MCC
Representative.
(iii) Management. Unless otherwise
agreed in writing by the Parties, the
Management shall report, through the
National Coordinator or other Officer as
designated in any Governing Document,
directly to the Board and shall have the
composition, roles and responsibilities
described below and set forth more
particularly in any Governing
Document.
(1) Appointment of the National
Coordinator. The National Coordinator
of MCA-Benin shall be selected by the
Board and hired after an open and
competitive recruitment and selection
process, which appointment shall be
subject to MCC approval. Such
appointment shall be further evidenced
by such document as the Parties may
agree.
(2) Appointment of Other Officers.
Unless otherwise specified in any
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Governing Document, the other Officers
of MCA-Benin shall be selected and
hired by the National Coordinator after
an open and competitive recruitment
and selection process, which
appointment shall be subject to the
approval of the Board and MCC.
(3) Composition. The Government
shall ensure that the Management shall
be composed of qualified experts from
the public or private sectors, including
such offices and staff as may be
necessary to carry out effectively its
responsibilities, each with such powers
and responsibilities as set forth in any
Governing Document, and from time to
time in any Supplemental Agreement
between the Parties, including without
limitation the following: (i) National
Coordinator; (ii) Administration and
Finance Director; (iii) Monitoring and
Evaluation Director; (iv) Land Project
Director, Financial Services Project
Director, Justice Project Director and
Markets Project Director (each a,
‘‘Project Director’’); (v) Environmental
and Social Assessment Director; (vi)
Legal Counsel and (vii) Procurement
Director (the persons holding the
positions in sub-clauses (i) through (vii)
and such other offices as may be created
and designated in accordance with any
Governing Document and any other
Supplemental Agreement between the
Parties, shall be collectively referred to
as ‘‘Officers’’). In addition, MCA-Benin
will have an implementation staff in
each of the Project divisions as
described below and administrative or
other assistants and staff in other
divisions as appropriate and budgeted
in the Detailed Financial Plan and
provided for in the applicable Work
Plan or other Implementation Plan
component, and as otherwise agreed by
MCC. The Administration and Finance
Division and the Procurement Division
shall have separate authorizations,
duties and responsibilities and each
shall report directly only to the National
Coordinator and the Board. The Parties
contemplate that for purposes of the
initial period of operations, and in no
event longer than six months, MCABenin may appoint an acting National
Coordinator, subject to the approval of
MCC; provided, following such period,
the Board shall ratify the actions of such
acting National Coordinator and the
Board shall select a permanent National
Coordinator through a competitive
selection process and subject to MCC
approval in accordance with this Annex
I. The divisions that manage the
implementation of each Project (‘‘Project
Division’’) shall have the following
general organizational structure, or such
other structure as may be agreed by the
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Parties in writing and specified in the
applicable Governing Document:
(A) Land Project Division. In addition
to the Project Director, there shall be (i)
a Senior Land Administration Advisor
for period to be specified in the Work
Plan, (ii) a National Land Policy Reform
Coordinator, and (iii) up to two Activity
Implementation Managers. The Land
Project Division will also receive
feedback and input from a stakeholders
group (the ‘‘Land Project Steering
Group’’), the composition and formation
of which shall be specified in the
applicable Governing Document or
Implementation Plan.
(B) Financial Services Project
Division. In addition to the Project
Director, there shall be (i) an Enabling
Environment Activity Coordinator and
(ii) a Capacity Building Activity
Coordinator. The Financial Services
Project Division will also receive
feedback and input from a stakeholders
group (the ‘‘Financial Advisory
Committee’’), the composition and
formation of which shall be specified in
the applicable Governing Document or
Implementation Plan.
(C) Justice Project Division. In
addition to the Project Director, there
shall be a Justice Project Coordinator.
The Justice Project Division will also
receive feedback and input from a
stakeholders group (the ‘‘Justice
Advisory Committee’’), the composition
and formation of which shall be
specified in the applicable Governing
Document or Implementation Plan
component.
(D) Markets Project Division. The
Markets Project Division will also
receive feedback and input from a
stakeholders group representing the
Markets Project beneficiaries (the ‘‘Port
Advisory Committee’’), the composition
and formation of which shall be
specified in the applicable Governing
Document or Implementation Plan.
(4) Roles and Responsibilities.
(A) Management shall assist the Board
in overseeing the implementation of the
Program and shall have principal
responsibility (subject to the direction
and oversight of the Board and subject
to MCC’s contractual rights of approval
as set forth in Section 3(c) of this
Program Annex or elsewhere in this
Compact or any relevant Supplemental
Agreement) for the overall management
of the implementation of the Program.
(B) Without limiting the foregoing
general responsibilities or the generality
of Designated Rights and
Responsibilities that the Government
may designate MCA-Benin,
Management shall develop the
components of the Implementation
Plan, oversee the implementation of the
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Projects, manage and coordinate
monitoring and evaluation, maintain
internal accounting records, conduct
and oversee certain procurements, and
such other responsibilities as set out in
the applicable Governing Document or
delegated to Management by the Board
from time to time.
(C) Appropriate Officers as designated
in the Governing Documents shall have
the authority to contract on behalf of
MCA-Benin under any procurement
under the Program undertaken in
accordance with the Procurement
Agreement and Procurement
Guidelines.
(D) Management shall have the
obligation and right to approve certain
actions and documents or agreements,
including certain Re-Disbursements,
MCC Disbursement Requests, Compact
Reports, certain human resources
decisions and other certain actions, as
provided in the applicable Governing
Document.
(5) Additional Resources.
Management, on behalf of MCA-Benin,
shall have the authority to engage
qualified persons or entities to serve as
outside project managers (each, an
‘‘Outside Project Manager’’) in the event
that it is advisable to do so for the
proper and efficient day-to-day
management of a Project; provided,
however, that the appointment or
engagement of any Outside Project
Manager, after a competitive selection
process, shall be subject to approval by
the Board and MCC prior to such
appointment or engagement. Upon
Board approval, Management, on behalf
of MCA-Benin, may delegate, assign, or
contract to the Outside Project Managers
such duties and responsibilities as it
deems appropriate with respect to the
management of the Implementing
Entities and the implementation of the
specific Projects or Project Activities,
subject to Section 3.2(c) of the Compact;
provided, however, that the
Management and the relevant Project
Manager shall remain accountable for
those duties and responsibilities and all
reports delivered by the Outside Project
Manager. Independent of any request
from Management, the Board may
determine that it is advisable for MCABenin to engage one or more Outside
Project Managers and the Board may
direct Management to commence and
conduct the competitive selection
process for such Outside Project
Manager. Upon a finding by the Board
that Management has not responded to
such a Board directive, the Board may
direct the Procurement Agent to
commence and conduct the competitive
selection process for one or more
Outside Project Managers.
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(e) Advisory Council.
(i) Formation and Composition. The
Government shall ensure the
establishment of an advisory council
with both governmental, private sector
and non-governmental representatives
(the ‘‘Advisory Council’’) consisting of
at least eight (8) and no more than
eleven (11) members, unless otherwise
agreed by the Parties, and comprised of
the following members: (A) Chief of
Staff of the Ministry of Foreign Affairs
and African Integration; (B) Chief of
Staff of the Ministry of Industry and
Commerce; (C) Chief of Staff of the
Ministry of the Interior, Security, and
Decentralization; (D) Chief of Staff of the
Ministry of Justice; (E) a representative
from the Private Sector (selected
following a national assembly of the
private sector); (F) a representative from
the labor unions (selected following a
national assembly of the labor unions);
(G) a representative from the regional
organizations (selected following a
national assembly of the regional
organizations); and (H) a representative
from the National Artisan Federation
(selected following a national assembly
of the National Artisan Federation).
Representatives described in (E) through
(H) shall be selected and vacancies
filled in accordance with the manner
and criteria set forth in the applicable
Governing Document, subject to MCC
approval. Following the selection of the
representatives described in (E) through
(H), the results of the selection shall be
posted on the MCA-Benin Website and
published in the local newspaper. The
Government shall take all action
necessary and appropriate actions to
ensure the Advisory is established
consistent with this Section 3(e) and as
otherwise specified in the Governing
Document or otherwise agreed in
writing by the Parties. The composition
of the Advisory Council may be
adjusted by agreement of the Parties
from time to time to ensure, among
other things, a cross-section
representative of the intended
beneficiaries. The number of members
of the Advisory Council may be
increased, but in no event more than
eleven (11), upon the majority vote of
the then existing members and the
vacancies created by such increase shall
be filled by the majority vote of the then
existing members, subject to the
approval of the Government and MCC.
(1) Each member position identified
in Sections 3(e)(i) of this Program
Annex shall be filled by the individual,
during the Compact Term, holding the
office identified and such individuals
shall serve in their capacity as the
applicable Government official and not
in their personal capacity. In the event
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that such member is unable to
participate in a meeting of the Advisory
Council such member’s principal
deputy may participate in the member’s
stead.
(2) In the event of a vacancy in
positions identified in Sections 3(e)(i)
(E) through (H) such vacancy to be filled
by nomination of the organization or
group for whom such seat is designated
and in the same manner as described in
Section 3(e)(i) for the initial designation
and as otherwise set forth in the
applicable Governing Document.
(ii) Role. The Advisory Council shall
be a mechanism to provide
representatives of the private sector,
civil society and local and regional
governments the opportunity to provide
advice and input to MCA-Benin
regarding the implementation of the
Compact. During quarterly meetings of
the Advisory Council, Management
shall present an update on the
implementation of this Compact and
progress towards achievement of the
Objectives. The Advisory Council will
have an opportunity to regularly
provide to the Board, via the Chair, its
views or recommendations on the
performance and progress on the
Projects and Project Activities,
components of the Implementation
Plan, procurement, financial
management or such other issues as may
be presented from time to time to the
Advisory Council or as otherwise raised
by the Advisory Council. Management
shall provide copies of the M&E Plan
and related reports to the Advisory
Council simultaneously with the
transmittal to the Advisory Council of
such documents and reports. The Board
may, in response to the Advisory
Council, require Management to provide
such other information and documents
as the Board deems advisable and
subject to appropriate treatment of the
information by the Advisory Council
and its members.
(iii) Meetings. The Advisory Council
shall hold quarterly meetings of the full
Advisory Council as well as such other
periodic meetings of the Advisory
Council or subcommittees thereof
designated along sectoral, regional, or
other lines, as may be necessary or
appropriate from time to time.
(iv) Board Observer. The Advisory
Council shall nominate, by majority
decision, one individual, either from the
Advisory Council or otherwise, to serve
as an Observer to the Board for a oneyear term. The Advisory Council shall
rotate its representative each year. Any
vacancy of the Observer seat designated
for the Advisory Council shall be filled
by the Advisory Council in same
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manner as it would the annual
nomination.
(v) Accessibility; Transparency.
Advisory Council members will be
accessible to the beneficiaries they
represent to receive the beneficiaries’
comments or suggestions regarding the
Program. The minutes of all meetings of
the Advisory Council meetings and any
subcommittees shall be made public on
the MCA-Benin Website in a timely
manner.
(f) Implementing Entities. Subject to
the terms and conditions of this
Compact and any other Supplemental
Agreement between the Parties, MCABenin may provide MCC Funding,
directly or indirectly through an
Outside Project Manager, to one or more
Government Affiliates or to one or more
nongovernmental organizations or other
public- or private-sector entities or
persons to implement and carry out the
Projects or any other activities to be
carried out in furtherance of this
Compact (each, an ‘‘Implementing
Entity’’). The Government shall ensure
that MCA-Benin (or the appropriate
Outside Project Manager) enters into an
agreement with each Implementing
Entity, in form and substance
satisfactory to MCC, that sets forth the
roles and responsibilities of such
Implementing Entity and other
appropriate terms and conditions, such
as payment of the Implementing Entity
(the ‘‘Implementing Entity Agreement’’).
An Implementing Entity shall report
directly to the relevant Project Manager
or Outside Project Manager, as
designated in the applicable
Implementing Entity Agreement or as
otherwise agreed by the Parties. The
Implementing Entities shall be either (i)
pre-determined ministries, bureaus or
agencies of the Government based on
their sector expertise with respect to
certain activities or (ii) government
bodies, businesses, micro-finance
institutions (‘‘MFIs’’) and/or nongovernmental organizations, vendors
and contractors selected according to a
the Procurement Guidelines.
(g) Fiscal Agent. The Government
shall ensure that MCA-Benin engages
one fiscal agent following an
international competitive process (a
‘‘Fiscal Agent’’) who shall be
responsible for, among other things: (i)
Assisting MCA-Benin in preparing the
Fiscal Accountability Plan, (ii) ensuring
and certifying that Re-Disbursements are
properly authorized and documented in
accordance with established control
procedures set forth in the
Disbursement Agreement, the Fiscal
Agent Agreement and other relevant
Supplemental Agreements; (iii) ReDisbursing from, cash management and
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account reconciliation of a Bank
Account established and maintained by
the Fiscal Agent for the purpose of
instructing Bank to make ReDisbursements from a Permitted
Account (to which Fiscal Agent has sole
signature authority), following
applicable certification by the Fiscal
Agent; (iv) providing applicable
certifications for MCC Disbursement
Requests; (v) maintaining and retaining
proper accounting, records and
document disaster recovery system of
all MCC Funded financial transactions
and certain other accounting functions;
(vi) producing reports on MCC
Disbursements and Re-Disbursements
(including any requests therefore) in
accordance with established procedures
set forth in the Disbursement
Agreement, the Fiscal Agent Agreement,
the Fiscal Accountability Plan, or any
other relevant Supplemental
Agreements, (vii) preparing budget
development procedures and the
Compact implementation budget, (viii)
managing funds control, (ix) inventory
control, and (x) internal management of
the Fiscal Agent operations. Upon the
written request of MCC, the Government
shall ensure that MCA-Benin terminates
the Fiscal Agent, without any liability to
MCC, and the Government shall ensure
that MCA-Benin engages a new Fiscal
Agent, subject to the approval by the
Board and MCC. The Government shall
ensure that MCA-Benin enters into an
agreement with each Fiscal Agent, in
form and substance satisfactory to MCC,
that sets forth the roles and
responsibilities of the Fiscal Agent and
other appropriate terms and conditions,
such as payment of the Fiscal Agent
(each, a ‘‘Fiscal Agent Agreement’’),
such Fiscal Agent Agreement shall not
be terminated until MCA-Benin has
engaged a successor Fiscal Agent or as
otherwise agreed by MCC in writing.
(h) Auditors and Reviewers. The
Government shall ensure that MCABenin carries out the Government’s
audit responsibilities as provided in
Sections 3.8(d), (e) and (f) of this
Compact, including engaging one or
more auditors (each, an ‘‘Auditor’’)
required by Section 3.8(d) of this
Compact. As requested by MCC in
writing from time to time, the
Government shall ensure that MCABenin also engages (i) an independent
reviewer to conduct reviews of
performance and compliance under this
Compact pursuant to Section 3.8(f) of
this Compact, which reviewer shall
have the capacity to (A) conduct general
reviews of performance or compliance,
(B) conduct environmental audits, (C)
conduct data quality assessments in
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accordance with the M&E Plan, as
described more fully in Annex III, and/
or (ii) an independent evaluator to
assess performance as required under
the M&E Plan (each, a ‘‘Reviewer’’).
MCA-Benin shall select the Auditor(s)
or Reviewers in accordance with any
Governing Document or other relevant
Supplemental Agreement. The
Government shall ensure that MCABenin enters into an agreement with
each Auditor or Reviewer, in form and
substance satisfactory to MCC, that sets
forth the roles and responsibilities of the
Auditor or Reviewer with respect to the
audit, review or evaluation, including
access rights, required form and content
of the applicable audit, review or
evaluation and other appropriate terms
and conditions such as payment of the
Auditor or Reviewer (the ‘‘Auditor/
Reviewer Agreement’’). In the case of a
financial audit required by Section 3.8(f)
of the Compact, such Auditor/Reviewer
Agreement shall be effective no later
than 120 days prior to the end of the
relevant fiscal year or other period to be
audited; provided, however, if MCC
requires concurrent audits of financial
information or reviews of performance
and compliance under this Compact,
then such Auditor/Reviewer Agreement
shall be effective no later than the date
agreed by the Parties in writing.
(i) Procurement Agent. The
Government shall ensure that MCABenin engages one or more procurement
agents through international
competitive process (each, a
‘‘Procurement Agent’’) to carry out and/
or certify specified procurement
activities in furtherance of this Compact
on behalf of the Government, MCABenin, the Project Manager or
Implementing Entity. The roles and
responsibilities of such Procurement
Agent and the criteria for selection of a
Procurement Agent shall be as set forth
in the applicable Implementation Letter
or Supplemental Agreement. The
Government shall ensure that MCABenin enters into an agreement with the
Procurement Agent, in form and
substance satisfactory to MCC, that sets
forth the roles and responsibilities of the
Procurement Agent with respect to the
conduct, monitoring and review of
procurements and other appropriate
terms and conditions, such as payment
of the Procurement Agent (the
‘‘Procurement Agent Agreement’’). Any
Procurement Agent shall adhere to the
procurement standards set forth in the
Procurement Agreement and
Procurement Guidelines and ensure
procurements are consistent with the
procurement plan adopted by MCA-
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12959
Benin pursuant to the Procurement
Agreement (the ‘‘Procurement Plan’’).
4. Finances and Fiscal Accountability
(a) Financial Plans.
(i) Multi-Year Financial Plan. The
multi-year financial plan for the
Program and for each Project (the
‘‘Multi-Year Financial Plan’’) is
summarized in Annex II to this
Compact.
(ii) Detailed Financial Plan. During
the Compact Term, the Government
shall ensure that MCA-Benin timely
delivers to MCC financial plans that
specify respectively the annual and
quarterly detailed budget and projected
cash requirements for the Program
(including monitoring and evaluation
and administrative costs) and each
Project, projected both on a commitment
and cash requirement basis (each a
‘‘Detailed Financial Plan’’). Each
Detailed Financial Plan shall be
delivered by such time as specified in
the Disbursement Agreement or as may
otherwise be agreed by the Parties. The
Multi-Year Financial Plan and each
Detailed Financial Plan and each
amendment, supplement or other
change thereto are collectively, the
‘‘Financial Plan.’’
(iii) Expenditures. No financial
commitment involving MCC Funding
shall be made, no obligation of MCC
Funding shall be incurred, and no ReDisbursement shall be made or MCC
Disbursement Request submitted for any
activity or expenditure, unless the
expense is provided for in the Detailed
Financial Plan and unless uncommitted
funds exist in the balance of the
Detailed Financial Plan for the relevant
period or unless the Parties otherwise
agree in writing.
(iv) Modifications to Multi-Year
Financial Plan or Detailed Financial
Plan. Notwithstanding anything to the
contrary in this Compact, MCA-Benin
may amend or supplement the MultiYear Financial Plan, or any component
thereof or any Detailed Financial Plan
without amending this Compact,
provided any material amendment or
supplement has been approved by MCC
and is otherwise consistent with the
requirements of this Compact including
Section 4 of Annex II and any relevant
Supplemental Agreement between the
Parties; provided, however, MCA-Benin
may modify the Detailed Financial Plan
to reallocate MCC Funding without
MCC prior approval to the extent that in
the aggregate during the Compact Term
the:
(1) Reallocation of funds within a
Project would not reduce or increase
any line item in the Detailed Financial
Plan for a Project Activity more than the
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lesser of 10% of such relevant line item
in the Detailed Financial Plan or USD
$2,000,000, taking into account any
modifications made pursuant to
paragraph (B) such that any
modifications made pursuant to (A) and
(B) in the aggregate shall not exceed
USD $2,000,000;
(2) Re-allocation of funds within a
Project Activity would not reduce or
increase any line item in the Detailed
Financial Plan for a sub-activity more
than the lesser of 10% of the relevant
line item in the Detailed Financial Plan
or USD $2,000,000 taking into account
any modifications made pursuant to
paragraph (A) such that any
modifications made pursuant to (A) and
(B) in the aggregate shall not exceed
USD $2,000,000;
(3) Re-allocation of funds between
Projects would not reduce or increase
any line item in the Detailed Financial
Plan for a Project Activity more than the
lesser of 10% of the relevant line item
in the Detailed Financial Plan or USD
$500,000;
(4) Re-allocation of funds within
Monitoring and Evaluation category of
the Detailed Financial Plan would not
reduce or increase more than the lesser
of 10% of the relevant line item in the
Detailed Financial Plan for the M&E
activity or USD $500,000; or
(5) Re-allocation of funds within
Program Administration category of the
Detailed Financial Plan would not
reduce or increase more than the lesser
of 10% of the relevant line item in the
Detailed Financial Plan for the Program
Administration expense category or
USD $500,000.
With respect to any modification
pursuant to subparagraphs (1)–(5)
above, such modification (A) shall be
consistent with the Objectives and the
Implementation Plan; (B) shall not
materially adversely impact the
applicable Project, Project Activity, subactivity, M&E activity or Program
administration activity; (C) shall not
cause the amount of MCC Funding to
exceed the aggregate amount specified
in Section 2.1(a) of this Compact; and
(D) shall not cause the Government’s
obligations or responsibilities or overall
contribution of resources to be less than
as specified in Section 2.2(a) of this
Compact, this Annex I or elsewhere in
this Compact; provided, further, that
MCA-Benin shall promptly deliver to
MCC any such modified Detailed
Financial Plan, together with a modified
Multi-Year Financial Plan to reflect the
corresponding modifications, and
further reflected in the Detailed
Financial Plan submitted with the MCC
Disbursement Request at the next
Disbursement Period.
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(b) Disbursement and ReDisbursement. The Disbursement
Agreement (and disbursement schedules
thereto), as amended from time to time,
shall specify the terms, conditions and
procedures on which MCC
Disbursements and Re-Disbursements
shall be made. The obligation of MCC to
make MCC Disbursements or approve
Re-Disbursements is subject to the
fulfillment, waiver or deferral of any
such terms and conditions. The
Government and MCA-Benin shall
jointly submit the applicable request for
an MCC Disbursement (the ‘‘MCC
Disbursement Request’’) as may be
specified in the Disbursement
Agreement. MCC will make MCC
Disbursements in tranches to a
Permitted Account from time to time as
provided in the Disbursement
Agreement or as may otherwise be
agreed by the Parties, subject to Program
requirements and performance by the
Government, MCA-Benin and other
relevant parties in furtherance of this
Compact. Re-Disbursements will be
made from time to time based on
requests by an authorized representative
of the appropriate party designated for
the size and type of Re-Disbursement in
accordance with any Governing
Document and Disbursement
Agreement; provided, however, unless
otherwise agreed by the Parties in
writing, no Re-Disbursement shall be
made unless and until the written
approvals specified herein or in any
Governing Document and Disbursement
Agreement for such Re-Disbursement
have been obtained and delivered to the
Fiscal Agent.
(c) Fiscal Accountability Plan. By
such time as specified in the
Disbursement Agreement or as
otherwise agreed by the Parties, MCABenin shall adopt as part of the
Implementation Plan a fiscal
accountability plan that identifies the
principles, mechanisms and procedures
to ensure appropriate fiscal
accountability for the use of MCC
Funding provided under this Compact,
including the process to ensure that
open, fair, and competitive procedures
will be used in a transparent manner in
the administration of grants or
cooperative agreements and the
procurement of goods and services for
the accomplishment of the Objectives
(the ‘‘Fiscal Accountability Plan’’). The
Fiscal Accountability Plan shall set
forth, among other things, requirements
with respect to the following matters: (i)
Re-Disbursement, cash management and
account reconciliation; (ii) funds control
and documentation; (iii) accounting
standards and systems; (iv) content and
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timing of reports; (v) preparing budget
development procedures and the
Compact implementation budget; (vi)
policies concerning records, document
disaster recovery and public availability
of all financial information; (vii)
procurement and contracting practices,
including timely payment to vendors;
(viii) inventory control; (ix) the role of
independent auditors; (x) the roles of
fiscal agents and procurement agents;
(xi) separation of duties and internal
controls; and (xii) certifications, powers,
authorities and delegations.
(d) Permitted Accounts. The
Government shall establish, or cause to
be established, such accounts (each, a
‘‘Permitted Account,’’ and collectively
‘‘Permitted Accounts’’) as may be agreed
by the Parties in writing from time to
time, including:
(i) A single, completely separate U.S.
Dollar interest-bearing account (the
‘‘Special Account’’) at a commercial
bank, subject to MCC approval, that is
procured through a competitive process;
(ii) If necessary, an interest-bearing
local currency of Benin account (the
‘‘Local Account’’) at a commercial bank,
subject to MCC approval, that is
procured through a competitive process
to which the Fiscal Agent may authorize
transfer from any U.S. Dollar Permitted
Account for the purpose of making ReDisbursements payable in local
currency; and
(iii) Such other interest-bearing
accounts to receive MCC Disbursements
in such banks as the Parties mutually
agree upon in writing.
No other funds shall be commingled
in a Permitted Account other than MCC
Funding and Accrued Interest thereon.
All MCC Funding held in an interestbearing Permitted Account shall earn
interest at a rate of no less than such
amount as the Parties may agree in the
respective Bank Agreement or
otherwise. MCC shall have the right,
among other things, to view any
Permitted Account statements and
activity directly on-line, where feasible,
or at such other frequency as the Parties
may otherwise agree. By such time as
shall be specified in the Disbursement
Agreement or as otherwise agreed by the
Parties, the Government shall ensure
that MCA-Benin enters into an
agreement with each Bank, respectively,
satisfactory to MCC, that sets forth the
signatory authority, access rights, antimoney laundering and anti-terrorist
financing provisions, and other terms
related to the Permitted Account,
respectively (each, a ‘‘Bank
Agreement’’). For purposes of this
Compact, the banks holding an account
referenced in Sections 4(d) of this
Program Annex are each a ‘‘Bank’’ and
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are collectively referred to as the
‘‘Banks.’’
(e) Currency Exchange. The Bank
shall convert MCC Funding to the
currency of Benin at a rate to which the
parties to the Bank Agreement mutually
agree with the Bank in the Bank
Agreement, subject to MCC approval.
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5. Transparency; Accountability
Transparency and accountability to
MCC and to the beneficiaries are
important aspects of the Program and
Projects. Without limiting the generality
of the foregoing, in an effort to achieve
the goals of transparency and
accountability, the Government shall
ensure that MCA-Benin:
(a) Establishes an e-mail suggestion
box as well as a means for other written
comments that interested persons may
use to communicate ideas, suggestions
or feedback to MCA-Benin.
(b) Considers as a factor in its
decision-making the recommendations
of the Board, particularly in MCABenin’s deliberations over pending key
Management decisions and key Board
decisions as shall be specified in the
relevant Governing Document.
(c) Develops and maintains the MCABenin Web site in a timely, accurate and
appropriately comprehensive manner,
such MCA-Benin Web site to include
postings of information and documents
in English and French.
(d) Posts on the MCA-Benin Website
and otherwise makes publicly available
via appropriate mediums (including
radio and print) in the appropriate
language the following documents or
information from time to time:
(i) All minutes of the meetings of the
Advisory Council and the meetings of
the Board; provided, however, in certain
instances of sensitivity and solely as
specified and in accordance with the
Governing Documents meeting minutes
may be maintained solely in the
corporate records of MCA-Benin
without public release;
(ii) The M&E Plan, as amended from
time to time, along with periodic reports
on Program performance;
(iii) Such financial information as
may be required by this Compact or as
may otherwise be agreed from time to
time by the Parties;
(iv) All Compact Reports;
(v) All audit reports by an Auditor
and any periodic reports or evaluations
by a Reviewer;
(vi) All relevant Environmental
Impact Assessments and supporting
documents, and such other
environmental documentation as MCC
may request;
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(vii) A copy of the Disbursement
Agreement, as amended from time to
time;
(viii) A copy of any documents related
to the formation, organization and
governance of MCA-Benin including
any Governing Documents, together
with any amendments thereto;
(ix) A copy of the Procurement
Agreement (including Procurement
Guidelines), as amended from time to
time and any procurement policies or
procedures and standard documents;
and
(x) A copy of information derived
from each Procurement Plan, as
specified in the Procurement
Agreement, and all bid requests and
awarded contracts.
Schedule 1 to Annex I—Access to Land
Project
This Schedule 1 generally describes
and summarizes the key elements of an
Access to Land Project (the ‘‘Land
Project’’) that the Parties intend to
implement in furtherance of the Land
Project Objective. Additional details
regarding the implementation of the
Land Project will be included in the
Implementation Plan and in relevant
Supplemental Agreements.
1. Background
Insecure access to land is a
determinant of poverty and a major
barrier to income growth in Benin as
reflected in the Government’s Action
Plan and the Poverty Reduction Strategy
Document. Investment climate studies
list land access among the top
constraints to business development in
Benin. Therefore, the Government’s
Access to Land proposal was met with
strong civil society support. Inclusion of
the Land Project in the Program reflects
an understanding of the importance of
sound property rights to overall
economic growth and to the owners and
users of land across Benin.
Currently, the title registration system
is expensive, slow, and complex. For a
small urban land parcel, titling and
registration costs approximately $1,400
and can take up to two years to
complete. As a result, only 1% of
households hold a formal title to their
land and a majority of the rural
population relies on oral customary
land rights. In urban areas, individuals
occupy land under a weak
administrative permit while enterprises
occupy state land by concession. Land
disputes are prevalent and are estimated
to comprise more than 70% of all civil
court cases in Benin. Women are often
disadvantaged under current practices
while investors are unable to acquire
sites with confidence. Public investment
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12961
in infrastructure is hindered by the lack
of land use planning and adequate
property tax administration. The lack of
registered land rights also limits access
to credit, particularly since Benin
adheres to agreements under the
Organization for Harmonization of
Business Law in Africa (‘‘OHADA’’)
requiring land titles as a basis for
pledging real property as collateral.
The Government is committed to
changing this scenario. The Government
has demonstrated a commitment to
adopting improved laws, regulations,
administrative processes and techniques
to meet its ambitious land policy vision.
It has already undertaken important
legal reforms and experimented with
new approaches to formalizing property
rights. The Government’s view of the
importance of converting to titles, albeit
in a progressive, voluntary approach,
will be promoted and ways to make the
process easier will be identified through
this Project. With MCA support, a new
land policy framework will be
developed and over 100,000 households
will attain registered land rights. The
Land Project will serve both rural and
urban areas and will lead to:
significantly reduced time and costs to
obtain titles and record transfers; fewer
land disputes; and increased sense of
land security. These improvements
should, in turn, motivate investment
and contribute, along with other
Projects, to income growth.
2. Summary of Projects and Activities in
Project and Expected Results
The Land Project is designed to
establish secure access to land and
efficient land administration services.
MCC Funding will support the
following Project Activities:
• Policy and Legal Reform: To enable
sustainable, efficient land registration
services, gender equity, land dispute
resolution and expanded use of land as
collateral, MCC Funding will support
legal, regulatory, administrative and
informational reforms within a national
land policy framework encompassing
both rural and urban land.
• Achieving Formal Property Rights
to Land: To provide citizens with more
secure and useful records of their land
rights, MCC Funding will support
conversion of 30,000 occupancy permits
to land titles in urban areas and
formally document land rights to 300
rural villages directly benefiting around
85,000 households with certificates or
titles.
• Improve Land Registration Services
and Land Information Management: To
reduce time and costs to register land
and expand access to land information
for public and private uses, MCC
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Funding will be used to upgrade and
decentralize title registration services in
twenty four communes and introduce
map-based land information systems in
twelve of these communes.
• Information, Education and
Communication: To create broad
awareness of land policy reform,
especially among more vulnerable
groups, in order to help citizens
understand, protect and use their land
rights.
• Support Land Program
Coordination: To strengthen the
capacity to manage the reform process
and to encourage active participation of
key stakeholder representatives, support
policy and program coordination
advisors, convene a Project steering
group, and establish working groups for
particular studies.
The M&E Plan (described in Annex
III) will set forth anticipated results and,
where appropriate, regular benchmarks
that may be used to monitor
implementation progress. Performance
against these benchmarks and the
overall impact of the Land Project will
be assessed and reported at the intervals
to be specified in the M&E Plan or as
otherwise agreed by the Parties from
time to time. The Parties expect that
additional indicators will be identified
during the implementation of the Land
Project. The expected results from, and
the key benchmarks to measure progress
on the Project, Project Activities and
sub-activities undertaken or funded
under the Land Project are set forth in
Annex III.
Estimated amounts of MCC Funding
for each Project Activity for the Land
Project are identified in Annex II of this
Compact. Conditions precedent to each
Land Project Activity and sequencing of
these Project Activities shall be set forth
in the Disbursement Agreement or other
relevant Supplemental Agreements or
component of the Implementation Plan.
The following summarizes the Land
Project Activities:
(a) Project Activity: Policy and Legal
Reform (the ‘‘Policy Activity’’).
Building from the Government’s
commitment to land reform, under this
Policy Activity, MCC funds will support
three-stages to establish a more
cohesive, functional land policy. The
three stages are analysis, policy
formulation and legal reform. This
Policy Activity is national in scope and
will address both urban and rural
issues. MCA-Benin shall take account of
the relevant outputs of the Policy
Activity, as described below, in the full
Implementation Plan (to be adopted
following the completion of the relevant
assessments in this Policy Activity). It is
also anticipated that the Policy Activity
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will affect the implementation strategy
to be used for certain other Land Project
activities or sub-activities.
Detailed assessments of a series of
topics will be produced by
commissioned experts working in
consultation with key stakeholder
representatives. As a result, decisionmakers will be better informed of best
options for detailing the legal,
administrative and technical solutions
needed to achieve secure land rights
and efficient land access. Based on the
assessment process, a Land Policy
White Paper will be prepared to guide
public and private actors regarding the
reform process. Endorsement from
senior Government of Benin officials,
including all relevant Ministers will be
sought by MCA-Benin. The Policy
Activity will also support drafting of a
National Land Policy Decree, drafting of
any needed legislation and/or
amendments, and, finally, the
compilation of land laws into a new
Land Code to reinforce cohesiveness.
MCC Funding will support the
following activities:
(i) Conduct of assessments that will
inform policy decisions and Land
Project implementation strategies. The
assessments will further clarify issues
and provide recommendations for
refining the reform strategy. Efficiency,
affordability, sustainability, gender
equity, and the ability to manage the
reform process with minimum risk will
be considered. The assessments listed
below will be conducted by experts and
MCA-Benin will convene working
groups of stakeholder representatives
that will consult on the terms of
reference for and the preparation of the
assessments described below. MCABenin shall ensure that the results of
these assessments are incorporated as
relevant in the complete and final Work
Plans for the activities described in
Sections 2(b)–(d) of this Schedule 1. The
assessments shall include the following
topics, unless otherwise agreed by the
Parties:
(1) A review of current practice and
proposed reforms related to the
administrative structure and functions
of national, regional and local agencies
involved in implementation of land
policy; clarify roles and responsibilities
and propose an approach to achieve
greater operational efficiency and
coherence;
(2) A review of the processes for
titling (conversion) and registration to
identify specific bottlenecks to an
accelerated, quality implementation
pace, including a review of technical
norms, administrative procedures,
evidences accepted and proofs required
to participate; taxes, fees and budget
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parameters; and the technical
specifications of the certification
processes (particularly of the Plan
Foncier Rural ‘‘PFR’’); make
recommendations for changes to make
the process more affordable and/or
efficient and its results more
sustainable;
(3) An assessment of the number and
types of land conflicts encountered in
the past under rural and urban pilot
activities and how/if these conflicts
have been resolved; recommend a
strategy for strengthening the capacity to
resolve land conflicts under formal and
informal means;
(4) An analysis of how to effectively
improve women’s access to land and the
security of their tenure; propose a
gender strategy on policy, legal,
administrative, and/or project
implementation measures and provide
guidelines for its implementation;
(5) Following the completion of the
assessment described in paragraph (1)
above, compare technology options to
meet information management needs at
national, regional and local levels
including mapping data, registration
data, land market information and land
use planning; compare initial
investment costs as well as implied
operational and maintenance costs and
capacity to sustain the systems; and
(6) An analysis of the operational
modalities for the communes in
implementing the proposed new rural
land law and related financing needs;
make recommendations for the content
for the regulations to this law.
(ii) Development, formalization and
dissemination of a new land policy
framework for Benin, that draws on the
assessments conducted under the subactivity described in Section 2(a)(i)
above:
(1) Draft and promote a Land Policy
White Paper covering rural and urban
land and addressing the findings of the
assessments conducted under subactivity described in Section 2(a)(i); seek
its immediate endorsement by relevant
senior Government of Benin officials for
use in implementation of Projects and
also a legislative mandate for
compliance with its key provisions;
(2) Upon completion of sub-activity
described in Section 2(a)(i) above,
prepare a new procedural manual for
the transformation of urban and rural
certificates into land titles;
(3) Review of relevant current law and
proposed legislation compared to the
requirements of the Land Policy White
Paper;
(4) Based on the conclusions reached
in paragraph 3 of this Section 2(a)(ii),
support the drafting of new or amended
laws and regulations as called for such
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that the resulting body of land
legislation removes disincentives to
register land rights and transactions,
facilitates compliance with relevant
agreements under OHADA; and
safeguards vulnerable populations to the
extent feasible from risks and undue tax
burdens;
(5) Following completion of the subactivity described in paragraph (4) of
this Section 2(a)(ii), support the
preparation of a draft unified Land Code
for submission to Parliament; and
(6) Conduct public consultation on
and dissemination of the new legislation
and procedures.
(b) Project Activity: Achieving Formal
Property Rights (the ‘‘Registration
Activity’’). By providing roughly
115,000 citizens with more secure and
useful property rights, this Registration
Activity will demonstrate the
effectiveness of Benin’s new policy and
approaches. Support will be provided
for the conversion of urban housing
land use permits into land titles in
selected neighborhoods primarily in
Cotonou, Parakou and Porto Novo. In
roughly 300 selected rural villages, the
recording of rural land rights through
written land plans and certificates of
customary ownership will be
undertaken using an existing
methodology. Additionally, converting
rural land certificates to land titles will
also be facilitated for beneficiaries that
choose to participate. To facilitate
progress in the Government’s title
conversion approach, the Registration
Activity will support mapping and
related technology improvements and
will help communities to identify and
resolve any case-specific issues that
could arise during tenure formalization.
Specifically, MCC Funding will
support the following:
(i) Expansion of formal registration of
land rights in urban areas. Based on
lessons learned in a pilot project
recently conducted by the Government,
improve and continue the process of
transforming urban housing land
permits to titles in selected
neighborhoods in Cotonou, Parakou,
Porto Novo and possibly other cities.
For each neighborhood selected:
(1) Investigation of the current status
of land tenure and records and take
measures to organize data and prepare
the areas for the conversion process;
(2) Organization and engagement of
the community as active and informed
participants in the conversion process;
and
(3) Measurement and mapping
individual parcels, conduct public
review of parcel maps to gain agreement
among community members on the
boundaries indicated on the maps, and
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issuance of registered land titles
(incorporating recommendations of the
relevant assessments conducted under
sub-activity described in Section 2(a)(i)).
(ii) Expansion of formal land rights in
rural areas. Consistent with existing
standards and guidelines, expand the
creation of rural land plans, land tenure
certificates and local land management
capacity:
(1) For each rural commune meeting
the site selection criteria and chosen by
MCA-Benin for participation, (A)
conduct of information campaigns, (B)
assessment of the socio-economic and
land tenure conditions of villages in the
area and (C) prepare village profiles
including documentation of any
location-specific land tenure terms and
norms;
(2) Based on the conclusions reached
in paragraph (1) above and the
application of the more general site
selection criteria to the villages within
each commune, final selection of
villages for implementing the PFR
process;
(3) For selected villages, production of
land use and tenure maps (the PFR)
using a participatory method and
submission of the plan for public review
and comment; and
(4) Based on the PFR, issuance of
rural land use certificates and
facilitation of formal, written records of
subordinate land rights such as
tenancies using improved approaches
(e.g., standard lease template).
(iii) Facilitation of voluntary, ‘‘ondemand’’ conversion of rural land
certificates into land titles. Conversion
of rural land certificates to land titles
through an efficient, affordable process.
Priority will be given to villages that
already have a PFR in place.
(iv) Improvements in capacity for
mapping and surveying. To facilitate
more rapid registration of land rights
and to establish databases that support
land information services e.g., for
planning and fiscal purposes and for
land market research, support the
following actions, incorporating as
relevant recommendations from subactivity described in Section 2(a)(i):
(1) Creation of up-to-date digital
imagery of Benin’s land resources;
(2) Creation of regional scale maps for
selected areas of the country indicating
major topographic features and
infrastructure systems, such regional
scale maps will be an important tool to
the production of an integrated set of
parcel maps generated through the
process of property rights formalization;
and
(3) Following the completion of the
design strategy described in Section
2(d)(iii), training for public and private
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12963
professionals in use of digital imagery
and in improved surveying and
mapping techniques.
(v) Improvement of local capacity to
adapt to changing land tenure and use
patterns and to resolve case-specific
issues that might arise during the
implementation of land tenure reforms
by:
(1) Supporting communes in rural
areas to develop improved social
programs and planning for the specific
needs of landless peasants and migrants;
(2) Supporting the provision of
paralegal, informational and other
advisory services related to land access
and tenure security to citizens who
otherwise would not have access to
such services;
(3) Improvement of the capacity of
citizens, local authorities and tribunals
to resolve disputes related to land
tenure;
(4) Establishment of transitional
measures, in urban areas, to protect the
rights of land occupants with
certificates who delay or opt-out of the
conversion process; and
(5) In a few pilot sites, introduction of
the use of parcel layout plans in
irregularly developed neighborhoods as
a step prior to the permit-title
conversion process (any site in which
such plans would call for resettlement
of persons to sites outside the
neighborhood prior to the conversion of
permits to titles may not be selected for
participation).
The activities contemplated under
this Registration Activity may begin
with preparatory activities such as those
described in Sections 2(b)(i)(1) and (2),
2(b)(ii)(1) and (2), and 2(b)(v) above
under a provisional work plan;
provided, however, full implementation
will require a complete and final work
plan which adopts, to MCC’s
satisfaction, the recommendations and
findings of the relevant reports
produced under the Project Activity
described in Section 2(a)(i).
(c) Project Activity: Improve Land
Registration Services and Land
Information Management (the ‘‘Services
and Information Activity’’).
To launch the process of moving
Benin’s land registration system services
to the local level, new offices of the
national property registry will be
established (i.e., deconcentration) , and,
select communes will be supported as
authority is transferred to them to
manage their land (i.e.,
decentralization). This Activity will
help design, equip and adequately staff
new local registry offices. Communes
should be chosen from among those in
which implementation of the
Registration Activity will occur, unless
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otherwise agreed in writing with MCC.
Some communes will also experiment
with a cadastre or parcel-based
registration system that may include
additional land information used for
planning and fiscal purposes. Finally,
the Services and Information Activity
will help make reliable land market
information (e.g., recent sales and
prices) available for use by households,
investors and public offices.
Pending completion of the relevant
studies in Policy Activity and
incorporation of the recommendations
into implementation plans, MCC
Funding will support the design and
implementation of more accessible,
efficient, reliable land registration and
information services. The
implementation strategy for each subactivity described below in paragraphs
(i), (ii) and (iii) shall promote, to the
extent practicable, the harmonization of
national, regional, and communal land
data and uses including the mapping
and certificate lists generated during the
PFR process.
Specifically, MCC Funding will
support:
(i) Deconcentration of the National
Land Registration Services.
(1) The establishment of regional
offices in Benin’s 12 prefectures and
communal service offices in 24 selected
communes; and
(2) In the offices established pursuant
to paragraph (1) of this Section 2(c)(i),
replacement of the manual system of
document administration with an
automated, digital records management
system and training of land registry
office staff in the operation of these
systems.
(ii) Decentralization of Land
Administration.
(1) Assist in development of capacity
of approximately 50 communes for land
administration, such assistance to
include training, acquisition of
equipment and transitional operational
support; and
(2) Design and implementation of a
pilot parcel-based or cadastreregistration system in 12 of the
communes where MCC Funding will
support decentralization; this subactivity will support a more
comprehensive, systematic approach to
the establishment of a cadastre may be
demonstrated in three of these twelve
communes (one rural, one urban and
one peri-urban).
(iii) Design and establishment of an
electronic national land market data
system.
(iv) Provision of technical assistance,
training (consistent with the design
strategy completed pursuant to Section
2(d)(iii)) and in relation to the capacity
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to manage and to quality control the
land information systems established in
(i) and (ii) of this Section 2(c).
(d) Project Activity: Information,
Education and Communication (‘‘IEC’’)
(the ‘‘IEC Activity’’).
MCA-Benin has an opportunity to
promote good governance through
appropriate transparency and
consultation on the Project throughout
the Compact Term. Moreover, informed
and widespread participation in
planning, dispute resolution and
decision-making are necessary for an
effective system of land registration. The
IEC Activity will ensure citizens have a
clear understanding of their rights and
responsibilities, and are able to
participate fully in the new processes of
planning, land securitization and
dispute resolution.
Specifically, MCC Funding will
support IEC campaigns throughout the
Compact Term to include but not
limited to the following topics (other
topics for these campaigns may be
implemented, subject to MCC approval):
(i) Creation of broad awareness and
understanding of the changing land
policy regime and how it affects the
rights of citizens; new processes and
services; gender considerations, and,
land markets and access to credit.
(ii) Conduct of specific public notice
and awareness of each activity and subactivity and of the results relevant to
particular groups or communities.
(iii) Design of a training strategy
precedent to implementation of any
training in the Registration Activity or
Services and Information Activity.
(e) Project Activity: Support Strategy
and Programmatic Coordination (the
‘‘Support Strategy Activity’’).
This Project Activity will ensure
coordination across the various Project
Activities and sub-Activities of the Land
Project, across agencies involved in the
land policy reform process, and
facilitate ongoing consultation with
stakeholder groups. In the near term,
this is critical to the Project
effectiveness in undertaking a
comprehensive and diverse set of reform
actions. By the end of the Compact
Term, the MCA-Benin Access to Land
Project division could be transformed
into a national coordination unit to lead
the completion of the reform
implementation process over a longer
time period.
Specifically, in addition to an overall
Land Project Director and the ordinary
Project-related operating expenses, MCC
Funding will support:
(i) Complement MCA-Benin
management staff with a group of
professionals dedicated to ‘‘change
management and coordination,’’ namely
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a National Land Policy Reform
Coordinator and a long term policy
advisor familiar with international best
practice in land administration. Among
their roles are, potentially, to (A) lead
the process of incorporation of the
results of the Policy Activity into
practice by both project implementing
partners and more generally, in Benin;
(B) provide guidance on policy and
implementation oversight issues to
senior Government officials and MCABenin management; (C) facilitate
linkages with the Financial Services
Project activities as relevant; (D) engage
other donors in Project specific
coordination; and, (E) respond to
beneficiary requests and queries.
(ii) Establishment (including rules
regarding selection, composition, roles
and frequency of meetings) and
convening of a Steering Group for
periodic consultations on the
implementation of the Land Project e.g.,
the development of annual work plans,
key terms of reference, draft reports and
otherwise as appropriate; including key
stakeholder representatives, at least one
person from each of the MCA-Benin
Finance Services Project and the Justice
Project divisions, and a gender expert.
(iii) Convening of discussion groups
for each of the assessments in Section
(2)(a)(i) and for the White Paper and
corresponding legal reform work.
(iv) Selection of sites for activities
undertaken under this Project. Sites
shall be chosen by applying selection
criteria developed by MCA-Benin,
subject to MCC approval, in a fair and
transparent manner. MCA-Benin will
publicize, including posting on the
MCA-Benin Website, both the criteria
for selection and the actual sites chosen,
giving a brief justification for each site.
These criteria will ensure that sites have
the following characteristics, among
others: representation of the North,
South and Central regions of Benin;
sites that exhibit both poverty and nearterm economic opportunity e.g.,
urbanizing areas, high-value crop
production sites, and places where
market participation is expanding;
willingness to comply with Benin’s
Family Code; site of activity under the
Financial Services Project and the
Justice Project; and location within the
scope of the decentralized registry and
land information systems to be
established under Services and
Information Activity set forth in Section
2(c) of this Schedule 1. These
characteristics will be strategic to
choosing sites that will more readily
experience near-term, economically
meaningful results including for the
poor and women. The completion of
this site selection shall be a condition
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precedent to certain activities under this
Project.
(v) Strengthening of the National Land
Commission for the transformation of
urban land permits to titles by providing
the resources and guidance to enhance
the quality and quantity of work it can
perform.
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3. Beneficiaries
The Land Project will encourage
investment in urban and rural land. A
new policy framework will enable a
progressive transition between
customary and administrative land
management to markets and a title
registration system. With lower
transactions costs and fewer disputes,
the climate for investment, productivity
and finance will be improved. The Land
Project will strengthen women’s land
rights under the law and, more
importantly, work to ensure the new
family code is practiced widely. In
Cotonou, Porto-Novo and Parakou, the
three main cities in Benin, up to 30,000
properties currently under
administrative certificates will have
titles. In twenty-four selected rural
communes, as many as 83,000 families
in 300 villages will receive a certificate,
which can be subsequently turned into
a land title. Other rural land users,
without full ownership rights, will also
have recorded agreements. Accurate
land rights information will benefit
potential local and international
investors, including Benin’s diaspora.
For example, reliable and cost-effective
inquiries of local records will be
possible before entering leases or
purchasing land. Finally, there will be
better capacity for local planning and
tax administration which will benefit
local municipalities and civil society.
Roughly 115,000 rural and urban
households will have more secure and
useful tenure, affordable access to
reliable land related information and
services; a 50% reduction in court cases
related to land disputes is targeted, and
a modest 10% to 20% investment
response is expected to boost income
earning opportunities.
4. Donor Coordination; Private Sector;
Role of Civil Society
In rural Benin, both Deutsche
¨
Gesellschaft fur Technische
Zusammenarbeit (‘‘GTZ’’) GmbH
(German) and Agence Francaise de
´
Developpement (‘‘AFD’’) (French) have
supported successful land use pilot
projects under the Program for Natural
Resources Conservation and
Management. A first phase of these pilot
projects has recently ended and both
donors have expressed interested in
continuing this work. The approach has
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been standardized and guidelines
established which will be used in
implementation of this Project.
In urban areas the Government
recently completed a pilot titling project
that had positive but limited results.
The limited results were due to
substantial titling fees, a reluctance to
being the initial participant (‘‘first
adopter’’), insufficient public outreach,
and administrative problems relating to
certificates previously pledged as
collateral. These limitations were
identified in the Proposal and will be
further addressed in the Implementation
Plan for the Registration Activity.
The ‘‘Transformation of Assets into
Usable Capital in the Least Developed
Countries’’ project initiated by the
International Land Coalition has chosen
Benin as a pilot country. Under this
International Land Coalition initiative,
the UNDP will support a stakeholder
analysis that could be used to refine the
relevant components of the Project
Activity Implementation Plans. The
Foreign Investors Advisory Service of
the International Finance Corporation
(‘‘IFC’’) will soon complete a study of
land access and investment. Their
preliminary recommendations are
generally consistent with this Project,
with some sub-activities herein having
been derived from it.
Private professionals, e.g., surveyors,
are currently called on by the
government to implement tasks within
the formalization process. To the extent
feasible, the Land Project will promote
out-sourcing and development of
private sector services related to land
registration and land markets. Among
the key stakeholders that will guide the
project implementation planning and
participate in the studies undertaken
pursuant to the Policy Activity, are
bankers and businessmen and civil
society organizations, e.g., women’s
groups. These are the end-users of the
improved formal property registration
system and their perspectives will
provide much-needed insight into final
definition of land policy and of the most
practical approaches to implementation.
5. U.S. Agency for International
Development
No USAID projects focus specifically
on land access and security in Benin.
However, MCA-Benin will continue to
dialogue with USAID to identify areas
in which it can complement or
coordinate with e.g., women’s legal aid.
6. Sustainability
One of the prime concerns that will
underlie the series of evaluations
conducted in the Policy Activity is the
need to ensure that investments can be
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12965
sustained and that near-term results
translate into long’term sustainable
change. The Government has set
ambitious targets for decreasing costs of
land titling and registration and will be
considering further rationalizing fee
structures. The final choice of technical
solutions for information management
and for supporting the process of
formalizing land tenure will be chosen
on a best-value for cost in the specific
context of Benin. The extensive
consultation, information dissemination
and training embedded across all the
Project Activities will reinforce
consensus and make it more likely that
people can take advantage of the new
land policy framework. The review of
the law will identify and address
disincentives to keep land records
formal over time. All together, these
features lend themselves to
sustainability.
7. Policy; Legal Reform; and Procedural
Changes
The Parties have identified the
following policy, legal and regulatory
reforms and actions that the
Government shall pursue in support,
and to reach the full benefits, of the
Land Project, the satisfactory
implementation of which will be
conditions precedent to certain MCC
Disbursements as provided in the
Disbursement Agreement:
(a) Undertake policy, legal and/or
procedural changes as called for in the
final approved assessment reports
produced under the Policy Activity: to
simplify, streamline and make
affordable all processes related to formal
registration of land rights;
(b) Endorse a Land Policy White
Paper produced in conjunction with this
Project; issue a National Land Policy
Decree endorsing its vision, adopt a law
requiring compliance with it and pass a
unified Land Code to consolidate the
body of law that affects land rights;
(c) Reform laws, regulations and
administrative processes as needed to
remove constraints to the use of land as
collateral;
(d) Undertake measures to improve
the enforcement of Benin’s Family
Code, Rural Code, and other legislation,
as identified in the gender strategy
undertaken pursuant to the Policy
Activity, which give and protect
women’s rights to land; and
(e) Undertake measures to ensure the
property taxes do not discourage
registration of land transactions and that
safeguard against undue tax burdens.
8. Proposals
Under the Land Project, public
solicitations for proposals are
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anticipated to procure goods and
services, as needed, to implement all
Land Project Activities. MCA-Benin will
develop, subject to MCC approval, a
process for consideration of both such
proposals. While competitive
procurement will be the norm for this
Land Project, MCA-Benin may also
consider, using a process developed
subject to MCC approval, any
unsolicited proposals it might receive.
Under Strategy Support Activity of this
Land Project, a Land Project Steering
Group and several working groups will
be comprised to guide implementation
planning and implementation of the
assessments to be conducted under the
Policy Activity. MCA-Benin will
determine the number and types of
participants in these groups. A public
call for expressions of interest to
participate will be made and candidates
will be selected by a panel comprised of
MCA-Benin’s Land Project Director,
Finance Project Director and one other
person to be determined by MCA-Benin
with MCC approval. The composition of
this panel shall be made publicly
available as will be their final selection
for any particular group.
This Land Project also involves
selection of particular communes,
villages or urban neighborhoods to
participate in Project Activities
described in Sections 2(b) and (c) of this
Schedule 1. As described in Sections
2(b) and (c), selection criteria for
identifying communes, villages or urban
neighborhoods to participate and a
method to apply these will be
developed by MCA-Benin, subject to
MCC approval. The criteria, method and
final selections (including justifications)
will be made known to the public. In
addition, MCA-Benin will incorporate
into the method for applying the
selection criteria a process for
consideration of unsolicited offers of
participation by particular communes,
villages or urban neighborhoods.
Schedule 2 to Annex I—Access to
Financial Services Project
This Schedule 2 generally describes
and summarizes the key elements of the
Access to Financial Services Project (the
‘‘Financial Services Project’’) that the
Parties intend to implement in
furtherance of the Financial Services
Objective. Additional details regarding
the implementation of the Financial
Services Project will be included in the
Implementation Plan and in relevant
Supplemental Agreements.
1. Background
Benin has a shallow financial sector
that provides limited services to micro
and small- and medium-scale
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enterprises (one or more of such
categories of enterprises, ‘‘MSMEs’’),
particularly those that are involved
directly or indirectly in the production
of goods in Benin. For example, the
banking sector, while possessing
significant liquidity, has focused much
of its credit services on short-term
financings and on larger companies,
such as multinationals with branches in
Benin. Savings services in Benin have
had limited penetration, with only a
small fraction of the population owning
a bank account. Although the
microfinance sector is relatively vibrant
in Benin, it faces significant challenges,
including the weak institutional
capacity of many MFIs and the need for
additional monitoring and supervision.
Moreover, much of the financial sector
has focused on urban areas and on
short-term commerce rather than longterm production.
The following factors contribute to the
limited scope of financial services to
MSMEs:
• High transaction costs, especially in
rural areas;
• Lack of reliable information on
clients;
• Lack of creditworthiness of many
borrowers;
• Limited resources and capacity of
some of the financial intermediaries;
and
• Perceived risk of clients, in part due
to lack of sufficient collateral (such as
title) and the inability of lenders to
effectively enforce debts or sell
collateral upon default, and price and
yield risks inherent in agriculture.
These factors constrain the growth of
MSMEs in Benin. The high cost or
unavailability of credit and other
financial services, including savings,
limits the capacity of small businesses
in Benin to expand production and
employment, to respond to business
opportunities and to manage risk.
Accordingly, alleviating these
constraints, and creating a broader and
deeper financial sector, should increase
incomes of the poor that own, are
employed by, or do business with
MSMEs.
2. Summary of Projects and Activities in
Project and Expected Results
The Financial Services Project is
designed to improve the ability of
MSMEs, particularly those directly or
indirectly involved in production in
Benin, to access financial services that
will help them improve the
sustainability of their businesses.
• The Financial Services Project
includes the following two Project
Activities:
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• Financial Institution and Borrower
Capacity Building Activity: This Project
Activity aims to (a) improve the
capacity of financial institutions to
expand existing or establish new
services for MSMEs and (b) improve the
capacity of MSMEs to access and use
expanded financial services
productively by improving their
creditworthiness; and
• Financial Enabling Environment
Activity: This Project Activity will
undertake to identify and support legal
and policy changes that are needed to
facilitate the expansion of the financial
sector in Benin.
The M&E Plan (described in Annex
III) will set forth anticipated results and,
where appropriate, regular benchmarks
that may be used to monitor
implementation progress. Performance
against these benchmarks and the
overall impact of Financial Services
Project will be assessed and reported at
the intervals to be specified in the M&E
Plan or as otherwise agreed by the
Parties from time to time. The Parties
expect that additional indicators will be
identified during the implementation of
the Financial Services Project. The
expected results from, and the key
benchmarks to measure progress on, the
Project, Project Activities and subactivities undertaken or funded under
the Financial Services Project are set
forth in Annex III.
Estimated amounts of MCC Funding
for each Project Activity for the
Financial Services Project are identified
in Annex II of this Compact. Conditions
precedent to each Financial Services
Project Activity and sequencing of these
Project Activities shall be set forth in
the Disbursement Agreement or other
relevant Supplemental Agreements or
applicable component of the
Implementation Plan.
The following summarizes the
Financial Services Project Activities:
(a) Project Activity: Financial
Institution and Borrower Capacity
Building (the ‘‘Capacity Building
Activity’’)
The overall goal of this Project
Activity is to broaden and deepen the
financial sector in Benin by improving
both the supply of and demand for
financial services. It is intended to build
the capacity of financial institutions, as
well as to improve MSMEs’
creditworthiness and ability to use
financial services productively.
This Project Activity involves two
sub-activities:
• Demand and feasibility
assessments; and
• A financial innovation and
expansion challenge facility (‘‘FINECF’’
or the ‘‘Challenge Facility’’).
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(i) Demand and Feasibility
Assessments. This sub-activity is
intended to help shape the criteria and
guidelines for the Challenge Facility
described in Section 2(a)(ii), and to
build on existing studies and improve
the quality of information available to
potential applicants. Satisfactory
completion of these studies, and
dissemination of the key findings, shall
therefore be conditions precedent to the
Challenge Facility. The below studies
shall be conducted by an expert or
experts retained after an international
competitive procurement; terms of
reference and procurement for these
studies shall be subject to MCC
approval. The results of the studies may
be further divided or combined into one
or more reports, so long as they cover
the topics mentioned below or such
other topics as the Parties may agree in
writing. MCC and MCA-Benin shall
consider cost structures where public
and private costs for the studies are
shared, with the private portion to
expand over time.
MCC Funding, together with potential
parallel or co-financing from other
sources, shall support the following:
(1) Conduct of demand study for
services to MSMEs. This will study the
demand for innovative and expanded
financial services (especially credit and
savings) that may be provided to
MSMEs by MFIs, banks and other
financial institutions. To the extent
practical, the study will assess demand
particularly among MSMEs involved in
production in Benin and in areas where
Land Project is likely to be active.
(2) Conduct of economic feasibility
and cost assessment. An economic
feasibility and cost assessment will
determine the effectiveness of certain
MFI investments in technologies that
have the potential to reduce operating
costs, increase the scale of operations
and expand services to MSMEs in
previously underserved regions and
sectors. The technologies that may be
explored and identified include,
without limitation, smart cards, epayment systems, management
information systems, and biometric
technology. To the extent practical,
these studies will focus on MFIs
operating in areas where the Land
Project is likely to be active.
(3) Conduct of demand study for
business development services. This
will study the demand for, and capacity
within Benin to supply, business
development services (‘‘BDS’’) to
MSMEs involved in agricultural and
non-agricultural sectors. In order to
determine capacity to supply such
services, the study will investigate
specialized BDS providers, MFIs and
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agricultural and rural organizations. To
the extent practical, these studies will
focus on BDS in areas where the Land
Project is likely to be active.
(4) Conduct of follow-up research and
studies or assessments, as needed
during the Compact Term, in the areas
covered by the studies and assessments,
set forth in paragraphs (1)–(3) of this
sub-activity or other similar types of
studies.
(ii) Financial Innovation and
Expansion Challenge Facility. MCC
Funding shall support a demand-driven
and competitive mechanism that will
co-fund with participants technical
assistance and capacity building for
both financial institutions and MSMEs.
This mechanism requires potential
beneficiaries to compete for support
based on transparent criteria and to
contribute a significant portion of the
project costs. These elements help
ensure that resources are directed to the
most motivated institutions and to the
most promising projects. MCC Funding
shall finance up to 66% of the cost of
selected projects with the share funded
by MCC Funding decreasing over time
(this is a cap, and in some cases the
program criteria may set a lower
percentage of support by MCC Funding).
Operating costs shall not be eligible for
support and the remainder of a project’s
costs must be provided by private
enterprises (which may include NGOs).
The Challenge Facility shall emphasize
and encourage support for local service
providers.
A qualified independent management
entity or entities shall manage and
implement the Challenge Facility (the
‘‘Facility Manager’’), acceptable to MCC
and MCA-Benin, selected after a
competitive tender. Funding for the
Challenge Facility shall be conditioned
upon: (a) Feasibility and demand
studies having been satisfactorily
concluded; (b) terms of reference and
procurement of Facility Manager being
satisfactory to MCC and (c) operating
guidelines and criteria for each
Component of Challenge Facility having
been developed in form and substance
satisfactory to MCC. The Challenge
Facility itself will not be making debt or
equity investments or issuing guarantees
to recipients of support; however, its
support, it is expected, will enable
institutions to better mobilize that
capital from others.
MCC Funding will support the
following activities, to be undertaken in
the manner described:
(1) Identification of viable applicants.
The Facility Manager shall filter
expressions of interest and identify
viable applicants for the three facility
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components described below in
paragraph (7).
(2) Provision of guidance to
applicants and development of
operating manual. The Facility Manager
will provide guidance to applicants
throughout the application procedure;
including guiding viable applicants
through the process of preparing a brief
concept note for review, and ultimately
providing assistance with development
of the full application. Challenge
Facility funds shall assist (where
appropriate, based on need) in the
development of applications that submit
a concept note with significant
potential. The Facility Manager shall
develop a policy as part of the operating
manual that will identify criteria for this
assistance.
(3) Review of applications and
selection of funding awards. Following
submission of applications, an
independent panel (the ‘‘Panel’’) shall
review applications and make awards
based on selection criteria described
below and subject to MCC approval.
MCA-Benin shall post on the MCABenin Website the names and
descriptions of applications that receive
awards, including amounts of awards.
(4) Development of award criteria.
The Facility Manager shall develop (A)
award criteria consistent with paragraph
(6) below and (B) an operating
procedures manual, each subject to
MCC and MCA-Benin approval. In
developing the award criteria, efforts
shall be made to support activities that
extend financial services to places
outside Cotonou where the Land Project
is (or is likely to be) active. Awards, if
practical, will be awarded in kind rather
than in cash, where technical assistance
or equipment or services are required.
Unless otherwise agreed by the Parties,
the Facility Manager shall be
responsible for selecting the provider
through a competitive tender, in
accordance with the procurement
guidelines that govern the Compact.
(5) Support of donor coordination
related to the Project Activity. The
Facility Manager, to the extent practical,
shall support capacity building
activities that leverage other donor
support or enable the beneficiary to
attract financing from other sources (for
example, enabling an MFI to attract
long-term financing from a bank or
enabling an MSME to obtain a loan).
MCA-Benin and the Facility Manager
shall seek to coordinate with other
donors to ensure that the MCA
assistance is as effective as possible.
(6) Development of criteria for
support by the Challenge Facility. The
selection criteria for funding under the
Components shall be determined by the
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Facility Manager, subject to approval by
MCC and MCA-Benin. The Parties
anticipate that the criteria will include
(without limitation) the following
categories:
(A) Market demand (there must be a
demonstrated need for the project);
(B) Impact (the project must be
expected to contribute, directly or
indirectly, to improved incomes and
opportunities for a substantial number
of poor people; the applicant’s
commitment to gender issues will be a
positive factor);
(C) Effectiveness (the project’s impact
must be expected to exceed its costs);
(D) Implementation Capacity
(applicants must have the capacity to
implement the project successfully);
(E) Demonstration effect (the project
must be unlikely to be undertaken
without the requested financial support.
In particular, projects suggested by forprofit entities, while permitted, shall be
scrutinized. In addition, pilot projects
shall be preferred over projects that
involve larger, untested ideas);
(F) Commitment (applicants must
show their commitment through the
share of project funding they are willing
to contribute);
(G) Sustainability (the project must be
expected to lead to the improved
financial sustainability of funding
recipients, and the impact of the project
must be expected to extend beyond the
termination of funding);
(H) Timing (the financial support of
the project must be completed prior to
the termination of the proposed
Program);
(I) Limitations on Use of Funding (the
proposed project must comply with the
limitations on use and treatment of MCC
Funding as set forth in Section 2.3 of
this Compact); and
(J) Other (the Facility Manager shall
develop such other selection criteria for
Components, including any criteria
unique to particular Component).
MCA-Benin shall post on the MCABenin Website the selection criteria
developed by the Facility Manager, as
approved by MCC and MCA-Benin.
(7) Implementation of Challenge
Facility Projects. Unless otherwise
agreed by the Parties, there shall be the
following three sub-facilities (each a
‘‘Component’’ and each described more
fully below) and to be funded equally;
provided, however, there may be
changes in allocations between the
Components, subject to MCC approval:
• The Innovation Component;
• The Institutional Strengthening
Component; and
• The MSME Business Development
Component.
Support under each Component is
expected to range from $25,000 to
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$250,000 per institution. Applications
can come from individual institutions or
groups of up to ten institutions with one
institution taking the lead. Where the
total project cost exceeds $500,000, the
application shall be subject to
heightened review and additional
selection criteria. A call for applications
shall be made up to twice per year, and
the guidelines and criteria will be
clearly communicated. Applications
must be supported by a sound business
plan by one of the eligible parties. In the
event MCA-Benin receives any
unsolicited written applications or
proposals and such proposals have not
been otherwise submitted to the Facility
Manager through the call for
applications, MCA-Benin shall forward
such applications to the Facility
Manager. The Facility Manager will
evaluate such unsolicited applications
in the same manner as those received
through the call and identify viable
applications in accordance with
paragraph (1) above.
(A) The Innovation Component shall
support financial institutions (nonbanks and banks) that expand their
product offering to MSMEs in
previously underserved regions and
sectors or introduce innovative
technologies that lead to economies of
scale and reduced operating costs and
risks. For example, funding may be used
to support investments in technology,
management information or
communications services, or to provide
technical assistance and staff training to
assist with the design, implementation
and marketing of new financial products
or services.
(B) The Institutional Strengthening
Component shall seek to strengthen the
capacity of selected microfinance
institutions in Benin by improving
internal controls, transparency,
management, and ability to access
additional stable financial resources
from commercial banks and investors at
reduced costs. As a result, MFIs shall be
able to provide better quality and
cheaper products and services to
MSMEs. This Component shall fund
technical assistance and grants for
equipment or supplies to build capacity
within MFIs that significantly serve
MSMEs. Unless otherwise agreed by the
Parties, 10% of grants under this
Component shall go to each of the
following:
(i) Promotion of transparency and
good governance at MFIs, such as
external audits and ratings and internal
controls.
(ii) Improvement of management/
analysis of long-term credit extended by
MFIs with national or regional scope.
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(iii) Training or other mechanisms to
improve the ability of MFI management
to access long-term financing and other
stable resources.
(iv) Assistance with compliance with
regulatory requirements.
(v) Evaluations of, and technical
assistance to improve, operating
capacity and efficiency of MFIs.
(C) The MSME Business Development
Component shall support business
development services for agricultural
and non-agricultural MSMEs. The
objective is to improve access to finance
by improving the MSMEs’
creditworthiness and ability to use
financial services productively. This
Component may include the following
types of funding:
(i) Funding to financial institutions,
such as MFIs: Assistance designed to
improve financial literacy and business
management (including through
improved marketing, internal controls
and accounting), as well as to improve
the ability of borrowers to complete
credit applications and access credit.
(ii) Funding to rural networks and
organizations (such as co-ops and
associations): Training and technology
to agricultural and rural networks and
organizations that present plans to build
the creditworthiness and productivity of
their MSME members.
(iii) Funding to specialized BDS
providers: Training and technology to
assist local specialized business
development service providers in
improving their capacity to provide
sustainable services.
(8) Monitoring of progress of the
Challenge Facility projects. Funding
agreements with entities receiving
benefits shall include annual
performance benchmarks to indicate
progress in meeting objectives, with the
form of such agreements subject to the
approval of MCA-Benin and MCC and
will be specified as conditions to certain
Re-Disbursements for the selected
Challenge Facility project. In the case of
the Institutional Strengthening
Component, this might include items
such as capitalization and other
financial reporting requirements. In the
case of the Innovation Component, this
might include items such as increased
amount of services, number of new
clients for all services and number of
new credit clients. Failure to meet these
benchmarks may lead to termination of
project support and in some cases a
requirement that the entity repay a
portion of the assistance received.
Repaid funds shall be used as grant
funding to finance other activities under
the Challenge Facility.
(9) Conduct of information, education,
and communications campaign. To
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improve the quality and responsiveness
of proposals, a portion of the MCC
Funding for FINECF shall be used to
support market information campaigns.
The campaigns shall inform potential
applicants about FINECF’s objectives
and guidelines for targeted technical
assistance and grants. Where
appropriate, certain trainings, technical
assistance, and services will be
provided through FINECF to incorporate
information on strategies for avoiding
environmental and social risks, using
environmental and social review criteria
and enhancing the sustainability of
loans.
(b) Project Activity: Financial
Enabling Environment Activity (the
‘‘Financial Enabling Environment
Activity’’).
The objective of the Financial
Enabling Environment Activity is to
identify and support legal and policy
changes that are needed to facilitate the
deepening and expansion of the
financial sector in Benin.
The Financial Enabling Environment
Activity consists of the following subactivities:
• Strengthening of Microfinance
Supervision: Support for Cellule de
Microfinance (‘‘Cellule’’), microfinance
supervisory authority in the Ministry of
Finance, and for audits of microfinance
institutions.
• Multi-stakeholder forums: Conduct
of electronic and/or physical forums to
discuss potential improvements to laws
and policies relating to an expanded
financial sector and use of land titles as
collateral.
• Improvement of regulatory
environment: Support for financial
sector regulatory changes by funding the
analysis of and advocacy for such
changes.
• Credit Bureau capacity building:
Building the capacity of the MFI credit
information bureau so that it can track
the payment history of borrowers more
accurately.
• Land titles as collateral: Provision
of support to assist ability of financial
institutions to use land titles as
collateral in loans or refinancings.
MCC Funding will support the
following activities:
(i) Strengthening of Microfinance
Supervision.
(1) Build capacity of the Ministry of
Finance and Economy’s Cellule de
Microfinance, which currently serves as
the supervisory authority for
microfinance in Benin, by providing
support in areas such as technical
assistance, training, and acquisition of
software and equipment. The goal of
this support is to improve the
supervision, transparency and
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governance of MFIs in Benin. MCC
Funding will not be used for salaries of
Cellule staff. This sub-activity will
improve the capacity of the Cellule to
increase its monitoring and licensing
activities and use resources more
effectively;
(2) Improvement of rules and
procedures for microfinance. An outside
advisor shall be engaged to work with
the Cellule to improve rules and
procedures in Benin regarding
microfinance, and improve the
efficiency and effectiveness of the
Cellule. It is intended that the advisor
shall come for approximately two weeks
a quarter, at least for the first year, with
limited follow-up visits thereafter; and
(3) Conduct of audits of microfinance
institutions, with the goal of further
strengthening the supervision of MFIs in
Benin. Institutions to be audited will be
recommended by the Cellule, with the
criteria for selection submitted to MCC
for approval. Funding for audits will be
conditioned on the development by the
Ministry of Finance and Economy of a
plan, approved by MCC, for the
sustainability of the conduct of audits
beyond the Compact Term.
(ii) Multi-stakeholder forums.
(1) Design workshops and electronic
forums to promote the discussion and
exchange of ideas on policies and
strategies for expanding access to
financial services. Where relevant,
implementers of other Projects in this
Program (especially Land Project and
Justice Project) will also have
representatives involved in the design
and implementation of these forums;
and
(2) Conduct of workshops and
electronic forums designed under
paragraph (1) above. Topics for these
forums shall be approved by MCC and
MCA-Benin and are expected to
include, for example (1) actions and
initiatives needed to ensure successful
use of land titles as collateral for loans
(with the participation of the
implementers of the Land Project,
including the MCA-Benin Land Project
division); and (2) legal and regulatory
hurdles, at the national and regional
level, to development and
implementation of expanded financial
services and new products. The
Government, including the Ministry of
Finance, shall participate in these
forums and respond to reasonable issues
raised therein. The presentations to and
results or feedback generated from these
forums shall be posted on the MCABenin Web site.
(iii) Improvement of regulatory
environment. Following completion of
initial multi-stakeholder forums
convened pursuant to paragraph (ii)
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above, MCC Funding shall support
analysis of, and advocacy for, changes
in West African regional and Benin
national regulations of the financial
sector that are intended to expand
access to financial services prudently.
On an annual basis, areas of focus for
these regulatory changes shall be agreed
upon between MCC and MCA-Benin,
and are expected to include the priority
reforms identified in the multistakeholder forums described above.
Other stakeholders may, at this stage,
present to MCA-Benin unsolicited
proposals for interventions or activities
that were not identified in the multistakeholder forums. In implementing
these activities, MCA-Benin shall
coordinate with other development
organizations and government agencies
involved in the financial sector in Benin
and in West Africa.
MCC Funding will support the
following:
(1) Technical assistance in identifying
areas of regulatory reform; and
(2) Drafting of regulations and/or
policy papers, and other acceptable
advocacy and consensus building
mechanisms in areas of regulatory focus
approved by MCC and MCA-Benin of
the areas of focus.
(iv) Credit bureau capacity building.
To build the capacity of the Consortium
Alafia (a microfinance trade association)
credit information bureau, MCC
Funding will support the following:
(1) Conduct of studies to assess
demand, feasibility and costeffectiveness of the recommended
improvements; and
(2) Improvements to Consortium
Alafia (a microfinance trade association)
credit information bureau, following
completion of the studies conducted
pursuant to paragraph (1) above and
subject to agreement between MCC and
MCA-Benin that: there is sufficient
demand, that the feasibility has been
demonstrated, and that the proposed
costs are acceptable. This activity will
build capacity of the credit information
bureau to track information and more
precisely identify customers in a credit
information database, including not just
negative (i.e., missed payment)
information, but also positive (i.e.,
satisfied payment) information of
clients. The activity may also link the
credit bureau database with databases
that include bank customer data.
(v) Land titles as collateral for loans.
This sub-activity will provide technical
assistance and other capacity building
for financial institutions, particularly
MFIs, to support their ability to make
title-based-loans or refinance portfolios
of loans secured by land titles. The
financial institutions to receive this
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assistance shall be selected based on
criteria developed by MCA-Benin,
subject to MCC approval. It is expected
that these financial institutions shall be
located or serve areas covered by the
Land Project. MCA-Benin shall post on
the MCA-Benin Web site the selection
criteria.
The activities MCC Funding will
support under this sub-activity are
expected to include, without limitation:
(1) Technical assistance to MFIs to
improve credit management and
assessment for secured loans and to
assist them in using portfolios of
secured loans as collateral for MFI
financing obtained from banks;
(2) Development of standardized
forms; and
(3) Installation of mechanisms of
collaboration between financial
institutions and land authorities to
facilitate and accelerate the treatment of
the files of application for credit.
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3. Beneficiaries
The principal beneficiaries of the
Financial Services Project are expected
to be people who own, are employed by,
or do business with MSMEs in Benin.
Particular efforts shall be made to reach
MSMEs in traditionally underserved
areas of the country, as well as in areas
where the Land Project is likely to be
active.
The urban and rural poor will benefit
directly, due to their (or the MSME with
whom they do business or are
employed) gaining access to a broader
and more effective menu of financial
products and services. They will also
benefit indirectly, because financial
sector deepening has been shown to
lead to economic growth and
disproportionately benefit the poor. The
Financial Services Project, in particular,
will benefit poor women. When
managed effectively, microfinance has
significant economic and social benefits
for women, and by strengthening the
microfinance sector in Benin, this
Project will extend these benefits to a
larger percent of the population.
Showing commitment to gender issues
will be weighted positively in the
criteria for allocating funding in
FINECF.
4. Donor Coordination; Private Sector;
Role of Civil Society
Donor Coordination: The Financial
Services Project complements the
activities of other donors. The World
Bank, United Nations Development
Program, African Development Bank,
and several bilateral donors have been
active in MFI and other financial sector
activities. The demand-driven nature of
the FINECF and the requirement for
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applicants to demonstrate the need for
funding should enhance rather than
duplicate donor efforts. In addition,
policy and regulatory initiatives funded
under this Project will be designed to
complement and support the efforts of
other donors that are leading similar
initiatives at the regional level.
Private Sector: MSMEs are a
particular focus of this project, and an
assessment of their financial services
needs will help drive the focus of the
Challenge Facility and efforts to support
policy and legal reforms.
Civil Society: The multi-stakeholder
forums are designed to solicit
suggestions from a wide range of voices
in society to improve the regulatory and
policy environment. In addition, a
number of the recipients of FINECF
funding are likely to be local NGOs.
5. U.S. Agency for International
Development
USAID was consulted during the
design of the Project, and their input
will be solicited throughout the
implementation and monitoring of the
Financial Services Project. This Project
will benefit from the lessons learned
from USAID’s main microfinance
project which is nearing the end of its
term. To the extent applicable, this
Project will be coordinated with
ongoing and future agricultural and
other programs focused on increasing
the breadth and quality of demand for
financial services.
6. Sustainability
The Financial Services Project is not
intended to create a new, sustainable
institution or financial mechanism.
Rather, it is intended to enhance the
success of existing commercial actors
that service MSMEs and make them
more sustainable. Beneficiary
institutions of the Challenge Facility, for
example, can be expected to continue to
implement improvements in financial
technologies and institutional capacities
after Program support ends, since
participating institutions are required to
present sustainable, economically
viable, plans for assistance and
demonstrate their financial commitment
to the project. Moreover, by
demonstrating best practices, the Project
will also encourage other financial
institutions or business development
service providers to follow the
innovations of participating institutions.
Support for portions of the Financial
Enabling Environment Activity shall be
conditioned on Benin having presented
and developed a funding and
sustainability plan for the microfinance
supervisory authority in the Ministry of
Finance that is satisfactory to MCC;
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such plan may include mechanism for
funding via national funds and private
funds and adjustments in staffing.
7. Policy; Legal Reform; and Procedural
Changes
The Parties have identified the
following policy, legal and regulatory
reforms and actions that the
Government shall pursue in support,
and to reach the full benefits, of the
Financial Services Project, the
satisfactory implementation of which
will be conditions precedent to certain
MCC Disbursements as provided in the
Disbursement Agreement:
(a) The implementers of the Financial
Services Project, including the MCABenin Financial Services Project
division, shall participate in the
development of the Land Policy White
Paper through representation on the
Land Project Steering Committee and in
the relevant working group(s). The
Government shall commit to adopt the
reforms consistent with this Land Policy
White Paper that are necessary to ensure
effective use of land titles as collateral
for loans and to enable financial
institutions to effectively enforce their
collateral interest in such title;
(b) The Government shall develop a
funding and sustainability plan for the
Cellule that shows appropriate use of
MCC Funding and is satisfactory to
MCC, including a commitment to
finance significantly increased and
adequate staffing for the Cellule as soon
as practical through the budget, fees, or
another sustainable mechanism. The
amount funded by this sustainable
funding mechanism must grow over
time and eventually replace the MCC
Funding. This commitment must be in
form and substance acceptable to MCC.
In addition, the Government shall
commit to working with the outside
advisor to the Cellule funded under the
Compact and adopting reasonable
reforms suggested by advisor;
(c) The Government shall develop and
seek MCC approval of a funding and
sustainability plan for the
implementation of regular audits of
microfinance institutions, as well as of
a plan for selection of these institutions;
(d) Support for improvements to the
credit bureau for microfinance shall be
conditioned upon the results of a study
(or studies) of feasibility and demand
(with procurement approved by MCC).
An implementation plan and detailed
budget for improvements, based on the
results of the feasibility and demand
study (or studies), shall be submitted to
MCC for approval;
(e) The National Policy for
Microfinance shall be adopted in form
and substance satisfactory to MCC; and
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(f) The Government shall develop and
advocate for, and use its best efforts to
adopt and implement, those reasonable
legal and regulatory reforms, if any, that
are identified by the multi-stakeholder
forums in the Financial Enabling
Environment Activity as necessary to
expand, significantly and sustainably,
financial services offered to MSMEs. A
yearly report, including a summary of
the forums and a resulting work plan,
shall be submitted to MCC for approval.
8. Proposals
Mechanisms for consideration of
solicited and unsolicited Challenge
Facility applications shall be as
described above in Section 2(a)(ii).
Mechanisms for consideration of
solicited and unsolicited proposals for
regulatory reforms shall be as described
above in Section 2(b)(ii).
In addition, as appropriate, MCABenin will develop, subject to MCC
approval, a process for consideration of
solicited and unsolicited proposals.
With respect to solicited proposals, the
evaluation process will include,
consistent as appropriate with the
Procurement Guidelines, the issuance of
a published request for proposals with
specific identified evaluation criteria
and peer reviewers.
Schedule 3 to Annex I—Access to
Justice
This Schedule 3 generally describes
the key elements of an Access to Justice
Project (the ‘‘Justice Project’’) that the
Parties intend to implement. Additional
details regarding the implementation of
the Access to Justice Project will be
included in the Implementation Plan
and in relevant Supplemental
Agreements.
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1. Background
A major obstacle to Benin’s economic
growth is the inadequate physical and
institutional infrastructure of the
judicial system. The judicial system and
courthouses serving Benin at
independence in 1960 are largely the
same system and courthouses that
serves Benin now. Archaic laws, few
and insufficiently trained judges,
insufficient administrative capacity, and
poor access to legal information
combine with few and old courthouses
to deny access to justice to many
Beninese. If individuals or businesses
dare to proceed into the maze of the
courts, expense, delays (it takes an
average of 570 days to enforce a
contract), and the risk of corruption
mean that justice is a highly uncertain
result. Business decisions are skewed,
and business expansion is stifled by the
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reality of slow, costly and uncertain
justice.
Throughout West Africa alternative
dispute resolution (‘‘ADR’’) is becoming
an increasingly viable means to resolve
commercial disputes. As part of Benin’s
obligations under OHADA, the Centre
d’Arbitrage, Mediation et Conciliation
(‘‘CAMeC’’) has been formed within the
Chamber of Commerce and Industry in
Cotonou. It has not yet begun to conduct
arbitrations or other ADR activities.
The Chamber of Commerce (the
‘‘Chamber’’) has initiated and is
managing a successful program in
business registration that this Justice
Project will build upon. Rather than a
lengthy corporate registration
proceeding through many offices in
many agencies, the Chamber has
developed a service that has already
reduced the average time for the
registration of companies from over
three months to ten days by centrally
managing the process of corporate
registrations. The Business Registration
Center is based in Cotonou with small
satellite offices in Porto-Novo, Abomey,
and Parakou.
The Government has already begun an
extensive process of legal reform: hiring
additional new judges and court
personnel, improving court
administration, and building new
courthouses. In addition, other donors
have already made commitments to the
improvement of Benin’s judicial
infrastructure. The Inspection General
service provides supervision for the
courts. It assures that courts are all
performing with uniform quality,
provides guidance to new judges, and
initiates investigations when improper
behavior by court personnel is reported.
MCC’s contribution will fit with Benin’s
ongoing legal reform plans and
complement the work of other donors.
A notable failure of the current judicial
system is the lack of access to legal
information and the absence of a central
location for legal information—whether
it is the decisions of courts, the laws of
Benin, or legal texts, either in paper or
electronic form. Greater knowledge of
the laws and courts of Benin for large
numbers of people will lead to greater
certainty in commercial transactions,
reduced demand for courts in minor
disputes, and less fear of the judicial
system for more serious disputes.
Informed public awareness of legal and
judicial issues is critical to public
confidence in the judicial system. For
this reason, the Government proposed
the creation of a Legal Information
Center.
This Project also aims at assisting
litigants in Benin currently suffering
from case backlogs and litigants or
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potential litigants who live great
distances from current courts. New
courts will be built, to an established
modern design, beginning late in year
two of the Justice Project. Training of
current judges and other court
personnel will begin in year one of the
Justice Project. A financing facility to
support legal aid to assist poorer
litigants will also be established. The
construction of the courts will be linked
to growth and training of new judges; as
noted Section 6 below, the Government
of Benin will hire new judges and other
personnel on an appropriate schedule to
staff the new courts and to allow for
training prior to their assignment to the
courts. Finally, the Justice Project will
increase the likelihood of success of
both the Land Project and Financial
Services Project by increasing speed and
likelihood of contract enforcement.
2. Summary of Project Activities
The overall objective of the Justice
Project is to improve the investment
climate by increasing the confidence in
the judicial system to enforce contracts.
In response to the conditions noted
above, this Project has three main
components:
• Support the expansion of the Center
of Arbitration, Mediation and
Conciliation at the Chamber of
Commerce;
• Improvement of the Registration
Center (Guichet Unique); and
• Improved services of courts
including capacity building and training
for judges, court personnel, legal aid,
and Inspection General service; creation
of a legal information center;
development of a public awareness
campaign; and the construction of new
courthouses.
The following summarizes the
contemplated Justice Project Activities.
The M&E Plan (described in Annex III)
will set forth anticipated results and,
where appropriate, regular benchmarks
that may be used to monitor
implementation progress. Performance
against the benchmarks and the overall
impact of the Justice Project will be
assessed and reported at the intervals to
be specified in the M&E Plan or as
otherwise agreed by the Parties from
time to time. The Parties expect that
additional benchmarks will be
identified during the implementation of
the Justice Project. Estimated amounts
of MCC Funding for each Project
Activity for the Justice Project are
identified in Annex II of this Compact.
Conditions precedent to each Project
Activity and sequencing of the Project
Activities shall be set forth in the
Disbursement Agreement, other relevant
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Supplemental Agreements, or
component of the Implementation Plan.
(a) Project Activity: Expansion of the
Arbitration Center (‘‘Arbitration Center
Activity’’).
Increased access to ADR will reduce
the burden on courts, reduce the cost of
dispute resolution, and allow for faster
resolution of commercial disputes.
Companies and individuals engaging in
commercial activities are the expected
beneficiaries for this Project Activity.
Increased economic activity and a
growing number of entrants to
commercial activity are expected
results, supporting the Program
Objective. This Project Activity will
facilitate a plan to fully launch
operations of CAMeC involves capacity
building, public outreach, and
budgetary support (e.g., staff costs).
MCC Funding will support the
following activities:
(i) Training for arbitrators and CAMeC
staff in arbitration procedures and ADR
and arbitration management.
(ii) Development of institutional
management and operational
procedures.
(iii) Promotion of public outreach,
including production of training and
publicity materials and maintaining of
Web site with relevant documents and
information.
(iv) Support for staff salaries at the
CAMeC; provided, however, MCC
Funding will gradually phase out over
the Compact Term as an incentive for
CAMeC to promote a commercially
viable pricing structure for provision of
and access to services of the Arbitration
Center and to ensure sustainability of
the activity after the Compact Term.
(v) Acquisition of new equipment and
some additional rented space for
CAMeC as increased caseload warrants.
(b) Project Activity: Business
Registration Center (Guichet Unique)
(‘‘Business Registration Activity’’).
The Business Registration Project
Activity is intended to greatly reduce
the steps required to register a company.
This Project Activity will track the
reduction of registration time year by
year, from the current average of twenty
days. MCC support will strengthen
current operations in Cotonou, PortoNovo, Abomey and Parakou and support
opening new satellite offices in
Natitingou and Lokossa. Investment in
existing and new offices will further
speed, simplify and reduce the cost of
corporate registration, and make this
service available to more enterprises. It
is expected that these improvements
will encourage the formation of
companies, boost employment in the
formal sector and increase incomes.
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MCC Funding will support the
following activities:
(i) Evaluation of the performance of
existing offices to identify necessary
improvements and assist with design of
new offices and services of the Business
Registration Center.
(ii) Introduction of new services such
as a system for registration under the
Investment Code.
(iii) Training of new staff in
regulations, rules and procedures
related to formation of companies.
(iv) Development and maintenance of
an electronic database of companies in
Benin.
(v) Provision of computers and other
office equipment for new offices of the
Business Registration Center.
(vi) Conduct of public outreach to
business community including seminars
and publicity or informational
materials.
(c) Project Activity: Improved
Services of Courts (‘‘Courts Activity’’).
The Courts Activity will allow Benin
to move forward its ten year plan for
improvement of the judiciary by
providing basic training, court
management, guidance, and physical
and institutional infrastructure.
MCC Funding will support the
following activities:
(i) Training of judges and court
personnel.
(1) Prior to commencing of activities
described in paragraphs (2) through (5)
below, design of a comprehensive
capacity building strategy for judges and
court personnel;
(2) Training of both new and current
judges in substantive and procedural
matters, particularly in commercial
issues as the laws of Benin are
modernized and harmonized, under the
OHADA process, with the rest of
francophone West Africa;
(3) Training of court personnel,
including clerks and court officials, in
modern case management procedures,
use of technology, and other substantive
and procedural matters as the courts
modernize;
(4) Continuing training of current
judges and court staff as well as training
of new hires, particularly on
commercial issues. This activity will
build on training programs already
underway supported by various
European aid agencies; and
(5) Development of comprehensive
training materials and judicial benchbooks and other documents to support
improved functioning of the courts and
further development of local training
capacity, to support efforts to
institutionalize the capacity building
process.
(ii) Inspection General Service. To
improve the efficiency of the Inspection
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General Service and its ability to serve
the increased number of courts
contemplated by Benin’s legal reform
plan, the work of other donors and this
Project:
(1) Training of new and existing
personnel of the Inspection General
Service to improve their ability to
supervise the courts, advise court staff,
and identify unethical behavior; and
(2) Development of training materials
to build Inspection General Service
capacity.
(iii) Legal Information Center. The
proposed Legal Information Center to be
located in Cotonou will serve not just as
law library, but as a center for the
disseminating of court decisions, laws,
and other legal information. The Legal
Information Center will be open to the
public, both physically and
electronically. The Legal Information
Center will: Serve as a central location
for case records; convert case records
and other legal documents to electronic
media; provide public access to laws
and other legal documents; serve as a
resource and training center for judges,
court personnel, and government
officials.
MCC Funding will support the
following activities:
(1) Following the completion of the
Category B environmental and social
assessment framework specified in
Section 2(c)(v)(3) and an individual
EMP or environmental assessment
(including an EMP) as determined
according to the framework and subject
to adoption of the Procedural Code and
other Codes specified in Section
2(c)(v)(1), construction and equipment
of a new Legal Information Center.
Hazardous and toxic materials will not
be permitted to be used or result as byproducts from construction and
operation of the buildings;
(2) Development of an electronic
database of legal information and
documents; and
(3) Conduct of a public awareness
campaign to demystify law and legal
proceedings to the broader public. This
will involve ‘‘open days’’ at the courts
and the Legal Information Center,
publication of legal information for nonlawyers, information dissemination via
the media, and other outreach efforts
such as coordination with the outreach
activities of the CAMeC and Business
Registration Center to introduce
consumers and the broader public to the
workings of each institution. Media
outreach will also be an important
aspect to the public awareness
campaign, along with publication of
informational and legal materials in
French and major local languages, and
the development of a web-based
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information system based at the Legal
Information Center.
(iv) Legal Aid.
(1) Support of poorer litigants gaining
access to legal services by law
professionals (lawyers and others) and
to information materials such as on
processes and rights by establishing a
fund for this purpose. Initial funding
will be USD$1,000,000. An additional
matching amount of up to
USD$1,500,000 will be provided from
MCC Funding on a dollar for dollar
basis to match funds provided by nonMCC sources, such as other bi-lateral or
multilateral donors, foundations or
corporations; and
(2) Funding shall be provided to, and
services provided by, existing nongovernmental organizations (‘‘NGOs’’)
active in Benin, or by a not-for-profit
entity established in the future to
provide these services. MCA-Benin shall
conduct a competitive selection process
to determine the best value providers of
legal aid services eligible for funding.
The selection process shall include an
evaluation by, among others, the Justice
Project Manager of proposals by
candidate NGO for use of funds. Final
selection of NGOs and awards shall be
subject to MCC approval. Funding shall
support selected NGOs implement the
proposed legal aid services.
(v) New Courthouses.
This sub-activity, the capstone to the
Justice Project, will support the creation
of new courthouses ‘‘ one appellate
court in Abomey, a region that is
currently lacking in appellate court
capacity, and eight courts of first
instance (Tribunaux de Premier
Instance) (‘‘TPI’’) distributed throughout
the country. Another key requirement
for this activity will be that a system for
case management is developed as
described in Section 2(c)(vi) and that
support of legal aid services is
undertaken as described in Section
2(c)(iv), likewise in keeping with
modern best practices, and
implemented prior to construction of
the courthouses.
MCC Funding will support the
following:
(1) Evaluation of Codes to be adopted.
As condition to MCC Disbursements
and prior to commencement of
construction, a new Code of Civil
Commercial, Administrative and Social
Procedure of Benin (‘‘Procedural Code’’)
and such other codes as may be
identified by the time specified in the
Disbursement Agreement and agreed by
the Parties, must be passed by the
legislature and adopted by the
Government. The Procedural Code, as
passed by the legislature must be in
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keeping with regional best practices, as
determined by independent experts;
(2) Select sites for courthouses. MCABenin shall select sites based on its
identification of viable sites. MCABenin shall consider input from civil
society and other stakeholders,
including any unsolicited proposals for
sites from communities or others. The
criteria for selection of courthouse
locations shall be as follows: (i)
Population density in surrounding area;
(ii) commercial activity in the
surrounding area; (iii) proximity of
proposed court site to underserved
populations and other courts; (iv) links
to other Projects, in particular the Land
Project and Financial Services Project
and (v) restrictions on selection of sites
that are (A) contaminated with toxic or
hazardous waste, (B) require major
service infrastructure improvements
(such as new roads, water supply or
treatment, transmission lines or sewage
treatment), or (C) in sensitive locations
as defined in Appendix C of the
Environmental Guidelines;
(3) Preparation of a Category B
environmental and social assessment,
pursuant to the Environmental
Guidelines, for the courthouses and the
Legal Information Center will be
required to provide pertinent guidance
in the form of a framework document.
This will allow more rapid and efficient
environmental and social assessment of
the courthouses and the Legal
Information Center. This document will
be used to screen sites, according to
MCC Environmental Guidelines, focus
the content of Environmental
Management Plans (‘‘EMPs’’) or any
Resettlement Action Plans (‘‘RAPs’’),
and provide standard contract/bid
clauses for impact mitigation during
construction and operation. The
framework document will provide
criteria for determining when individual
environmental and social assessments
or solely EMPs of the buildings are
needed and will incorporate procedures
to address economic or physical
displacement consistent with the World
Bank policy on Involuntary
Resettlement in effect as of the date
hereof;
(4) Subject to completion and
satisfactory results of the environmental
and social assessment framework
conducted under paragraph (1) above
and an individual EMP or
environmental and social assessment
(including an EMP) for each
construction, as determined according
to the framework, construction of
courthouses. Construction of four TPI
and one appellate court can commence
as early as the end of year two of
compact, assuming code modernization,
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case management, and training goals
and other conditions precedent have
been achieved. Process of construction
of final four courthouses may
commence one year after construction
starts for first set of TPI, assuming
continued satisfaction of conditions
precedent and other criteria such as case
management and training. Hazardous
and toxic materials will not be
permitted to be used or result as byproducts from construction and
operation of the buildings; and
(5) Following the construction
undertaken in accordance with
paragraph (2) above, equip newly
constructed courthouses. This includes
computers, furniture, and other
necessary items and systems.
(vi) Case Management. To the
facilitate increasing the speed and
efficiency of the processing cases
through judicial system, MCC Funding
will support the following:
(1) Conduct of a survey of current case
management system and develop
recommendations for improvement in
case management and will include
recommendations regarding
administrative risks including time
limits to process cases, procedures for
assignment of judges to cases, and
technology to manage case flow though
court system; and
(2) Development by the courts of
improved regulations and more effective
administrative processes to manage
cases and implementation of those
regulations and processes.
Implementation will include
incorporation of recommendations
developed in paragraph (1) above which
MCA-Benin and MCC deem advisable.
3. Beneficiaries
The intended beneficiaries of the
Justice Project will be ordinary citizens
as well as MSMEs and other commercial
actors. Currently only 8% of commercial
cases received in a given year are treated
by the system. This case backlog
diminishes confidence in the system
and increases the potential for
corruption. Benin was recently rated by
the World Bank’s ‘‘Doing Business in
2006’’ as among the most difficult
countries in the world to do business.
By improving the capacity of the court
system to resolve claims, the Project
will benefit all users hindered by delays
and backlogs. It will also support the
benefits of the Land Project and
Financial Services Project by increasing
the likelihood of timely and appropriate
enforcement of contracts and resolution
of other disputes. The Legal Information
Center is expected to reach a large class
of beneficiaries including judges,
government officials, business
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representatives, and the general public.
Poorer litigants will benefit from the
legal aid services.
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4. Donor Coordination; Role of Private
Sector and Civil Society
(a) Donors. The Justice Project will
benefit significantly from lessons
learned by the European Union (‘‘EU’’)
regarding the construction and
equipping of new courthouses. A
current EU project is underway to
refurbish several existing courthouses
and build four new TPIs and appellate
court. Assuming the Beninese and
others are satisfied with the design of
the courts being built by the EU, the
Justice Project would follow the same
design. Several donors have been
engaged with projects related to Access
to Justice. Bi-lateral assistance from
France and Belgium has supported redrafting of codes for which MCC will
require enactment as conditions
precedent to court construction. MCC
will coordinate with in particular AFD
in connection with the adoption and
development of the Procedural Code as
the AFD has supported the code
redrafting efforts. Their involvement
provides some comfort that the codes
are modern and harmonized, where
appropriate, with codes of neighboring
countries. Neither the World Bank nor
the African Development Bank have
justice sector projects in Benin but both
are interested in promoting passage of
modernized codes as it will increase the
likelihood and degree of success of
other World Bank programs. It is
anticipated that some of the NGOs
supported by the legal aid services
activity described in Section 2(c)(iv)
may funded as well by other donors and
it is also possible that some of the
matching funds contemplated with
respect to that activity could be
provided by other bilateral or
multilateral donors (as well as private
sector or other sources).
(b) Private Sector. It is anticipated that
members of the private bar and business
sector will actively participate in the
public outreach and other activities of
the Business Registration Center, Legal
Information Center, and the CAMeC.
(c) Civil Society. Civil society and
other stakeholders, including
communities or municipalities, will
have the opportunity to participate in
courthouse selection process or submit
proposals for sites as described in
Section 2(c)(v)(2).
5. U.S. Agency for International
Development
USAID supports a Women’s Legal
Rights Initiative in Benin that has
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offered valuable assistance in the
development of this Project.
6. Sustainability
To sustain the Justice Project there
will need to be sufficient demand for
Alternative Dispute Resolution in Benin
and satisfaction by the Government of
key conditions precedent related to of
court construction, and court design and
maintenance. To mitigate the risk of
insufficient ADR-related demand,
market pricing mechanisms will be built
into the CAMeC support. This will
promote development of a fee-supported
ADR system. Initiation of court
construction process will be set at the
end of year two of the Compact Term,
which will give the Government time to
make necessary required Project-related
legal reforms. Construction and
maintenance will also benefit,
respectively, from EU experience in
court construction, and be sustained by
the increased annual budget of the
Ministry of Justice. The Government
will ensure the sustainability of the
Legal Information Center by ensuring
support for adequate staffing of Legal
Information Center during and
following the Compact Term.
The key to ensuring environmental
and social sustainability of the Project is
ongoing public consultation. By the
time specified in the Disbursement
Agreement, MCA-Benin shall engage the
Environment and Social Assessment
Director, subject to MCC approval, as
described in Section 3(d)(iii)(3) of
Annex I.
Environmental and social analyses of
the courthouses and the Legal
Information Center will be conducted as
part of the technical survey and design
to determine the environmental impacts
and existence of economic and physical
displacement. In addition to the
analyses, EMPs satisfactory to MCC will
be developed, implemented and
monitored during project
implementation.
Disbursement of MCC Funding will be
contingent upon issuance of
environmental licenses, as needed, or
any other required permits and subject
to the environmental and social
assessment review described as
requirements under Sections 2(c)(v)(3)
and (4).
7. Policy; Legal Reform; and Procedural
Changes
The Parties have identified the
following policy, legal and regulatory
reforms and actions that the
Government shall pursue in support,
and to reach the full benefits, of the
Justice Project, the satisfactory
implementation of which will be
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conditions precedent to certain MCC
Disbursements as provided in the
Disbursement Agreement:
(a) Passage of the new Procedural
Code and other codes as identified in
accordance with Section 2(c)(v)(1). The
new Procedural Code should include
adequate provisions pertaining to the
speed with which court cases are heard,
and the means by which cases proceed
through the courts;
(b) Development and implementation
of enhanced case management
techniques and implementation of the
case management system developed
based on recommendations formed
pursuant to Section 2(c)(vi), including
modernized methods of case assignment
and case tracking, even though not
required as part of the Procedural Code;
(c) Development of CAMeC activities
by measures, acceptable to MCC, to
facilitate the removal of old cases from
the TPI to CACeM;
(d) Undertake, as necessary, steps to
support the enforceability of arbitral
awards;
(e) As necessary and if evaluation of
Business Registration Center indicates
warranted, undertake improvements in
regulations, policies or procedures
related to business registration and
company formation;
(f) Hire and train new judges and
court personnel sufficient to staff new
courts; and
(g) Commitment by the Government of
budgetary resources to support salaries
for judges and other court personnel and
for the maintenance of those courts
constructed under this Project.
8. Proposals
Objective selection criteria for the
selection of NGOs to be supported by
the legal aid sub-activity of the Courts
Activity shall be as specified in Section
2(c)(iv)(2). Objective selection criteria
and procedures for determining the
locations (towns) of the courthouses to
be constructed under the Courts
Activity shall be as specified in Section
2(c)(v)(2).
Schedule 4 to Annex I—Access to
Markets Project
This Schedule 4 generally describes
and summarizes the key elements of an
Access to Markets Project that the
Parties intend to implement in
furtherance of the Markets Objective
(the ‘‘Markets Project’’). Additional
details regarding the implementation of
the Access to Markets Project will be
included in the Implementation Plan
and in relevant Supplemental
Agreements.
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1. Background
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Benin’s economy is dependent on
cotton production, subsistence
agriculture and an increasingly
uncompetitive Port of Cotonou (the
‘‘Port’’). Key impediments to sustainable
economic growth are its poor
investment climate and lack of dynamic
private sector activity. Benin has long
been a strategic trading center and a
keystone in the trade corridor that links
the landlocked countries of the West
African Economic and Monetary Union
(‘‘WAEMU’’) with Nigeria, Europe, and
the Americas. Trade and transport have
traditionally made up a large part of the
nation’s economy, and limitations in
Benin’s transportation network have
increased costs for raw materials to the
country and the region. The bottleneck
at the Port has impeded access to
external markets by agricultural and
fish/shrimp producers and processors.
Improved Port facilities will lower
production and marketing costs and
encourage greater agricultural
production as well as increased trade
between Benin and other countries.
This Project is designed to promote
access to markets by improvements to
the Port of Cotonou, including a fish
inspection facility. This Project aims to
improve Port performance and security,
expand capacity, and reduce costs. A
more efficient Port will contribute to
importer and exporter value-added
through reducing transportation costs
and improving product quality.
Moreover, because Benin’s road
transport industry is relatively
competitive, it is likely that the
anticipated reduction in shipping costs
will be passed on to wholesalers and
traders, and ultimately be reflected in
consumer prices. Finally, both the
Project Activities and the policy or other
actions the Government will undertake
as set forth in Section 6 of this Schedule
4 are designed to reduce the potential
for corruption at the Port.
Expanding the Port to meet Benin’s
long-term developmental needs will
require a significant number of large
investments. Due to the complexity and
scope of the Port expansion plan, not
only will it take several years to design,
build and construct the facilities to meet
a growing future demand but it will also
be necessary to accommodate current
demands by upgrading existing Port
facilities.
2. Summary of Projects and Activities in
Project and Expected Results
The objective of the Markets Project is
to improve the Port of Cotonou through
increasing the efficiency at the Port and
volume of goods flowing through the
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Port and reducing vehicle operating
costs.
The Markets Project includes the
following Project Activities:
• Studies and Port Institutional
Activity: This Project Activity will
include key feasibility studies,
environmental assessments and revision
of master plan for the Port, as well as
the computerization and streamlining of
customs clearance procedures for
merchandise, technical assistance and
training in information systems and Port
management, and improvements to
legal, fiscal and institutional
frameworks that govern the subactivities.
• Port Security and Landside
Improvements: This Project Activity
will address the safety and security
aspects of the Port for compliance with
international safety requirements
(conforming to International Ship and
Port Security Code (‘‘ISPS’’) standards).
The expansion and reconfiguration plan
for the Port under this Project Activity
includes: major improvements to the
physical infrastructure including the
access gates, access road, vehicle access
facilities, storage areas, and the
construction of a compulsory inspection
facility for fish and seafood products
with associated training and technical
assistance.
• Waterside Improvements: This
Project Activity will support the
construction of a new South wharf to
accommodate additional containerized
merchant marine vessels and a dry bulk
conveyor system; environmental
management improvements; and, an
environmentally appropriate solution to
address sedimentation of the Port’s
entrance.
The M&E Plan (described in Annex
III) will set forth anticipated results and,
where appropriate, regular benchmarks
that may be used to monitor
implementation progress. Performance
against these benchmarks and the
overall impact of the Markets Project
will be assessed and reported at the
intervals to be specified in the M&E
Plan or as otherwise agreed by the
Parties from time to time. The Parties
expect that additional indicators will be
identified during the implementation of
the Markets Project. The expected
results from, and the key benchmarks to
measure progress on the Project, Project
Activities and sub-activities undertaken
or funded under the Markets Project are
set forth in Annex III.
Estimated amount of MCC Funding
for the Project Activity for this Markets
Project is identified in Annex II of this
Compact. Conditions precedent to the
Project Activities and sequencing of the
Project Activities shall be set forth in
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the Disbursement Agreement or other
relevant Supplemental Agreements or
component of the Implementation Plan.
The following summarizes the
Markets Project:
The Project will address institutional,
landside and waterside improvements
necessary to meet the unmet demand
and address resulting inefficiencies.
Because of the complexity and timing of
the sub-activities, the environmental
and social assessment requirements will
be implemented in a phased manner.
To support the expansion and
improvement of the Port, MCC Funding
will be used for the following activities:
(a) Project Activity: Feasibility
Studies and Assessments (‘‘Studies
Activity’’).
(i) Conduct of initial technical studies
(engineering pre-feasibility,
environmental and economic) (‘‘Initial
Technical Studies’’) to evaluate in
further detail the costs, engineering and
environmental aspects of the key
waterside components of the Markets
Project. These Initial Technical Studies
will:
(1) Objectively evaluate alternative
schemes that address sedimentation of
the harbor access, including but not
limited, to the use of other studies and
proposals related to erosion control and
environmental impacts;
(2) Evaluate the dredging for the new
South wharf;
(3) Perform any additional sampling
and testing of sediments related to the
wharf or other areas to be dredged as
part of the harbor access;
(4) Determine needs as well as options
for disposal of dredged material;
(5) Evaluate the engineering to the
pre-feasibility level; and
(6) Provide expanded information on
costs and benefits.
Based on the recommendations of the
Initial Technical Studies, the
Government shall select, subject to MCC
approval, its preferred option that will
both reduce sedimentation of the Port
access channel and not adversely
impact coastal erosion and also select,
subject to MCC approval, disposal of
dredged material and other key
waterside component options.
(ii) Following the satisfactory
completion of the Initial Technical
Studies, conduct of detailed engineering
and economic feasibility studies of the
entire Markets Project, including studies
to ensure appropriate scheduling and
budgeting have been established. These
feasibility studies shall include, but not
be limited to, studies regarding:
(1) Port container scanning system;
and
(2) A dry port facility at Tori.
(iii) Following the satisfactory
completion of the Initial Technical
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Studies, conduct of Environmental and
Social Impact Assessments (‘‘ESIAs’’)
for landside improvements described in
Section 2(c)(ii), fish/seafood inspection
and handling facility services described
in Section 2(c)(iii), and waterside
improvements described in Section 2(d).
The ESIAs will address landside and
waterside in the following manner:
(1) The ESIA for Port landside
rehabilitation/ restructuring shall
incorporate an Environmental
Management Plan/System (based on an
audit of existing operations as well as
the assessment of the proposed
activities), an overall Environmental
Management Plan, language for bid
solicitations and construction contracts
to implement the EMP, and, if needed,
a Resettlement Action Plan (consistent
with World Bank Policy on Involuntary
Resettlement), all of which shall be
subject to MCC approval. Port
Autonome de Cotonou (‘‘PAC’’) shall
adopt the EMP/EMS, implement the
HIV/AIDS awareness program and
implement any RAP, prior to initiation
of construction under the landside
improvements activity described in
Section 2(c)(ii).
(2) The ESIA for waterside
improvements will include an EMP as
well as language for bid solicitations
and construction contracts to implement
the EMP, all of which shall be subject
to MCC approval. Such language must
cover capital and maintenance dredging
and dredged material disposal as well as
construction work. PAC shall adopt the
EMP prior to initiation of any
construction. The ESIA for the
waterside may be combined with the
ESIA for the landside, if timing of
construction activity permits.
(iv) Following the satisfactory
completion of the Initial Technical
Studies and feasibility studies work to
be conducted under Section 2(a)(ii),
development of a revised master plan
for the Port that consolidates the
expected improvements, operational
environment and land use for long term
planning purposes which master plan
shall be completed in conjunction with
the feasibility studies work to be
conducted under Section 2(a)(ii) and
which master plan may be updated
periodically thereafter.
(b) Project Activity: Port Institutional
and Systems Improvements (‘‘Port
Institutional Activity’’).
(i) Computerization and streamlining
of customs clearance procedures for
merchandise including information
technology systems, warehouse
computer management system, and
transit cargo system;
(ii) Improvements in the legal, fiscal
and institutional frameworks that
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govern Port activities including
restructuring concession agreements
with stevedoring companies, conducting
independent financial audits and
project reviews, and implementing with
additional consultants the existing and
new Port rules and regulations based
upon consultant recommendations for
port best practices. PAC and the
Government will cooperate with the
MCA-Benin consultant(s) including
providing unlimited access to the PAC
Director General, Customs Department
and other PAC related entities for
development, recommendation and
evaluation of potential improvements in
PAC and Customs Department policies,
procedures, rules and regulation; and
(iii) Training for tug boat and ship
pilots for night docking of petroleum
cargo ships.
(c) Project Activity: Port Security and
Landside Improvements (the ‘‘Port
Security and Landside Improvements
Activity’’).
Subject to the satisfactory results of
the Studies Activity assessments and
studies described in Section 2(a), a plan
for renegotiation of PAC concessions
and reallocation of berths and land
usage satisfactory to MCC,
implementation of any RAP, adoption of
the EMP and implementation of the
HIV/AIDS awareness plan, MCC
Funding will support the following
capital improvements and other goods
and services at the Port:
(i) Port security. Acquisition and
installation of, and training associated
with, an integrated security system for
compliance with ISPS standards,
including oceanographic monitoring
systems, video surveillance systems,
and radio communications systems.
(ii) Landside Improvements.
(1) Front-end engineering and design
for major civil and mechanical facilities
and works, which shall be completed
prior to any sub-activities set forth in
this Section 2(c)(ii);
(2) Port road construction and
rehabilitation including upgrading and
expanding existing Port roads,
illumination, and gate system. Other
works include constructing an east-side
gate, rezoning by berth usage, land and
warehousing to achieve efficient
operations;
(3) Construction of a dry bulk
conveyor system leading to storage/
truck loading bins provided by private
sector operators;
(4) North wharf structural
improvements including reinforcements
to wharf substructure (as needed) to
accommodate rail mounted gantries and
mobile cranes;
(5) Acquisition and implementation of
pollution control equipment necessary
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to respond to significant discharges of
hazardous materials in the Port and
other equipment and activities related to
the EMP/EMS;
(6) Installation of fire control and
prevention equipment;
(7) Construction of a compulsory
inspection base for fish and seafood
products and facilities for efficiently offloading and handling product before
transport to processing centers, market,
or ships for export; and
(8) Technical assistance and training
of appropriate regulatory agency staff in
seafood/fish inspection and safety
administration.
(iii) Fish/seafood inspection and
handling facility (‘‘BOC’’) services.
(1) Development and adoption of a
management plan for the BOC including
required training and technical
assistance program targeted at
inspectors, other employees, and user
associations;
(2) Adoption of improved design and
procedures for BOC including
mechanized off-loading based on
required demand study; and
(3) Development and implementation
of a user fee system to defray some
operation and maintenance costs of the
BOC.
(d) Project Activity: Waterside
Improvements (the ‘‘Waterside
Improvements Activity’’). Upon
completion, satisfactory to MCC, of the
Studies Activity described in Section
2(a) and the execution of PAC
concessions and reallocation of berths
and land usage, each with results
satisfactory to MCC and subject to
adoption of the EMP and
implementation of the HIV/AIDS
awareness plan, MCC Funding will
support the following waterside
improvements:
(i) Front-end engineering and design
for major civil and mechanical facilities,
works and dredging and dredged
material disposal, which shall be
completed prior to any sub-activities set
forth in this Section 2(d).
(ii) New South wharf construction of
approximately 595 meters of berth space
for new terminal operations, and
mitigating measures associated with
dredging and dredged material disposal,
in accordance with the results of the
Initial Technical Studies.
(iii) Sedimentation control scheme
that permits reduction of the
sedimentation at the Port entrance and
does not adversely impact coastal
erosion, in accordance with the results
of the Initial Technical Studies.
(iv) Acquisition of additional tug boat
with necessary pilot training.
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3. Beneficiaries
The principal beneficiaries of the
Markets Project are expected to be
Beninese importers, exporters and
consumers, including individuals and
businesses, through improved quality of
transportation services and fish
processing facilities following the
upgrades to and expansion of the Port.
The intended beneficiaries will be
identified more precisely, and where
possible disaggregated by gender, age,
location and income level during the
initial phases of the implementation of
the Markets Project.
The principal intended beneficiaries
of this Project are potentially quite
broad. As the economy of Benin is
driven by foreign trade and that foreign
trade is dependent the Port, both
consumers of imported products and
exporters of Beninese products will
benefit directly or indirectly from
efficiency gains in Port operations that
translate into lower transportation costs
of goods or increased operating margins
for Beninese operators and businesses.
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4. Donor Coordination; Private Sector
(a) Donor Coordination. The World
Bank has been working with the
Government to expand private
management at the Port. The Markets
Project Activities will be coordinated
with the study of privatization options
and competitiveness at the Port that the
World Bank expects to complete by
December 2006. The Danish and Dutch
governments have been active in
supporting analyses of improvements at
the Port. The Danish and other studies
were used to assess the sedimentation
and erosion control problems. MCC will
coordinate with DANIDA (the Danish
aid agency), the Dutch embassy, the
Japanese International Cooperation
Agency, the World Bank, Islamic
Development Bank, African
Development Bank, Arab Bank for
Economic Development in Africa, OPEC
Funds, Saudi Funds, and the
Government to (i) assess and address the
erosion and port sedimentation
problems and (ii) ensure all subactivities support Port improvements to
maximize the benefits available of donor
activities.
(b) Private Sector. In order to achieve
the expected benefits from MCC
Funding, several improvements at the
Port are dependent on private sector
complementary investments and
expanded private sector management
services associated with the operations
of the Port. MCA-Benin will work with
PAC to coordinate with existing private
sector operators at the Port, and MCABenin and PAC will establish the
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appropriate private sector participation
at each stage of the sub-activities
including renegotiation of existing
concession agreements to provide for
the appropriate investments by the
private operators in the Port.
5. U.S. Agency for International
Development; U.S. Government
Agencies
MCC will seek to coordinate with
USAID during the Compact Term, as
appropriate, though there is not
currently any USAID activity in this
area. In addition MCC will seek to
coordinate with the U.S. Department of
Homeland Security and U.S. Coast
Guard on the Markets Project.
6. Sustainability
(a) Improvements to the cargo
handling operations and the physical
layout of the Port will improve the
financial performance of the Port. The
introduction of private sector
participation in operations is also
critical to the sustainability of the
Markets Project. Part of the restructuring
of the Port needs to include revenue
from the concessions, which are now
paid to a different Government agency
as a conduit to the state owned
stevedoring company, in order to
support port services and to increase
transparency and Port efficiency.
(b) Investments by private sector
tenants and other users of the Port will
provide complementary improvements
that will contribute to the long-term
sustainability of the Port’s ability to
meet market demand.
(c) The Port’s financial condition has
suffered from declining revenues and
from increasing labor costs. In addition,
its revenues have been declining
recently due to restrictions on Nigerian
import policies.
(d) A rationalized user fee schedule
for the BOC will be developed as part
of a required demand study to help
defray some of the inspection costs
associated with its operation and
maintenance.
(e) Essential to the environmental
sustainability of the Markets Project is
the conduct of the Initial Technical
Studies, as well as the landside ESIA,
the waterside ESIA and the associated
EMPs, each as described in Section 2(a).
(f) The key to ensuring environmental
and social sustainability of the Project is
ongoing public consultation. By the
time specified in the Disbursement
Agreement, MCA-Benin shall engage the
Environment and Social Assessment
Director (‘‘ESI Officer’’), subject to MCC
approval, as described in Section
3(d)(iii)(3) Annex I.
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7. Policy; Legal Reform; and Procedural
Changes
The Parties have identified the
following policy, legal and regulatory
reforms and actions that the
Government shall pursue in support,
and to reach the full benefits, of the
Access to Markets, the satisfactory
implementation of which will be
conditions precedent to certain MCC
Disbursements as provided in the
Disbursement Agreement:
(a) Renegotiation of existing lease and
concession agreements and port leases
on terms acceptable to MCC that
provide for capital investment based
upon the market demand for Port
services; in all cases, for any concession
within the port right-of-way the PAC
shall be the grantor and the beneficiary
of the income resulting from the
concession or lease. To the extent not
covered in the renegotiation of the
existing concession agreements,
completion of new concession
agreements for terminal operations of
the new South wharf berths shall
include private capital investments
acceptable to MCC based upon the
demand for Port services;
(b) The Government and PAC shall
agree to enforce maritime-related
international and regional conventions
and agreements to which they are
signatory, including the MARPOL
International Convention for the
Prevention of Pollution from Ships and
the UN Convention on the Law of the
Sea, and shall also agree to
internationally accepted practices, such
as the London Dumping Convention and
Protocol (to which Benin is not
signatory) for the disposal of dredged
material, including contaminated
material, and the control of pollution in
the harbor, its entrance and the landside
Port operations;
(c) By the time specified in the
Disbursement Agreement, PAC shall
create and fill the permanent staff
position of PAC Environmental
Manager, whose qualifications, selection
and replacement shall be acceptable to
MCC. The PAC Environmental Manager
shall serve as the PAC representative
concerning the environmental aspects of
the Project Activities and other
environmental management activities of
PAC. The Government shall ensure that
the PAC provides appropriate resources
to the PAC Environmental Manager as
identified by PAC and as recommended
by MCA-Benin port advisor consultant
as provided for in Section 2(b)(ii) above
and the ESI Officer.
(d) The Government and PAC shall
provide a permanent office for the MCABenin port advisor adjacent to the office
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of the Director General of the PAC. The
Government and PAC Board of Directors
shall facilitate and endorse the
assistance by the MCA-Benin port
advisor to the Director General of the
PAC in the implementation of private
management activities and operational
improvements associated with the
Markets Project;
(e) Execution of private management
or concession agreements satisfactory to
MCC for the dry bulk conveyor, and the
BOC, and other new facilities to be
constructed at the Port; Satisfactory
progress on meeting ISPS certification,
in particular implementing
recommendations as specified by MCC
in the Disbursement Agreement or
otherwise;
(g) Development and ongoing
satisfactory implementation of a
program to accomplish financial control
and other recommendations as may be
specified by the independent financial
auditor contemplated by the Markets
Project;
(h) Commitment shall be made by the
Government to fund, or commitments
shall be made by another funding source
satisfactory to MCC, for amounts in
excess of budgeted amount in the
financial plan including amounts that
may be necessary for environmental
mitigation and remediation. All
Beninese environmental and other
permits (including any necessary or
advisable environmental certificates
under Benin law) shall be issued, valid
and in full effect;
(i) Support the redesign of the BOC to
ensure that specifications address likely
traffic and activity requirements,
including equipment for mechanical
unloading of seafood cargo, and that a
demand study is completed as specified
by MCC;
(j) Support the design, approval and
implementation of a rationalized user
fee system for the BOC;
(k) Support the design, approval, and
implementation of a capacity building
training and technical assistance plan
for cold chain, product quality
assurance;
(l) Satisfactory results from customs
and warehouse systems implementation
reflected in reduced in Port cargo
processing time;
(m) The Government agrees not to
institute a container scanning system at
the Port (1) until after a study of the
effectiveness of such a scanning system
has been completed pursuant to Section
2(a)(i) or (2) in the event that MCC
determines that the Government
proposed scanning system would be
detrimental to the effectiveness of MCC
investments at the Port;
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(n) The Government agrees not to
institute or continue a tax, levy, duty, or
other charge or any delivery procedure
or requirement at the Port or elsewhere
since commencement of MCC review on
August 1, 2005 of the port proposal
which may affect the competitiveness of
the Port without the prior consent of
MCC; and
(o) Completion of the World Bank
privatization and competitiveness study
by the time specified in the
Disbursement Agreement, with
commitments by the PAC and other
Government Affiliates to implement
recommendations as requested by MCC
and satisfactory implementation of such
recommendations.
Annex II—Summary of Multi-Year
Financial Plan
This Annex II to this Compact (the
‘‘Financial Plan Annex’’) summarizes
the Multi-Year Financial Plan for the
Program. Each capitalized term in this
Financial Plan Annex shall have the
same meaning given such term
elsewhere in this Compact.
1. General
A multi-year financial plan summary
(‘‘Multi-Year Financial Plan Summary’’)
is attached hereto as Exhibit A. By such
time as specified in the Disbursement
Agreement, MCA-Benin will adopt,
subject to MCC approval, a Multi-Year
Financial Plan that includes, in addition
to the multi-year summary of
anticipated estimated MCC Funding and
the Government’s contribution of funds
and resources, an estimated draw-down
rate for the first year of the Compact
Term based on the achievement of
performance milestones, as appropriate,
and the satisfaction or waiver of
conditions precedent. Each year, at least
30 days prior to the anniversary of Entry
into Force, the Parties shall mutually
agree in writing to a Detailed Financial
Plan for the upcoming year of the
Program, which shall include a more
detailed plan for such year, taking into
account the status of the Program at
such time and making any necessary
adjustments to the Multi-Year Financial
Plan.
2. Implementation and Oversight
The Multi-Year Financial Plan and
each Detailed Financial Plan shall be
implemented by MCA-Benin, consistent
with the approval and oversight rights
of MCC and the Government as
provided in this Compact, the
Governing Documents and the
Disbursement Agreement.b
b The role of civil society in the implementation
of this Compact (including through participants on
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3. Estimated Contributions of the Parties
The Multi-Year Financial Plan
Summary identifies the estimated
annual contribution of MCC Funding for
Program administration, monitoring and
evaluation, and each Project. The
Government’s contribution of resources
to Program administration, monitoring
and evaluation, and each Project shall
consist of (a) ‘‘in-kind’’ contributions in
the form of Government Responsibilities
and any other obligations and
responsibilities of the Government
identified in this Compact, including
contributions identified in the notes to
the Multi-Year Financial Plan Summary,
(b) such other contributions or amounts
as identified in notes to the Multi-Year
Financial Plan Summary, and (c) such
other contributions or amounts as may
be identified in relevant Supplemental
Agreements between the Parties or as
may otherwise be agreed by the Parties;
provided, in no event shall the
Government’s contribution of resources
be less than the amount, level, type and
quality of resources required to
effectively carry out the Government
Responsibilities or any other
responsibilities or obligations of the
Government under or in furtherance of
this Compact.
4. Modifications
The Parties recognize that the
anticipated distribution of MCC
Funding between and among the
various Program activities and Project
and Project Activities will likely require
adjustment from time to time during the
Compact Term. In order to preserve
flexibility in the administration of the
Program, in addition to Section 4(a)(iv)
of Annex I, the Parties may, upon
agreement of the Parties in writing and
without amending this Compact, change
the designations and allocations of
funds between Program administration
and a Project, between one Project and
another Project, between different
activities within a Project, or between a
Project identified as of the Entry into
Force and a new Project, without
amending this Compact; provided,
however, that such reallocation (a) is
consistent with the Objectives, (b) does
not cause the amount of MCC Funding
to exceed the aggregate amount
specified in Section 2.1(a) of this
Compact, and (c) does not cause the
Government’s obligations or
responsibilities or overall contribution
the Stakeholders’ Committee and Steering
Committee), the responsibilities of the Government
and MCC in achieving the Compact Goal and
Objectives, and the process for the identification of
beneficiaries are addressed elsewhere in this
Compact and therefore are not repeated here.
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of resources to be less than specified in
Section 2.2(a) of this Compact, this
Annex II or elsewhere in this Compact.
5. Conditions Precedent; Sequencing
MCC Funding will be disbursed in
tranches. The obligation of MCC to
approve MCC Disbursements and
Material Re-Disbursements for the
Program and each Project is subject to
satisfactory progress in achieving the
Objectives and on the fulfillment or
waiver of any conditions precedent
specified in the Disbursement
Agreement for the relevant Program
activity or Project or Project Activity.
The sequencing of Project Activities or
sub-activities and other aspects of how
the Parties intend the Projects to be
implemented will be set forth in the
Implementation Plan, including Work
Plans for the applicable Project, and
MCC Disbursements and ReDisbursements will be disbursed
consistent with that sequencing.
EXHIBIT A.—MULTI-YEAR FINANCIAL PLAN SUMMARY
[In thousands]
Project
Year 1
1. Access to Land:
(a) Policy Activity ......................................................
(b) Registration Activity .............................................
(c) Services and Information Activity 1 ......................
(d) IEC Activity ..........................................................
(e) Support Strategy Activity .....................................
Sub-Total ...........................................................
Year 2
Year 3
Year 4
Year 5
Total
520
3,310
510
100
120
4,560
260
6,550
3,350
150
120
10,430
520
4,605
3,205
100
120
8,550
0
4,375
2,775
100
120
7,370
0
4,320
620
50
120
5,110
1,300
23,160
10,460
500
600
36,020
(a) Capacity Building Activity ....................................
(b) Financial Enabling Environment Activity .............
Sub-Total ...........................................................
1,770
1,380
3,150
3,570
1,850
5,420
3,870
1,540
5,410
3,570
1,140
4,710
270
690
960
13,050
6,600
19,650
3. Access to Justice Activity:
(a) Arbitration Center (CAMeC) ................................
(b) Business Registration Activity .............................
(c) Courts Activity 2 3 .................................................
Sub-Total ...........................................................
400
470
2,960
3,830
160
830
6,860
7,850
140
330
8,590
9,060
180
200
6,590
6,970
0
0
6,560
6,560
880
1,830
31,560
34,270
5,993
3,251
2,101
4,876
0
1,196
0
980
0
1,016
8,094
11,319
200
0
9,444
23,154
0
30,131
42,158
22,939
66,293
8,151
53,232
62,363
200
0
1,216
73,863
76,171
169,447
Monitoring and Evaluation ...............................................
Sub-Total ...........................................................
3,190
3,190
1,690
1,690
1,240
1,240
1,240
1,240
1,420
1,420
8,780
8,780
Program Administration and Control:
(a) Program Administration 6 ....................................
(b) Fiscal and Procurement Agent ...........................
(c) Audits ...................................................................
3,395
3,398,688
1,416,120
2,795
3,398,688
1,416,120
2,933
3,398,688
1,416,120
2,919
3,398,688
1,416,120
3,015
3,398,688
1,416,120
15,057
16,993,440
7,080,600
Sub-Total 7 .........................................................
8,209,808
7,609,808
7,747,808
7,733,808
7,829,808
39,131,040
Total Estimated MCC Contribution 8 .................
32,383,808
63,130,808
98,300,808
90,386,808
23,095,808
307,298,040
2. Access to Financial Services:
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4. Access to Markets:
(a) Studies Activity ....................................................
(b) Port Institutional Activity ......................................
(c) Port Security and Landside Improvements Activity 4 .........................................................................
(d) Waterside Improvements Activity 5 .....................
Sub-Total ...........................................................
1 MCC Disbursements in connection with this Activity shall be conditioned upon, among others, the completion, satisfactory to MCC, of the relevant studies in Policy Activity and incorporation of the recommendations into implementation plans as appropriate.
2 After the first $1 million for the legal aid services sub-activity described in Section 2(c)(iv) of Schedule 3 to Annex I, any additional MCC Disbursement for this sub-activity shall be conditioned upon the Government obtaining matching funds to support the legal aid services program described in Section 2(c)(iv) of Schedule 3 of Annex I.
3 MCC Disbursements in connection with the new courthouses sub-activity described in Section 2(c)(v) of Schedule 3 to Annex I, shall be conditioned upon, among others, passage of the Procedural Code and certain other codes, which codes should contain adequate provisions in areas
as may be specified by MCC in the relevant Supplemental Agreement (including with respect to the Procedural Code, provisions pertaining to the
speed with which court cases are heard, and the means by which cases proceed through the courts).
4 MCC Disbursements in connection within the landside improvements sub-activity described in Section 2(c)(ii) of Schedule 4 of Annex I shall
be conditioned upon, among others, the following: (i) Renegotiation of existing concession and lease agreements on terms acceptable to MCC
that provide for capital investment based upon the demand for Port services, (ii) a contract management program of the dry bulk conveyor system acceptable to MCC, (iii) the completion of Initial Technical Studies, (iv) a Government commitment of funding, or commitments obtained from
another funding source (satisfactory to MCC) for amounts in excess of budgeted amount in the Detailed Financial Plan, including amounts that
may be necessary for environmental and mitigation, and (v) subject to results, satisfactory to MCC, of feasibility studies and ESIA that includes
an environmental audit and EMP, (vi) redesign of the fish inspection facility, (vii) completion of a World Bank privatization and competitiveness
study, and (viii) selection of a construction management agent.
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5 MCC Disbursement in connection with the waterside improvements sub-activity described in Section 2(d) of Schedule 4 of Annex I shall be
conditioned upon, among others, the following: (i) Satisfactory results of the Initial Technical Studies, (ii) demonstration, satisfactory to MCC, of
improvements in customs and warehouse systems operations, (iii) implementation of recommendations of the independent financial auditor, (iv)
obtaining environmental permits, (v) a Government commitment of funding, or commitments obtained from another funding source (satisfactory to
MCC) for amounts in excess of budgeted amount in the Detailed Financial Plan, including amounts that may be necessary for environmental and
mitigation, (vi) results, satisfactory to MCC, of feasibility studies and ESIA that includes an environmental audit and EMP and (vii) the completion
of a long-term management services agreement for the operation of a Port sedimentation facility (or other harbor dredging program, as appropriate) on terms satisfactory to MCC.
6 The total administration budget as a percentage of the Program cost is equal to 5.61%.
7 The total implementation budget as a percentage of the Program cost is equal to 14.59%.
8 Total Government contribution of 5 billion CFA to be included in the annual national budget (1.25 billion CFA per year during the first four
years of Compact) and to be allocated in a manner agreed upon by the Parties in writing.
This Annex III to the Compact (the
‘‘M&E Annex’’) generally describes the
components of the Monitoring and
Evaluation (M&E) Plan for the Benin
Program, and how progress toward the
Compact Goal will be measured. Each
capitalized term in this Annex III shall
have the same meaning given such term
elsewhere in this Compact. This Annex
represents the agreement between the
Government of Benin and the MCC on
the Goals and Objectives of the MCA
sroberts on PROD1PC70 with NOTICES
2. Monitoring Component
To monitor progress toward the
achievement of the Compact Goal,
Objectives and Outcomes, the
Monitoring Component of the M&E Plan
shall contain the following elements:
(a) Indicators. The M&E Plan shall
measure the results of the Program using
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1. Overview
Prior to disbursement for any Project
(other than administrative expenses),
the parties shall formulate an M&E Plan
that specifies (a) how the
implementation of the Program and
progress toward the Compact Goal and
Objectives will be monitored (the
‘‘Monitoring Component’’), (b) a
methodology, process and timeline for
the evaluation of planned, ongoing, or
completed Project Activities to
determine their impact and likely
sustainability (the ‘‘Evaluation
Component’’), and (c) other components
of the M&E Plan described below.
Information regarding the Program’s
performance, including the M&E Plan,
and any amendments or modifications
thereto, as well as periodicallygenerated reports, will be made publicly
available on the MCA-Benin Web site
and elsewhere. The Compact Goal,
Objectives and Outcomes of the MCABenin Program are summarized in the
following diagram:
quantitative, objective and reliable data
(‘‘Indicators’’). Each Indicator will have
one or more targets that quantifies the
result and the expected time by which
that result will be achieved (‘‘Target’’).
The M&E Plan will detail the process for
measuring and reporting on Indicators
at several levels. First, the indicators for
the Compact Goal (each, a ‘‘Compact
Goal Indicator’’) will measure the
results for the overall Program on the
intended beneficiaries (collectively, the
‘‘Beneficiaries’’).
Second, the indicators for each
Objective (each, an ‘‘Objective
Indicator’’) will measure the ultimate
program and the timeline for achieving
them.
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Annex III—Description of the M&E Plan
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result for each of the individual
Projects. Third, intermediate indicators
(each, an ‘‘Outcome Indicator’’) will
measure the intermediate results
achieved under each of the Project
Activities in order to provide early
measures of progress towards the
accomplishment of the Project
Objective. Further, other indicators will
be included in the M&E Plan to measure
the direct outputs of the Project
Activities (each, an ‘‘Output Indicator’’).
Benin’s national household living
standards measurement survey
´
´
(L’Enquete Modulaire Integree sur les
Conditions de Vie (‘‘EMICoV’’) will
provide baseline data where identified.
MCC Funding will support the 2006
baseline survey as well as regular
follow-up surveys as described in the
level and age, where appropriate and to
the extent practicable. For some
indicators baseline data was not
available as of the date of conclusion on
the Compact. For such indicators
identified in the tables that follow, the
M&E Plan and Disbursement Agreement
will specify requirements for baseline
data collection that shall be met prior to
disbursing funds for each Project or
Project Activity. Subject to prior written
approval from MCC, MCA-Benin may
modify and add Indicators or refine the
Targets of existing Indicators.
(i) Compact Goal Indicators. The M&E
Plan shall contain the Compact Goal
Indicators and their definitions, as listed
in the table below. The corresponding
Targets to be achieved are in the tables
that follow.
M&E Plan (‘‘2006 Baseline Data
Survey’’). The Government will also
fund a portion of the 2006 baseline
survey. All EMICoV data will be
disaggregated by gender, income and
age group where appropriate. MCC
Funding in connection with the 2006
Baseline Data Survey shall support
activities such as the following:
• Training of field and data entry
staff;
• Conducting pilot test of survey
questionnaire;
• Communication and transportation
for survey staff;
• Supervision and Quality Assurance;
and
• Data Management.
For all indicators, data collection will
be disaggregated by gender, income
COMPACT GOAL INDICATORS
Purpose
Indicator
Definition of indicator
Increase household income in land and finance-targeted areas.
Average annual household income in the land
and finance areas.
Increase value added to MSMEs ......................
Profits and wages of MSMEs benefiting from
Access to Finance capacity building activity.
Increase value added due to port infrastructure
improvements.
Profits and wages of Port users ......................
Average revenue and consumption level per
household land/finance areas measured
through the national living standards measurement survey (EMICoV).
Additional profits and wages of MSMEs that
are clients of institutions that are beneficiaries of the Challenge Facility.
Additional profits and wages of Port users.
COMPACT GOAL TARGETS
Indicators
Baseline
Year 1
Year 2
Year 3
Year 4
Year 5
Average household income in the land
and finance areas.
TBD 1 ............
......................
......................
......................
......................
Profits and wages of MSMEs benefiting
from the Capacity Building Activity.
Additional annual profits and wages of
Port users.
Zero 2 ...........
......................
......................
......................
......................
Estimated at 7% increase in treated
areas compared
to untreated
areas
USD$5 million.
Zero ..............
......................
......................
......................
......................
USD$36 million.3
1 EMICoV
will provide baseline data to be available starting in August 2006. 2004 GNP per capita is estimated at USD$538.
will estimate current wages and profits of client enterprises of MFIs in the Demand Study at the end of the third quarter, Year 1 of the
Compact Term.
3 Port users include: Ship-owners, firms operating within the port and trucks transporting cargo to and from the Port.
2 Benin
(ii) Objective and Outcome Indicators.
The M&E Plan shall contain the
Objective and Outcome Indicators and
their definitions, as listed in the tables
below. The corresponding Targets to be
achieved are in the tables following the
definitions.
ACCESS TO LAND PROJECT INDICATORS
Indicator
Definition of indicator
Objective:
Strengthen property rights and increase investment in rural and urban land.
sroberts on PROD1PC70 with NOTICES
Purpose
Total value of additional investment in targeted rural land parcels.
Value of investments made to rural land parcels per year; land investment data will
come from self-reported data through
EMICoV.
Value of investments made to urban land parcels per year; land investment data will
come from self-reported data through
EMICoV.
Total value of additional investment in targeted urban land parcels.
Outcomes:
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ACCESS TO LAND PROJECT INDICATORS—Continued
Purpose
Indicator
Definition of indicator
Reduced time to obtain new land title ........
Average time required to obtain a new land
title.
Reduced costs to obtain new land title ......
Average cost required to obtain a new land
title.
Perception of land tenure security increased.
Percent of respondents perceiving greater
land security.
Reduction in number of land disputes ........
Number of land disputes brought to court .......
Average time associated with obtaining land
title, disaggregated by rural and urban
areas.1
Average cost associated with obtaining land
title, disaggregated by rural and urban
areas.1
Share of respondents perceiving land tenure
security; as measured through EMICoV.
Data should be disaggregated by inhabitants of communities benefiting from the
Registration Activity and those that are not.
Total number of land disputes registered at
TPIs, per year.
Total number of land disputes (not brought to
formal court) as reported by commune
heads as measured through EMICoV.
Number of land disputes reported by commune heads.
1 Disaggregated time and costs to obtain a land title was not available as of the date of conclusion of the Compact. Going forward, data will be
collected and reported for the rural and urban areas separately.
ACCESS TO LAND PROJECT TARGETS
Baseline
Year 1
Year 2
Year 3
Year 4
Year 5
Zero 1 ............
.......................
.......................
.......................
Zero (Current
level for
Cotonou
only is
USD$310
million).
.......................
.......................
5% increase
from baseline.
8% increase
from baseline.
15% increase
from baseline.
10% increase
from baseline.
20% increase
from baseline.
12 months .....
.......................
.......................
10 months .....
.......................
6 months.
USD$1,300 ...
.......................
.......................
.......................
.......................
USD$180.
TBD 1 .............
.......................
.......................
30% increase
from baseline for beneficiary
communes.
.......................
Number of land disputes brought to court ..
8000 2 ............
.......................
.......................
.......................
.......................
Number of land disputes reported by commune heads.
TBD 1 .............
.......................
.......................
.......................
.......................
50% increase
from baseline for beneficiary
communities.
50% reduction
in MCA–targeted
zones.
.
Objective Level Indicators (Metric of Project
success observable by end of Compact
Term).
Total value of additional investment in targeted rural land parcels.
Total value of additional investment in targeted urban land parcels.
Outcome Level Indicators (Early indicators
of Project Activities impact on Objectives).
Average time required to obtain a new land
title.
Average cost required to obtain a new land
title.
Percent of respondents perceiving greater
land security.
1 EMICoV
2 This
will provide baseline data to be available starting in August 2006.
baseline figure is an estimate. Data will be verified by quarter 3 of Year 1 of the Compact Term.
ACCESS TO FINANCE PROJECT INDICATORS
sroberts on PROD1PC70 with NOTICES
Purpose
Indicator
Objective:
Expand access to financial services ..................
Definition of Indicator
Value of new financial services offered by financial institutions.
Total incremental increase in value of new
credit extended and savings received by financial institutions participating in the
project.1
Outcomes:
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ACCESS TO FINANCE PROJECT INDICATORS—Continued
Purpose
Indicator
Definition of Indicator
Strengthened capacity of select financial institutions.
Average portfolio-at-risk > 30 days participating MFIs.
Share of value of all loans outstanding that
have one or more installments of principal
past due over 30 days. Participating institutions institutions will be compared to a national average.
Operating revenue/(financial expense + loan
loss provision + operating expense). Measures extent of cost coverage from operating
revenues. Participating institutions will be
compared to national average. Indicator values are illustrative of each class/cohort’s
performance.
Total number of micro finance institutions that
are supervised and have received recommendations from the Ministry of Finance
Supervisory Authority.
Total number of loans guaranteed by land titles, per year.
Operational self-sufficiency of participating
MFIs (%).
Strengthened monitoring capacity of Supervisory Authority.
Number of MFIs supervised by the Microfinance Cellule.
Improved use of land titles as collateral ............
Number of new bank credits guaranteed with
land titles.
1 Indicator
and target will be amended if services other than credit and savings are offered.
ACCESS TO FINANCE PROJECT TARGETS
Baseline
Objective Level Indicators (Metric of Project
success observable by end of Compact
Term):
Value of new financial services offered
by financial institutions
Outcome Level Indicators (Early indicators of Project Activities impact on
Objectives):
Average portfolio-at-risk > 30 days of
participating financial institutions.
Operational self-sufficiency of participating financial institutions.
Number of MFIs supervised by the
Microfinance Cellule.
Number of new bank credits guaranteed with land titles.
Year 1
Year 2
Year 3
Year 4
Year 5
USD$155 Million in Credit and
USD$73
Million in
savings.1.
.......................
.......................
USD$24 Million.
.......................
USD$59 Million.
10% 2 .............
.......................
8% .................
7% .................
6% .................
5%
103% 2 ...........
.......................
106% .............
109% .............
.......................
112%
27 ..................
.......................
35 ..................
40 ..................
50 ..................
75
60 ..................
.......................
.......................
100 ................
150 ................
200
1 Current
aggregate value of savings and credit offered in system as cited in National Policy for Micro finance.
baseline values represent the national average. Once financial institutions are selected, baselines will be recalculated. Targets values
are average values for cohort/class entering the Program after 2, 3, 4, and 5 years.
2 These
ACCESS TO JUSTICE PROJECT INDICATORS
Purpose
Indicator
Definition of Indicator
Objective:
Improved ability of justice system to enforce
contracts and reconcile claims.
Average time required to enforce a contract ...
Number of days associated with filing payment dispute in court until moment of actual
payment.
Percent of manufacturing firms who agree
with statement ‘‘I have confidence in the judicial system.’’
Percent of firms reporting confidence in the judicial system.
sroberts on PROD1PC70 with NOTICES
Outcomes:
Increased efficiency and improved services of
courts and the arbitration center.
Increased access to court system .....................
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Number of cases processed at Arbitration
Center.
Percent of all cases resolved in TPI courts per
year.
Percent of all cases resolved in court of appeals per year.
Average distance required to reach TPI (km)
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Number of cases processed at Chamber of
Commerce Arbitration Center, per year.
Share of number of cases resolved of total
cases filed at all TPIs, per year.
Share of number of cases resolved of total
cases filed at court of appeals, per year.
Distance between village and jurisdictional
TPI in kilometers.
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ACCESS TO JUSTICE PROJECT INDICATORS—Continued
Purpose
Indicator
Definition of Indicator
Improved enterprise registration center .............
Number of enterprises registered through the
registration center.
Annual number of enterprises registered with
Chamber of Commerce Guichet Unique
central or satellite offices.
Number of days associated with registering
enterprise with Chamber of Commerce
Guichet Unique central or satellite offices,
per year.
Average time required to reigster an enterprise (days).
ACCESS TO JUSTICE PROJECT TARGETS
Baseline
Objective Level Indicators (Metric of Project
success observable by end of Compact
Term):
Average time required to enforce a contract
(days).
Percent of firms reporting confidence in the
judicial system.
Outcome Level Baseline Year Indicators
(Early indicators of Project Activities impact on Objectives)
Number of cases processed at Arbitration
Center.
Percent of all cases resolved in TPIs per
year.
Percent of all cases resolved in court of appeals per year.
Average Distance required to reach TPI
(km).
Number of enterprises registered through
the business registration center.
Average time required to register an enterprise (days).
Year 1
Year 2
Year 3
Year 4
Year 5
570 ................
.......................
.......................
470 ................
.......................
370
35% ...............
.......................
.......................
47% ...............
.......................
60%
0 ....................
.......................
25 ..................
150 ................
200 ................
250
40% ...............
.......................
.......................
45% ...............
.......................
50%
8% .................
12% ...............
15% ...............
18% ...............
21% ...............
24%
50 ..................
.......................
.......................
.......................
.......................
34
9,600 (total to
2004).
20 ..................
.......................
.......................
1,400 .............
1,000 .............
500
.......................
.......................
10 ..................
.......................
3
ACCESS TO MARKETS PROJECT INDICATORS
Purpose
Indicator
Definition of indicator
Objective:
Improve access to markets through improvements to the Port of Cotonou.
Volume of merchandise traffic through the
PAC (million metric tons).
Total volume of exports and imports passing
through Port of Cotonou, per year in million
metric tons.
Surcharge associated with congestion per
twenty-foot equivalent unit (‘‘TEU’’), in Euro.
Port surcharges due to delay ...........................
Outcomes:
Reduced ship wait time .....................................
Bulk ship carriers waiting times at the Port
(days).
Average duration of stay of trucks at Port .......
Number of days bulk carrier must wait at anchor (before proceeding to berth) and at
berth.
Time associated with moving merchandise
through customs procedures.
Share of port users satisfied with Port operations, estimated through Port user survey.
Average duration of stay trucks at Port.
Volume of seafood exports processed through
BOC (tons).
Total volume of seafood exports processed
through the BOC (tons).
Streamlined customs clearance procedures .....
Average customs clearance times at Port .......
Increased satisfaction with Port operations
among users.
Reduced average duration of stay of trucks at
Port.
Increased usage of import/export facilities of
Port among fishing/seafood businesses.
Port user satisfaction .......................................
ACCESS TO MARKETS PROJECT TARGETS
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Baseline
Objective Level Indicators (Metric of Project success
observable by end of Compact Term):
Volume of merchandise traffic through the PAC
(million metric tons) ...............................................
Port surcharges due to delay (Euros) ......................
Outcomes—Bulk ship carriers waiting times at the Port
(days):
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Year 1
Year 2
Year 3
4.1
125
4.9
....................
5.2
....................
5.6
....................
5.9
50
6.3
25
7
....................
....................
....................
5
3
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Year 4
Year 5
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ACCESS TO MARKETS PROJECT TARGETS—Continued
Baseline
Average customs clearance times at the Port
(days) ....................................................................
Port user satisfaction ................................................
Average duration of stay of trucks at Port (hours) ...
Volume of seafood exports processed through BOC
(tons) .....................................................................
Year 1
Year 2
Year 3
Year 4
Year 5
5
50%
24
....................
....................
....................
....................
....................
....................
3
65%
18
....................
70%
12
1
75%
7
0
....................
....................
....................
250
500
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Note: Attainment of most targets in the Markets Project tables in the years specified depends on the successful completion of early subactivities.
(iii) The final M&E Plan will also
include a number of activity-level
(Output) measures that will track
progress toward realizing the direct
outputs of the Projects and Activities.
Examples of the indicators likely to be
included are:
(1) Number of villages with plan
foncier rural (PFRs);
(2) Number of urban land titles
transformed from permis d’habiter or
living permits in Cotonou, Parakou and
Porto Novo;
(3) Number of clients of financial
service providers trained;
(4) Average cost of registering an
enterprise with Chamber of Commerce
Guichet Unique;
(5) Number of judicial employees
receiving pre-service training; and
(6) Port meeting ISPS standards.
(b) Beneficiaries. The M&E plan shall
describe the beneficiaries of the Program
in detail, including the expected
number of beneficiaries, their income,
gender and other general demographic
characteristics.
(c) Data Collection and Reporting. The
M&E Plan shall establish guidelines for
data collection and a reporting
framework, including a schedule of
Program reporting and responsible
parties. In addition, MCA-Benin shall
conduct regular assessments of program
performance to measure progress on the
Goals and Objectives and to alert all
parties to any problems in
implementation. These assessments will
report actual results compared to the
Targets on the Indicators referenced in
the Monitoring Component, explain
deviations between these actual results
and Targets, and describe any planned
actions to address performance
problems. With respect to any data or
reports received by MCA-Benin, MCABenin shall promptly deliver such
reports to MCC along with any other
related documents, as specified in the
M&E Plan or as may be requested from
time to time by MCC, and will make
these assessments available to the
public on their Web site.
(d) Data Quality Reviews. As
determined in the M&E Plan or as
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16:03 Mar 10, 2006
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otherwise requested by MCC, the quality
of the data gathered through the M&E
Plan shall be reviewed to ensure that
data reported are as reliable, timely and
valid as resources will allow. The
objective of any data quality review will
be to verify the quality and the
consistency of performance data, across
different implementation units and
reporting institutions. Such data quality
reviews also will serve to identify where
consistent levels of quality are not
possible, given in-country capacity or
other constraints.
3. Evaluation Component
The Program shall be evaluated on the
extent to which the interventions
contribute to the Compact Goal and
Objectives. The Evaluation Component
shall contain the methodology for
conducting the most rigorous impact
evaluations feasible and cost-effective,
as well as the process and timeline for
analyzing data. The Evaluation
Component shall contain two types of
reports: A Final Program Evaluation and
Project, Project Activity, or Interim
Evaluations.
(a) Final Evaluation. MCC will engage
an independent evaluator to conduct a
program evaluation at the expiration or
termination of the Program (‘‘Final
Evaluation’’). The evaluation
methodology, timeline, data collection,
and analysis requirements will be
finalized and detailed in the M&E Plan.
The Final Evaluations must at a
minimum (i) estimate quantitatively and
in a statistically valid way, the causal
relationship between the Compact Goals
(to the extent possible), the Objectives
and Outcomes; (ii) determine if and
analyze the reasons why the Compact
Goals, Objectives and Outcomes were or
were not achieved; and (iii) assess the
overlapping benefits of the Projects.
(b) Project or Interim Evaluations. The
Evaluation Component in the M&E Plan
will also describe other individual
Project, Project Activity, or Interim
Evaluations. The evaluation
methodology, timeline, data collection,
and analysis requirements will be
finalized and detailed in the M&E Plan.
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Fmt 4701
Sfmt 4703
Determination of the evaluation
methodologies will be condition
precedent for specified MCC
Disbursements.
(c) Ad Hoc Evaluations or Special
Studies. In addition to the evaluations
described in the M&E Plan, MCC may
require ad hoc evaluations or special
studies prior to the expiration of the
Compact Term. If MCA-Benin engages
an evaluator, the evaluator will be an
externally contracted independent
source subject to the prior written
approval of MCC for terms of reference
and final selection, following a tender in
accordance with the Procurement
Guidelines, and otherwise in
accordance with any relevant
Implementation Letter or Supplemental
Agreement. The cost of an independent
evaluation or special study may be paid
from MCC Funding. If MCA-Benin
requires an ad hoc independent
evaluation or special study at the
request of the Government for any
reason, including for the purpose of
contesting an MCC determination with
respect to a Project or Project Activity or
to seek funding from other donors, no
MCC Funding or MCA-Benin resources
may be applied to such evaluation or
special study without MCC’s prior
written approval.
4. Other Components of the M&E Plan
In addition to the Monitoring and
Evaluation Components, the M&E Plan
shall include the following components
for the Program, Projects and Project
Activities, including, where
appropriate, roles and responsibilities of
the relevant parties and Providers:
(a) Costs. A detailed annual budget
estimate for all components of the M&E
Plan.
(b) Assumptions and Risks. Any
assumptions and risks external to the
Program that underlie the
accomplishment of the Objectives and
Outcomes; provided such assumptions
and risks shall not excuse performance
of the Parties, unless otherwise
expressly agreed to in writing by the
Parties.
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Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 / Notices
5. Implementation of the M&E Plan
sroberts on PROD1PC70 with NOTICES
(a) Approval and Implementation.
The approval and implementation of the
M&E Plan, as amended from time to
time, shall be in accordance with this
M&E Annex, and any other relevant
Supplemental Agreement. Stakeholders’
Committee’s review of the completed
portions of the M&E Plan shall be
required prior to the expiration of the
first year of the Program. Review and
approval of the M&E Plan shall be
completed by time specified in the
Disbursement Agreement.
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16:03 Mar 10, 2006
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(b) MCC Disbursement and ReDisbursement for a Project Activity. As
a condition to each MCC Disbursement
or Re-Disbursement there shall be
satisfactory progress on the M&E Plan
for the relevant Project or Project
Activity, and substantial compliance
with the M&E Plan, including any
reporting requirements. In addition, for
certain activities, collection of baseline
data will be condition precedent for
specified MCC Disbursements.
(c) Modifications. Notwithstanding
anything to the contrary in the Compact,
including the requirements of this M&E
PO 00000
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Sfmt 4703
Annex, the Parties may modify or
amend the M&E Plan or any component
thereof, including those elements
described herein, without amending the
Compact; provided, any such
modification or amendment of the M&E
Plan is reviewed by the Stakeholders’
Committee and has been approved by
MCC in writing and is otherwise
consistent with the requirements of this
Compact and its Objectives, and any
relevant Supplemental Agreement
between the Parties.
[FR Doc. 06–2252 Filed 3–10–06; 8:45 am]
BILLING CODE 9210–01–P
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[Federal Register Volume 71, Number 48 (Monday, March 13, 2006)]
[Notices]
[Pages 12934-12986]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-2252]
[[Page 12933]]
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Part III
Millennium Challenge Corporation
-----------------------------------------------------------------------
Notice of Entering Into a Compact With the Government of the Republic
of Benin; Notice
Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 /
Notices
[[Page 12934]]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 06-05]
Notice of Entering Into a Compact With the Government of the
Republic of Benin
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: In accordance with Section 610(b)(2) of the Millennium
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium
Challenge Corporation (MCC) is publishing a summary and the complete
text of the Millennium Challenge Compact between the United States of
America, acting through the Millennium Challenge Corporation, and the
Government of the Republic of Benin. Representatives of the United
States Government and the Government of the Republic of Benin executed
the Compact documents on February 22, 2006.
Dated: March 6, 2006.
Jon A. Dyck,
Vice President & General Counsel, Millennium Challenge Corporation.
Summary of Millennium Challenge Compact With the Government of the
Republic of Benin
I. Introduction
Situated in West Africa, between Nigeria and Togo in the Gulf of
Guinea, Benin is a very poor country with a population of nearly seven
million, a third of which live in poverty. Progress in development is
attributed to reforms initiated in the early 1990s as Benin
transitioned from a Marxist-Leninist state towards a pluralistic
democracy and market economy.
Despite growth rates averaging 5 percent per year in the past
decade, rapid population growth has offset much of these gains and
poverty remains widespread. Per capita income in Benin remains below
the sub-Sahara African average and rural poverty has increased in
recent years. Benin's economy is narrowly dependent on cotton
production, subsistence agriculture and regional trade through the Port
of Cotonou. Key impediments to sustainable economic growth and poverty
reduction are a poor investment climate and a lack of dynamic private
sector activity. These are hindered by land insecurity, lack of access
to capital, an inefficient judicial system, and an increasingly
uncompetitive Port of Cotonou.
The five year, approximately $307 million Millennium Challenge
Compact with the Government of Benin (GOB) aims to increase investment
and private sector activity in Benin. The program to be funded under
the Compact (Program) seeks to remove key constraints to growth and
supports improvements in physical and institutional infrastructures.
The projects included in the Program reinforce each other and MCC
estimates they will together contribute to an economic rate of return
(ERR) of 24 percent.
II. Program Overview and Budget
Benin's MCA Program is a series of strategic investments designed
to improve core physical and institutional infrastructure and increase
investment and private sector activity. The Program comprises four
Projects: ``Access to Land,'' ``Access to Financial Services,''
``Access to Justice,'' and ``Access to Markets.''
1. Access to Land (``Land Project'') (approximately $36 million):
Investment climate studies list land access among the top constraints
to business development in Benin. 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. MCC anticipates
this Project will reduce the time and cost to obtain a title, reduce
the number of land disputes, and increase the perception of land
security.
2. Access to Financial Services (``Financial Services Project'')
(approximately $20 million): Due to the high cost or unavailability of
credit and other financial services, small businesses in Benin are
unable to expand production and employment. This Project aims to
improve the ability of micro, small and medium-sized enterprises
(MSMEs) to respond to opportunities by expanding access to financial
services. The Project is designed to expand the financial services
provided to MSMEs, improve supervision of microfinance institutions
(MFIs), increase MFI operational self-sufficiency, decrease MFI
portfolio at risk, and increase the number of loans guaranteed with
land titles.
3. Access to Justice (``Justice Project'') (approximately $34
million): A major obstacle to investment and economic growth in Benin
is the inefficiency of the judicial system. Only 8 percent of
commercial cases filed are resolved within a year. Benin was recently
rated by the World Bank as among the most difficult places in the world
to enforce a contract. 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. The
Project is expected to increase the number of cases resolved per year
by the Courts of First Instance, increase the number of cases handled
by the Arbitration Center, and increase the number of registered
enterprises.
4. Access to Markets (``Markets Project'') (approximately $169
million): The importance of the Port of Cotonou to Benin's economy has
been increasing, while its competitiveness has been steadily
decreasing. This Project is designed to promote access to markets by
improving Port operations and infrastructure. Specifically, it aims to
improve Port performance and security, expand capacity, and reduce
costs. MCC anticipates the Project will reduce delays at the Port and
increase the volume of imports and exports.
The following table outlines the estimated MCC contribution to the
Program by year and category for term of the Compact.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Timeline
----------------------------------------------------------------------------------------------- Total
Description Compact YI Compact YI Compact Y2 Compact Y3 Compact Y4 Compact Y5 ($US
($US mil) ($US mil) ($US mil) ($US mil) ($US mil) ($US mil) mil)
--------------------------------------------------------------------------------------------------------------------------------------------------- -------
Access to Land..................................... 4.56 10.43 8.55 7.37 5.11 36.02
Access to Financial Services....................... 3.15 5.42 5.41 4.71 0.96 19.65
Access to Justice.................................. 3.83 7.85 9.06 6.97 6.56 34.27
Access to Markets.................................. 9.45 30.13 66.29 62.36 1.22 169.45
Program Administration & Audits.................... 8.21 7.61 7.75 7.73 7.83 39.13
Monitoring & Evaluation............................ 3.19 1.69 1.24 1.24 1.42 8.78
----------------------------------------------------------------------------------------------------
Estimated Total................................ 32.39 63.13 98.30 90.38 23.10 307.30
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 12935]]
III. Impact
The Program is expected to impact up to five million beneficiaries
and lift an estimated 250,000 Beninese out of poverty by the year 2015.
Specifically, the Land Project is expected to assist an estimated
115,000 rural and urban households with more secure and useful tenure;
contribute to a 50 percent reduction in court cases related to land
disputes; and result in a 10 percent increase in investment in rural
land and a 20 percent increase in investment in urban property. The
Financial Services Project is expected to expand financial services to
MSMEs by nearly $60 million (a multiple of three times the Project's
funding), thereby increasing MSME value added and incomes of the poor
that own, are employed by, or do business with those enterprises. The
Justice Project is anticipated to benefit approximately 2.38 million
Beninese by bringing courts closer to rural populations and making them
more responsive and effective. Finally, a more efficient Port will
contribute to importer and exporter value-added by reducing
transportation costs and increasing the level of Port operations. It is
likely that the anticipated reduction in shipping costs will be passed
on to wholesalers and traders, and ultimately be reflected in lower
consumer prices. Additional added value in jobs from fish processing
and Port operations are expected from improvements in several
infrastructure components.
IV. Program Management
GOB will create a legal entity (MCA-Benin) to manage and oversee
the implementation of the Program. This entity will be comprised of an
eleven-member Board of Directors and a management team. The Board of
Directors will make certain strategic decisions and recommendations,
provide oversight of the Program implementation and ensure the success
of the Program. MCA-Benin's management will be responsible for the
implementation of the Program, including contracting, program
management, certain financial management functions, and coordination of
monitoring and evaluation. In addition, an eight-member Advisory
Council will be established to provide recommendations and feedback to
the MCA-Benin Board of Directors.
Independent fiscal and procurement agents, selected through
international competitive search processes, will be engaged to provide
fiscal management and procurement services respectively.
Other Highlights
A. Consultative Process: This Program has undergone one of the most
robust consultative processes to date in an MCA-eligible country.
Benin's proposal is the product of a genuine, meaningful and
participatory consultative process. Guided by the Poverty Reduction
Strategy Paper (PRSP), GOB's consultative process included a wide
cross-section of private sector and civil society groups in the
formulation of Benin's MCA priorities. Benin held several consultative
meetings with representatives from various stakeholder groups as well
as radio and television events to broadly present the outlines of the
proposal and garner feedback from intended beneficiaries. The
consultative process was guided by the Benin National Committee (BNC),
whose members were elected or delegated by their respective
constituencies. Representation on the BNC includes six representatives
of GOB, three representatives of civil society, three representatives
of the Chamber of Commerce, three representatives of national labor
unions, two representatives of the Agricultural Chamber, and one
representative of artisan associations.
B. Government Commitment and Effectiveness: The Program has
received considerable attention during the Compact development process.
GOB allocated $680,000 for the preparation of the proposal and has
committed as part of the Compact to contribute an additional 5 billion
CFA ($9.2 million) to the Program during the Compact Term. One fourth
of this contribution has already been included in the national budget
for 2006 and will be available immediately following Compact signing.
GOB has also expressed its commitment to the Program by its willingness
to condition key activities upon requirements for institutional change
and policy reform.
C. Sustainability: Sustainability will be ensured through training,
capacity building, policy reforms and institutional changes. The Land
and Justice Projects contain core training, information and education
campaigns that will build public knowledge on land and justice issues,
respectively. A key objective of the Financial Services Project is to
enhance the sustainability of existing commercial actors that service
MSMEs. Beneficiaries of the Challenge Facility can be expected to
continue to implement improvements in financial technologies and
institutional capacities after Program support ends. The Markets
Project includes greater private management of operations, more
efficient land usage, and streamlining of customs processing.
D. Environment and Social Impacts: The Land and Financial Services
Projects are expected to have few or no adverse environmental and
social impacts. They have been placed in screening category ``C'' under
the MCC Environmental Guidelines. The Land Project is anticipated to
have positive social effects as well as to foster land stewardship. The
Financial Services Project will incorporate training, technical
assistance, and services, where appropriate, on strategies to avoid
environmental and social risks and enhance the sustained impact of
access to financial services. Both of these projects have specific
commitments to take into account gender concerns.
The Justice Project has the potential for modest, adverse
environmental and social impacts because of construction of a legal
information center and courthouses. The Justice Project has been placed
in screening category ``B'' under the MCC Environmental Guidelines. A
framework environmental and social assessment will be required to
screen sites once they are proposed and provide guidance for site-
specific Environmental Management Plans (EMPs) and Resettlement Action
Plans (RAPs) consistent with international best practices. To enhance
the social impacts of this project, outreach will be designed to
incorporate gender considerations as well as access by vulnerable
segments of society.
The Markets Project has been placed in screening category ``A''
under the MCC Environmental Guidelines and will require a comprehensive
Environmental and Social Impact Assessment (ESIA), conducted in phases.
As a critical first step, technical, environmental, engineering and
economic studies are required to evaluate alternatives and select the
preferred design to reduce sedimentation of the harbor access and not
adversely impact coastal erosion east of the Port; studies must also
analyze disposal of potentially contaminated dredged material, for the
selected alternative and new wharf construction. Based on these
studies, an ESIA and EMP will be required to address impacts of
increased Port activity and new infrastructure and compliance with
international marine conventions. An ESIA (combined or separate,
according to schedule needs) will be required for landside
improvements, including an environmental audit of the existing
operations, an Environmental Management Plan/System, and an
[[Page 12936]]
overall EMP. Verification is required to determine if economic or
physical displacement will occur and a RAP is needed.
E. Donor Coordination: MCC's investment would position the United
States Government as the largest bi-lateral donor to the country. Other
major donors to Benin are the Netherlands, Denmark, France, Belgium and
Germany.
GOB and MCC have convened various discussions and meetings with
donor partners to ensure complementarity. The German development
agency, Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ),
financed a pilot phase of the Rural Land Plans upon which sections of
GOB's proposal are based. A recent International Finance Corporation
Foreign Investment Advisory Service (FIAS) investigation of the
investment climate in Benin will recommend a reform agenda very similar
to what is proposed for MCC funding. A number of multilateral and
bilateral donors, including the World Bank, France, Denmark, and the
Netherlands, have been involved in activities and studies aimed at
improving the performance of the Port of Cotonou.
Millennium Challenge Compact Between the United States of America
Acting Through the Millennium Challenge Corporation and the Government
of the Republic of Benin
Table of Contents
Article I. Purpose and Term
Section 1.1 Objectives
Section 1.2 Projects
Section 1.3 Entry into Force; Compact Term
Article II. Funding and Resources
Section 2.1 MCC Funding
Section 2.2 Government Resources
Section 2.3 Limitation on the Use or Treatment of MCC Funding
Section 2.4 Incorporation; Notice; Clarification
Section 2.5 Refunds: Violation
Section 2.6 Bilateral Agreement
Article III. Implementation
Section 3.1 Implementation Framework
Section 3.2 Government Responsibilities
Section 3.3 Government Deliveries
Section 3.4 Government Assurances
Section 3.5 Implementation Letters; Supplemental Agreements
Section 3.6 Procurement; Awards of Assistance
Section 3.7 Policy Performance; Policy Reforms
Section 3.8 Records and Information; Access; Audits; Reviews
Section 3.9 Insurance; Performance Guarantees
Section 3.10 Domestic Requirements
Section 3.11 No Conflict
Section 3.12 Reports
Article IV. Conditions Precedent; Deliveries
Section 4.1 Conditions Prior to the Entry into Force and
Deliveries
Section 4.2 Conditions Precedent to MCC Disbursements or Re-
Disbursements
Article V. Final Clauses
Section 5.1 Communications
Section 5.2 Representatives
Section 5.3 Amendments
Section 5.4 Termination; Suspension
Section 5.5 Privileges and Immunities
Section 5.6 Attachments
Section 5.7 Inconsistencies
Section 5.8 Indemnification
Section 5.9 Headings
Section 5.10 Interpretation; Definitions
Section 5.11 Signatures
Section 5.12 Designation
Section 5.13 Survival
Section 5.14 Consultation
Section 5.15 MCC Status
Section 5.16 Language
Section 5.17 Publicity; Information and Marking
Exhibit A: Definitions
Exhibit B: List of Certain Supplemental Agreements
Schedule 2.1(a)(iii): Description of Compact Implementation Funding
Annex I: Program Description
Schedule 1: Land Project
Schedule 2: Financial Services Project
Schedule 3: Justice Project
Schedule 4: Markets Project
Annex II: Summary of Multi-Year Financial Plan
Annex III: Description of the M&E Plan
Millennium Challenge Compact
This Millennium Challenge Compact (the ``Compact'') is made between
the United States of America, acting through the Millennium Challenge
Corporation, a United States Government corporation (``MCC''), and the
Government of the Republic of Benin (the ``Government'') (referred to
herein individually as a ``Party'' and collectively, the ``Parties'').
A compendium of capitalized terms defined herein is included, for
convenience only, in Exhibit A attached hereto.
Recitals
Whereas, MCC, acting through its Board of Directors, has selected
the Republic of Benin as eligible to present to MCC a proposal for the
use of Millennium Challenge Account (``MCA'') assistance to help
facilitate the advance of economic growth and poverty reduction in
Benin;
Whereas, the Government has carried out a consultative process with
the country's private sector and civil society to outline the country's
priorities for the use of MCA assistance and developed a proposal,
which final proposal was submitted to MCC on September 5, 2005 (the
``Proposal'');
Whereas, the Proposal focused on, among other things, improving
core physical and institutional infrastructure to increase investment
and private sector activity;
Whereas, MCC has evaluated the Proposal and related documents to
determine whether the Proposal is consistent with core MCA principles
and includes proposed activities and projects that will advance the
progress of Benin towards achieving economic growth and poverty
reduction; and
Whereas, based on MCC's evaluation of the Proposal and related
documents and subsequent discussions and negotiations between the
Parties, the Government and MCC determined to enter into this Compact
to implement a program using MCC Funding to advance Benin's progress
towards economic growth and poverty reduction (the ``Program'');
Now, Therefore, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the Parties hereby agree as
follows:
Article I. Purpose and Term
Section 1.1 Objectives. The overall objective of this Compact is to
increase investment and private sector activity in Benin (``Program
Objective''), which is key to advancing the goal of economic growth and
poverty reduction in Benin (the ``Compact Goal''). The Parties have
identified the following project-level objectives (each, a ``Project
Objective'' and together, the ``Project Objectives'') of this Compact
to advance the Program Objective and Compact Goal, each of which is
described in more detail in the Annexes attached hereto:
(a) Strengthen property rights and investment (the ``Land
Objective'');
(b) Expand access to financial services (the ``Financial Services
Objective'');
(c) Improve ability of the justice system to enforce contracts and
reconcile claims (the ``Justice Objective''); and
(d) Improve access to markets through improvements to the Port of
Cotonou (``Markets Objective'').
The Government expects to achieve, and shall use its best efforts
to ensure the achievement of, the Compact Goal, Program Objective and
Project Objectives during the Compact Term. The Program Objective and
the individual Project Objectives collectively referred to herein as
``Objectives'' and each individually as an ``Objective.''
Section 1.2 Projects. The Annexes attached hereto describe the
specific projects and the policy reforms and other activities related
thereto (each, a ``Project'') that the Government will carry out, or
cause to be carried out, in
[[Page 12937]]
furtherance of this Compact to achieve the Objectives and the Compact
Goal.
Section 1.3 Entry into Force; Compact Term. This Compact shall
enter into force on the date of the last letter in an exchange of
letters between the Principal Representatives of each Party confirming
that each Party has completed its domestic requirements for entry into
force of this Compact (including as set forth in Section 3.10) and that
all conditions set forth in Section 4.1 have been satisfied by the
Government and MCC (the ``Entry into Force''). This Compact shall
remain in force for five (5) years from the Entry into Force, unless
earlier terminated in accordance with Section 5.4 (the ``Compact
Term'').
Article II. Funding and Resources
Section 2.1 MCC Funding.
(a) MCC's Contribution. MCC hereby grants to the Government,
subject to the terms and conditions of this Compact, an amount not to
exceed Three Hundred Seven Million Two Hundred and Ninety Eight
Thousand and Forty United States Dollars (USD $307,298,040) (``MCC
Funding'') during the Compact Term to enable the Government to
implement the Program and achieve the Objectives.
(i) Subject to Sections 2.1(a)(ii), 2.2(b) and 5.4(b), the
allocation of the MCC Funding within the Program and among and within
the Projects shall be as generally described in Annex II or as
otherwise agreed upon by the Parties from time to time.
(ii) If at any time MCC determines that a condition precedent to an
MCC Disbursement has not been satisfied, MCC may, upon written notice
to the Government, reduce the total amount of MCC Funding by an amount
equal to the amount estimated in the applicable Detailed Financial Plan
for the Program, Project or Project Activity or sub-activity for which
such condition precedent has not been met. Upon the expiration or
termination of this Compact, (A) any amounts of MCC Funding not
disbursed by MCC to the Government shall be automatically released from
any obligation in connection with this Compact and (B) any amounts of
MCC Funding disbursed by MCC to the Government as provided in Section
2.1(b)(i), but not re-disbursed as provided in Section 2.1(b)(ii) or
otherwise incurred as permitted pursuant to Section 5.4(e) prior to the
expiration or termination of this Compact, shall be returned to MCC in
accordance with Section 2.5(a)(ii).
(iii) Notwithstanding any other provision of this Compact and
pursuant to the authority of Section 609(g) of the Millennium Challenge
Act of 2003, as amended (the ``Act''), upon the conclusion of this
Compact (and without regard to the satisfaction of all of the
conditions for Entry into Force required under Section 1.3), MCC shall
make available One Million Five Hundred Thirty Six Thousand Four
Hundred and Ninety United States Dollars (USD $1,536,490) (``Compact
Implementation Funding'') to facilitate certain aspects of Compact
implementation as described in Schedule 2.1(a)(iii) attached hereto;
provided, such Compact Implementation Funding shall be subject to (A)
the limitations on the use or treatment of MCC Funding set forth in
Section 2.3, as if such provision were in full force and effect, and
(B) any other requirements for, and limitations on the use of, such
Compact Implementation Funding as may be required by MCC in writing;
provided, further, that any Compact Implementation Funding granted in
accordance with this Section 2.1(a)(iii) shall be included in, and not
additional to, the total amount of MCC Funding; and provided further,
any obligation to provide such Compact Implementation Funding shall
expire upon the expiration or termination of this Compact or five (5)
years from the conclusion of this Compact, whichever occurs sooner.
Notwithstanding anything to the contrary in this Compact, this Section
2.1(a)(iii) shall provisionally apply prior to Entry into Force.
(b) Disbursements.
(i) Disbursements of MCC Funding. MCC shall from time to time make
disbursements of MCC Funding (each such disbursement, an ``MCC
Disbursement'') to a Permitted Account or through such other mechanism
agreed by the Parties under and in accordance with the procedures and
requirements set forth in Annex I, the Disbursement Agreement or as
otherwise provided in any other relevant Supplemental Agreement.
(ii) Re-Disbursements of MCC Funding. The release of MCC Funding
from a Permitted Account (each such release, a ``Re-Disbursement''),
shall be made in accordance with the procedures and requirements set
forth in Annex I, the Disbursement Agreement or as otherwise provided
in any other relevant Supplemental Agreement.
(c) Interest. Unless the Parties agree otherwise in writing, any
interest or other earnings on MCC Funding that accrue (collectively,
``Accrued Interest'') shall be held in a Permitted Account and accrue
in accordance with the requirements for the accrual and treatment of
Accrued Interest as specified in Annex I or any relevant Supplemental
Agreement. On a quarterly basis and upon the termination or expiration
of this Compact, the Government shall return, or ensure the return of,
all Accrued Interest to any United States Government account designated
by MCC.
(d) Conversion; Exchange Rate. The Government shall ensure that all
MCC Funding that is held in the Permitted Account(s) shall be
denominated in the currency of the United States of America (``United
States Dollars'') prior to Re-Disbursement; provided, that a certain
portion of MCC Funding may be transferred to a Local Account and may be
held in such Local Account in the currency of the Republic of Benin
prior to Re-Disbursement in accordance with the requirements of Annex I
and any relevant Supplemental Agreement. To the extent that any amount
of MCC Funding held in United States Dollars must be converted into the
currency of the Republic of Benin for any purpose, including for any
Re-Disbursement or any transfer of MCC Funding into a Local Account,
the Government shall ensure that such amount is converted consistent
with Annex I, including the rate and manner set forth in Annex I, and
the requirements of the Disbursement Agreement or any other
Supplemental Agreement between the Parties.
(e) Guidance. From time to time, MCC may provide guidance to the
Government through Implementation Letters on the frequency, form and
content of requests for MCC Disbursements and Re-Disbursements or any
other matter relating to MCC Funding. The Government shall apply such
guidance in implementing this Compact.
Section 2.2 Government Resources.
(a) The Government shall provide or cause to be provided such
Government funds and other resources, including any Government
contributions set out forth on Annex II attached hereto, and shall take
or cause to be taken such actions, including obtaining all necessary
approvals and consents, as are specified in this Compact or in any
Supplemental Agreement to which the Government is a party or as are
otherwise necessary and appropriate to effectively carry out the
Government Responsibilities or other responsibilities or obligations of
the Government under or in furtherance of this Compact during the
Compact Term and through the completion of any post-Compact Term
activities, audits or other responsibilities. The Government shall
submit to the Parliament on an annual basis the amount of the upcoming
year's
[[Page 12938]]
Government contribution for inclusion in the applicable finance law of
Benin and such amount shall be committed in the national budget for
that year for purposes of the Program, such contribution to be
allocated within and in furtherance of the Program as agreed by the
Parties. The Government shall disburse funds on a quarterly basis from
this committed amount into an account, held at a bank acceptable to
MCC, designated solely for this purpose.
(b) If at any time during the Compact Term, the Government
materially reallocates or reduces the allocation in its national budget
or any other Beninese governmental authority at a departmental,
municipal, regional or other jurisdictional level materially
reallocates or reduces the allocation of its respective budget of the
normal and expected resources that the Government or such other
governmental authority, as applicable, would have otherwise received or
budgeted, from external or domestic sources, for the activities
contemplated herein, the Government shall notify MCC in writing within
fifteen (15) days of such reallocation or reduction, such notification
to contain information regarding the amount of the reallocation or
reduction, the affected activities, and an explanation for the
reallocation or reduction. In the event that MCC independently
determines, upon review of the executed national annual budget that
such a material reallocation or reduction of resources has occurred,
MCC shall notify the Government and, following such notification, the
Government shall provide a written explanation for such reallocation or
reduction and MCC may (i) reduce, in its sole discretion, the total
amount of MCC Funding or any MCC Disbursement by an amount equal to the
amount estimated in the applicable Detailed Financial Plan for the
activity for which funds were reduced or reallocated or (ii) otherwise
suspend or terminate MCC Funding in accordance with Section 5.4(b).
(c) The Government shall use its best efforts to ensure that all
MCC Funding is fully reflected and accounted for in the annual budget
of the Republic of Benin on a multi-year basis.
Section 2.3 Limitations on the Use or Treatment of MCC Funding.
(a) Abortions and Involuntary Sterilizations. The Government shall
ensure that MCC Funding shall not be used to undertake, fund or
otherwise support any activity that is subject to prohibitions on use
of funds contained in (i) paragraphs (1) through (3) of section 104(f)
of the Foreign Assistance Act of 1961 (22 U.S.C. 2151b(f)(1)-(3), a
United States statute, which prohibitions shall apply to the same
extent and in the same manner as such prohibitions apply to funds made
available to carry out Part I of such Act; or (ii) any provision of law
comparable to the eleventh and fourteenth provisos under the heading
``Child Survival and Health Programs Fund'' of division E of Public Law
108-7 (117 Stat. 162), a United States statute.
(b) United States Job Loss or Displacement of Production. The
Government shall ensure that MCC Funding shall not be used to
undertake, fund or otherwise support any activity that is likely to
cause a substantial loss of United States jobs or a substantial
displacement of United States production, including:
(i) Providing financial incentives to relocate a substantial number
of United States jobs or cause a substantial displacement of production
outside the United States;
(ii) Supporting investment promotion missions or other travel to
the United States with the intention of inducing United States firms to
relocate a substantial number of United States jobs or a substantial
amount of production outside the United States;
(iii) Conducting feasibility studies, research services, studies,
travel to or from the United States, or providing insurance or
technical and management assistance, with the intention of inducing
United States firms to relocate a substantial number of United States
jobs or cause a substantial displacement of production outside the
United States;
(iv) Advertising in the United States to encourage United States
firms to relocate a substantial number of United States jobs or cause a
substantial displacement of production outside the United States;
(v) Training workers for firms that intend to relocate a
substantial number of United States jobs or cause a substantial
displacement of production outside the United States;
(vi) Supporting a United States office of an organization that
offers incentives for United States firms to relocate a substantial
number of United States jobs or cause a substantial displacement of
production outside the United States; or
(vii) Providing general budget support for an organization that
engages in any activity prohibited above.
(c) Military Assistance and Training. The Government shall ensure
that MCC Funding shall not be used to undertake, fund or otherwise
support the purchase or use of goods or services for military purposes,
including military training, or to provide any assistance to the
military, police, militia, national guard or other quasi-military
organization or unit.
(d) Prohibition of Assistance Relating to Environmental, Health or
Safety Hazards. The Government shall ensure that MCC Funding shall not
be used to undertake, fund or otherwise support any activity that is
likely to cause a significant environmental, health, or safety hazard.
Unless MCC and the Government agree otherwise in writing, the
Government shall ensure that activities undertaken, funded or otherwise
supported in whole or in part (directly or indirectly) by MCC Funding
comply with environmental guidelines delivered by MCC to the Government
or posted by MCC on its Web site or otherwise publicly made available,
as such guidelines may be amended from time to time (the
``Environmental Guidelines''), including any definition of ``likely to
cause a significant environmental, health, or safety hazard'' as may be
set forth in such Environmental Guidelines.
(e) Taxation.
(i) Taxes. The Government shall ensure that the Program, any
Program Assets, MCC Funding and Accrued Interest shall be free from any
taxes imposed under the laws currently or hereafter in effect in the
Republic of Benin during the Compact Term. This exemption shall apply
to any use of any Program Asset, MCC Funding and Accrued Interest,
including any Exempt Uses, and to any work performed under or
activities undertaken in furtherance of this Compact by any person or
entity (including contractors and grantees) funded by MCC Funding, and
shall apply to all taxes, tariffs, duties, and other levies (each a
``Tax'' and collectively, ``Taxes''), including:
(1) To the extent attributable to MCC Funding, income taxes and
other taxes on profit or businesses imposed on organizations or
entities, other than nationals of the Republic of Benin, receiving MCC
Funding, including taxes on the acquisition, ownership, rental,
disposition or other use of real or personal property, taxes on
investment or deposit requirements and currency controls in the
Republic of Benin, or any other tax, duty, charge or fee of whatever
nature, except fees for specific services rendered; for purposes of
this Section 2.3(e), the term ``national'' refers to organizations
established under the laws currently or hereafter in effect in the
Republic of Benin, other than MCA-Benin or any other entity established
solely for purposes of managing or overseeing the implementation of the
Program or any wholly-owned subsidiaries, divisions, or Affiliates of
entities not registered or established under the laws currently or
hereafter in effect in the Republic of Benin;
[[Page 12939]]
(2) Customs duties, tariffs, import and export taxes, or other
levies on the importation, use and re-exportation of goods, services,
or the personal belongings and effects, including personally-owned
automobiles, for Program use or the personal use of individuals who are
neither citizens nor permanent residents of the Republic of Benin and
who are present in the Republic of Benin for purposes of carrying out
the Program or their family members, including all charges based on the
value of such imported goods;
(3) Taxes on the income or personal property of all individuals who
are neither citizens nor permanent residents of the Republic of Benin,
including income and social security taxes of all types and all taxes
on the personal property owned by such individuals, to the extent such
income or property are attributable to MCC Funding; and
(4) Taxes or duties levied on the last transaction for the purchase
of goods or services funded by MCC Funding, including sales taxes,
tourism taxes, value-added taxes (VAT), or other similar charges. The
term ``last transaction'' refers to the last transaction by which the
goods or services were purchased for use in the activities funded by
MCC Funding.
(ii) This Section 2.3(e) shall apply, but is not limited to (A) any
transaction, service, activity, contract, grant or other implementing
agreement funded in whole or in part by MCC Funding; (B) any supplies,
equipment, materials, property or other goods (referred to herein
collectively as ``goods'') or funds introduced into, acquired in, used
or disposed of in, or imported into or exported from, the Republic of
Benin by MCC, or by any person or entity (including contractors and
grantees) as part of, or in conjunction with, MCC Funding or the
Program; (C) any contractor, grantee, or other organization carrying
out activities funded in whole or in part by MCC Funding; and (D) any
employee of such organizations (the uses set forth in clauses (A)
through (D) are collectively referred to herein as ``Exempt Uses'').
(iii) If a Tax has been levied and paid contrary to the
requirements of this Section 2.3(e), whether inadvertently, due to the
impracticality of implementation of this provision with respect to
certain types or amounts of taxes, or otherwise, the Government shall
refund promptly to MCC to an account designated by MCC the amount of
such Tax in the currency of the Republic of Benin, within thirty (30)
days (or such other period as may be agreed in writing by the Parties)
after the Government is notified in writing of such levy and tax
payment, in accordance with procedures agreed by the Parties, whether
by MCC or otherwise; provided, however, the Government shall apply
national funds to satisfy its obligations under this paragraph and no
MCC Funding, Accrued Interest, or any assets, goods, or property (real,
tangible, or intangible) purchased or financed in whole or in part
(directly or indirectly) by MCC Funding (``Program Assets'') may be
applied by the Government in satisfaction of its obligations under this
paragraph.
(iv) The Parties shall memorialize in a mutually acceptable
Supplemental Agreement or Implementation Letter or other suitable
document the mechanisms for implementing this Section 2.3(e), including
(A) a formula for determining refunds for Taxes paid, the amount of
which is not susceptible to precise determination, (B) a mechanism for
ensuring the tax-free importation, use, and re-exportation of goods,
services, or the personal belongings of individuals (including all
Providers) described in paragraph (i)(2) of this Section 2.3(e), (C) a
requirement for the provision by the Government of a tax-exemption
certificate which expressly includes, inter alia, the thirty (30) day
refund requirement of Section 2.3(e)(iii), and (D) any other
appropriate Government action to facilitate the administration of this
Section 2.3(e).
(f) Alteration. The Government shall ensure that no MCC Funding,
Accrued Interest nor Program Assets shall be subject to any
impoundment, rescission, sequestration or any provision of law now or
hereafter in effect in the Republic of Benin that would have the effect
of requiring or allowing any impoundment, rescission or sequestration
of any MCC Funding, Accrued Interest or Program Asset.
(g) Liens or Encumbrances. The Government shall ensure that no MCC
Funding, Accrued Interest, or Program Assets shall be subject to any
lien, attachment, enforcement of judgment, pledge, or encumbrance of
any kind (each a ``Lien''), except with the prior approval of MCC in
accordance with Section 3(c) of Annex I, and in the event of the
imposition of any Lien not so approved, the Government shall promptly
seek the release of such Lien and if required by final non-appealable
order, shall pay any amounts owed to obtain such release; provided,
however, the Government shall apply national funds to satisfy its
obligations under this Section 2.3(g) and no MCC Funding, Accrued
Interest, or Program Assets may be applied by the Government in
satisfaction of its obligations under this Section 2.3(g).
(h) Other Limitations. The Government shall ensure that the use or
treatment of MCC Funding, Accrued Interest, and Program Assets shall be
subject to and in conformity with such other limitations (i) as
required by the applicable law of the United States of America now or
hereafter in effect during the Compact Term, (ii) as advisable under or
required by applicable United States Government policies now or
hereafter in effect during the Compact Term, or (iii) to which the
Parties may otherwise agree in writing.
(i) Utilization of Goods, Services and Works. The Government shall
ensure that any Program Assets, services, facilities or works funded in
whole or in part (directly or indirectly) by MCC Funding, unless
otherwise agreed by the Parties in writing, shall be used solely in
furtherance of this Compact.
(j) Notification of Applicable Laws and Policies. MCC shall notify
the Government of any applicable United States law or policy affecting
the use or treatment of MCC Funding, whether or not specifically
identified in this Section 2.3, and shall provide to the Government a
copy of the text of any such applicable law and a written explanation
of any such applicable policy.
Section 2.4 Incorporation; Notice; Clarification.
(a) The Government shall include, or ensure the inclusion of, all
of the requirements set forth in Section 2.3 in all Supplemental
Agreements to which MCC is not a party and shall use its best efforts
to ensure that no such Supplemental Agreement is implemented in
violation of the prohibitions set forth in Section 2.3.
(b) The Government shall ensure notification of all of the
requirements set forth in Section 2.3 to any Provider and all relevant
officers, directors, employees, agents, representatives, Affiliates,
contractors, sub-contractors, grantees and sub-grantees of any
Provider. The term ``Provider'' shall mean (i) MCA-Benin and any
Government Affiliate or Permitted Designee involved in any activities
in furtherance of this Compact or (ii) any third party who receives at
least USD $50,000 in the aggregate of MCC Funding (other than employees
of MCA-Benin) during the Compact Term or such other amount as the
Parties may agree in writing, whether directly from MCC, indirectly
through Re-Disbursements, or otherwise.
(c) In the event the Government or any Provider requires
clarification from
[[Page 12940]]
MCC as to whether an activity contemplated to be undertaken in
furtherance of this Compact violates or may violate any provision of
Section 2.3, the Government shall notify, or ensure that such Provider
notifies, MCC in writing and provide in such notification a detailed
description of the activity in question. In such event, the Government
shall not proceed, and shall use its best efforts to ensure that no
relevant Provider proceeds, with such activity, and the Government
shall ensure that no Re-Disbursements shall be made for such activity,
until MCC advises the Government or such Provider in writing that the
activity is permissible.
Section 2.5 Refunds; Violation.
(a) Notwithstanding the availability to MCC, or exercise by MCC of,
any other remedies, including under international law, this Compact, or
any Supplemental Agreement:
(i) If any amount of MCC Funding or Accrued Interest, or any
Program Asset, is used for any purpose prohibited under this Article II
or otherwise in violation of any of the terms and conditions of this
Compact, any guidance in any Implementation Letter, or any Supplemental
Agreement between the Parties, MCC may, upon written notice, require
the Government to repay promptly to MCC to an account designated by MCC
or to others as MCC may direct the amount of such misused MCC Funding
or Accrued Interest, or the cash equivalent of the value of any misused
Program Asset, in United States Dollars, plus any interest that accrued
or would have accrued thereon, within thirty (30) days after the
Government is notified, whether by MCC or other duly authorized
representative of the United States Government, of such prohibited use;
provided, however, the Government shall apply national funds to satisfy
its obligations under this Section 2.5(a)(i) and no MCC Funding,
Accrued Interest, nor Program Assets may be applied by the Government
in satisfaction of its obligations under this Section 2.5(a)(i); and
(ii) If all or any portion of this Compact is terminated or
suspended and upon the expiration of this Compact, the Government
shall, subject to the requirements of Sections 5.4(e) and 5.4(f),
refund, or ensure the refund, to MCC to such account(s) designated by
MCC the amount of any MCC Funding, plus any Accrued Interest, promptly,
but in no event later than thirty (30) days after the Government
receives MCC's request for such refund; provided, that if this Compact
is terminated or suspended in part, MCC may request a refund for only
the amount of MCC Funding, plus any Accrued Interest, then allocated to
the terminated or suspended portion; provided, further, that any refund
of MCC Funding or Accrued Interest shall be to such account(s) as
designated by MCC.
(b) Notwithstanding any other provision in this Compact or any
other agreement to the contrary, MCC's right under this Section 2.5 for
a refund shall continue during the Compact Term and for a period of (i)
five (5) years thereafter or (ii) one (1) year after MCC receives
actual knowledge of such violation, whichever is later.
(c) If MCC determines that any activity or failure to act violates,
or may violate, any Section in this Article II, MCC may refuse any
further MCC Disbursements for or conditioned upon such activity, and
may take any action to prevent any Re-Disbursement related to such
activity.
Section 2.6 Bilateral Agreement. All MCC Funding shall be
considered United States assistance under the Economic, Technical and
Related Assistance Agreement by and between the Government of the
United States of America and the Government of the Republic of Benin,
dated May 27, 1961, as amended from time to time (the ``Bilateral
Agreement''). If there are conflicts or inconsistencies between any
parts of this Compact and the Bilateral Agreement, as either may be
amended from time to time, the provisions of this Compact shall prevail
over those of the Bilateral Agreement.
Article III. Implementation
Section 3.1 Implementation Framework. This Compact shall be
implemented by the Parties in accordance with this Article III and as
further specified in the Annexes and in relevant Supplemental
Agreements.
Section 3.2 Government Responsibilities.
(a) The Government shall have principal responsibility for
oversight and management of the implementation of the Program (i) in
accordance with the terms and conditions specified in this Compact and
relevant Supplemental Agreements, (ii) in accordance with all
applicable laws then in effect in Benin, and (iii) in a timely and
cost-effective manner and in conformity with sound technical, financial
and management practices (collectively, the ``Government
Responsibilities''). Unless otherwise expressly provided, any reference
to the Government Responsibilities or any other responsibilities or
obligations of the Government herein shall be deemed to apply to any
Government Affiliate and any of their respective directors, officers,
employees, contractors, sub-contractors, grantees, sub-grantees, agents
or representatives.
(b) The Government shall ensure that no person or entity shall
participate in the selection, award, administration, or oversight of a
contract, grant or other benefit or transaction funded in whole or in
part (directly or indirectly) by MCC Funding, in which (i) the entity,
the person, members of the person's immediate family or household or
his or her business partners, or organizations controlled by or
substantially involving such person or entity, has or have a direct or
indirect financial or other interest or (ii) the person or entity is
negotiating or has any arrangement concerning prospective employment,
unless such person or entity has first disclosed in writing to the
Government the conflict of interest and, following such disclosure, the
Parties agree in writing to proceed notwithstanding such conflict. The
Government shall ensure that no person or entity involved in the
selection, award, administration, oversight or implementation of any
contract, grant or other benefit or transaction funded in whole or in
part (directly or indirectly) by MCC Funding shall solicit or accept
from or offer to a third party or seek or be promised directly or
indirectly for itself or for another person or entity any gift,
gratuity, favor or benefit, other than items of de minimis value and
otherwise consistent with such guidance as MCC may provide from time to
time.
(c) The Government shall not designate any person or entity,
including any Government Affiliate, to implement, in whole or in part,
this Compact or any Supplemental Agreement between the Parties
(including any Government Responsibilities or any other
responsibilities or obligations of the Government under this Compact or
any Supplemental Agreement between the Parties) or to exercise any
rights of the Government under this Compact or any Supplemental
Agreement between the Parties, except as expressly provided herein or
with the prior written consent of MCC; provided, however, the
Government may designate MCA-Benin or, with the prior written consent
of MCC, such other mutually acceptable persons or entities, (each, a
``Permitted Designee'') to implement some or all of the Government
Responsibilities or any other responsibilities or obligations of the
Government or to exercise any rights of the Government under this
Compact or any Supplemental Agreement between the Parties each in
accordance with the terms and conditions set forth
[[Page 12941]]
in this Compact or such Supplemental Agreement (referred to herein
collectively as ``Designated Rights and Responsibilities'').
Notwithstanding any provision herein or any other agreement to the
contrary, no such designation shall relieve the Government of such
Designated Rights and Responsibilities, for which the Government shall
retain ultimate responsibility. In the event that the Government
designates any person or entity, including any Government Affiliate, to
implement any portion of the Government Responsibilities or other
responsibilities or obligations of the Government, or to exercise any
rights of the Government under this Compact or any Supplemental
Agreement between the Parties, in accordance with this Section 3.2(c),
then the Government shall (i) cause such person or entity to perform
such Designated Rights and Responsibilities in the same manner and to
the full extent to which the Government is obligated to perform such
Designated Rights and Responsibilities, (ii) ensure that such person or
entity does not assign, delegate or contract (or otherwise transfer)
any of such Designated Rights and Responsibilities to any person or
entity and (iii) cause such person or entity to certify to MCC in
writing that it will so perform such Designated Rights and
Responsibilities and will not assign, delegate, or contract (or
otherwise transfer) any of such Designated Rights and Responsibilities
to any person or entity without the prior written consent of MCC.
(d) The Government shall, upon a request from MCC, execute, or
ensure the execution of, an assignment to MCC of any cause of action
which may accrue to the benefit of the Government, a Government
Affiliate or any Permitted Designee, including MCA-Benin, in connection
with or arising out of any activities funded in whole or in part
(directly or indirectly) by MCC Funding.
(e) The Government shall ensure that (i) no decision of MCA-Benin
is modified, supplemented, unduly influenced or rescinded by any
governmental authority, except by a non-appealable judicial decision,
and (ii) the authority of MCA-Benin shall not be expanded, restricted,
or otherwise modified, except in accordance with this Compact, the
Governance Agreement, the Governing Documents or any other Supplemental
Agreement between the Parties.
(f) The Government shall ensure that all persons and individuals
that enter into agreements to provide goods, services or works under
the Program or in furtherance of this Compact shall do so in accordance
with the Procurement Guidelines and shall obtain all necessary
immigration, business and other permits, licenses, consents and
approvals to enable them and their personnel to fully perform under
such agreements.
Section 3.3 Government Deliveries. The Government shall proceed,
and cause others to proceed, in a timely manner to deliver to MCC all
reports, notices, certificates, documents or other deliveries required
to be delivered by the Government under this Compact or any
Supplemental Agreement between the Parties, in form and substance as
set forth in this Compact or in any such Supplemental Agreement.
Section 3.4 Government Assurances. The Government hereby provides
the following assurances to MCC that as of the date this Compact is
signed:
(a) The information contained in the Proposal and any agreement,
report, statement, communication, document or otherwise delivered or
otherwise communicated to MCC by or on behalf of the Government on or
after the date of the submission of the Proposal (i) are true, correct
and complete in all material respects and (ii) do not omit any fact
known to the Government that if disclosed would (A) alter in any
material respect the information delivered, (B) likely have a material
adverse effect on the Government's ability to effectively implement, or
ensure the effective implementation of, the Program or any Project or
to otherwise carry out its responsibilities or obligations under or in
furtherance of this Compact, or (C) have likely adversely affected
MCC's determination to enter into this Compact or any Supplemental
Agreement between the Parties.
(b) Unless otherwise disclosed in writing to MCC, the MCC Funding
made available hereunder is in addition to the normal and expected
resources that the Government usually receives or budgets for the
activities contemplated herein from external or domestic sources.
(c) This Compact does not conflict and will not conflict with any
international agreement or obligation to which the Government is a
party or by which it is bound.
(d) No payments have been (i) received by any official of the
Government or any other government body in connection with the
procurement of goods, services or works to be undertaken or funded in
whole or in part (directly or indirectly) by MCC Funding, except fees,
taxes, or similar payments legally established in the Republic of Benin
(subject to Section 2.3(e)) and consistent with the applicable
requirement of Beninese law or (ii) made to any third party, in
connection with or in furtherance of this Compact, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended (15
U.S.C. 78a et seq.).
Section 3.5 Implementation Letters; Supplemental Agreements.
(a) MCC may, from time to time, issue one or more letters to
furnish additional information or guidance to assist the Government in
the implementation of this Compact (each, an ``Implementation
Letter''). The Government shall apply such guidance in implementing
this Compact.
(b) The details of any funding, implementing and other arrangements
in furtherance of this Compact may be memorialized in one or more
agreements between (A) the Government (or any Government Affiliate or
Permitted Designee) and MCC, (B) MCC and/or the Government (or any
Government Affiliate or Permitted Designee) and any third party,
including any of the Providers or Permitted Designee or (C) any third
parties where neither MCC nor the Government is a party, before, on or
after the Entry into Force (each, a ``Supplemental Agreement''). The
Government shall deliver, or cause to be delivered, to MCC within five
(5) days of its execution a copy of any Supplemental Agreement to which
MCC is not a party.
Section 3.6 Procurement; Awards of Assistance.
(a) The Government shall ensure that the procurement of all goods,
services and works by the Government or any Provider in furtherance of
this Compact shall be consistent with the procurement guidelines (the
``Procurement Guidelines'') reflected in a Supplemental Agreement
between the Government (and/or a mutually acceptable Government
Affiliate or MCA-Benin) and MCC (the ``Procurement Agreement''), which
Procurement Guidelines shall include the following requirements:
(i) Internationally accepted procurement rules with open, fair and
competitive procedures are used in a transparent manner to solicit,
award and administer contracts, grants, and other agreements and to
procure goods, services and works;
(ii) Solicitations for goods, services, and works shall be based
upon a clear and accurate description of the goods, services or works
to be acquired;
(iii) Contracts shall be awarded only to qualified and capable
contractors that have the capability and willingness to perform the
contracts in accordance with the terms and conditions of the
[[Page 12942]]
applicable contracts and on a cost effective and timely basis; and
(iv) No more than a commercially reasonable price, as determined,
for example, by a comparison of price quotations and market prices,
shall be paid to procure goods, services, and works.
(b) The Government shall maintain, and shall use its best efforts
to ensure that all Providers maintain, records regarding the receipt
and use of goods, services and works acquired in furtherance of this
Compact, the nature and extent of solicitations of prospective
suppliers of goods, services and works acquired in furtherance of this
Compact, and the basis of award of contracts, grants and other
agreements in furtherance of this Compact.
(c) The Government shall use its best efforts to ensure that
information, including solicitations, regarding procurement, grant and
other agreement actions funded (or to be funded) in whole or in part
(directly or indirectly) by MCC Funding shall be made publicly
available in the manner outlined in the Procurement Guidelines or in
any other manner agreed upon by the Parties in writing.
(d) The Government shall ensure that no goods, services or works
may be funded in whole or in part (directly or indirectly) by MCC
Funding which are procured pursuant to orders or contracts firmly
placed or entered into prior to the Entry into Force, except as the
Parties may otherwise agree in writing.
(e) The Government shall ensure that MCA-Benin and any other
Permitted Designee follows, and uses its best efforts to ensure that
all Providers follow, the Procurement Guidelines in procuring
(including soliciting) goods, services and works and in awarding and
administering contracts, grants and other agreements in furtherance of
this Compact, and shall furnish MCC evidence of the adoption of the
Procurement Guidelines by MCA-Benin no later than the time specified in
the Disbursement Agreement.
(f) The Government shall include, or ensure the inclusion of, the
requirements of this Section 3.6 into all Supplemental Agreements
between the Government, any Government Affiliate or Permitted Designee
or any of their respective directors, officers, employees, Affiliates,
contractors, sub-contractors, grantees, sub-grantees, representatives
or agents, on the one hand, and a Provider, on the other hand.
Section 3.7 Policy Performance; Policy Reforms. In addition to the
specific policy and legal reform commitments identified in Annex I and
the Schedules thereto, the Government shall seek to maintain and to
improve its level of performance under the policy criteria identified
in Section 607 of the Act, and the MCA selection criteria and
methodology published by MCC pursuant to Section 607 of the Act from
time to time (``MCA Eligibility Criteria'').
Section 3.8 Records and Information; Access; Audits; Reviews.
(a) Reports and Information. The Government shall furnish to MCC,
and shall use its best efforts to ensure that all Providers and any
other third party receiving MCC Funding, as appropriate, furnish to the
Government (and the Government shall provide to MCC), any records and
other information required to be maintained under this Section 3.8 and
such other information, documents and reports as may be necessary or
appropriate for the Government to effectively carry out its obligations
under this Compact, including under Section 3.12.
(b) Government Books and Records. The Government shall maintain,
and shall use its best efforts to ensure that all Providers maintain,
accounting books, records, documents and other evidence relating to
this Compact adequate to show, to the satisfaction of MCC, without
limitation, the use of all MCC Funding, including all costs incurred by
the Government and the Providers in furtherance of this Compact, the
receipt, acceptance and use of goods, services and works acquired in
furtherance of this Compact by the Government and the Providers,
agreed-upon cost sharing requirements, the nature and extent of
solicitations of prospective suppliers of goods, services and works
acquired by the Government and the Providers in furtherance of this
Compact, the basis of award of Government and other contracts and
orders in furtherance of this Compact, the overall progress of the
implementation of the Program, and any documents required by this
Compact or any Supplemental Agreement between the Parties or reasonably
requested by MCC upon reasonable notice (``Compact Records''). The
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