EXECUTIVE SUMMARY __________________________________________________________________________ only be very slow. Nevertheless, growth resumed in 2006, reaching a rate of 4.1%, with optimistic prospects for 2007 and 2008. 2.3 Benin and the challenges facing its government 2.8 Despite its encouraging and rapid economic recovery since 2006, Benin has experienced severe and persistent problems, including significant levels of poverty (one-third of the population is on the poverty threshold); corruption; a large informal economy; lack of infrastructure; and a barely competitive agricultural and industrial sector. Moreover, the importance of its trade with neighbouring countries makes Benin vulnerable to upheavals in the region. 2.9 Still, the national authorities remain optimistic about Benin’s inevitable resurgence in the years to come. To this end, the policy of the current government is based on four priorities: (i) human resources; (ii) consultative governance; (iii) development of an entrepreneurial spirit; and (iv) the construction of new infrastructure. In the country’s ‘Alafia Bénin 2025’ framework, the government’s ambition is to eventually make Benin an emerging country. This vision is highlighted in a strategic policy document for the period 2006-2011, which has as its main strategic thrusts the reconstruction of the administration; promotion of economic recovery; resolute continuation of structural reforms (harbours, telecommunications, electrical energy and water); development of human capital (providing free primary education); and the promotion of fundamental development through decentralisation. Underpinning these thrusts is the Growth and Poverty Reduction Strategy (GPRS – second-generation) for the 2007-2009 period. This strategy constitutes the frame of reference for dialogue with the country’s Technical and Financial Partners (TFPs) with a view to mobilising and coordinating resources. 2.10 The preferred tool for implementing developmental policies and programmes is an efficient public administration with capacity to fulfil the functions of a responsible public service. This remains a major challenge to democracy and development in Benin. Being fully aware of this, the government’s developmental policy is geared to rehabilitate the administration in its entirety through the effective implementation of a series of reforms. 2.11 It has to be said that Benin has no shortage of assets to provide a basis for its development. In fact, despite its modest economic weight in the subregion, Benin plays a central role as a trade centre for Niger, and particularly for its neighbour Nigeria. The global business environment is also favourable following the country’s implementation of a modern commercial legal system and a new investment code with related tax incentives. Benin’s political stability is an added factor to promote the private sector and attract foreign investors. 5