EXECUTIVE SUMMARY __________________________________________________________________________ measures to address the constraints noted – particularly with regard to the external sector, financial system, debt relief and privatisations. 3.28 Sectoral and microeconomic policies. It was noted that the implementation of programme budgets in the agricultural sector encountered difficulties of resource mobilisation and mastery of budgetary procedures by the players. In the industrial sector, administrative delays and barriers to investment and privatisation contribute significantly to increasing operating costs, thus affecting the pace of growth and competitiveness of enterprises. 3.29 The major obstacles to economic growth and poverty reduction are structural. They concern the rigidity of the production machinery and structure, the low level of investment, limited diversity of exports (dominated by cotton), the noninclusiveness of growth, and the low level of job creation. This situation makes the economy very vulnerable to external shocks and weakens the country’s balances. 3.30 With this in mind, the APR Panel recommends measures and actions that would meet the challenges and address the constraints, particularly in: (i) macroeconomic and sectoral governance; (ii) forecasts and statistics; and (iii) the reduction of vulnerability to exogenous shocks. 3.31 Implementation of sound, transparent and predictable economic policies. Benin has defined a long-term vision – Alafia Bénin 2025 – which has been translated into Benin’s strategic development orientations and which will be implemented under the GPRS (2007-2011). The vision seeks to build a “leading nation, a well-governed, united and peaceful country, with a prosperous and competitive economy, cultural influence and social wellbeing”. The country has made significant efforts in cleaning up the macroeconomic framework, defining sectoral strategies and allocating budgetary resources. However, the projection of an emerging Benin requires a number of economic policies that are not yet clear. These include the nature and model of economic growth, its sustainability, inclusiveness and the diversification of its productive base; the reconfiguration of the national space and its adaptation to the strategy of growth poles; the country’s capacity to address the focus and challenges of the current and emerging Benin; and finally, translation of the vision and its six strategic development orientations into appropriate sectoral policies and programmes. 3.32 The transparency and predictability of economic policies require that the control of economic governance and public resource management should be effective and firm. This function suffers from serious weaknesses, thereby fostering a general climate of financial misappropriation, illegal enrichment, corruption and impunity. It was noted that there were no detailed reports on budget implementation – in terms of concrete results in the implementation of development programmes – that would facilitate assessment of the effectiveness and quality of public expenditures in development programmes. The CRM also noted that the cleaning up of the macroeconomic framework is not development-oriented, since it does not contribute to poverty reduction. Given the importance of the informal sector and the transit economy, if the 13