Strengthening financial sustainability in Zimbabwe
24 April 2020
CLGF has partnered with the Ministry of Local Government in Zimbabwe on a project to strengthen the financial sustainability of local authorities.
Local authorities in Zimbabwe are facing financial challenges which have reduced the quality and range of the services they are able to provide, as well as the development targets they can achieve. There is a widening gap between the availability of financial resources and the expenditure needed to cover service delivery and development costs.
The formal recognition of local government in the Constitution has stimulated debate about the ideal resource mobilisation and the sharing of a framework between central government and lower tiers. Recognising that local authorities are the tier of government closest to communities, the Constitution entitles them to ‘not less than five per cent of national fiscal resources. The existing fiscal framework is, however, steeped in sub-national tiers of government, which means there are not enough resources to allow local authorities to fulfil all their functions. Most local authorities in Zimbabwe are yet to fully understand and embrace budget development as a policy setting process, or involving the public.
It is against this background that CLGF is supporting local authority financial sustainability. Driven by the theory that if local authorities are financed on a stable basis, using effective budget formulation, concerted revenue collection and management, they will be able to lead in development and service delivery in their areas of jurisdiction.
The project supported several platforms where the Ministry of Local Government provided training and budget analysis, focusing on strengthening the revenue side of local authority budgets. The first intervention on Programme Based Budgeting provided training and capacity-building to almost 800 senior and middle managers from all 92 local authorities; this has resulted in improved understanding and preparation for the 2020 budgets, using the new system.
Direct ministerial involvement
At workshops organised by CLGF, the Minister of Local Government articulated various statutory provisions and practical strategies that local authorities can use to leverage more revenue income and collection, with a direct link to improving service delivery. CLGF Project Manager, Leopold Bhoroma, said: "The direct involvement of the Minister in strengthening local authority budget and revenue collection strategies is making a huge impact in improving budgets, particularly on the income side."
At the recent workshop held at the beginning of March and attended by town clerks, town secretaries, chief executives and finance directors from all 92 local authorities, Minister July Moyo Minister provided a detailed analysis of the 2020 budgets. He laid the legal foundation underpinning the Program Based Budgeting Process, highlighting the powers of local authorities, such as raising taxes and the revenue sources at their disposal; as well as describing the areas that need to be improved. The Minister also articulated the policy and use of intergovernmental transfer funds that are currently being disbursed by Central Government under Section 301 of the Constitution. This has been very much appreciated because of the significant difference and contribution to local government funding. It is crucial that the engagement between local authorities and central government continues to ensure that the disbursed funds are properly used for the development of local authority functions and development work.
The feedback from local authorities and other local government stakeholders points toward the engagement between the Ministry and local authorities - particularly being led by the Minister - as being an extremely effective intervention towards improving financial sustainability at the local level. This type of platforms is regarded as something that has been sadly missing within the local government sector.
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