Executive Director of National Local Government Finance Committee, Dr. Kondwani Santhe, has challenged municipalities, district and city councils to diversify their revenue base for the sustainability of their financial autonomy and improved public service delivery.
Santhe was speaking Tuesday in Mzuzu during Malawi Local Government Association (MALGA) Financial Managers Network (FINET) Symposium and the 5th Annual Conference for directors of finance from local authorities across the country.
“All councils in Malawi generate revenue and spend it all 100 percent; as such, they should utilize what is provided for in Local Government Act to maximize their revenue. The Act outlines areas from which they can generate revenue.
“They have unlimited sources of revenue, such as various forms of licenses, parking fees, property rates, fines as penalties for breaking by-laws, development services fees, and building and structure permits, among others,” said Santhe.
Commenting on seeded revenue from Roads Fund Administration, he said that government is making strides in providing the same to municipal and city councils and that the facility would be extended to district councils.
Executive Director for MALGA, Hadrod Mkandawire, said there cannot be effective decentralization without fiscal devolution as local authorities require resources to better serve people.
He then called local authorities to be vigilant in raising own revenue which can address government funding gaps and deficits whilst exercising prudent financial management.
Mkandawire, however, said that local authorities face several challenges in revenue generation, as all lucrative revenue sources like fuel levy, motor vehicle registration fees, and gambling fees among others are dominated by central government, leaving negligible ones to local authorities.
In her remarks, chairperson for MALGA FINET, Ellen Kayira, challenged councils to think out of the box for them to continue operating properly amidst lack of adherence to cash flows, rate and erratic funding by central government.
“In decentralization, councils are expected to operate as autonomous entities and they are supposed to be innovative in creating revenue sources for operations and service delivery.
“For instance, Nkhata Bay District Council has a paying ward at Nkhata Bay District Hospital and it uses the proceeds to procure fuel, cleaning materials and essential medicine, hence delivering services as it is required,” said Kayira.
The conference was held under the theme ‘Enhanced Local Revenue Generation and Improved Financial Management Towards Malawi 2063’.
