Plans are at an advanced stage to disband the Local Development Fund (LDF) and National Local Government Finance Committee (NLGFC), two agencies used in financing development projects at local government level.
The National Local Government Finance Commission (NLGFC) is set to be born from a merger of the two institutions and will be responsible for combined mandate of the outgoing institutions.
In an interview yesterday, Minister of Local Government and Rural Development Kondwani Nankhumwa said the development follows criticism in 2015 over the two organs’ failure to manage abuse of resources, particularly LDF, Constituency Development Fund (CDF) and District Development Fund (DDF).
He said: “Basically, this is part of devolution of decentralisation systems. In the local government system, there is LDF which finances development projects in various councils and NLGFC which finances operations of various councils.
“Since 2010, government has been contemplating a major review and in 2015 there was a Cabinet resolution to establish a function review.”
The minister said the Cabinet-sanctioned function review through a multi-ministerial committee recommended the disbanding of the two institutions.
He said: “A working committee comprising officials from Ministry of Local Government, Ministry of Finance, Economic Planning and Development and the Department of Human Resource Management and Development embarked on a functions review and we now have a report which is recommending a new organisation with merged staff.”
But while stating that a final resolution is yet to be reached by Cabinet, Nankhumwa indicated that it was likely the recommendation would be adopted.
He said he was optimistic that having everything under one roof will ensure coordination of resources.
Said Nankhumwa: “In operation funds there have been little abuse but in projects such as DDF, CDF there was that abuse. But once things are under one roof, there will be better coordination and monitoring the use of the resources.”
Reacting to the development, Parliament’s Public Accounts Committee (PAC) chairperson Alekeni Menyani, whose oversight committee has repeatedly raised red flags over abuse in the local government financing system, welcomed the decision as a move in the right direction.
He said: “We are happy to hear this news. We cannot do without LDF until a moment when the system has been cleaned and we are confident again that public funds are being used prudently.
“What is wrong is that the current systems are prone to abuse and unless the systems are improved, any new institution will have to face a test on whether it’s better than the current one.”
LDF spokesperson Booker Matemvu also confirmed the pending change in an interview, saying the technical committee submitted the report on the matter in November.
But he said: “The right words would be to describe the development as a merger instead of disbandment of the two institutions. The technical committee had an opportunity to look at the final report but issues such as employment would come under review as part of the functions review.”
Recently, Nation Publications Limited (NPL) brands—The Nation, Weekend Nation and Nation on Sunday—exposed, through an investigative journalism project, abuse of funds under LDF, DDF and CDF. The project exposed how millions of taxpayers’ money went down the drain due to mismanagement and outright embezzlement.