Local public finances are our new focus

With billions of kwachas going directly to local councils for various development projects in districts, towns and cities thanks to the deepening of decentralisation, local governments have become increasingly important in Malawi.

As a leading media house, The Nation believes that while ensuring that the central government is transparent and accountable in the use of public resources is our primary concern, there is need to aggressively expand our attention to local governments, who have direct control over resources meant for poor communities

The council secretariats also play a critical role in service delivery, promotion of participatory planning and budgeting as well as encouraging a demand-driven development agenda—all of which help ensure community ownership of development initiatives and achievement of better outputs and outcomes, which ultimately lead to poverty reduction.

While the link between fiscal decentralisation and poverty reduction always attracts duelling views among development practitioners, consensus is emerging today that decentralisation has bore positive outcomes in the generation and redistribution of income, entrenching an ownership culture of development projects among communities, local empowerment, active participation of the poor and cushioning their vulnerability to external shocks.

There is also agreement that poverty is local; hence, it needs local solutions that follow a community driven development (CDD) approach.

In addition, there are efficiency gains made when local knowledge and expertise is used to identify and satisfy the needs and preferences of local communities.

I contend that councils have a more in-depth understanding of the specific needs of the people than officials stationed at Capital Hill because they are the ones who work and live with beneficiaries.

Granted, there are some projects that can have maximum impact at the macro level if implemented from the centre even if the area identified for the project is within the jurisdiction of a particular council.

This is why Malawi’s decentralised system is calibrated in such a way that it clarifies, through various legal and policy instruments, what can be done better from the centre and what should best be left to the council.

In terms of fiscal decentralisation and democratic governance, an explicit link exists between the two.

And there is no doubt that fiscal decentralisation in Malawi has brought government closer to the people it serves.

Communities now have a much bigger say on decisions that affect their lives. We now have clear participatory planning processes in councils that are bottom-up rather than top-to-bottom.

They start from communities through their democratically elected village development committees (VDCs), to area development committees (ADCs) before district executive committees (DECs) consolidate communities’ prioritised needs into District Development Plans and align them to the Malawi Growth and Development Strategy (MGDS).

These CDD processes are in line with the country’s current Decentralisation Policy that government approved in 1998.

This policy has devolved powers and functions of governance and development to local councils, which used to be called Local Assemblies before the Local Government Act was amended in 2010. Apart from transferring political and administrative powers to councils, government has also made rapid progress in fiscal decentralisation, which is a transfer of fiscal authority to local administrative units.

Fiscal decentralisation has given councils a wider mandate to raise own revenue. For example, the Central Government in Lilongwe has empowered them to levy local taxes, which are supplemented by resources from the Capital Hill and are put under the councils’ direct control for the benefit of the poor.

That is the whole essence of this page—dedicated to coverage of economic governance issues at local level.

I believe a lot of stakeholders will be interested in this noble cause. These partners include those in government, donor community, private sector, civil society and the faith community.

Yet, at the centre of local economic governance in Malawi, specifically enabled by fiscal decentralisation, is the National Local Government Finance Committee (NLGFC), a constitutional body established in 2001 under Section 149 of the Republican Constitution to facilitate the process of fiscal decentralisation and financial management.

The committee basically exists to oversee council resources, which makes it a key agent of the country’s decentralisation process, especially given the amount of money being transferred to councils keeps rising each fiscal year.

Considering how central NLGFC is to the local economic governance, The Nation asked the committee to be writing a column on this page aimed at providing a framework of transparency and accountability in which councils operate and on whose basis various watch dogs, including The Nation, can take to task local government leaders.

This column, NLGFC Corner, will be anchored by stories sorely focused on local governance issues. The column starts next Wednesday.

I, therefore, invite all patriots across the country to give us tips on development issues in your localities for The Nation coverage.

Get in touch with Bright Kumwenda, the Business Editor on 0888 209027 or e-mail him on bkumwenda@mwnation.com. You can also contact Ephraim Munthali, Deputy Editor on 0888954584 or emunthali@mwnation.com or newsroombt@mwnation.com.