For councils to operate as distinct local government entities, they need to have resources.  In this discourse, I set out to describe the three main sources of revenue for councils in order to bridge the information gap that exist among different stakeholders regarding revenue sources of the council which in itself brings about a mismatch in expectations from such stakeholders and what councils actually deliver to the citizenry.

To begin with, Councils’ existence as local government areas came in the wake of implementation of National Decentralization Policy by Malawi Government since 1998. The policy defined the local government areas (35) which comprised districts, towns, municipals and cities with the view of improving service delivery to the communities. These local government areas have been the main implementing agents of Malawi Government Policies. These councils have been empowered through the Decentralization Policy  and Local Government Act to implement the functions which have since been devolved from line ministries to the local government level. The Local Government Act second schedule defines the sources of revenue for councils to include: central government transfers, locally generated revenue and funds from Development partners as well Non-governmental organizations.

Central government transfers to councils include all those resources which are sent to councils in order for the council to implement sectoral policies at local level as well as operational resources which are given to councils to facilitate implementation for the same. The number of sectors that have devolved over time has grown from three in 2005/6 financial year to currently sixteen. Among these include: education, health, agriculture, water, gender, immigration, irrigation, trade, housing, National Registration Bureau (NRB) youth and sports. These are otherwise known as devolved funds. Central government transfers also include the funds which are meant for implementation of development projects in councils such as District Development fund (DDF), Infrastructure Development Fund (IDF), Constituency Development Fund (CDF) as well as Boreholes Fund. Urban councils are limited to IDF and specifically for cities they also access city roads rehabilitation resources (through Roads Fund Administration) as well. A typical district council gets District Development Fund, Constituency Development Fund and Boreholes Funds which vary across council depending on some selected parameters. There is no Constituency Development Fund that is allocated to municipals and town councils because the CDF are already conveniently attached to the district except for cities which are relatively bigger.

The second source of revenue for councils is locally generated revenue. Councils are empowered by the local government act 1998/2010 through to collect local revenue in their respective areas of jurisdiction. Five main sources of revenue include: Income from market establishments, income from commercial ventures, fees and service charges, licenses and permits and property rates. Only urban councils can collect from all these sources, but a typical district council does not collect property rates. These resources are used by the councils at that level without sending these resources to the famous Malawi Government Account NUMBER ONE. The LGA also defined, long term revenue sources that are expected to be ceded to councils as follows: Toll gates, casino and gambling fees, motor vehicle registration fees, fuel levy and industrial registration. These have up to now not been ceded to councils for different reasons.

Finally, the councils also get resources for implementing various projects through development partners as well as Non-governmental organization. These resources may be sent directly to councils or the relevant partners may donate in kind or in whichever way as agreed by the two parties. They may set the accountability systems as deemed convenient and consistent with Public Finance Management Act and related statues.

The current status for these revenue sources is around K73 billion using the 2020/21 budget estimates. Central government transfers were estimated around K53 billion, locally generated revenue was estimated to contribute K20 billion. In terms of projects coordinated directly by NLGFC (Social Cash Transfer, Enhanced Public Work Programme (EPWP) K893 million and K12 billion under Social Support for Resilient Livelihood Programme coming to a total of K13 billion was estimated to be disbursed to councils in the 2020/21 financial year. There is no concrete data for Development partners and Non-governmental organizations working in all the councils as they do not fund the councils through NLGFC.

A NLGFC our huge role has been to ensure that these public resources are used to improve the standards of the citizenry. Specifically, allocating central government transfer, monitoring the utilization of resources in accordance with Public Finance Management Act, ensuring that councils are optimizing their local revenue collection potential and ensuring financial accountability systems are in place. Due to the convenience of our institution and expertise, NLGFC is also coordinating implementation of various world Bank funded programmes such as Social  Cash Transfer, Enhanced Public Works Programme, SSRLP and the recently launched Governance to Enable Service Delivery (GESD). The LGA also defined, long term revenue sources that are expected to be ceded to councils as follows: Toll gates, casino and gambling fees, motor vehicle registration fees, fuel levy and industrial registration. These have up to now not been ceded to councils for different reasons.

The pilot Enhanced Public Works Programme (EPWP) is helping people from Traditional Authority (TA) Mwase create assets for both the community and individuals.

The interventions under the programme include afforestation and land resource management where the communities have planted trees that they hope to turn into community forests apart from conserving soil which will help in more crop yields.

Foreman supervising the public works activities in the catchment area Patroba Chinyanga said the area is set to have a community forest with the trees that have been planted in bare areas.

We have planted about 15 thousand trees that have all done well. We have different varieties like Nkunkhu, Ntangatanga, Nthethe and Nsangu and in the end we are hopeful that the community will have a big forest, said Chinyanga.

Through working in the sub projects of the EPWP beneficiaries are paid some money which some have also tried to gather assets for their households.

Patricia Zimba, of Feza village who together with her husband look after 12 children and survive on small scale business, decided to buy a pig which she hopes will multiply.

I decided to buy a pig from the money I earned after working in the public works programme. I am hopeful the pig will help me make money after it gives birth, said Zimba.

The assets created gives hope to community to produce tangible resources for future use according to Kasungu EPWP liaison officer Kingster Kathumba.

The implementation of EPWP sub projects in all catchments gives hope of creating more quality assets within a short period of time, said Kathumba.

Kasungu has five catchments under EPWP in Chankhanga, Mphazi, Katcherekhwanya, Chatalala and Mpherere.

National Local Government Finance Committee (NLGFC) is implementing the pilot climate smart EPWP in Kasungu, Lilongwe, Dowa, Nkhotakota, Karonga, Chitipa, Chiradzulu, Blantyre, Balaka and Phalombe.

The crops outlook in Kasungu looks good in most fields promising a good yield for most households.

The prospects of having a good yield has been attributed to the good rains and also the Affordable Input Programme (AIP).

Much as this is the case, the pilot climate smart Enhanced Public Works Programme (EPWP) has also contributed to the good yield.

Chairperson of Mphazi Catchment Area Khamalatha Siliya said most of the farmers who are beneficiaries of EPWP had money to buy fertilizer for their maize fields and now the maize fields look promising.

“The good thing was that the people here received the project with both hands when it came. They were committed to work in the sub projects and in the end got their pay,

“It is with this payment that most beneficiaries had to buy bags of the subsidized fertilizer for their maize fields and the rest of the money used for other needs,” said Siliya.

The hope of yielding more crops through earnings from EPWP is just a bonus to what the beneficiaries have done at Mphazi catchment.

About 18,970 trees have been planted on top of 840 bamboos which most have done well.

The catchment also has other sub projects in soil conservation where they have planted vetiver grass to control soil from being washed away and in agroforestry where fertilizer trees like Gliricidia sepium have been planted in fields.

PCI Malawi, one of the organizations working with communities in combating food insecurity and drought, and its partner Emmanuel International had to visit and appreciate what the communities are doing in Mphazi catchment.

Jam Masebo disaster and risk reduction coordinator for Emmanuel International said he was satisfied and enlightened with the visit.

Masebo said if the community in the catchment can take care of the assets they are creating there will be change.

“It is important for everyone in the committee to know what is happening in the programme and be able to know what needs to be achieved,

He however said councils should also take a huge role in driving the initiative.

“Let these be part of the District Development Plans (DDP) and let councils take a role in monitoring and supervising,” he said.

Team leader for PCI Jones Chimpukuso however urged the catchment committees to always put down in writing whatever they are doing as a committee.

“Documentation of your activities is not there despite the committee meeting most of the times. There is need to have somewhere where things are written down,” said Chimpukuso.

Story Credit: Vincent Khonje, District Information Officer, Kasungu

National Local Government Finance Committee (NLGFC) is implementing the pilot EPWP in Kasungu, Lilongwe, Dowa, Nkhotakota, Karonga, Chitipa, Chiradzulu, Blantyre, Balaka and Phalombe.

Government has officially handed over the magnificent Lunzu Market in Blantyre worth K6144 Million under More Income and Employment in Rural Areas (MIERA) project.

Speaking during the official ceremony on Saturday in Blantyre, deputy minister of Local Government Halima Daud described the German KFW Bank funded market as an essential catalyst in providing socioeconomic environment to boost livelihoods among people living in the rural areas who are the majority of the country’s population.

Said Daud; “This newly constructed modern market will provide farmers, businesses and entrepreneurs with a place and facilities where they can sell their produce and public with a conducive structure to access various products and services and in so doing, Improve their economic status”.

Daud then appealed to Blantyre District Council to come up with ways to make the market exceptional in revenue collection service provision, citizen satisfaction, care and maintenance to ensure a long-lasting structure.

Speaking earlier, Blantyre District Council Chairperson Mussa Chikwakwa said the market has uplifted the face of the district and promised the council will now start raising funds to construct an equally modern bus terminal behind the market.

While appealing to traders to effectively utilize the market, the chairperson also urged the newly elected market leadership to guard facility saying “it is such structures that promote the growth of any economy”.

KFW country director Oliver Gleiss said Lunzu Market was one of the eight markets that had been financed by the bank to a tune of €7 million (K7 billion) with facilitation of the National Local Government Finance Committee (NLGFC).

Other market constructions that have benefited from the project are Sadzi, Goliati, Neno, Nkhatabay, Dyeratu, Chinkhoma and Embangweni.

The MIERA project started in January, 2017 and expected to end December,2020. However, the project was extended by a year due to delayed technical issues.

Story Credits: Loness Gwazanga, District Information Officer, Blantyre

Left to right: Noel Kabambe,  Councillor Wild Ndipo, Commissioner Steve Duwa, James Ali, Abel Mwambinga

Communities around Chikutu catchment area in Karonga district have expressed satisfaction with Enhanced Public Works Programme (EPWP) saying it will assist in reducing land degradation in many parts of the area along river banks.

Chikutu Catchment Area Foreman Nixon Mlenga was in his area, when a team from Karonga district council went to appreciate progress of the programme.

Mlenga said through the EPWP they have been able to control the flow of water along Kasantha river by among other things constructing stone bands, planting trees and banana suckers.

“This river year in and out has been flooding around this area and many houses were swept away, but now we have seen that the water flow has been controlled because of this initiative. We thank government for coming up with this programme,” he said

Karonga district Liaison officer for National Local Government Finance Committee (NLGFC) Geoffrey Ntengula said he was impressed with progress of the work that has been done saying it will control the arable land that was heavily degraded in the past due to run off water.

“I am very impressed with what this community has done here because apart from conserving the environment through constructing stone bands along Kasantha river, they have also planted bananas that will be used as a source of food and income in the near future,” he said.

Ntengula therefore assured the community that NLGFC will continue providing all necessary support for all five catchment areas in Karonga so that it achieves its intended goals.

EPWP is being implemented in ten districts namely Chitipa and Karonga in the North, Nkhota-kota, Kasungu, Dowa and Lilongwe in the center and Balaka, Chiradzulu, Phalombe and Blantyre in the south on pilot phase with financial support from World Bank.

Story Credits: Andrew Mkonda Banda; District Information Officer-Karonga

Governance to Enable Service Delivery (GESD) project is rolling into implementation. The targeted 28 Local Authorities (LAs) appear ready to meet the Minimal Access Conditions (MACs) for accessing the US$100 million funding.

GESD project coordinator Charles Chunga said, ‘with the funding comes major projects in the districts such as improved and quality water supply, modern school blocks and qualified teaching staff, improved road infrastructure among others. It even means more transparency and accountability in the LA’s through a vibrant citizen engagement model’.

Chunga said GESD which is implemented under the Performance-Based Grant (PBG) conditions, means funding is determined by how LA’s perform while meeting the MACs. The LAs will be scanned through Local Authority Performance Assessment (LAPA) - a tool for assessing their performance to determine if they are ready to access funding.

‘The LAPA tool, among others, helps determine whether LAs have basic capacities/safeguards to manage development grants - to ensure that good performers are rewarded, and bad performers helped to achieve an acceptable capacity level to access resources,’ Chunga said.

The idea is to make sure that LAs access the funding. Therefore, another tool – the Performance Improvement Plans (PIPs) which is a process for preparing the LAs using developed or refined guidelines and systems to support them address any identified blockages that might deny them access the funding has been developed. The GESD project wants all LAs to improve their performance and meet the MACs.

For example, during preparation of inventory of incomplete projects resourced by the District Development Fund (DDF) – it was established that a number of investment projects in district LAs are incomplete. Therefore, before starting on completely new investments, uncompleted projects will have to be completed and made functional first. This is not negotiable.

The process requires that the PIP tool rolls into action to drill the LAs. Targeted key areas to prepare LAs include planning and budgeting for completion of the unfinished investments. This will equip councils with skills of developing and approving Annual Investment Plans (AIPs).

National Local Government Finance Committee (NLGFC) recently disbursed MK500 Million under the Social Cash Transfer Programme to the 11 World Bank supported Councils for case management training.

This comes following findings of the Social Cash Transfer Program (SCTP) Technical Audit Report, which revealed that Councils are not executing case management processes adequately.

NLGFC Social Development Officer, Mateso Kazembe said Case Management is one of the issues that is hindering a smooth implementation of SCTP in all the councils. 

“Case management is a series of protocols, which respond to specific beneficiary circumstances such as update of information, claims and complaints that arise through programme implementation. However, often times Councils neglect these. This inconveniences households and messes up collection of transfers altogether,” he said.

It was noted that poor handling of case management processes was due to the fact that most officers who handle SCTP were not part of the first training in case management. It was therefore necessary to orient the programme frontline officers. Case Management execution is expected to improve following the conclusion of these orientations.

Below is the list of officials oriented per council.

Zomba City Council has described the e-ticketing system of collecting revenue as a tool for increased revenue and reduced fraud at collection points in councils.

ZCC introduced e ticketing in its markets, car parks and depot in July, 2017, a decision which saw council revenue increase to an average 53% in the first years of implementation

Principal Investments Promotion Officer for the council Maurice Tsoka Banda said since the introduction of the system, the council’s revenue collection in markets, carparks and depot have improved, fraudulent activities among revenue collectors reduced, and accountability improved which has resulted in improved service provision.

 “This improvement in collection translates to an improved service delivery to the residents of Zomba. For example, on issues like waste management, we are able to service and fuel our vehicles and collect waste in all spots, be it in markets or residential areas,” he said.

Tsoka Banda also said the increased revenue, has enabled the council to pay employee salaries in good time and also improve project monitoring which was not the case previously.

The introduction of the e-ticketing according to Banda has been well welcomed by the vendors in markets and depot as they are assured that by using this system, their market fees will benefit the council as the machines record transactions on council systems in real time, therefore according no chance to revenue collectors to pocket the money.

According to Tsoka Banda “before the implementation of the system vendors in our markets and their leadership were briefed, and now they appreciate the accountability that e-ticketing brings, and so they pay voluntarily, refuse to pay when revenue collectors are using manual tickets and act as whistle blowers to the council where manual tickets are issued without a clear explanation.”

Currently Zomba City Council is planning to make the system even more effective by interfacing it with its Integrated Financial Management Information System (IFMIS) and expand e-ticketing to other revenue bases, starting with automation of business license issuance.