Minister of Local Government and Rural Development, Kondwani Nankhumwa says the introduction of the Development Fund for Local Authorities (DFLA) will help boost councils’ financial muscle, thereby making them invest in income generating activities.
Nankhumwa said this on Tuesday when he toured DFLA offices in Lilongwe to appreciate services the institution is offering.
DFLA has been mandated to provide loans to local authorizes to enable them provide and maintain municipal services and infrastructure.
Nankhumwa said government has gone full throttle in decentralization to make councils perform on service delivery which he said needs a financial injection into the system by among other things introducing arms of government like DFLA to provide loans to service infrastructure development.
“Through DFLA, we will walk the talk of decentralization and devolution looking at how greatly it is going to improve service delivery in the councils. It is unfortunate that for a long time, the institution was being run by a private sector and since government has now taken over, we will make sure that we assist to recapitalize its financial capabilities,” said Nankhumwa.
He said government’s focus will be to enable the institution to service more loans to councils as they also pump in efforts encouraging councils to utilize the institution.
“It is important that councils know the institution and I am glad to learn that in its strategic plan, the institution has included issues to do with visibility and marketing and they will take that seriously for councils to understand why they need to work with an institution like DFLA,” he said.
DFLA Chief Executive Officer, Cydex Makunje said government through the Ministry of Local Government established the institution to assist councils to come up with projects that will help them generate income.
“Government has been talking of decentralization which simply means that councils should be independent. They should be developing projects that will be generating money and it’s from DFLA where they can get the finances to inject into those activities,” said Makunje.
He said councils should understand that DFLA funds are disbursed to local councils for investment in infrastructure and maintenance of existing infrastructure to support rapid growth and not for the council’s daily operations.
He said Thyolo is one good example which through, DFLA, bought an excavator and they are renting it out making good profits.
Established in 1993 as a Trust Fund under the Trustees Incorporation Act, DFLA became fully operational in 1994 as an autonomous corporate entity.