MALGA demand government to remit ceded revenue to local councils

Malawi Local Government Association (MALGA) has demanded that the Central Government start remitting ceded revenue to local councils, saying this will enable the councils to fulfil their constitutional mandate of initiating development and providing social services at local level.

Ceded revenue, according to Section 10 of the Decentralization Policy, is a percentage of money government must remit to a local council after collecting funds from, among others, tollgates, mining activities, forests, vehicle registration and other major investments hosted by that council.

Hadrod Zeru Mkandawire

MALGA says local councils are struggling to fulfil their mandate for they do not have funds such as ceded revenue and owe suppliers and other service providers—problems coming about because “government is breaching most of its financial obligations to the councils”.

MALGA Executive Director, Hadrod Zeru Mkandawire, made the sentiments on Saturday in Salima during a post budget fiscal devolution dialogue meeting with the Parliamentary cluster on social and community affairs and local authorities and rural development.

MALGA and NGO Coalition on Child Rights (NGO-CCR) organized the interface meeting with financial support from UNICEF.

Non-remittance of ceded revenue is among a plethora of issues that MALGA—an umbrella body for all local councils in Malawi—had presented to the Parliamentary cluster, which later tabled a report in Parliament and the house adopted it, eventually.

Halima Daudi

During the dialogue meeting, stakeholders verified and agreed that government has never ever remitted ceded revenue to any local council, thereby contributing to the councils deep indebtedness and poor performance.

Mkandawire emphasized that ceded revenue can be one of the crucial sources of income for local councils and would be of enormous help to the councils in order for them to perform to the expectations of the people.

“The dragging of fiscal devolution by the Central Government is indeed suffocating the councils. Government is also failing to honour a minimum of 5 percent remittance of unconditional grants to local councils from national annual revenues, as prescribed by the Decentralization Policy. It has only managed less than 2 percent over the years.

So, ceded revenue is not remitted. The national revenue threshold is never met. No wonder local councils are in sorry state. We demand that the government implement decentralization with the requisite financial obligations,” Mkandawire said.

District Commissioner (DC) for M’mbelwa District Council, Rodney Simwaka, said citizens expect a lot from local councils, hence the need for more revenue sources.

“Citizens want better roads, hospitals, schools, infrastructure and improved service provision. We can only be able to do that if we have enough money,” Simwaka said.

Deputy Minister of Local Government, Halima Daudi, who was the guest of honour, acknowledged the challenge of non-remittance of ceded revenue to local councils and other devolution challenges affecting the councils, saying her ministry is engaging the Ministry of Finance and other relevant government agencies on the matters raised.

According to MALGA, the other issues that were presented during the 2022/2023 national budget consultation and later to the Parliamentary cluster include; bailout package for the local councils, official vehicles for controlling officers, increase of city roads budget with extension to municipals, waiver of duty on one vehicle in every five years for each of the local councillors, devolvement of the drug budget to ease drug stock outs in district hospitals and devolvement of health facilities maintenance budget.

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