MALGA laments absence of debt bailout for local councils in 2021/2022 budget
Lack of a bailout package for local councils in the 2021/2022 national budget will make the councils remain in perpetual debts that would render them more ineffective, the Malawi Local Government Association (Malga) has warned.
Currently, debts for the councils stand at K14 billion; thus, MALGA, which is an umbrella body of all local governments in Malawi, fears absence of a bailout package could spell doom in their of their efficiency and effectiveness in service delivery.
When he presented the 2021/2022 budget statement in Parliament on Friday, the Finance Minister, Felix Mlusu, announced that K30 billion is the development budget under local councils.
He had broken down the amount as follows: K2.8 billion for the District Development Fund (DDF), K2.3 billion for the construction of water structures, K24.9 billion for construction of city roads, K1.0 billion for dualisation of the Chileka-Blantyre Road and K607.9 million for Infrastructure Development Fund.
“Madam Speaker, the conditions of our city roads, drainage system and street lighting are in very deplorable state. Government has, therefore, allocated K8.9 billion to the city of Blantyre, K7.8 billion to the city of Lilongwe, K4.1 billion to the city of Mzuzu and another K4.1 billion to the city of Zomba for maintenance and rehabilitation of these city facilities,” Mlusu told the August House.
However, in an interview with Nyasa Times, MALGA acting executive director, Hadrod Zeru Mkandawire, said local councils have, once again, lost out on the budget in terms of the minimum financial requirements for them to effectively deliver development outcomes and meet the ‘wide expectations’ of the citizens.
“Much as we appreciate the improved allocation for city roads construction, the overall development budget for Local councils remains low. It is also regrettable that our plea for a bailout package has also been overlooked. The bailout package could have gone a long way in transforming the local governments on how they serve the citizens and contribute to Malawi’s 2063, MGDS III and Sustainable Development Goals,” said Mkandawire.
Mkandawire added that MALGA fears that the much touted Public Sector Reforms in the local governments could become mere talk show instead of being turnaround strategies.
He said the councils will continue to concentrate on survival strategies that include paying long outstanding debts.
According to the MALGA acting executive director, the central government needs to appreciate that local councils are in debt crisis as a result of government’s consistently failing to match devolved responsibilities with fiscal transfers.
“As it stands now, local councils will not be able to pay long outstanding debts to goods and services providers including unpaid utility bills in district hospitals. We wonder why the central government is so hypothetical and pretends a great deal that it considers decentralization as a gate way to attaining its development goals and yet its actions are the exact opposite,” said Mkandawire.
Apparently, when he announced the amounts for the development budget under local councils, Mlusu called for prudent management of these resources, saying the people’s expectations are high.
“These are substantial amounts and can make a difference in the development of our cities. Government is, therefore, calling upon management of these city councils to work diligently to ensure that the allocated resources are used efficiently. Madam Speaker, Government, through the Treasury, will monitor developments in this budget line,” he had told Parliament.
But Mkandawire wondered how this would be possible ‘in the face of the many challenges the local councils face’.
“We wonder how this will be achieved when ward councillors continue to operate with mobility challenges to monitor projects as most of them cannot afford even a reconditioned vehicle. Our request for an importation of duty free vehicles once every five years for ward councillors has not been considered. We are also surprised why our request for the introduction of chiefs administration budget has not been considered too,” he said.
Mkandawire further said ‘it is even more worrisome that development budgets for sectors for local governments have been retained at the ministries and yet the functions are devolved to the local governments’.
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