Local govt in revenue crisis
Jan 15, 2007
DECLINING revenue collections by local governments in Uganda has severely affected their performance. The administrative activities undertaken by local councils are gradually grinding to a halt.
By Alfred Wasike
DECLINING revenue collections by local governments in Uganda has severely affected their performance. The administrative activities undertaken by local councils are gradually grinding to a halt.
Local government minister Kahinda Otafiire told a two-day 2007/8 Budget preparatory meeting in Kampala on Friday: “Today, local governments are collecting only 30% of what they used to in 1995. In 1995 they collected sh230b from their own revenue sources.â€
“Since then, the local revenue started declining irreversibly. In 2002/03, they collected sh100b from their own revenue sources and today they are collecting about sh70b. This trend has severely affected the financial standing and performance of local governments,†Otafiire observed.
He further warned, “The revenue problems in local governments have adversely affected the capacity and ability of local councils to finance their decentralised mandates and services. The administrative activities undertaken by local councils are gradually grinding to a halt.â€
“This is because they are unable to hold meetings to discuss government business and take decisions on important issues, as they cannot afford to facilitate council businesses,†Otafiire pointed out.
He further revealed that many local governments were even unable to meet their pension obligations to retired employees. “The pension arrears are accumulating every year. This has caused untold hardship to their pensioners, many of whom are dying before they get their pension.â€
Otafiire revealed that over the last seven years, local councils, through the Local Government Development Programme and Conditional Grants, have invested heavily in service delivery.
“Rural roads have been constructed, new classrooms have been built, water points have been installed and health centres have been put up. All these investments must be maintained and sustained by local governments using their local revenue, but this is not currently being done,†he lamented.
Otafiire said all local governments had developed local revenue enhancement plans that outline steps to raise their revenue.
He said the steps include computerising licence registration, tightening control measures, intensifying tax education, motivating good revenue collection performers and holding an annual investment day to attract investment.
DECLINING revenue collections by local governments in Uganda has severely affected their performance. The administrative activities undertaken by local councils are gradually grinding to a halt.
Local government minister Kahinda Otafiire told a two-day 2007/8 Budget preparatory meeting in Kampala on Friday: “Today, local governments are collecting only 30% of what they used to in 1995. In 1995 they collected sh230b from their own revenue sources.â€
“Since then, the local revenue started declining irreversibly. In 2002/03, they collected sh100b from their own revenue sources and today they are collecting about sh70b. This trend has severely affected the financial standing and performance of local governments,†Otafiire observed.
He further warned, “The revenue problems in local governments have adversely affected the capacity and ability of local councils to finance their decentralised mandates and services. The administrative activities undertaken by local councils are gradually grinding to a halt.â€
“This is because they are unable to hold meetings to discuss government business and take decisions on important issues, as they cannot afford to facilitate council businesses,†Otafiire pointed out.
He further revealed that many local governments were even unable to meet their pension obligations to retired employees. “The pension arrears are accumulating every year. This has caused untold hardship to their pensioners, many of whom are dying before they get their pension.â€
Otafiire revealed that over the last seven years, local councils, through the Local Government Development Programme and Conditional Grants, have invested heavily in service delivery.
“Rural roads have been constructed, new classrooms have been built, water points have been installed and health centres have been put up. All these investments must be maintained and sustained by local governments using their local revenue, but this is not currently being done,†he lamented.
Otafiire said all local governments had developed local revenue enhancement plans that outline steps to raise their revenue.
He said the steps include computerising licence registration, tightening control measures, intensifying tax education, motivating good revenue collection performers and holding an annual investment day to attract investment.