Administrative and Fiscal Decentralisation in East Africa

Administrative And Fiscal Descentralization in East Africa

East Africa or Eastern Africa is the easterly region of the African continent, variably defined by geography or geopolitics. In the UN scheme of geographic regions, 19 territories constitute Eastern Africa: Tanzania, Kenya, Uganda, Rwanda, and Burundi (which make the East African Community (EAC)); Djibouti, Eritrea, Ethiopia and Somalia (collectively known as the Horn of Africa); Mozambique and Madagascar, Malawi, Zambia, and Zimbabwe (often included in Southern Africa); Mauritius, Seychelles and Comoros (small island nations in the Indian Ocean) and RĂŠunion and Mayotte (French overseas territories also in the Indian Ocean).

For the purpose of this project East Africa refers to the member states of the East African Community (EAC): Burundi, Kenya, Rwanda, Tanzania and Uganda.

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ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

in East Africa

A. Decentralization Decentralization is the creation of local self-government; where locally elected representative bodies are assigned responsibilities and resources and make independent decisions with regard to local development issues in general, and in particular on the provision of services to their citizens. When the transfer of authority is sufficient, local governments obtain political, financial, and administrative autonomy to better address community needs.

In environments with little tradition of citizen participation, decentralization can be an important first step in creating regular, predictable opportunities for citizen-state interaction. The process of decentralization can itself enhance the opportunities for participation by placing more power and resources at a closer, more familiar, more accessible level of government.

Decentralization in East Africa

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- Brings decision making to the level closest to the people.

- Builds national integration, addresses historical injustices and promotes national healing and reconciliation through ensuring representation of regional diversity.

- Enhances local development and service delivery through good governance, improved accountability, participatory planning, budgeting and inclusive service delivery.

Decentralization

- Deepens the entrenchment of democracy and democratic institutions.

- Contributes to mobilize local capacities and resources to foster local initiatives.

- Accelerates attainment of national development objectives and Millennium Development Goals (MDGs) based on country-specific situations.

- Increases the legitimacy of national governments both towards citizens and the international community.

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ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

in East Africa

B. Decentralization

Decentralization in East Africa. While the countries of East Africa have experienced widely divergent leaderships and ideologies, their structures of governance have moved in remarkably similar directions.

They have all passed through periods as single-party or non-party regimes, and are all currently invested in mulit-party democratic practices. While local government has existed in all five countries for an extended period, the responsibilities and revenue bases allocated to the local level has been limited.

The five East African Community partner states are at different levels of reforming local government to meet respective country objectives, with policies focused on the need for efficient, effective and accountable local governments that deliver services to the local communities at affordable costs and promote local development. Local governments are increasingly seen as the level where poverty reduction and wealth creation can be addressed within a framework of increasing citizen participation.

This situation is illustrated by the Kenya Vision 2030, Vision 2020 for Rwanda and Uganda, and 2025 for Tanzania, and their national economic growth and poverty reduction strategies. Country experiences show that while governments have embraced the need for decentralization and have put legislative mechanisms in place, issues of fiscal decentralization remain to be addressed in a meaningful manner.

Inadequate resources and management skills both at the national and local government levels continue to slow down efforts towards decentralization. Important issues of accountability and efficient public expenditure management, participatory budgeting, greater transparency in public procurement and contracting procedures, still need to be streamlined for a higher development impact. Similarly issues of fiscal mandate and power to borrow in order to access additional resources to finance development programs are also waiting.

Decentralization in East Africa

01/BURUNDI 02/KENYA 03/RWANDA 04/TANZANIA 05/UGANDA

ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

in East Africa

Burundi is in the process of implementing decentralization following a strong centralized system. In 2005, a local government law was enacted giving the communes the autonomy of self management. Democratic elections took place and various organs were put in place at different levels.

Vision BURUNDI 2025 and the Poverty Reduction Strategic Plan (CSLP) aim at accelerating attaining the Millennium Development Goals (MDGs), however the transfer of power to the local governments has been slow and it is feared this will negatively impact the realization of the MDGs.

Kenya: As of 1995 there has been increased investment in the decentralization process in Kenya, with a focus on increasing participation, enhancing service delivery and strengthening accountability. The Local Authorities Transfer Fund (LATF), the Local Authorities Service Delivery Action Plans (LASDAP) and the implementation of Results Based Management (RBM) all worked to strengthen the role and effectiveness of local government.

On the 27th August 2010 Kenya adopted a new Constitution with a devolved government system, providing for a two-tier devolved governance model. Functions, roles and responsibilities are specifically assigned between the national level and the 47 counties governments. The objectives of the devolved governance approach, in line with the Kenya Vision 2030, includes the promotion of democratic and accountable government, citizen participation, fostering of national unity, and ensuring equitable sharing of national and local resources. While this new structure provides a number of opportunities to strengthen local government there remain challenges in how these processes will be implemented.

ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

in East Africa

Rwanda adopted its decentralization policy in May 2001. The policy was adopted in order to achieve three main goals: (i) promoting good governance, (ii) poverty reduction, and (iii) effective accountable service delivery.

The Rwanda Decentralization Strategic Framework was adopped in 2007, and is currently in the second phase of implementation. The Rwanda Vision 2020 sets good governance as the 1st pilar, to be implemented through a process of citizen empowerment with the aim of eradicating poverty by 2020.

There has been significant good practice to come out of this process for local governance and decentralization.

Tanzania: Good governance is one of the five core goals of the 2025 vision for Tanzania. In 1998 the Government of Tanzania published a comprehensive policy on Decentralization

by Devolution underpinned by key principles for the transformation of Tanzanian local government system: Political decentralization, Fiscal decentralization, Administrative decentralization, Service delivery decentralization, guided by the principle of subsidiary and redefined central-local relations.

The first phases of the Local Government Reform Programme (LGRP) was implemented for the period in 1998-2008, and the second phase was recently adopted (2009-2014). The overall goal of the programme is accelerated and equitable socio-economic development, public service delivery and poverty reduction across the country, and to transform Local Governments to strategic leaders and coordinators of socio-economic development, accountable and transparent service delivery and poverty reduction actors, in their areas of jurisdiction.

As part of celebrating 50 years of independence, the Government has initiated the process of reviewing the Constitution of the United Republic of Tanzania. It is expected that under the people engineered constitutional process the agenda of decentralization by devolution will have high priority.

ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

in East Africa

Uganda has one of the most devolved systems of government in the region, based in the experience and lessons learned during the civil conflicts. In the 1980’s, the National Resistance Movement (NRM) Party established community-based Resistance Councils (RCs) responsible for maintaining law and order, setting in motion a new way of exercising democracy at the local level. This 5-tier system became the basis for the current local council system, enacted in 1997, and promotes participation and people’s empowerment to enhance accountability and responsibility.

C. Local Government and the East African Community (EAC) The East African Community (EAC) recognizes the role of local governments in the deepening and widening of the integration process. The Council of Ministers has invited proposals on how to integrate the local governments in its governance, programs and projects and in regional development. The last ten years have revealed that the EAC cannot expect to speed up regional integration without the cooperation and support of local level organizations and institutions, among these the local governments of the region and their representative associations, the institutions of governance closest to the people. Local governments can be key actors in strengthening the integration process, carrying out civic education, and dissemination on EAC treaties, protocols and policies to the citizens, as well as in implementing growth initiatives.

While the EAC is working to build connections with the local government sector, policies such as the East African Common Market Protocol (CMP), which will have far reaching implications on the region’s local governments (on regulatory frameworks, revenue generation, service provision and trade management)1 have to date been developed without inclusive consultation or feedback from the local government sector.

See report Liviga, Athumani J. et all (2008) “EALGA Study on the Impact of the EAC Common Market Protocol on Local Governments in Partner States�

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East African Community (EAC) The East African Community (EAC) recognizes the role of local governments in the deepening and widening of the integration process.

ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

in East Africa

D. The Challenge The decentralization process challenges The emergence of new structures has posed a challenge to existing human capital, management systems, financial resources, and coordination

The adoption of decentralization in the countries of East Africa has been largely as a result of realizations that a highly centralized approach to governance has not been effective in delivering good governance, democracy, tackling poverty and building a sustainable development.

The decentralization process has had important impacts on service delivery, local economic development and citizen well being. However the emergence of new structures has posed a challenge to existing human capital, management systems, financial resources, and coordination at the decentralized levels across the countries of the East African Community.

Solving these problems will include a re-examination of the policy, legal and regulatory framework, and institutional arrangement governing the local level, as well as building the capacity of local governments, and increasing their level of autonomy of local governments and supporting enhanced budgetary allocations to decentralization and local government financing.

The process of Decentralization in East Africa FROM

TO popularly elected local level local tailored programs and projects

involvement in decision making increased opportunities for participation in decision making

on the lines of accountability

Decentralization is a process, which must be: • •

• •

supported by both leaders and the people, undertaken in participatory and inclusive manner, responsive to varied local needs, well-managed in order to remain meaningful and yield desired results.

ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

Recommendations Ten recommendations for strengthening local governance

in East Africa

E. Ten recommendations for strengthening Local Governance in the East African Community:

1. Respect the Principals of Decentralization Local decision making is best delivered by the level of government closes to the people.

2. Harmonize legislation 3. Increase Local Autonomy Local governments must be provided with an enabling environment allowing them to meet their responsibilities, and to plan and implement independent local development plans.

Support adopted commitments towards decentralization across all levels of government.

4. Finance Follows Function The need to balance expenditure responsibilities with revenue sources is central to the performance, efficiency and effectiveness of local governments.

5. Increase Fiscal Decentralization Currently across East Africa local government incomes are overly reliant on intergovernmental transfers making local governments more accountable to central government than their local constituency, minimizing their responsiveness to local needs and priorities.

6. Ensure Transfer Predictability Transfers must be predictable both in terms of timing and amount to allow local government to provide a continuity of services and implement multiyear development plans.

ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

in East Africa

7. Enable Local investment (Access to loans and financial markets) The financing of local and urban investment should be seen as a priority in public expenditure policy, and in the allocation of assistance provided by international cooperation.

8. Build Capacity Capacity building and human resource development must be an integral part of decentralization and local governance to ensure local governments can meet their current and future responsibilities towards their communities.

9. Recognise LGs as key development actors Local governments are key actors in organizing the access of citizens to basic services, improving quality of life and meeting the Millennium Development Goals (MDGs) in the local sphere.

10. Strengthen Citizen Participation Local governments are challenged to create positive impact, be outstanding in service provision, and be dynamic institutions that maintain strong relations with their citizens.

ADMINISTRATIVE AND FISCAL DESCENTRALIZATION

in East Africa

EA “ This document has been produced with the financial

assistance of the European Union. The contents of this document are the sole responsibility of UCLG and EALGA and can under no circumstances be regarded as reflecting the position of the European Union”