By Brenda Kayo:
The Parliamentary Committee on Local Authority and Rural Development has asked the Ministry of Finance to fund local councils by Monday next week.
Committee chairperson Horace Chipuwa said this in Lilongwe Thursday during a meeting with Ministry of Finance officials.
According to an analysis of the Third Quarter Fiscal Space for Local Government in Malawi for the 2024-25 Fiscal year, councils have gone three months without getting Other Recurrent Transactions (ORT) funding from the Central Government.
He said the delay in releasing the funds had affected the implementation of development projects in councils.
“They have determined that the Treasury has credited all councils and the remaining part is that the Reserve Bank [of Malawi] should transfer the actual fund to the council, which will be done by the end of business tomorrow. We will follow up on Monday and check if the councils will have received their money,” Chipuwa said.
He said this after Director for Public Finance Management System Division in the Ministry of Finance Martha Chizimba had indicated that the Accountant General has disbursed the funds for third-quarter allocation to all councils.
She said the funds were expected to be transferred to the councils by the central bank by the end of business today.
‘The delay is because the Reserve Bank [of Malawi] has not sent the funds to the councils but we assure you that, by the end of business tomorrow [today], all the council will have received their money,” Chizimba said.
During the meeting, Chizimba also said the lack of a Fiscal Decentralisation Policy had affected the circling of funds to councils.
As at 3pm yesterday, a number of councils acknowledged receiving December funding.
On Wednesday, Ministry of Finance spokesperson Williams Banda indicated that the Accountant General has disbursed the delayed funds to all councils.
However, Malawi Local Government Association Executive Director Hadrod Mkandawire indicated that councils had not received the money by that time.
According to Mkandawire, it has been difficult for Local Government Authorities to provide public health services, including ambulatory services, patient feeding, cleaning services and even medical services.
He observed that the third quarter is the time the agriculture sector prepares farmers for the farming season.
“It is the time [the] Affordable Inputs Programme is affected as farmers plant their crops and apply fertilisers [to crops as part of] the rainy season.
“It has been very difficult to operate without operational funds which have, since November 2024, not been transferred to all the Local Government Authorities,” he said.
Mkandawire added that one of the main principles of devolution was that there should be fiscal autonomy of LGAs as envisioned in the Constitution of the Republic of Malawi and the Local Government Act, Chapter 22:01.
He added that the revised Decentralisation Policy of 2024 highlights this.
“We, therefore, reiterate our persistent and long call for the Central Government to adhere to the provisions of the Decentralisation Policy 2024 which, among other things, provide that the [Central] Government shall share ceded revenue with Local Government Authorities.
“In addition, the Central Government should consider making a policy shift on local taxes by leaving some taxes to Local Government Authorities, which would enhance the sources of revenue for the Local Government Authorities,” Mkandawire said.
Meanwhile, Centre for Social Accountability and Transparency Executive Director Willy Kambwandira has called on the Central Government to take responsibility for the persistent funding challenges facing local councils.
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