Fiscal decentralisation in urban councils in Zimbabwe: A critical review of the challenges faced by Harare City Council in generating its own revenue, 2000-2013.

Abstract

In a basic number of countries, local authorities assume a leading role in the provision of goods and services to the public. Local authorities have been perceived to be better placed to meet the demands of local communities and this has been seen to improve citizen participation in governance. This has necessitated the strengthening of the revenue base of local authorities, particularly urban councils, to enable them to meet the demands of the ever-growing population. This dissertation examines the challenges faced by urban councils in Zimbabwe in generating their own revenue, with particular reference to Harare City Council, against the background of perceived decline in transfers from central government. The problem which motivated this research is that the fiscal autonomy granted to urban local authorities in Zimbabwe is ambivalent and a matter of contention. This has motivated the hypothesis that limited fiscal autonomy is hindering the adequate mobilization of revenue by Harare City Council. Fiscal decentralisation has been adopted to form the conceptual framework of this research since the principles of a sound sub-national revenue system emanate from the overall objectives of fiscal decentralization. Qualitative data collection methods such as documentary search and in-depth interviews have been used to gather data on the challenges faced by Harare City Council in generating its own revenue. Research findings indicate that while urban councils in Zimbabwe have been given powers to raise their own revenue, such powers are subject to central government direction and approval. It was also found that whilst fiscal transfers from central government to urban authorities are a necessity given the inadequacy of these local authorities‟ revenue to meet their expenditure requirements, such transfers have been very limited and in most instances non existent between 2000 and 2013. Further, the constitutional and legislative framework governing sub-national revenue is weak and does not grant urban councils adequate powers to raise their own revenue. In this light, it is recommended that in order for urban councils to enjoy a meaningful degree of fiscal autonomy which allows them to have powers to generate their own revenue effectively and adequately, the regulatory and institutional framework should be revised to give such effect. This entails not only central government commitment and support of urban local authorities‟ revenue generation initiatives but also, the restructuring by urban councils themselves, of their revenue collection mechanisms in keeping with current trends.