Business
A two-day Experts Group Meeting to review and validate the Financial Performance Assessment Report of Nairobi City has concluded with a call to African cities to ensure financial, fiscal and budgetary planning for proper resource allocation and development in the wake of increased urbanization.
At a panel discussion on Building Urban Resilience: Pathways to Revenue Diversification and Fiscal Autonomy, experts stressed the importance of financial and fiscal space diversification for African cities.
“African cities, particularly the capital cities are expected to see an influx of urban residents in the near future. It’s important to prepare for this impending urbanization wave,” said Eshetayehu Kinfu, Head, Strategic Programs Management in the Addis Ababa Mayor’s Office.
Discussing revenue collection and allocation, Godfrey Akumali, County Secretary and Head of County Public Service, Nairobi City County Government said the City of Nairobi faces liquidity problems due to heavy dependence on national government funding.
“The county aims to diversify revenue streams by leveraging technology to improve efficiency in billing and collection. Updating taxpayers’ registry is crucial to identify and track customers across all the revenue streams in Nairobi,” said Mr. Akumali.
Noting the challenge of uncollected revenue that the city faces, Mr. Akumali said going forward the city’s focus is to collect all due revenues without introducing new taxes, emphasizing the importance of capacity building in technology and internal processes.
He explained that the city is currently funded by the national government contributions and its own revenue which has grown from Ksh7.8 billion ($ US 60.3million) to Ksh 12.8 billion ($ US 99.06million) and the goal is to reach Ksh 13billion ($ US 100.6million) by the end of this financial year.
“Nairobi has an annual budget need of approximately Ksh 20 billion ($ US 155million) which is equivalent to the equitable share level necessitating an improvement in its revenue source,” he said.
“The strategy for increased revenue collection is through digital revenue collection, enhancing compliance through a customer-centric approach, and ensuring efficient use of technology.”
Akumali indicated that Nairobi City County has already started the process of enhancing revenue collection with a significant portion of revenues being collected digitally with minimal human interaction.
The goal, he said, is to enhance this system to ensure higher revenue collection without increasing the tax burden on Nairobi residents
He stressed the need for more Nairobi residents to participate in the development of the city as revenue is the basis for service delivery and emphasized the importance of partnerships with the private sector to expand the revenue base and improve public service delivery.
Jenifer Wakhungu, Deputy Director of Local Transformative Finance, UN Capital Development Fund, UNCDF, said National governments should simplify and popularize existing policies, enhance training for tech-savvy individuals and improve resource mobilization and allocation.
She emphasized the importance of research to keep up with dynamic systems and alternative financing mechanisms, including working with private financial sectors and proper fiscal planning.
Wakhungu highlighted the necessity of wealth distribution among regions especially those rich in natural resources.
“Capacity building and introducing new financing instruments such as municipal bonds are key strategies for the development of cities in Africa,” she said.
Additionally, she said local governments should partner with international organizations such as the UN in the area of financing for cities and new financing methodologies or instruments. She also emphasized the need to simplify and popularize the existing policies to make them more actionable.
The two-day meeting was organized in collaboration with UN-Habitat, UN Capital Development Fund, UNCDF, and Nairobi City County Government and is geared towards validating and enriching the financial assessment report of the City of Nairobi.
The review is part of an ongoing project known, in UN parlance as the Development Account, which seeks to accompany six selected cities in cities in Africa – Addis Ababa, Dar Es Salam, Kigali, Lusaka, Nairobi, and Yaoundé – and assess their fiscal space limitations due increased to challenges of meeting development needs, including infrastructure and housing, healthcare and education in the post-Covid era.
Atkeyelsh Persson, Chief of Urbanization and Development at the ECA noted that, like Nairobi and Lusaka, ECA provides support to the local team to review and validate the collected data, ensuring its accuracy, completeness, and reliability before proceeding with the analysis and report preparation for all the cities.
“This step is essential for maintaining the integrity of the financial assessment report and to provide a sound basis for subsequent analysis and decision-making processes,” said Persson.
A.I
Dec. 14, 2024
Tags: Atkeyelsh Persson Godfrey Akumali Jenifer Wakhungu
