I first published this article in my LinkedIn Account on the 1st of January 2019.
2018 has come and gone and the rhetoric question is - are we better off now than when 2018 started? In the sphere of local governance, 2018 was a difficult year, as most local authorities reviewed by TMR® cited financial challenges owing to reduced income and increasing operational expenditure. A good number had statutory debts. Some local authorities, particularly RDCs, failed to pay full salaries to staff. Externally, the Office of the Auditor General issued several damning reports, casting a shadow on institutions that were expected to shine, more so after the promulgation of the Public Entities Corporate Governance Act of 2018. Even as local authorities continued to work together as organisations, as witnessed by the formation of their umbrella body ZILGA in July 2018, accountability to stakeholders remained elusive as service delivery was compromised, partly because of councils’ failure to live up to expectations and also partly to the harsh operating environment. Naturally, development partners should be applauded and appreciated for coming to the rescue of many local authorities. But central government’s silence and absence is testimony that all is not well.
As we step into 2019, what is the lot and fate of local government in Zimbabwe?
The Stakeholder Theory argues that there are other parties involved in the running of an organisation and for a local authority these include employees, residents, financiers, communities, government bodies, political parties, trade unions, among many other organisations. All these institutions have bona fide claims on local authorities and in return, the local authority must operate in such a way that it meets the expectations of these institutions without compromising on its mandate. In a recent online survey, we found that 75% of residents are not aware of their rights in their relationship with their local authority. When this is the case, accountability and transparency are sure to be compromised.
Will this be the case in 2019? What can local authorities look forward to in 2019? We review PESTEL factors affecting our local authorities and give insights into what may lie ahead.
Political
The majority of councillors are elected on political party lines, with little or no thought on their willingness or ability to deliver. These councillors will only push the development agenda only as far as it is in line with their respective political party policies. As they settle down for their first full year in 2019, we anticipate these councillors to become comfortable in their roles, too comfortable actually, thereby making council passive. Why? This is a culture that has been bred in Zimbabwe and with no significant change in government’s work ethic, nothing at the local level will change. This trend is expected to continue until we get to a situation where councillors are elected based on their suitability and not political affiliation. However, it is true that a political party’s economic policy may be what the doctor ordered but it is up to the individual councillor when in the council chambers to push for what his party stands for. Politics is expected to continue playing a major part in local governance in three main ways. One. In local authorities where councillors come from both main political parties, unnecessary and unproductive squabbling will continue. Pride will bar councillors from accepting the other side’s view even if it may be beneficial for the communities they represent. Two. The government’s 2% tax. This will have the effect of reducing disposable income for both rate payers and the local authority itself. Three. Ignoring the question of legitimacy or otherwise, the current trend in Zimbabwe is that urban councils are run by the opposition MDC Alliance whilst central government is under the control of the ruling ZANU PF. This has seen some urban councils’ efforts scuttled by central government. Harare as the capital city has been inundated with service delivery challenges in recent periods and the press has always referred to the “MDC-led council” when reporting about poor service delivery. We see this disunity continuing into 2019. In this regard, we call for professionalism and impartiality on the part of the Ministry of Local Government.
Economic
Zimstats has reported that the year on year inflation rate (annual percentage change) for the month of October 2018 as measured by the all items Consumer Price Index (CPI) stood at 20.85 percent, gaining 15.46 percentage points on the September 2018 rate of 5.39 percent. It is believed that the actual, rather than the official, rate of inflation was over 300% in that same period. In the absence of dollarization, we anticipate that inflationary pressures will continue into 2019. Such inflationary conditions bring economic suffering to communities as well as to local authorities themselves. Businesses are also affected. The net result is a combination of reduced income as communities fail to pay rates and increasing operational costs. The fact that councils provide public services on a non-exchange basis means that there is a widening gap between revenue and expenditure. The majority of 2019 budgets approved for local authorities had reduced expected inflows and councils barely catered for increased operational costs. Services providers have benchmarked the cost of their services with parallel market rates of the bond/greenback, pushing prices up significantly. The government’s exchange control regime pitying the bond note as equal to the USD has made it difficult for public entities to react decisively to counter the negative effects of the economic downturn. However, a week before the close of the year, the City of Bulawayo issued a public statement stating that at its final full council of 2018, they took positions of charging in hard currency for selected clients and for particular items such as those in the diaspora and the sale of some stands respectively, probably taking a cue from central government itself. In the 2019 Budget, central government announced that duty for most vehicle imports would be payable in hard currency. Going into 2019, we expect to see many different semi-official survival techniques as central government has already warned that the road is still bumpy ahead. Further, there is little sign that the latest economic blueprint, the TSP, will bring relief to the economy in the next 12 months. There are no major shifts from the old economic policies of prior year and politics still leads economics. In 2019 we are likely to see increased financial difficulties being experienced by local authorities thereby impacting service delivery negatively. As disposable incomes are being eroded by the day, rate payments will definitely be on the decline.
Social
Zimbabwean communities have been plagued by several ills such as unemployment, pandemics and epidemics such as HIV/Aids and Cholera respectively as well as the lack of adequate and modern social amenities. In rural communities, there has been a heavy dependence on development partners who have come in to fill the gap left by the local authorities’ shortcomings. The local authority is expected to ensure that social infrastructure such as roads and public lighting is maintained, and social amenities such as clinics are fully functional, well-staffed and equipped. This has not been easy given the economic downturn. Libraries are barely operational, parks are not the expected lush green and clinics are battling to serve communities, fight cholera as well as infant mortality. There are significant housing backlogs leading to overcrowding and therefore to faster spread of diseases and other social ills. Crimes in the high density suburbs are on the increase. The increasing unemployment levels together with rural to urban migration have increased the number of youths and adults who fuel crime and engage in other anti-social activities such as gang violence and prostitution. The informal sector is growing and is very difficult to regulate. The local authority has to rise above all this and provide human settlements are that are inclusive, resilient, safe and sustainable as per the requirements of SDG-11. There will be very limited progress towards the achievement of SDG-11 in 2019 as the changing demographic patterns will pile more pressure on municipalities, rendering them mere fire fighting institutions with no room for planning and implementation of plans. With reference to housing, Harare had 49,672 people on the waiting list in 2010, and this ballooned up to 212,734 in 2016. By 2018, it had risen to 500,000 and the expectation is that this may take a minimum of 15 years to clear. So clearly 2019 will perpetuate this backlog. With land being a finite resource, overcrowding will continue. We anticipate that pressure groups such as residents’ associations will continue their usually not so effective lobbying but we would be happy to see greater and more meaningful engagement between these associations and local authorities.
Technological
Most urban councils are using BIQ software and some around the country are on Pastel. It is commendable that there is a level of automation in the operations of councils. However, audit reports usually revealed that there were significant variances (up to $200 million in Harare) in bank balances (between ledger and statement), for inventory and even for customer balances. This was a clear picture that most councils were not fully utilising the software available as they posted only some of the transactions. It is way less than half of local authorities with fully functional and updated websites. In this digital era, councils lose out on potential investment by not being visible online. With globalisation and digitalisation gathering momentum, we expect to see local authorities becoming more tech savvy, with an increasing number having functional websites. We also expect to see more social media presence in platforms such as Twitter, Facebook and Instagram. The councils should also have their own email domains as this would be more professional. In interacting with the public, there will be need to embrace all payment platforms such as Eco Cash and POS so as to arrest the shortage of cash that may lead to defaults. However, it may mean rural folk also rise to the occasion and adapt to the new technological way of transacting with their local authority. The full and effective use of technology should result in the timely preparation of financial statements, their timely submission for audit, and hopefully a clean report. Data storage and security is a factor that local authorities will need to consider. As they go digital, they should be alive to the existence of cyber security threats. Councils should also consider upgrading their equipment, from the office to the engineering departments so as to provide a more efficient service. The live streaming of full council meetings, pioneered by the Centre of Innovation and Technology and the City of Bulawayo is a welcome and good example of using technology to improve accountability and transparency.
Environmental
There has been an increase in environmental management initiatives in Zimbabwe, with EMA, the statutory body tasked with environmental management, coming up with a number of regulations to protect the environment. Local authorities superintended over huge tracks of land where a lot of environmental degradation takes place. Gold panning within Insiza and Umzingwane Rural Districts have left a lot of land wasted. In Matobo district, mining claims have also derailed a new housing project. Current land development regulations demand that EMA carries out an Impact Assessment before authorisation is given. So we expect EMA to work closely with local authorities so that they can collectively enforce environmental protection regulations. There is need, however, for EMA to significantly bring down their impact assessment costs. Local authorities should also consider having comprehensive environmental policies that will regulate the gold panners found in their respective wards. Regulating gold panners will allow for land planning and may also translate to a more systematic and formal extraction of minerals. Socially, the WASH agenda has gathered significance as the cleanliness of the environment affects the livelihood of communities and affects also a community’s overall health. The Cholera drama experienced in Harare is a sign that the environment was not conducive for human settlement, to the extent that the council is even failing to provide adequate portable water. In most urban areas, councils have managed to collect refuse from residential areas although in the last quarter of the year there have been a few glitches due to the erratic availability of diesel. As part of their Corporate Social Responsibility, there is need for councils to invest heavily in environmental management as they have a mandate constitutionally as well as by virtue of Zimbabwe subscribing to the SDGs to provide safe environments for communities to thrive. In 2019, we hope to see more councils having a full department dedicated to environment management as is the case with large municipalities. This will also aid in the overall land planning and development. The councils should also invest in educating communities about the best care for the environment. This will enable the community to partner the local authority in environmental management. Proactivity has always been better than reactivity, as prevention is better than cure. We encourage rural district councils to have documented environment management guidelines for all development partners that come in to work with the local authority.
Legal
Local government is highly regulated. Whilst local authorities are autonomous organisations, a number of Acts regulate their operations, chief among them the Urban Councils Act (29:15), the Rural District Councils Act (29:13) and the Public Financial Management Act (22:19). These pieces of legislation ensure that all local authorities operate within known boundaries this ensures that the mandate of local governance is fulfilled. However, these regulations have brought with them a number of bottle necks in the operations of council. The main bottleneck has been that of a number of approvals having to be done by the Minister of Local Government and this is especially problematic if their relationship is politicised. By law, local authorities should be audited by the Office of the Auditor General on an annual basis but as at the end of 2018, a good number of local authorities were still unaudited. The obvious downside of this is that the audit function loses its credibility and purpose when audits are done four or five years later. The Acts that govern local authorities, like any other regulation, are usually read with other Acts and/or Schedules and this leaves room for subjectivity as in one recent case of Section 290 and 291 of the Urban Councils Act that created a problem when Harare City Council borrowed funds for the payment of salaries. There is need for clarity of legislation so as to remove ambiguity. One interesting legal requirement in the operations of local authorities is that they should have a payroll to income ratio of 30:70 and this is a condition for the approval of their annual budgets. Low income local authorities may then fail to attract the right personnel due to unattractive salaries and this will obviously lead to lower council efficiency. The NEC also does not take into account the financial hardships of local authorities but rather negotiates based on the performance of the economy in general. Councils are legally required to adhere to NEC rates. There may be need to lobby for a change in regulation as one rural district council in Matabeleland South did highlight that there is a possible clash in regulation when it comes to land development. The rural district council is on its own an authorised planning authority but the Mines and Minerals Act seems to give some other power to the Ministry of Mines whenever there is a mining claim on the land in question. The alignment of laws to the constitution should be done together with the correction of laws that clash or contradict. We are looking forward to a time when legislation will guide the appointment of finance personnel in terms of their qualification and membership to professional bodies. This will go a long way in making sure top level financial employees are regulated by their professional bodies and therefore act with probity all the time. As a bare minimum, we recommend that going forwards; all top level finance positions should be manned by members of the PAAB.
Devolution
2019 seems to be the year the government may finally implement the Devolution project in line with the 2013 Constitution. Whilst this is meant to be a means to enhance the local economy and decentralise wealth, it has been heavily politicised. For it work, there will be need for all levels of government together with communities to support it and work together devoid of politicking. The provincial councils that have been put in place will present a new tier of government and will be in the reporting structure of local authorities. This may present both advantages and disadvantages. We will continue monitoring the progress of the devolution agenda and analyse its effect on local government.
Conclusion
Overall, it is the financial position and sustainability of local authorities that will determine the trajectory that local government will take. A number of municipalities in the UK are suffering financially, with indications that central government will reduce appropriations to local government in 2019. Zimbabwe is already in an economic quagmire and this renders the provision of services an uphill task. Financial management will need to be improved, and it may have to take a bolder Public Accounts Committee of Parliament to deal decisively with audit reports that show financial mismanagement. There is no reason why a tell-tale audit report is ignored. As we go into 2019, local authorities should continue to keep their eyes firmly on the SDG-11 as they are very key and pivotal in its fulfilment. There were very limited PPP arrangements in 2018 and before. However, this is one way in which a local authority may provide social infrastructure amongst many other facets of service delivery. 2019 should see a number of councils working with NGO’s and with private companies as the economy continues to present financial challenges.
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