Main Expenditure Items of the Municipalities56

Main Expenditure Items of the Municipalities⁵⁶

49. 
    An unclear scope of mandates lowers accountability. The main weakness of decentralization implementation in Cape Verde is precisely that there is no clear framework that delineates the roles and responsibilities of the local and the central governments. This omission makes it difficult to define adequate levels of expenditure and revenue assignment. The municipalities are legally endowed with most basic service delivery responsibilities. However, the structure of the state and the flows of information and resources were not necessarily adapted to this new reality.
    
50. 
    Unclear reporting aggravates the problem. Another weakness regarding accountability is that, despite a set of rules that mandate detailed information on municipal finances, most municipalities do not present their budgets in a form that enables scrutiny.
    
51. 
    The analysis of the budget breakdown for four municipalities exemplifies this lack of transparency (table 4.6). It shows that municipalities are involved primarily in construction––roads, electrification, and social housing) but that their activities span various areas. However, table 4.6 also shows the limit of the existing budget classification––or rather the limits of the municipality’s capacity to implement it (see section on financial management). The budget combines line items and “programs” items, which precludes the possibility of getting a comprehensive view of total expenditure at the sectoral level. For instance, it is not possible to identify staff costs per sector, or to identify which sector benefited from the uses of “machines and equipment.”
    

52. 
    In the sample, recurrent expenditures constitute the bulk of municipal expenditures, leaving few resources for investments (figure 4.3). In fact, personnel costs represent 29 percent to 58 percent of the overall budget. There are no mandatory expenditures in the country (except for the amortization of previous loans), nor any provision for a compulsory ratio between recurrent and capital expenditures.
    

Figure 4.9: Share of Capital and Recurrent Expenditures in 2005 Budget

Figure 4.10: Share of Capital and Recurrent Expenditures
(staff and non staff) in 2005 budget (%)