Republic of Côte d'Ivoire Urbanization Review
Strengthening the system for municipal finance and expanding financing opportunities
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- Consolidating, harmonizing, and enforcing the legal and regulatory framework for municipal financing
- Intervening to strengthen the intergovernmental fiscal framework
- Strengthening the local revenue base
- Following up on specific new areas for municipal financing
Strengthening the system for municipal finance and expanding financing opportunitiesThe analysis of the financial situation of communes in Côte d’Ivoire reveals that they have little capacity to finance infrastructure investments. The main reason for this is the low level of internally generated resources, fiscal revenue, and government assistance combined with inconsistencies in the legal and institutional framework. In addition, the overall financial management standards at the commune level are affected by poor capacity and limited and systematic oversight from the central authorities, leading to prevalence of limited availability of financial reports, systems, the update of loans without repayment, and other systemic issues—hence limiting options for transitioning into alternative financing mechanisms. The financing needs of cities have to be addressed within the context of devolved financial arrangements. Municipalities and regions are responsible for a wide range of public expenditures. Based on the principles of subsidiarity and least cost, municipalities are responsible for organizing community life and public participation in managing local affairs, for promoting and implementing local development, and for managing and maintaining public assets in their jurisdiction.189 The inconsistencies in the legal and institutional framework and its rollout—especially relative to the government’s 2012 decentralization policy—need to be reconciled urgently. Devolution has not been accompanied by a transfer of financial and human resources. Law No. 2003–208 of July 7, 2003 on the transfer and distribution of responsibilities of the state to local authorities specifies 16 areas of expertise for transfer. But this division of powers is based on the old organization of local government with five levels of decentralization. Another impediment is that the implementation of the power transfer sometimes leads to conflicts of responsibility between decentralized entities and other public bodies. The systemic gaps in financing across Global, Regional, and Domestic Connectors require immediate attention to address the issues of the regulatory framework, volume, and predictability of financing. Three sets of policy options need to be considered. First, address the inconsistencies between devolution and decentralization alignment so that delegated functions follow finance and minimum human resources capacity is in place. Second, strengthen municipal finance and revise the fiscal transfer systems in key areas, simplifying the number of transfers and supporting the expansion and improvement of own-source revenue collection. This entails registering all taxpayers, expanding street addressing and basic measures to consolidate the tax base and upgrading cadastral registers, and revising formulas for the allocation of shared revenues. Third, leverage collaboration between regions, municipalities, and utilities to generate economies of scale in infrastructure services delivery. Complementing these interventions, the government should assess the efficiency of current transfer systems, consolidate administrative decentralization to enable improved performance at the commune level, and consider introducing new elements to incentivize performance. Steps could include: (i) assess the performance of DGF and its efficiency in absorbing and using these resources; (ii) consider the introduction of other targeted development grants for urban areas with an emphasis on introducing conditions for performance (such as in revenue collection, budgeting, planning, and implementation, asset management, and financial management); (iii) introduce the use of a fixed percentage of national budget or national revenues as allocations for municipalities through DGF, to ensure predictable funding; (iv) review the performance of the FPCL and its relevance for the financing of local governments going forward, including addressing the issues of existing municipal debts; and (v) introduce minimum standards across all municipalities with an emphasis on large urban areas, focusing on human resources, audits, revenue collection, financial reporting, and budget and implementation. In the medium to long term, government may explore the viability of additional new sources of financing. This would include (i) assessing the sustainability of the current municipal borrowing scheme and to see whether or not it would be a credible instrument given the current low repayment rates; (ii) exploring to what extent municipalities in Abidjan could become sufficiently creditworthy to become eligible for sub-national borrowing including from the International Finance Corporation subnational financing window; (iii) exploring the opportunity to amend and update the PPP legislation to allow municipalities to further engage in PPPs190 and strengthening their capacity to attract private sector investment in infrastructure and service delivery; (iv) investigating the opportunities for land-based financing, such as land value capture; and (v) expanding, deepening, and institutionalizing the existing mechanisms for inter-municipal collaboration (box 4.4). Of these potential new sources, (iii) and (v) will be the most promising options in the short to medium term. Box 4.4: Mainstreaming inter-municipal collaboration Intercommunal cooperation and development of municipal infrastructure are promising areas for municipal financing. One of the objectives of decentralization is to promote urban development and land planning. With the large number of municipalities and their disparities in population size, economic potential, and technical and human resources, it is hard to produce high-quality, affordable infrastructure and services that meet the expectations of individual users and the community as a whole. One solution is to promote groupings of municipalities to constitute another level of public policy. Their area would be in key local public services, including water distribution, sanitation, waste removal, and transport. Law No. 95–611 of August 3, 1995 defines the institutional framework for inter-municipal cooperation and is expected to be strengthened with a number of incentives to promote such cooperation. Municipalities have already started to come together in this way. They have established an association, the Association of Cities and Communes of Côte d’Ivoire (UVICOCI) and its various subgroups, as well as a few groupings of municipalities. UVICOCI also acts as a coordinator for the municipality subgroups. With the gradual development of municipal groupings, UVICOCI now has several regional and thematic groups to deal with issues on regions or homogeneous groups of municipalities. One of the purposes of grouping municipalities is to ensure that, within their territory, the responsibilities devolved from central government are fulfilled consistently, in a coordinated manner, and with effective use of resources (to avoid duplication). Some groups have launched development projects, with partner assistance. These include building capacity, investing in infrastructure for municipalities, and managing forests and the environment. In the west, the European Development Fund has provided some towns with computerized systems and vehicles and ran pilot rural domestic water projects. Joint projects have been launched in health, agriculture, and education. Inter-municipal groupings have also been active in forest and environmental preservation. Four sets of recommendations cover the key thematic areas described above. Consolidating, harmonizing, and enforcing the legal and regulatory framework for municipal financing
Intervening to strengthen the intergovernmental fiscal framework
Strengthening the local revenue base
Following up on specific new areas for municipal financingAsset and land managementt: (i) encourage communes to set up a database on communal land ownership; and (ii) set up a framework for consultation between the departments of the ministry of construction and urban development and communes, in order to supervise the attribution of land plots and ensure that municipal authorities are able to monitor such activities. Public-private partnerships: (i) rectify decree No. 2012–1151 of December 19, 2012 to include specific reference to decentralized local authorities in particular communes; (ii) undertake capacity building interventions of selected communes for negotiating and managing PPPs. Directory: curated curated -> Concept stage curated -> Concept stage curated -> Report No: aus11011 Central America curated -> Report No. 94474-pk fiscal Disaster Risk Assessment Options for Consideration curated -> Environmental and Social Management Framework for the Costa Rica Telecommunications Sector Modernization Project curated -> Environment Impact Assessment For Jiangxi Shangrao Sanqingshan Airport Beijing Guohuantiandi Environmental Technology Development Center. Ltd. Oct. 2012 Content curated -> Growth through Innovation An Industrial Strategy for Shanghai By Shahid Yusuf Kaoru Nabeshima April 22nd, 2009 curated -> Report No: 70178. People's Republic of China curated -> Making Nutrition Policy Central to Development Understanding the Political and Institutional Conditions for Policy Change Case Study of the Political Economy of Nutrition Policies in Ethiopia Prepared By Download 0.83 Mb. Share with your friends:
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