Devolution as a tool for promoting equitable development, poverty reduction and good governance: Is there Political will to implement?

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Devolution provides a ray of hope for the people of Hwange, Matabeleland North Province with the highest prevalence of poverty in Zimbabwe. Hwange residents expressed interest on public finance management in the context of devolution in the countryat the recently held PFM Reform Indaba in Hwange convened by the Zimbabwe Coalition on Debt and Development (ZIMCODD) on the 7th of May 2019. The major question was: How will Hwange benefit from its natural resources as the country commit to devolution spelt out in Chapter 14 of the Constitution of Zimbabwe Amendment 20 of 2013? The question is very relevant considering that Matabeleland hosts the largest coal deposits in the country, Hwange National Park and the mighty Victoria Falls, the two of which are world renowned tourist destinations with the latter being of the Seven Wonders of the World. The deliberate decision to cede or transfer power from central government to provincial councils and local authorities is a noble idea. The criteria proposed under the 2019 National Budget Statement based on population size, poverty levels, infrastructure deficits and economic disparities between provinces is a good starting point. However, a comprehensive revenue sharing model should not only be influenced by political parameters. The financial and economic considerations have to be made in determining the weight of population, infrastructure gaps and/or economic disparities in setting the fiscal formulae for revenue sharing in which case, the different provincial and local councils will be funded commensurate to their fiscal needs, effort and gaps.

Nevertheless, devolution is not a panacea to inequality, poverty and poor corporate governance if it does not bring about empowerment, participation and inclusion by the governed. Moreover, the success of devolution depends on sound PFM systems at both central and local levels. The Indaba was therefore clear on strengthening legal and institutional provisions enhancinge fficiency and effectiveness in public service delivery and allocation of resources amid outright corruption and misappropriation of state funds by local authorities. PFM principles, therefore guarantee integrity in financial and non financial reporting, control, budgeting &performance systems.

 The success of devolution in Zimbabwe, therefore lies in the ability to plan and implement, consistent with Section 301 of the National Constitution, on allocation of revenues between provincial and local tiers of government and related frameworks for public finance management hinged on the following;

·         Expenditure management;

·         Financial accountability mechanisms and frameworks;

·         Respect of statutory limits on state borrowing;

·         Internal control mechanisms;

·         Reporting requirements of the Auditor General and Parliament of Zimbabwe in their joint oversight roles.

 

Towards effective local governance...

ZIMCODD therefore calls for political will to address weak internal controls, poor corporate governance, procurement irregularities, and inadequate controls in receipting payments and meeting statutory obligations and deadlines for financial reporting which are recurrent in the successive Auditor General’s reports. Without political will to implement punitive measures on errant local and central government officials, the inherent benefits associated with devolution will remain theoretical. The first step therefore will be to enforce the implementation of Section 299(1) of the Constitution regarding the role of parliament to monitor and oversee provincial and metropolitan councils as well as local authorities through the alignment of the Public Finance Management Act to the Constitution and the promulgation of an Act of Parliament to operationalize devolution. The proposed Act of Parliament should be clear on the obligation of sub-national governments to submit annual budgets and financial performance reports to government, Auditor General and Parliament of Zimbabwe. Such provisions should also incorporate provisions that establish institutional and administrative frameworks that are used by parliament in monitoring and overseeing state revenues and expenditure.

 Hwange PFM Reform Indaba strategic as fiscal decadence rock the giant coal miner...

 The Indaba came at an opportune time in Hwange as the Hwange Colliery Company is under reconstruction and still grappling withovert corruption, weak corporate governance and destructive political interference with all the mess linked to some currently serving top public officials.Despite successive audits pointing out to abuse of public funds at the parastatal, political interference at the coal mining giant has thwarted appropriate action to be taken against corrupt individuals who have contributed to massive losses by HCCL. This has seen wage backlogs the coal miner is currently battling with and this is a typical natural resource curse or paradox of plenty where communities endowed with natural resources tend to have less economic growth and worse development compared to those communities without natural resources.

 This is all despite the strategic importance of the coal mine as the backbone of the Zimbabwean industry supporting a number of strategic industries including power generation, agriculture and manufacturing.Nevertheless, the situation at the coal mine is only but a typical example of the fiscal decadence rocking public enterprises and this only highlights that parastatal reforms are long overdue.  It is a pity how state owned enterprises have been reduced to mere “cash cows” for the top brass of the Zimbabwean society. If the government is seriously committed to economic revival, it is high time public finance management reforms are implemented for the betterment of the whole nation. Transparency and accountability remain key for ensuring effective and progressive fiscal management. Lest you missed the Hwange PFM Reform Indaba, click here and listen to live updates aired on Breeze Fm.

 Did You Know?

a.    Devolution is a form of decentralisation that involves assigning powers and functions to elected sub national governments with significant autonomy.

b.    Public Finance Management refers to the manner in which the government collects and utilise/use public revenue. Effective PFM guarantees fiscal discipline, resource allocation according to priority needs & effective delivery of public services like education and health.

c.    Transparency in PFM refers to openness and the level of information sharing regarding public funds management. It should not be difficult to access information on public financial information so that people are not left in suspicion and assumptions.

d.    Accountability in PFM refers to the obligation of the government to account for public funds and accept responsibility over its public expenditure activities.Accountability should be able to answer the What, When, Where, Who, Why and How questions.

e.    Fiscal discipline refers to a situation whereby the government maintains a balance between the revenue and expenditure.

f.     Government revenue refers to financial resources at the government's disposal and government revenue sources include taxes, fines, penalties, aid, loans etc

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Blog Release Date: 
Tuesday, May 14, 2019 - 12:45
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