The Local Government Finance Commission has called on government to put in place a specific law to regulate financing of local governments.
According to the Chairperson of the Local Government Commission, Dr. Agnes Atim Apea, the objective of the law would be to secure sound, predictable and sustainable management of financial affairs of local governments in line with Article 176 of the Constitution.
“We have raised this in the Committees of Local Government and with our sector Minister. We need a law with a stipulated amount of money to cater for activities carried out by the local governments,” Atim said.
She said there is need to ensure that funds meant for decentralized services are removed from the votes of Ministries, Departments and agencies (MDAs) and directly transferred to local governments during the financial year.
Atim said this while presenting the Local Government Finance Commission annual Performance reports for the financial years 2017/2018, 2018/2019 and 2019/2020, to Speaker of Parliament Rebecca Kadaga on Friday, 26 March 2021.
The reports are presented in compliance with Section 25(1) of the Local Government Finance Commission Act, 2003 and they cover activities, challenges and recommendations of the Commission.
The Commission Chairperson also raised concerns on the sustainable funding for 15 newly created cities by Parliament of which 10 became operational adding that financing needs to be enhanced.
“The issue of physical planning is a critical area where resources need to be allocated. We also need to invest in local economic development for sustainable cities as well as business incubators that will help to develop skills.,” said Atim.
The Speaker said that MDAs which did not have implementing structures in districts were hindering the work of local governments by keeping money allocated in the budget. She directed the Chairperson of the Local Government Committee of Parliament to make a follow up on the same.
She also reiterated the need to set a law to provide for adequate funding to Local Government.
“In Kenya, the county governments have succeeded in getting specific funds and they are doing a great job. We need to borrow a leaf from them in improving the funding for our local governments,” said Kadaga.
She added that she had tasked the Minister for Local Government to bring a law to Parliament that will operationalize the newly created cities.
“Under the Constitution, the country only has one city that is Kampala, so we need to give a structure for the new cities that are already in place,” the Speaker added.