The Minister of Local Government and Rural Development, Hon. Gary Nkombo, today launched the ZIPAR Local Authorities’ Debt and Arrears Report in Lusaka. The report provides an in-depth analysis of the financial challenges facing Zambia’s Local Authorities, outlining the evolution of municipal debt and the regulatory frameworks governing local government financial management.
In his keynote address, Minister Nkombo emphasized the significance of the report in strengthening Zambia’s decentralization agenda and enhancing financial sustainability at the local government level. He highlighted that historical governance changes, shifts in policy, and fiscal constraints have contributed to the financial distress of local authorities, making service delivery increasingly difficult.
“Financial distress, particularly rising debt in pension arrears and unpaid taxes, poses a significant threat to the stability of our Local Authorities. If left unaddressed, these challenges will continue to hinder service delivery and stall local development. The government is committed to ensuring sustainable revenue mobilization and strong financial management to create an efficient and decentralized governance system,” said Hon. Nkombo.
To address some of the challenges outlined in the report, the government has undertaken several key measures, including:
The Devolution of 13 functions from various Ministries to Local Authorities, accompanied by matching financial resources.
- The direct transfer of sector funds from the treasury to district sector grant accounts to ensure timely financial allocations.
- Declaring all Local Authorities as Ratable areas to enhance fiscal capacity through property rate collection.
- Amending the Local Government Equalisation Fund Act to allow councils to utilize the full allocation without previous restrictions.
- Accelerating the automation of revenue collection through the Government Service Bus (GSB) to improve financial accountability.
The report also identifies additional areas for improvement, such as aligning recruitment with available resources, enhancing digital payment systems to reduce revenue leakages, and developing a robust debt-tracking mechanism for local authorities.
The government, in collaboration with key stakeholders, is committed to developing clear debt restructuring frameworks and strengthening financial oversight to ensure that Local Authorities can meet their obligations while maintaining resources for service delivery.
Minister Nkombo extended his appreciation to the Zambia Institute for Policy Analysis and Research (ZIPAR) for the initiative, the United Nations Children’s Fund (UNICEF), and all stakeholders who contributed to the study. He reaffirmed the government’s dedication to implementing reforms that will ensure Local Authorities are financially stable, well-governed, and capable of driving sustainable development across Zambia.
