The Government of Zambia has prioritized decentralization by devolution to counter historically centralized governance and limited local development. Despite previous policy efforts, progress was constrained by low institutional capacity, weak incentives, and implementation challenges, particularly in rural districts. To address these gaps, Government has introduced the 2023 Decentralization Policy and its Implementation Plan (DIP) 2023-2027, aimed at empowering Local Authorities through increased resources, capacity building, and strengthened intergovernmental fiscal architecture. Key governance functions and personnel have also been seconded to local authorities to enhance service delivery and citizen participation. Supporting this effort is the USD 210 million Zambia Devolution Support Programme (ZDSP), which is being implemented across all Local Authorities to boost financial and institutional capacity and advance the national devolution agenda.

The goal will be achieved through providing of support to eligible Town Councils through capital grants and provision of support to strengthen the institutional performance of Town Councils in their core functional areas of; Public Financial Management, Inter-Governmental Fiscal relations, Performance Management, Accountability of local service delivery and Oversight and monitoring

Key Result Areas

Result Area 1: Capital Grants to Town Councils

The program will introduce a capital grant window to the inter-governmental fiscal framework, that will provide dedicated resources to Town Councils to meet their capital investments, incentivize institutional performance and enhance accountability of TCs.

Result Area 2: Strengthened Public Financial Management (PFM), Transparency and Accountability of Local Authorities (Las).  

The increased flow of resources to LAs necessitate good governance through democratic effective and coherent governance systems and institutions while respecting autonomy of the sub-structures.  This will require TCs to carry out their core PFM and procurement functions in an efficient, accountable and transparent manner.  This result area is about strengthening governance aspects of decentralization. 

Result Area 3: Strengthened Fiscal Framework for Devolution.

The DIP has identified many gaps in the fiscal landscape at the local level including high indebtedness, unsustainable management of debt, dwindling local own resource revenue etc.  Keeping in line with the priorities of the Government, the result area three will contribute towards the review and reform of the existing fiscal framework for decentralization such as the review of the intergovernmental resource allocation, and a review of the gaps in the existing policy and practice frameworks for local revenue collection and local debt management.

Result Area 4: Capacity Building of Town Councils.

The Government is reforming the human resource management system and has embarked on a comprehensive capacity development program for LAs to enhance, efficient and quality of service delivery.  There exist wide variances in the capacity of TCs across the country. Considering the program design of having TCs to qualify for accessing grants, the TCs are required to be supported with capacity building upfront. The capacity building support will be provided through the IPF