Addis Ababa, 7 May 2024 (ECA) - A new project, aimed at strengthening fiscal space capacities in African cities post-COVID-19 has been initiated in selected African countries.
The projected known as the Development Account (DA) project was presented at an inception meeting on Enhanced Fiscal Space in African Cities to facilitate the implementation of expanded and resilient urban fiscal space for an inclusive and resilient COVID-19 recovery in Africa in Addis Ababa, Ethiopia.
It will be implemented in six Africa cities, namely Addis Ababa, Dar Es Salam, Kigali, Lusaka, Nairobi, and Yaoundé.
The Economic Commission for Africa (ECA) is spearheading the project in collaboration with implementing partners UN-Habitat and The UN Capital Development Fund (UNCDF) as well as Resident Coordinator Offices (RCOs) and UN country teams (UNCTs)
Atkeyelsh Persson, Economic Affairs Officer at the Macroeconomics and Governance Division at ECA said the project will be implemented in three years in the selected cities across Africa.
“Targets combination of criteria relevant to fiscal space performance at national and local levels as well as opportunities for effective collaboration were identified and used to select these cities,” said Ms. Persson.
Additionally, she said building economic resilience during and after COVID-19, where these cities participated, were taken into consideration.
“The fiscal space of local government is its capacity to spend without compromising its overall budget sustainability. This is determined by the economic, financial and legislative pillars of the country,” said Persson.
The project aims to strengthen the capacities of city governments in Africa to develop and implement policy reforms and strategies to expand and build resilient urban fiscal space as part of national building forward priorities.
It is expected that at the end of the three year period, the cities where the project is implemented will see an enhanced financial management capabilities; adoption of innovative fiscal policies and reforms; improved city-national government fiscal collaboration.
Ms. Persson explained that the focus areas of the project are on the financial pillar including liquidity, autonomy, operating surplus, collective efficiency, and solvency, which helps to define financial performance and in turn fiscal space to fulfil city government mandates while responding to shocks such as COVID-19, Climate Change and Conflicts.
In her opening remarks delivered on her behalf at the inception meeting, Laura Petrella, Chief, Planning, Finance and Economy Section UN-Habitat said Africa needs to empower local governments with the resources and capacity necessary to fulfill their mandates and deliver essential services to their communities.
“This particular project seeks to find new solutions to these complex challenges facing African cities. The key mechanism that we are putting forward in this project is a fiscal performance assessment,” said Petrella.
According to Ms. Petrella, the local governments across Africa play a pivotal role in the pursuit of sustainable development goals, serving as frontline agents of change and progress. But the challenges facing local governments are manifold including limited fiscal resources that often constrain their ability to address pressing development needs, ranging from infrastructure and housing to healthcare and education.
“Inadequate revenue streams, coupled with unfunded mandates and poor access to external finance, present formidable obstacles to effective service delivery from the ground up,” she said.
Giuseppe Tesorier, Economic Affairs Officer at urbanization and development section of ECA said cities are growing and should be well equipped with finance for economic growth.
He noted that high performing municipalities promotes urban development which in turn influences economic growth of cities and shape the development of countries.
The project will support the selected cities through a chain of interventions ranging from generating evidence to the design of actual interventions for improved fiscal space.
Emphasis will be placed on the capacity of city authorities to carry out these functions whilst promoting fiscal transparency and accountability.
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org