Transcript Slide 1

Republic of Botswana
Financing Local Authorities in
Botswana
BY GABA SEKWAKWA
TOWN CLERK
LOBATSE TOWN COUNCIL
1.0 Introduction

Local Authorities are funded through the Ministry of
Local Government, which is responsible for
maintaining and developing a framework for local
government finance

The framework should meet Government Macroeconomic and fiscal policy requirements
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It should also support the government policy on the
delivery of services to the people
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Introduction Cont…
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Each year Local Authorities Prepare budget which
goes through Finance committee of Council and Full
council
submit budget estimates to the Ministry of Local
Government.
MLG meets LAs to discuss budget estimates.
Ministry of Local Government consolidates and
submits to Ministry of Finance and Development
Planning;
The budgets submitted to Parliament as part of the
Ministry of Local Government budget for both
capital and recurrent budget.
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2.0 Recurrent Budgeting
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Urban Councils receive 70% of their budget as
Revenue Support Grant (RSG) from Central
Government. 30% is funded from own sources

Own sources for Urban Councils include
- Property rates
- Service levy
- Staff housing rentals
- Other service fees
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Recurrent Budgeting Cont…

District Councils receive 97% of their budget as Revenue
Support Grant (RSG) from Central Government the
remaining 3% is funded from their own sources

Own sources for district councils include
- Service fees (e.g. water)
- Staff housing rentals
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The new Local Government Bill which is currently in
parliament seeks to introduce property rating to district
councils
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RSG for Councils is issued on a quarterly basis
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3.0 Development Budgeting

Development budget is fully funded by
Central Government guided by prevailing
Local and National Development Plans and
policies.
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Councils may fund some minor
development projects if they have funds
from their “General Fund” or savings.
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4.0 Loans and Overdrafts
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Local Government (District Councils) Act and
Townships Act empower Councils to raise short to
medium term borrowing from commercial banks

Such loans are raised against their own sources of
revenue [and not RSG]

Overdraft facility should not exceed 1/3 of revenue
(except with approval of the Minister)

Loans can be secured on the revenue and assets of
Councils
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5.0 Donor Funding
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Donor funds are not directly given to Local
Authorities
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These are channeled through Ministry of Finance
and Development Planning and Ministry of Local
Government- currently declining
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Ministry of Local Government will then be required
to make quarterly progress reports to Ministry of
Finance and Development Planning
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6.0 Financial Controls
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Councils control funds sub vented to them
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Councils are required to cause accounts for preceding
financial year balance.
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This should be within 3 months from end of financial
year.
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Financial Controls Cont….
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Abstract of such accounts are submitted to Auditor
General for auditing.
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Audit reports are submitted to the Finance
Committee of Council and later to Full Council.
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Audit reports are also examined by the Local
Authority Public Accounts Committee (LAPAC),
which is separate from Parliamentary Public
Accounts Committee.
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7.0 Challenges
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Dependency on Government Grant.
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Community not willing to pay for services.
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Recession.
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Limited own income sources.
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Highly subsidized services which do not consider
actual cost of service.
Councils not able to raise expected own revenue
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8.0
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WAY FORWARD
Development of a tariff model that will
reflect actual cost of services.
LAs have to as a matter of urgency explore
other sustainable sources of revenue.
Considering PPP models.
Council to set up investments arm/body.
Outsourcing of services.
Intensify revenue collection through credit
control unit
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KEA LEBOGA
Botswana
“our pride , your destination”
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