Wednesday, June 5, 2013

KCCA PROGRESSING SLOWLY BUT SURELY



Anyone who drives through Nakasero can’t help but noticing the working being done on and around the roads.

Lumumba Avenue and Nakasero Road, previously death traps for your car’s shocks are now a smooth ride, but in addition there is a lot of work happening on the drainage systems around those areas.

KCCA says this is part of an sh18b project.

Quietly too our city is much cleaner and greener than it was a two years ago.

Many years ago someone in the financial sector told me how KCC – as it was known at the time, would never lack for funding if they did a few things right.

If they did nothing else and just verify their revenue sources they would have the world at their feet.

At the time KCC would lay claim to revenues from market dues, ground rents and trading licenses but there was no clear record of how much was due to the authority and therefore how much they should collect.

KCCA has done a commendable job of roping in more and more of what is due to itself.  So far authorities say they have collected in the region of sh51b up almost 70% from last year’s sh31b.

They are looking for more. They have now installed an automated revenue management system that will help track revenue from all sources.

As a first step this is commendable but it has far reaching repercussions as well. Our natural instinct is to pay for things with cash, but to finance the major infrastructure and social services required in the city debt will be required.

In other parts local governments issue municipal bonds, essentially they borrow from the public, to finance such investments.

In my mind there are two long term benefits to this.

One, that KCCA will develop the capacity to not only collect but ferret out all possible sources of revenue due to it, important for the long term health of our city. Secondly, KCCA will subject itself to more rigorous scrutiny of its operations making it more efficient in service delivery for the benefit of its citizens.

And one may also add that you expose yourself o the limitless pool of financing sloshing around the world in search of a home.

Last month Rwanda issued a Euro bond, essentially borrowed from the open market. They were looking for $400m but the interest in the offer was more than eight times what they were looking for. It goes to show that there are investors out there that are not cynical about Africa’s prospects and have a sufficiently long term view to put their money where their mouths are at, all they need is the right instruments for them to concretize their interest.

In the world of high finance anything can be bankrolled it’s how you package it that will do the trick.

The detractors will argue that why should we borrow money at market rates when we have donor money that is going for a pittance with longer repayment periods?

Inexpensive money is always welcome but free things, or cheap things in this case, often turn out to be more expensive than they seem. By failing to wean ourselves off the cheap donor money we are failing to mobilise our own resources to fund our own priorities. Apart from keeping us addicted to the indignity of always going around begging bowl in hand it also doesn’t help our democratic processes – we end up more accountable to the donors than our own Ugandans.

If we have to extract more and more taxes from Ugandans we would have to show results in the way of improved service delivery, if not we run the risk of angering the population and in danger of them refusing to pay taxes. Such a government would be forced to negotiate with its people to raise revenue.

You have to like the trajectory KCCA is on, which makes you wonder about the people trying to throw spanners into the works at every turn.  But that shouldn’t be a mystery the chaos that was KCC benefited some people and that clique cannot be amused at the regularization of its operations. A straightening out of its activities will inevitably lead to a loss of revenue or leverage for these individuals and hence their heckling and sniping.

KCCA needs to be supported if only to stand out as an example that what was previously thought to be impossible can be achieved. Who knows their example may spread out to the rest of the country and to the central government …. But no! I am getting ahead of myself!

2 comments:

  1. Interesting take and I will admit you are mostly right. KCCA has the potential to raise a lot more money if they could just streamline their revenue collection and such other mechanisms.

    However, its interesting to note that those who you say are throwing a spanner in the works are actually advocating for a lot of what you suggest if you bother to listen (I am talking about the Lord Mayor here, do not know about others'complaints).

    They are calling for an assessment of all properties and businesses so that a realistic and fair rate system can be developed to increase and improve revenue collection and move away from disproportionately depending on revenue from easy targets like taxis and food kiosks, while hotels and such pay peanuts in comparison and thousands of other businesses pay nothing at all. They are also calling for instituting the legally mandated accountability/audit structures to ensure that once said monies are collected they are not misused. They want the institution of a procurement department/body to replace the haphazard procurement prevailing. They want a properly constituted Physical planning department and an updated metropolitan planning authority and plan. All these and others are lacking and when they have been pointed out the issues have been glossed over and deflections made to paint those raising them as having subversive agendas.

    Thats not to say that all is rosy in the political wing of the KCCA, far from it. But I have noticed that many people are quick to wax lyrical about the most basic improvements that the ED and her team makes while ignoring the more crucial and far-reaching shortcomings of the operations of the technical arm of the authority.

    When praise and criticism are dished out evenly and fairly only then can the authority ever hope to clean up its act and learn from its past blunders and offer a real chance of development for Kampalans.

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