The emergence of COVID 19 in the world has brought a lot more disruptions in the world economies, resulting in many countries announcing major stimulus packages to Industries and households. These measures are meant to lighten the burden brought about by the novel COVID-19. COVID 19 is no respecter of personality or country. It’s sweeping lives as well as revenues from the least person in the society.
Covid-19 is the Tasmania of our time, crushing the very small gains of the poor, supply chains, business operations and many more policies and procedures are being disrupted. It is re-writing the new world order in a tremendous manner.
It is against this background that all Metro Municipal and District Assemblies (MMDAs) will be affected in terms of their revenue mobilization drive, thereby affecting their internally generated funds (IGF). What COVID-19 has done is to cause the President of the republic of Ghana to come out with measures that is detrimental to the survival of MMDAs. However, these measures are also needed to safeguard the very existence of these MMDAs.
The measures include among others;
i. Stay Home
ii. Social Distancing
iii. Closure of recreational and entertainment centers
iv. Limited participation in the local market activities (such that only those in the food supply chain can go out to sell)
v. Limited commercial cars plying on the roads and many more.
These measures mean an automatic closure of IGF to MMDAs.
In terms of IGF generation, the measures will mean the following to Rate Payers or the Assembly;
Say No to or please stay home ‘do not collect the following:
i. Property Rate Collection
ii. Market Toll
iii. Lorry park toll
iv. Business Operating Permit
v. Toilet / Urinal fees collection
vi. Building Permit collection
vii. Bill Board fees collection
viii. Renewals, etc
The MMDAs generate their IGF from these sources; however, these sources are no more at the reach of these Assemblies. This is going to have a serious financial constraint on the MMDAs and shall affect the minor developmental projects in the communities.
These IGFs are used in varied ways such as:
i. Paying of salaries of those not on Controller and Accountant ii. Generals’ Department (CAGD) payroll
iii. Maintenance or minor repairs of roads / schools
iv. Honanoriums to Assembly Members during Assembly sittings
v. Other projects and small meetings
vi. Mass Education / Sensitization etc
Effects of Covid-19 on MMDAs IGF
MMDAs are going to experience a major reduction in their IGFs leading to huge financial burden on the Assemblies. The reason being that Revenue Collectors, for the fear of contracting COVID 19, will not attempt to step out to do revenue collection especially the market tolls – even after the lifting of the restrictions of movement.
Further to this, rate payers shall deliberately refuse to pay or may not have the means to pay due to the reduction in their revenues resulting from the long stay at home. Also, the fear of contracting the virus from Revenue Collectors shall make some rate payers shy away from given money to Collectors.
MMDAs shall have most of their planned programmes shelved as a result of lack of funds.
There shall be a reduction in donor funds due to the effect of the virus in the countries where these funds are coming from, leading to shelving most of the donor funded projects. Some of these projects include among others, sanitation projects, Girl Child Education and many more. The effect of these are that communities will be inundated with sanitation problem, surge in teenage pregnancy, juvenile crimes, etc. Most of these funds go into training of the teens and the youth to prevent these incidences in the communities.
Agitation from salaried workers not on CAGD payroll shall increase and will be regular. This shall come about as result of non-availability of funds borne out of the drying up of the IGF as a result of low collection of revenues.
These notwithstanding, most Metropolitan Assemblies shall survive with the exception of Cape Coast. Cape Coast is not cosmopolitan and not endowed with many properties and businesses like AMA, KMA or TaMA and many others. Further to this, most ‘smaller’ Districts (in terms of accumulated revenue and not land size) shall be the hardest hit in this time of COVID-19. This is because the total annual revenue of most of these Districts represents just a month total collection of total revenue for Tema or AMA or KMA.
Recommendations to improve IGF in the midst of Covid-19
These effects are real and are hitting the MMDAs now. This calls for a thought-out, well- structured and pragmatic strategy to reduce these impacts on the Assemblies. These strategies must be home-grown but must be facilitated by the Local Government Ministry.
Firstly, MMDAs endowed with arable lands must a matter of urgency consider going into large scale farming. The Assembly is at a better position to venture into farming with stringent measures to ensure successful cultivation of food crops and or animal farming. The Assembly can take advantage of the value chain in the Agri-business to rake in more revenue.
Although land acquisition for such projects is problematic, however, proper consultation with the Chiefs and Land Owners on the need for this project, shall reduce the incidence of land tenure issues. This project could be led by the Department of Agriculture in the Assembly under the strict supervision of the MMDCE.
Secondly, MMDAs with markets (big or small) is presented with an opportunity to segregate the market place to enhance revenue collection. For example, move all fish sellers (including those breaking the bulk) to one area. Categories these sellers into big players or small players and generate a unique identifiers (i.e numbers and given out ID card) to them. The segregation and categorization can help the Assembly to know how much revenue can be mobilized in a given area. All these must be done with the help of the market queens.
The Assembly may consider coordinating with a Telco Company to provide them with a unique short code to enable these market women to pay their rate no matter how small to the Assembly account without incurring a service charge. Task Force shall only be deployed to enforce those who have not paid. All new entrants to the market must first register with the market queen and the details sent to the Assembly for the unique identifier before the new entrant can start trading.
The MMDAs as matter of urgency must review their budget and present same to their General Assembly. The reviewed budget must state realistically the expected revenue and what the Assembly can do with such limited revenue. In so doing, appeal to the Assembly Members to get involved in the collection of revenues. The Assembly must enter into revenue collection performance target with the Assembly Members to ensure effectiveness in mobilization of revenue.
Mass Education is one measure that the Assembly can deepen to erase stigmatization, encourage rate payers and market women to pay their rates. This education must be regular and timely to ensure that rate payers get to hear the education.
MMDAs must pursue aggressively an efficient revenue mobilization technology to help collect revenue even in difficulty times. There abound many revenue application but most of them do not stand the test of time as well as not configured to the needs of the Assembly. Therefore, it creates user problems for the Assemblies and such apps get discarded after few months of purchase.
The Central Government must increase the DACF by 25% to augment the lost revenue particularly this year 2020. Further to this, the third and fourth quarter MPs common fund must be paid directly to the MMDAs with the consent of the MP. This is to shore up the revenue of the Assembly to be able to carry out a lot of projects including humanitarian programmes. This is because, a lot more people may lose their jobs by the time this COVID-19 is over. Hence the Assembly shall grapple with individuals with urgent needs especially food and shelter.
Finally, MMDAs must be innovative and come up with projects or programmes that shall be attractive for funding from the donors.
Benjamin Twum is a Business Development & Sales Consultant. He is an expert in IGF mobilization at the MMDAs and has done this for many years, helping some MMDAs to strategies effectively to rake in more revenue)