1. Mwanza, Tanzania 24 th – 27 th November 2009

4.  To provide municipal services LAs need to be appropriately funded.  The Urban Government Act, Section 86 provides sources of revenue for a Council as well as Chapter XIV of the National Constitution.  These sections explicitly provide for own sources of revenue as well as Government transfers to LAs.  In addition Local Authorities have the power to borrow provided ministerial approval is obtained.

5.  However, with all these provisions, the revenue base of LAs remain narrow.  Councils rely heavily on Property Taxes (Rates) for the bulk of their revenue (>70%)  This is followed by Government Subventions at just over 10% and the rest is miscellaneous income primarily from user fees and charges.

6.  Slow down in economic activity - drastic decline in global demand resulting in closure of some companies  Lay-off from work  Stagnant city tax base as a result of fewer rateable properties coming on stream (insignificant new investment)  Ability to pay property taxes affected resulting in an increase in rate payers defaulters.

7.  A reduction in the rates collected reduces the ability of an LA to deliver services by the factor of uncollected rates.  There is a mismatch between the demand for services (both in level and quality) and actual provision due to inadequacy of funding.  The rates levied and other income are not sufficient to provide the required services to the satisfaction of not only the ratepayers but all residents as well.

8.  Given this situation the Municipal Council formulated a turnaround strategy  Strategy meant to be rescue plan for the municipality and make it financially and operationally viable  Restore confidence in the municipality by all stakeholders especially the citizens and central government.

9.  The municipal council of Mbabane will cease to exist and would be subsumed into government  The people of Mbabane will suffer the most and we will have betrayed them  There could be high turnover of good people  The image of the city will be tarnished and will be difficult and expensive to restore  People will loose faith, investors will relocate and potential investors will look elsewhere.  There will be conflict and instability and blaming across the board  We rather not start than start and fail.

10.  Restructuring  Financial Measures  Non-financial measures

11.  Reduction of departmens from seven to four  Rationalisation of functions in the municipality according to team approach to work.  Outsourcing non-core functions based on efficiency gains principles.

12.  Expenditure reduction budget (20%)  Cut down on in-house wastage  Eradicate duplicate spending  Improve and tightened financial controls (new FMS)  Improved efficiency spending  Deal with pilferage

13.  Business Process reengineering  Asset protection  Establish service level standards  Build Strong Management Team  Conclude Performance Management Agreements with senior Management  Review and implement customer/ citizens relations management systems

14.  Engage central Government to increase IFTS  Diversification and increase of sources of revenue  Define and seek funding for unfunded mandates  Seek greater autonomy from Government