19 Apr 2022

Towns and City Councils continue to make efforts and develop initiatives to expand own sources of revenue to reduce reliance on government grants.

Assistant Minister of Local Government and Rural Development Mr Sethabelo Modukanele said this in response to a question in Parliament on Wednesday.

Mr Modukanele said the specific initiatives and efforts included implementation of the Revenue Maximisation Strategy of 2019, review of existing fees and charges as well as identification of revenue streams.

To date, he said three out of six urban councils had reviewed and implemented new tariffs while others were still at consultation stage.

Mr Modukanele pointed that the most impactful opportunity to increase own source revenue in urban councils, was with property rates thus efforts had been made to facilitate valuation of property in towns, cities and districts.

This, he said would be done in phases and would go a long way in assisting councils to generate revenue and reduce reliance on central government, adding ‘to this end, budgetary provision of P89.5 millon has been made to facilitate the exercise in three councils of Gaborone, Francistown and South East (Game City and Commerce Park),’ he said.

While opportunities existed for urban councils to generate more revenue, Mr Modukanele said such revenue remained inadequate to fully fund all council expenditure obligations.

He stated that given that one of the key responsibilities for councils was to provide social services as well as promote equity within their respective communities, such fees and charges were usually subsidised and low yielding, necessitating funding augmentation from central government.

“Given the above scenario, councils will not be in any position to fully fend for themselves in the foreseeable future,” he said.

The House was also informed that the ministry expected that once the decentralisation policy was approved and implemented, funding systems for councils would be reformed to motivate them to generate their own revenues sources, going forward.

He said about 23.3 per cent of the urban councils expenditure was funded through own source revenue with expenditures amounting to over P229 million of the requisite P984 million funded through own source for 2021/22 financial year.

In addition, he said with appropriate revenue generating strategies, robust collection efforts and sufficient buy-in from stakeholders, urban councils could generate adequate revenue to invest in income generating projects.

Kanye North MP, Mr Thapelo Letsholo had asked the minister to apprise the House on specific initiatives and efforts of town and city councils to self-fund.

MP Letsholo also wanted to know when the councils would be in a position to fully fend for themselves.

He further wanted to know what proportion of their annual expenditures was funded from their own revenue and if they could make enough money to invest in revenue generating projects. Ends