Can Financial Autonomy Improve Local Government Service Delivery? -By Onyinye Ough

The Kaduna State governor, Mallam Nasir El-Rufai recently set the stage for reforming Nigeria’s local governments. He has ended the joint account systems between the state and local governments in his state. In addition, the governor made a commitment to giving 10 percent of internally generated revenue to local governments in the state. Many local government chairmen blame poor service delivery at the local levels on state governments not releasing funds to them. Therefore, financial autonomy for local government chairmen is a good first step towards achieving effective service delivery at local levels.

However, financial autonomy alone is not a guarantee for the successful delivery of services at local levels. It should be accompanied by the putting in place of accountability measures to ensure that local government chairmen do not mismanage or abuse public funds. These accountability measures should be upward (to the state government) and downward (to citizens/beneficiaries in communities). Kaduna State government has also led the way in this area by partnering with a civil society group (BudgIT) to create a platform for citizens to access budget records, monitor progress and provide feedback. This is a welcome development and should be replicated by the other 35 states.

Beyond Kaduna State, here are some accountability measures that can be introduced or strengthened by other states at the local level to ensure effective management of funds in the delivery of public goods and services. These measures can be categorised as follows:

Upward Accountability of state governments

1. Performance contracts between state governors and the local government chairmen

State governors should introduce annual performance contracts between state governments and local government chairmen. This contract will state the expected performance standards for each year. It will list the public goods and services that local government chairmen are expected to deliver in that year. Performance will be reviewed at the end of the year by the state government and community representatives. Appropriate action should then be taken when a local government chairman fails to deliver. This contract should be made publicly available.

2. Publish all budgetary allocations

The state governments should ensure that all local government chairmen publish their monthly budgetary allocations.

3. Conduct independent audits of local government accounts

The state auditor general office should conduct regular audits on local government accounts. These audits should be made publicly available.

4. Transparency in the procurement processes

Local government chairmen should be made to publish all contracts awarded in the provision of public goods and services. For example, the building of rural roads, schools and hospitals, and the provision of water, etc.

5. Establish complaints handling mechanisms

State governors should establish an avenue for citizens to report or complain about poor service delivery. It could be in the form of hotlines based in the governor’s office. This will also aid in monitoring the delivery of local services.

Social Accountability of citizens

With the support of non-governmental organisations (NGOs)/community based organisations (CBOs), citizens in local communities should do the following:

1. Monitor the procurement process

The process for awarding and implementing contracts should be closely monitored by citizens. NGOs/CBOs can make a great difference in in this area.

2. Monitor service provision

Citizens in communities should track and monitor the delivery of key services. Feedback from this monitoring should be made publicly available and presented to state governors and local government chairmen.

3. Establish service charters for various local services

The citizens in local communities should advocate for the establishment of service charters for various services in the local communities. E.g. service charter in hospitals, schools, registration of births, refuse collection, agricultural services, etc. A service charter is a social contract between the service provider and service beneficiaries that lists the expected services and standards and provides information on how citizens can make a complaint if these standards are not met. Service charters are useful tools that help communities in monitoring the delivery of public services.

4. Conduct annual social audits

Social audits are another form of community monitoring that can be conducted to compare the budgetary allocations and expenditures with the actual goods and services procured. The results from social audits can be presented and discussed at public hearing events.

Financial autonomy for local government chairmen is a necessary first step in improving service delivery at the local levels. However, financial autonomy alone cannot improve service delivery in local communities. It should be accompanied by accountability measures (both upward and downward) to ensure the effective provision of local goods and services. These accountability measures can only be effective with the cooperation from state governments.

Onyinye Ough, a development practitioner working on public service reforms in Nigeria, writes regularly on issues of good governance on her blog, Step Up Nigeria.