Financing the SDGs in African cities?

Programme Type: EventsPublic Discourse Programme: PEAK Urban

On the Wednesday, 19 June, Liza Rose Cirolia, researcher at the African Centre for Cities, presented a talk entitled Financing the SDGs in African cities?. The seminar was attended by 21 people, representing different research departments at UCT, civil society, provincial government, as well as a large contingent of Cape Town City officials.

Liza Rose Cirolia started by providing an overview of different global development agendas that have been adopted over the past few years. All of these, such as the Sustainable Development Goals (SDGs), New Urban Agenda and the Addis  Ababa Action Agenda, allocate a central role to cities as sites and actors in achieving sustainable development. Financing urban development will require a scaled mobilization of resources at the local level, not just to meet the urban SDG or finance urban areas or infrastructure but also to finance urban local government and city authorities themselves. According to Cirolia, financing the SDGs or any other development agendas, requires robust local government systems which can scale up spending and channel this to localized priorities. In other words: “getting urban financing right is actually about getting local government and city financing right”.

Strong fiscal systems for city governments include a range of characteristics such as a clear decentralisation framework, a mix of different revenue streams to sustain capital and operating expenditures, the ability to borrow funds to finance long term development and an administrative system that aligns with the actual spatial boundaries of the city. However, most African cities do not have such systems in place and fiscal data are notoriously difficult to access.

Cirolia nevertheless proceeded by presenting a range of detailed data sets to give insight into the variety of fiscal systems and structures across the African continent. This involves the extent to which local governments control their own revenues and expenditures, sources of revenue and per capita as well as capital versus operational spending. Apart from the variety between cities in Africa, she also pointed to the differences between primary and secondary cities, with in some countries secondary cities being given preferential treatment over primary cities or the other way around. In addition, regional comparisons indicate similar regional averages between West and East Africa while per capita spending in Southern Africa is much higher than in Central Africa. While sub-national borrowing is allowed in most African countries, many do not borrow for reasons of financial unviability or because this is blocked by national government. Moreover, few city-scale institutions exist and when they do they are often controlled by national governments, such as the Kampala Capital City Authority.

Against this backdrop, South African metropolitan governments represent an exception as they represent significant levels of decentralisation, high levels of own revenue and expenditure and alignment of city boundaries at the metro scale. Cirolia illustrated this through the case of the City of Cape Town. An analysis of revenue and expenditure streams and patterns shows Cape Town to have a strong fiscal system with spending being predominantly allocated to basic urban infrastructure and services. While this aligns with many of the SDGs, especially the urban SDG, the City’s budgeting process does not follow the global goals. Cirolia therefore concluded by asking if or to what extent Cape Town should align its finance more closely to the SDGs and what other African cities can learn from Cape Town’s financing framework.

Cirolia’s presentation was followed by an engaging discussion with the audience.  Questions were asked about the role of politics in shaping fiscal systems in Africa, for instance when looking at cities controlled by opposition parties. Other questions touched on the trade-offs between targeted investments in catalytic urban infrastructures and mixed planning or redistributional social spending. The trade-off between local government spending in times of crisis versus everyday city finance and the importance of spaces for people to participate in and contribute to city budgets and decision making was also raised. Overall, questions pointed to the tension between the need for transversal discretionary spending to meet and honour the holistic and collaborative spirit of global goals such as the SDGs and the reality of existing local fiscal structures and procedures. Cirolia concluded by commending the availability and robustness of fiscal data of the City of Cape Town and the need for more and better fiscal data in Africa in order to deepen further comparative analyses.

 

PLEASE NOTE: There will be no SDG seminar in the month of July. The next SDG seminar is scheduled to take place on the 21 August with the details of the presenter and topic to be announced closer to the time.