The Roads Fund Administration (RFA) has put its foot down to cede some revenue generated from toll gates to local councils.
The Malawi Local Government Association (Malga) in a recent statement called on the RFA to consider ceding some revenue generated from toll gates to benefit councils where the toll gates are constructed.
Malga believes the revenue will uplift the councils’ development as opposed to just being used as toll gates hosts by RFA without benefits in return.
However, in an interview, RFA chief executive officer Stewart Malata said currently the toll gate fees, as per their establishment, have a single purpose of rehabilitating the M1 so that it is of high standards for users who pay the toll fees.
He said: “The law now requires us to use these toll resources to maintain the tolled road; it does not allow us to use the resources to other implementing agencies for other projects, so that would not be possible.”
Councils are facing funding challenges and they believe a chunk of money from the toll gates would complement their revenue base.
Malga executive director Hadrod Mkandawire said in an interview that Section 10 of the Decentralisation Policy defines revenue sources such as toll gates among others but what has been happening is that government is yet to start ceding the resources to councils as whatever is generated goes to the central government.
On the other hand, he said Section 150 of the Constitution of Malawi states that government will ensure that local authorities are well funded and have enough resources to discharge their mandate.
Mkandawire said: “The decentralisation policy of 1998 stipulates that government shall provide a minimum of five percent of total annual revenues to the local authorities as unconditional grants but we have never reached above two percent.
“So the national annual revenue is not being met; the ceded revenue is not being committed, government is dragging the fiscal devolution; it has devolved local authorities’ functions quite well but the responsibilities are not being supported with requisite resources”.
Deputy Minister of Local Government Halima Daudi said government is committed to addressing the Malga concerns and that the ministry is engaging with Treasury on demands for local authorities funding.
She said: “Over the years, we have been in discussion with a lot of ministries that they should devolve some of the activities to councils, but they have been saying that the councils are not capable. But now councils have started showing capability to handle everything within them and ministries are now devolving the activities to councils”.
She said it is the wish of her ministry to see all ministries devolving the activities to councils so that their work is made easy. The country has two toll gates that have already generated K1.6 billion. The facilities are the Chingeni Toll Gate Plaza which was launched in October 2021 and Kalinyeke in Dedza was rolled out in December.