The International Monetary Fund (IMF) recently reported that global economic recovery is still at risk. According to the IMF, Eurozone countries are still in a ‘precarious’ situation, and a delay or inadequate response from leaders in European and African countries to the crisis would further distort the recovery.
The IMF stepped down its forecast for global growth and improvement for 2013 from 4.1% to 3.9%, a prediction that it had earlier made in April 2012. The IMF’s forecast for World output this year – as measured by gross domestic product – was little changed at 3.5%.
According to the IMF’s updated World Economic Outlook, which is published twice each year, ‘Downside risks continue to loom large, importantly reflecting risks of delayed or insufficient policy action’. This IMF publication adds that, if European leaders do not take serious action to avoid the sovereign debt crisis from mounting and prevent a market meltdown; the Euro area will remain in a ‘precarious’ situation. Municipalities in Africa would definitely be affected by such a precarious situation.
Tacking this financial crisis is particularly urgent since it occurs at the level of government where many Africans receive essential services, such as water and electricity, which have a significant influence on their quality of life. One of the main reasons why local governments have failed in service delivery in the wake of the global crisis is because even though they have the greatest potential for being effective, they are the furthest removed from the central authorities and the donor community. Most local governments in Africa like those of Cameroon and Zimbabwe are yet to be administratively and financially autonomous. There is also no intergovernmental relations between local government and other spheres of government in these countries.
Slashing local government budgets in the case of a fiscal shortfall means cutting back on essential services such as health care and quality water supply. In Swaziland for instance, supplies of anti-retroviral drugs to local government, has been slashed by central government as a result of the global financial crunch, especially as donors have cut back on the assistance they used to give to this country towards fighting the HIV/ AIDS pandemic.
For African economies to be able to survive the global economic recession, it is time to reflect on effective monetary policies as well as measures on encouraging trade among African nations. One of such ways is the twinning of municipalities in Africa as well as other parts of the world, so as to boost the participation of local government in international issues traditionally reserved for central government like international business. This would definitely entail lessening the numerous trade barriers that exists among African nations.
It is also important for the powers including administrative and financial powers of local government in Africa, to be constitutionalised. In this way, local government will be able to make effective decisions affecting the local populace in essential service delivery areas such as health care and water supply. Autonomy to local government does not mean that there should be no supervision of this sphere of government especially by regional government. Local government should be supervised without any usurpation of powers.
There is also need for municipal personnel especially municipal executives like the mayors and municipal managers to be well trained and educated. One of the major reasons why municipalities have been unable to withstand the global recession is because of lack of professionalisation. The central government, the regional governments as well as other partners such as universities, need to join efforts to train municipal officials and executives.
There is also need for intergovernmental relations between all spheres of government in African states. If spheres of government in a state cooperate among themselves, combating the global financial crisis can be made easier, especially as ideas on budgeting; service delivery, as well as trade can be shared across the board.
Corruption is another canker-worm eating into the economic fabric of local government in Africa, in addition to the global economic recession. There exist numerous anti-corruption measures including lengthy legislation on the continent, but the problem of effective implementation remains the greatest dilemma. Fighting the global recession would definitely need unified efforts from governments including local governments and a serious boost from free market engineers in Africa and Europe.
If such measures are agreed upon by African leaders and effectively put in place, then African economies can survive the global economic crisis which has grossly hit hard on local government.