Why the new Revenue Sharing Act is a Step in the Right Direction
August 23, 2022
On July 14, 2022, the House of Representatives concurred with the Senate and passed the Revenue Sharing Bill, allowing sub-national structures to collect and retain portions of revenues generated at county level. This is a key milestone for Liberia as the country’s path to sustained development must include improved delivery of services to people at the local level – in their districts and communities.
The Revenue Sharing Bill was submitted to the Legislature by President George M. Weah in November of 2021.We commend the President and his Administration for their commitment to support the decentralization process in Liberia.
In 2012, the government launched the National Policy on Decentralization and Local Governance to provide guidance to the overall process of decentralizing power, authority, functions, and responsibilities to local governments. This process was further enhanced by the setting up of County Service Centers (CSCs) – one-stop shops that enable citizens to access a variety of government services under one roof - across the 15 political subdivisions. Many of us as development partners – Embassy of Sweden, Embassy of Ireland, UNDP, the EU Delegation, USAID – supported the establishment and functioning of these CSCs as we saw this as a good model to help ensure that citizens, no matter where they are, could have access to services without having to travel to Government ministries and agencies in Monrovia.
Unquestionably, County Service Centers have had positive impacts on service delivery, social cohesion, and domestic resource mobilization across the country despite the challenges they encounter. It is estimated that CSCs have provided services to over 800,000 citizens since the inception. In the process of providing these services, citizens have had the opportunity to build a stronger bond with each other as well as with their government, which has considerably strengthened social cohesion. This is vital to strengthening the social contract between the State and citizens – universally, citizens are more likely to do their part and fulfill their civic duties when they see that their government is working for them.
Despite the many successes, CSCs have been challenged by resource constraints, which have occasionally impeded operational efficiency. Assessments of CSCs across the country reveal that some are constrained by the lack of stable electricity while others are not receiving adequate operational funds to effectively provide services to citizens. For example, the Montserrado County Service Center has not been fully functional for some time now due to the lack of stable electricity.
In terms of addressing the challenge with electricity, the Ministry of Internal Affairs, with support from UNDP and the Embassy of Ireland, has been working with other partners to solarize CSCs as a means of ensuring stable electricity. To date, we have installed solar systems in nine of the fifteen County Service Centers and plan to continue until the remaining CSCs are fully solarized.
The second main challenge – inadequate operational budget – should now be addressed through the Revenue Sharing Law. The Law will promote local economic development through the investment of locally generated revenues, creating employment opportunities and facilitating trade and commerce.
Another key element of the Law is that it will create an Equalization Fund. This means that some resources will be set aside to invest in the regions of the country that are poorest and lagging furthest behind.
Additionally, the Law will provide an incentive for local governments and CSCs to actively work to increase services to citizens because greater access to services will result in more revenue generation.
The task now is to begin building local government capacities. Revenue administration requires both technical and institutional capacities for effective implementation. Hence, the government should now focus on strengthening the capacities of local government staff while leveraging the expertise of the Liberia Revenue Authority to support this process. Some of this capacity strengthening has already started in Bong, Nimba, Margibi and Grand Bassa Counties, with support from Sweden, Ireland and UNDP.
It is also vital to involve citizens and tools like the Citizens Feedback Mechanism should be reenforced. The Embassy of Sweden and UNDP supported the Government to pilot this mechanism some years ago and it continues with funding from Ireland. The process also needs a robust oversight and accountability mechanism to ensure that resources that are retained at the local level are used for the purposes intended.
To further sustain and give meaning to the Revenue Sharing Act, signatories should be devolved from central to local levels, to allow full local ownership of resources collected. Local structures, as described by the 2011 National Policy on Decentralization and Local Governance, should also be empowered.
Liberia has taken a major step forward on decentralization, and progress to date has been good. But there is now more work to be done to reach the finish line – the point where there is real, tangible improvement in the lives of Liberians across the country. We - UNDP, the Embassy of Sweden, and Embassy of Ireland - remain committed partners with the Government of Liberia in this journey, and we look forward to working alongside Liberians to ensure that everyone, especially the poor, can reap the dividends of decentralization.
By: Gerard Considine Chargé d’Affaires, Embassy of Ireland, Liberia, Urban Sjöström Ambassador of Sweden to Liberia and Stephen Rodriques UNDP Resident Representative in Liberia