Fiscal decentralisation

Fiscal decentralisation is not simply a fiscal transfer; it is much more than delegating decision-making and service delivery powers to the territorial or regional administrations of the central government.

Fiscal decentralisation refers to the process of transferring financial powers, responsibilities, and resources from central governing bodies to local self-government bodies or regional organizations, such as municipalities or provincial governments. It is a broader direction of decentralisation reforms and aims to improve the efficiency and responsiveness of public services by allowing local governments greater control over their budgets and fiscal decisions.

Benefits of fiscal decentralisation:

Improved service delivery: By giving local self-government bodies more control over finances, fiscal decentralisation allows for a more tailored approach to the delivery of public services, addressing the unique needs of local communities.

Increased local accountability: Local governments become more accountable to their citizens when they control both revenues and public service-related expenditures, leading to better governance and public trust.

Economic growth: With greater control over local resources and decision-making, municipalities (communities) and regions can focus on development policies that promote local economic growth, reduce regional disparities, and create jobs.

Better governance: Fiscal decentralisation can reduce the concentration of power at the center, leading to more democratic, equitable, and participatory governance.

Fiscal decentralisation involves the redistribution of financial powers and responsibilities to local self-government bodies in order to increase operational autonomy, improve the quality of public services, and ensure better and more relevant conditions for local needs.