CHAPTER ONE

INTRODUCTION

1.1 BACK GROUND TO THE STUDY

Every country is working towards development, progress or ensuring positive change in human wellbeing.in recent times, there has been a shift from mere development to the aspect of sustainable development which is seen as development that meets the needs of the present generation without compromising that of the future generation (Brundiland report 19870).

A review of the development literature reveals that, most central governments in Africa historically took decisions , designed policies and implemnted them without consulting the local people, who can determine and are affected by the realisation pf the policies(top down approach). the failure of this approach has led to the evolution of the bottom up approach in an effort to speed up citizen participation in the development process (Manyi 2007).

In cameroon, laws have been passed which organise and give councils the right to mobilise resources. Lwas have been passed that created councils and caused Cameroon to democratise thje system in order to devolve power to these DTCs to champion the planning and implementation of councils’ project. The spirit of decentralisation is that, local government should generally be in a better position than the central government to identify local needs, and to deliver public services accordingly (Brewer, Chandler and Ferrel, 2000).

The major challenge faced by organisations and development institutions is that of limited resources. Resource mobilisation (RM) can be seen as a management process that involves identifying people who share the same values as your organisation and taking steps to manage that relationship(international development research center, 2010). other organisations and researchers have also highlighted their views on the meaniung of RM. The united nations development group2008, views RM as the ability to acquire resources and to mobilize people towards achieving stated development goals. In the past, the words RM was used as a synonym to fundraising. but should be noted that, fundraising ios only one of the techniques of RM. RM can be viewed under three dimensions; human, material and financial resources.

RM plays and indispensable role in the implementation of activities in the council. It is the ways of mobilising human, material and financial resources to support organizations and state owned institutions to realise their plans. Since resources increase the probability of realising councils project or activities, effective planning to mobilise their resources are critical to the success of development programs. Resource mobilisation is the major link between the implementation of plans and the attainment of development. This is because plans cannot be realised without the use of resources. This makes resource mobilisation a precondition for project implementation and development. It is important for councils to improve on RM strategies and techniques in order to ensure long term financial sustainability.

Local governments can mobilise resources through taxes, donations, loans, grants, partnerships, transfers from the state. The UN IPOS approach to resource mobilisation is the most widely used and consist of five major steps; resource gap analysis, external environment analysis, matching potential donors with unfunded outcomes, prioritizing potential partners and the development of a resource mobilisation strategy document.

Local governments around the world today play a key role in facilitating development and improving lind standards through their activities carriedout in their municipalities which range from economic to social facilities. DTCs is a collective term for local councils, ( Oluwu et al, 2004). in cameroon, 374 local councils exist and are managed by elected officials (GIZ2012), of the 374 councils, there are 10 regional councils, 14 city councils and 350 subdivisional councils. These councils were created to bring the government closer to the people and also to serve as a tool to implement decentralization (Manyi 2007). The creation of councils in Cameroon was informed by the need to improve the capacity of the local population to mobilise and generate the resources which are required to implement their local development initiatives. This is so because the central government cannot provide all the resources needed by the people at the grass root. Thus, councils are charged with the responsibility of generating her own resources and ensuring endogenous growth.

The literature shows that, councils in Cameroon in particular have wonderful development visions and initiatives which are always accompanied by very appealing plans. However, this appealing plans are always hindered by limited resources. In Africa, few DTCs achieve up to 70percent of their development initiatives, this not necessarily because the resources are not available, but because they lack the the capacity needed capacity to mobilise it.

In Cameroon, councils are faced with serious challenges in RM which ranges from internal to external challenges (Buea CDP,2012). For local authorities to provide the services required adequately and efficiently, they will need to find new methods and ways of mobilising more revenues (Tibaijukab2005). Lack of appropriate financial strategy have also been cited as contributing to the low revenue generation and collection (Rupublic of kenya 2008). This has caused so many councils to be indebted to FEICOM who acts as a support fund to councils. Resources are very instrumental in the implementation of projects and in the planning process. However, due to gap in literature, there is thus the need to examine and improve on RM to ensure their success. This study covers the Yaoundé iv council jurisdiction central region of cameroon. It is therefore relevant to adress the sources of finance to councils, the challenges faced by the councils to mobilise their finances and a critical examination of the effect of this revenue on the implementation of councils’ project.

1.2 SATEMENT OF THE PROBLEM

Local councils in every part of Cameroon are playing an extremely significant role in the provision of essential public services. However, these DTCs, are faced with challenges in adequately meeting community needs. This is because of accelerated population growth, disruptive urbanization and the impacts of political instability in the Northwest and Southwest Regions. Most DTCs in Africa and Cameroon precisely, is faced with more devastating challenges. The fundamental problem facing most DTCs especially in less developed countries, is the growing gap between the financial resources available and the rapid demand for councils’ projects and activities. one of the key factors accounting for this increasing financial deficit is the exponential rise of urban populations (the case of Yaoundé where people are seeking refuge and better opportunities due to the political instability in the two English speaking regions of Cameroon). which is generating every greater demand for local public services and the challenge in the devolution of revenue from the central to the local governments.

On the 18 of January 1996, the constitution of Cameroon gave birth to decentralisation . Article 1 of the constitution holds that, Cameroon is a unitary decentralised state which meant that, DTCs would be delegated some degree of power [ competence] and resources to manage their local needs[affairs]. this constitution has been implemented, since regional councils have been set up, the administrative and functional autonomy of DTCs has been ensured. In 2010, the first transfer of competence and resources was done. On February 24, 2017, the PM signed a decree which made the effective transfer of financial resources to DTCs across the country a reality to ensure effective decentralisation.to this effect, the sales of automobile stamps, windscreen licenses, and LDT now the responsibility of the councils. Part of revenue from forestry and revenues previously collected by the council the responsibility of the council through the rural assistance fund.

As far as fiscal decentralisation goes, an effective expenditure assignment precedes adequate revenue allocation to provide revenue sources to match the expenditure on the activities devoted to them. Theoritically, in Cameroon, the framework guiding the finances of local authorities is defined by laws and decrees as summarised in table 2.

Law no 2009/011 of 10^th July 2009 and law no 2009/o15 of 15 December 2009, both highlights that councils shall be financially autonomous with the responsibility of managing the taxes developed to them, and their revenue and expenditure within the framework of their budgets as adopted by a competent deliberative body. This then puts the reesponsibility to mobilise and manage resources by local councils in Cameroon for the good of the needs of their communities. This framework, also gives DTCs the right to benefit from subsidies and subventions from other competent public authorities and enter into loan contracts. Loans within and without the national territory are subjected to authorization by a competent deliberative body and approved by the competent supervisory authority.

With all the reforms and enactments of laws to facilitate fiscal decentralisationin Cameroon, identifying, and mobilising resources for the implementation or funding of activities DTCs still pose significant challenges. This is evident by the increasing level of national debt to ensure local development, some unfinished projects by the DTCs, identifies that, locally generated revenue and intergovernmental transfers constitute the primary sources of revenue for the financing of local activities but are however inadequate due to limited sources of resources and the existence of political regimes in the councils which makes the local authorities, more accountable to the ruling party than to the local population. however, this negative influential on resource mobilisation, has affected the capacity of councils to generate the required resources to implement their local public services or activities.

This is evidence with the presence of insufficient amenities such as; portable water in most communities, HYSACAM. the implication of insufficient finances is evident in the Yaoundé iv subdivision. Which has caused this council to be indebted to FEICOM most especially as it serves as a support fund to most councils. Resources are indispensable in the implementation of councils’ activities and in their planning process. As a result, complaints from councils as a result of inadequate finances has been on the rise since 2014.

However, so many questions are raised when we talk about resource mobilisation and its effect on implementing councils’ projects, but this study seeks to provide answers. one may wish to know if the problem of the councils is the legal framework, but however the above analysis, stresses more on the legal framework.

Previous studies on resource mobilisation strategies in cameroon has focused more seriously on financial resources. For example, (Mukeshet al 1996) undertook a study on developing and implementing a financial management strategy for councils, (Odhiambo 2005) was also preoccupied with how councils use their funds. (Markus et al ,2007) worked on a strategic framework for the planning and monitoring of municipal development in Cameroon. (Toreme2013) emphasized the need for councils to mobilise internally generated revenue. the need for DTCs to mobilise resources has been emphasized in literature, but however, there exist a huge gap between councils’ revenue and the implementation of their activities. in effect, this study seeks to contribute in filling the gap on financial resources and its effect on the activities of the Yaoundé iv council.   

1.3 RESEARCH QUESTIONS

 MAIN QUESTION

What is the main source of financial resource to the council?

 SPECIFIC RESEARCH QUESTIONS

What effect does tax collection have on the implementation of activities in councils?

What role do, subventions or transfers from state play on the financial resources of the Yaoundé iv council.

What are the other sources of finance to the council?

1.4 OBJECTIVES OF THE STUDY

 MAIN OBJECTIVE

To examine the main source of financial resource to the Yaoundé iv council.

 SPECIFIC OBJECTIVES

To analyse the effect of revenue from taxes on the performance of the Yaoundé iv council.

To access the contribution of state transfers on the financial resources of the Yaoundé iv council

To evaluate the effect financial revenue has on the implementation of the councils’ projects.

1.5 HYPOTHESIS OF THE STUDY

A hypothesis is a testable statement on the relationship that exist among variables of interest. There are two types of hypothesis; null hypothesis denoted the HO, which is no effect claim, and the alternative hypothesis denoted H1, opposite or different from the Ho claim.

H0; there is no relationship between taxes and councils’ revenue.

H1; there is a relationship between taxes and councils’ revenue.

Ho; there is no relationship between financial resources and the implementation of activities by the council.

H1; there is some degree of relationship between financial resources and the implementation of councils’ activities.