LADP

MUNICIPAL FINANCE & IMPROVED BUDGET EXECUTION IN URBAN RELATED SECTORS IN IRAQ

Local Area Development Program

Implementing the New Urban Agenda

through enhanced planning capacity and responsiveness to citizen’s needs

Even though the decentralisation of political authority to the Governorates in Iraq is outlined by Law No. 21/2008, the devolution of powers has not been adequately coupled with the necessary administrative and financial decentralisation measures to the sub-national level. Most of the investment budget is allocated to sectors through line ministries and their branches in the provinces, while only a small percentage goes to regional development through the local authorities. Local revenues are negligible compared to citizen needs for services. Municipal Finance, revenue collection and budgeting processes reflect the legacies of a centralist tradition of governance, revealed in the management approaches to policy,
planning, budgeting and execution, but are also by a range of systemic inefficiencies and unsustainable subsidies.

This critical LADP component has been working closely with focal points from four pilot municipalities: the city of Basra in Basra Governorate; Al Rumaitha in Al Muthanna; Ali Al-Gharbi in Maysan; and Al Shamiya in Qadissiya to assess their capacity to raise municipal revenues, manage expenditures and execute for the improvement of key services in specific urban related sectors with the aim to strengthen the capacities of staff at the provincial level in this regard. The UN-Habitat team, led by a senior economist, guided counterparts through the gathering and analysis of data. Comparative diagrams illustrating the revenues and expenditures and concerted discussions with municipal officials allowed the team to identify discrepancies in revenue collection between governorates, the lack of systematic data, missed opportunities to leverage municipal property values, and a range of legal bottlenecks and policies that hinder the
capacity of the local authorities to locally finance improved service delivery.

LADP Municipal Finance Brief_Oct2017

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