An example from Ghana showcases the opportunities that digitalisation offers for administration. By digitalising processes, districts are able to strengthen their autonomy and generate more revenue for local projects.
Faster data collection and more revenue – what administration wouldn’t want that?
A digital administration system is making this possible today in some 70 districts in Ghana. Some local authorities have experienced a five-fold increase in revenue from property taxes and business levies since introducing the so-called ‘dLRev’ system. One of them is New Juaben North Municipal Assembly. Created about three years ago following a municipal regrouping, this fledgling local authority area initially lacked any requisite infrastructure back in 2018. No town hall, no school – there weren’t even any street names or house numbers. Hand-written bills for properties were distributed by revenue collectors which, given the lack of street names and house numbers, proved very laborious and time-consuming. The assembly also lacked a proper overview of its financial situation. However, all this changed when dLRev was introduced. The software allows for the data-driven planning, collection and management of finances – in short, a digital fiscal cadastre. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH developed and rolled dLRev out jointly with its local partners.
65 per cent more revenue for local authorities
Now it is not only possible to issue bills at the push of a button, but also to list the individual items separately. One result of digital revenue management is, on average, a 65 per cent rise in fee-based revenue for the districts concerned, which gives them the financial leeway they need for local projects. This is something new because, although local governments are financially autonomous, they essentially remain dependent on central government funding. This means that districts generally earmark just 20 per cent of their total national budget allocations for their own local projects. Now the additional money coming in can be used to expand municipal infrastructure, support poverty-reducing measures or grow local businesses. New Juaben North Municipal Assembly has mainly channelled its first intake of additional revenue into health care, education and road infrastructural development. ’We have re-roofed school buildings ripped-off by torrential rains, renovated a community centre to house the Municipal Health Directorate, procured and installed a number of street lights to improve neighbourhood security, among other things,’ explains Comfort Asante, Chief Executive of New Juaben North Municipal Assembly. ‘We are very thankful for the new possibilities at local level and for the fact that we can now plan our budget better.’
The software is good for urban planning, too. The land and commercial data in the system, which is retrievable at any time, can now be harnessed for sustainable urban development and to strengthen the resilience of settlements situated in areas prone to flooding, for example.
Success factor: partnership-based cooperation
At the same time, dLRev is fulfilling its original purpose of advancing decentralisation in Ghana. GIZ is implementing a project in this area jointly together with Ghana’s Ministry of Local Government, Decentralisation and Rural Development under a commission from Germany’s Development Ministry (BMZ). Since 2011, GIZ has been advising Ghana’s Government on laws and ordinances and its local authorities on their implementation and enforcement. GIZ is now working on site with 100 of the 260 districts. And – seeing that a key indicator for successful decentralisation is a local government’s capacity to generate its own income – it is definitely making headway.
Excellent software with potential
Ghana’s Government has since adopted dLRev as a standard programme for local revenue management. In keeping with the Ghana Digital Roadmap, it was agreed with partners that all 100 districts should be using the cloud-based software by the end of 2022. All digital data is stored securely on the servers of the National Information Technology Agency (NITA), which is responsible for implementing Ghana’s IT policies. A helpdesk is also planned to assist other local authorities in adopting the system. In August 2020, the think-tank Copenhagen Consensus Center selected dLRev as a Ghana Priorities project due to its efficiency potential. On analysis, this means that every Ghanaian Cedi invested in the software turns a profit of 8.8 Cedi. Lucrative prospects!
Last update: October 2020