The state of the Municipal Infrastructure in Mozambique
Publisher: Viriato Teotónio e. Tamele
Published: 2009
Language: eng
Description: Introduction
	
Municipalities in Mozambique were established in 1997 and for the first time elected in 1998. Most inherited archaic and dysfunctional remnants of colonial and central government systems and infrastructure, and as such limited progress was achieved in transforming them into functioning local governments during the first mandate 1998/02. During the second mandate 2003/8, however, significant improvements were seen as municipalities began to grasp the nettle of local governance and some service delivery challenges. By the end of their first decade most municipalities have reorganized themselves to some extent and a number have undertaken initiatives that are beginning to bear fruit. 

Legal and Policy Framework

The overall legal framework for municipalities is covered the so called “Pacote Autárquico” or Municipal Package of Laws enacted in 1997 and reformulated in 2007/8, a number of these laws were still recently under revision. A further important development is the draft Decentralization Policy and Decentralization Strategy. These documents purpose to lay out the broader approach of the Government to decentralization, and establish the roles and functions.

Not all municipal responsibilities are clear under the existing legal framework. Although some steps have been taken to clarify ambiguities in the original package there remains a lack of clarity within the legal framework as to the current responsibilities of the municipalities.

Municipal mandates that include: infrastructure for local traffic, drainage; infrastructure for trade of food and household products; licensing and regulation of private transportation; infrastructure and services of cemeteries; licensing and regulation of buildings; infrastructure such as parks, gardens and green spaces; and policing compliance with municipal Bay-laws (posturas)

The Municipal Development in Mozambique

Municipalities are growing in number and in size. According to the United Nations, Mozambique has one of the largest urban populations in East Africa at 36%, and it is expected to grow to 60% by 2030. The urban growth (3.03%) and municipal growth (2.84%) are both faster than national and rural growth numbers with substantial variability. Municipalities are also growing in number, from 33 in 1997 to 43 in 2008. In the absence of proper urban planning , the rapid pace of growth in certain municipalities can result in the expansion of informal settlements. Small municipalities may require special attention as their explosive population growth may challenge their capacity to deliver services.

Municipal development has progressed in the last ten years. The municipalities created in 1998 inherited an extremely weak organizational structure and infrastructure that had generally not been maintained or upgraded since the colonial era. Similarly, they inherited a very limited municipal tax base with no or outdated property registers and generally no culture of tax payment. Despite this disadvantaged starting point, a number of municipalities have managed to overcome some of their organizational challenges and have achieved positive improvements in service delivery. There is nevertheless a major backlog in all areas of service delivery combined with a rapid increasing demand for services from the growing urban population. The pressure for improving services, including those not strictly within the mandate of municipalities, is felt acutely by mayors  and their executive councils , as municipalities are administratively responsible for most urban territory in Mozambique. 

Municipal mandates are increasing from providers of local services such as parks, roads, public safety, public lighting, municipal policing, and solid waste, amongst others, to more complex social services including aspects of education and health as mandated Bay Decree 33/2006. The increase in demand for services is not, however, being accompanied by an expansion of infrastructure, employment, formal economic activity and revenue. Close to 70% of the GDP in Mozambique is produced by the industry and services sectors, mostly located in urban areas but urban poverty remains high and from 1996/97 to 2002/3 did not fall as rural poverty. There is also substantial variation of growth and poverty within municipal boundaries and between the urban, peri-urban and rural areas.

Municipal VS state Roles in the Provision of Urban Infrastructure

Urban roads
The road network in Mozambique is regulated and managed by of the Administracao Nacional das Estradas (ANE) supervised by the Ministry of public works and Housing (MOPH). Autarquias  are responsible for maintenance of the network of roads and streets within their boundaries except in the cases of primary and secondary roads as defined in the national roads policy framework and classification system.

A key feature of the roads sector is the legally mandated funding provided for municipal road maintenance from the National Roads Fund (FE), an earmarked state institution financed directly by fuel taxes. The legislation regarding the FE requires that 10% of revenues from fuel taxes be transferred to municipalities to finance maintenance of municipal roads and associated infrastructure. The criteria, formulas and other rules governing the distribution of these funds to autarquias and their use by them are defined by the FE’s board and are administered by ANE. Thus a specialized sectoral financing mechanism ensures a minimum flow of dedicated resources are transferred to municípios in each annual budget cycle to provide a financial basis for their road maintenance activities. The use of FE funds is in principle at the discretion of municipalities but in practice the FE has required them to provide plans and budgets as a precondition for disbursement and some adjustments regarding priorities and standards have been “requested” by the FE.

With respect to municipal road works financed by sources other than the FE; including those financed by own-source revenues, Local Investment Fund - Fundo de Investimento Local (FIL) transfer payments and external assistance; municipal priorities and plans are not subject to prior review by state authorities however these are frequently coordinated, formal or informally, with ANE and the Provincial Directorate of Public Works and Housing (DPOPH) road departments in order to obtain technical advice and/or in-kind partnerships.

Water 
The municipal framework legislation states only that autarquias are in charge of public investment in municipal water supply systems.  By contrast however, legislation specific to the water sector, approved in the context of policy reform and restructuring in order to permit delegation of management of public water supply systems to the private sector, provides for the transfer of the management of water supply systems for the benefit of the municípios.  Concretely, the Decree 72/98 provides that the process of restructuring start in Maputo, Beira, Quelimane, Nampula and Pemba, and that at the end of three years a decision should had been taken regarding the moment at which the responsibility for such systems would be transferred to the respective municipalities. Obviously, this transfer of
privately managed systems has not yet taken place, and the municípios are not yet
exercising the corresponding powers.  Indeed, water supply (as distinct from drainage) is noticeably absent from the list of competences to be assumed by the municípios over the coming three to five years, as expressed in D33/2006.

The CRAA , the water supply regulatory body, is a public law entity with legal personality and with financial and administrative autonomy, intended balance the interests of service providers and users while maintaining the economic sustainability of water supply systems, controlling rates in relation to the quality of the service provided, as well as the conception of and monitoring performance under the delegated management contracts, among other powers.

Legally, the management of the water supply systems of the 13 urban systems directed by the State is at present allocated to FIPAG . FIPAG responsibility includes water supply for Maputo, Xai-Xai, Chókwe, Inhambane, Maxixe, Beira, Chimoio, Quelimane, Tete, Nampula, Nacala, Pemba and Lichinga. On an inter-institutional level, the autarquias are represented on the Boards of Directors of FIPAG, participating in strategic deliberations and in decisions regarding the financing of specific projects. In addition, nominally they cooperate with FIPAG, DNA (Water Department in MOPH ), CRAA and the urban water supply companies through a representative indicated for this purpose. This is the case in Maputo, Beira, Quelimane, Pemba and Nampula.

At the same time, many independent water sources exist within municipal boundaries, including point sources (dug wells and boreholes) and small piped systems which are often privately developed and managed to provide water to households and enterprises in peri urban areas where municipal and/or public enterprise supported distribution networks do not provide coverage. Both provincial water departments (deriving their authority from the DNA) and municipal authorities are involved in the supervision of independent water providers, however clearer regulations and institutional mechanisms are needed to clarify their respective roles and responsibilities.

Sanitation
The public drainage system is defined as the set of installations for both domestic and industrial waters as well as surface rainwater and runoff, including the network of collectors, pipes, gutters, canals, and complementary equipment/installations. On a national level, the responsibility for surface water drains, comprising administrative and financial management of services and maintenance and operation of infrastructure, is assigned to the State or to autarquias and may be delegated to third parties under the terms developed in the section below. The D33/2006 sets forth the transfer to autarquias of the competences related to planning and implementation of investments and the management of facilities supporting municipal drainage systems and the treatment of urban wastewater and surface water. Notwithstanding this legal instrument and the implicit policy for decentralization of drainage functions to the autarquias, as of 2008 it remains common that state institutions, namely the MoPH and its provincial directorates, continue to intervene directly in resolving urban drainage problems.

The execution of new systems of water distribution and drainage of surface water drains, as well as remodeling, rehabilitation or amplification of existent systems is subject to an obligatory presentation of a project. The execution of works for drainage of surface water by other public or private entities is subject to inspection regarding the quality of design, materials and equipment, among others. In regard of systems of water distribution and drainage associated with individual buildings, whether public or private, the responsibility for their installation and maintenance falls to the proprietors and/or users/renters of the buildings, including the obligatory connection of those systems to corresponding public networks.

It should be noted that while in basic legislation, water supply and sanitation responsibilities are entrusted to the same entities, the development of new institutions for water supply provision have in effect separated these functions to different entities with different access to investment resources and technical capacities. As a result there is at present an imbalance in institutional capabilities related to wastewater management in urban areas as compared to those available to plan, finance and manage urban water supply.

Electricity 
In Mozambique the production, transportation, distribution and commercialization of electric energy is the responsibility of the public enterprise Electricidade de Moçambique E.P (EDM), E.E. EDM is a public enterprise with legal personality and patrimonial, financial and administrative autonomy, under the supervision of the Ministry of Energy. Electric energy supply is defined as the activity of supplying electricity to consumers, including, joint or separately, the production, transportation, distribution and commercialization, as well as import and export of electric energy. In the energy domain, municipal legislation refers only to matters of investment in electric energy distribution and public lighting. On the inter-institutional level, there is no legal instrument, which governs relations between the municipalities and EDM, which different autarquias conduct on a case-by-case basis. Municípios typically request EDM to extend distribution networks and to provide public lighting in underserved neighborhoods and urban expansion areas, however there is no requirement that EDM comply wit these requests or respect urban development plans approved by the municípios.

Thus collaboration between EDM and municípios can be see as voluntary, although municípios may use their own resources to finance EDM-managed service expansion.
A creative example of collaborative relation between a municípios and EDM is the
Commercial contract between the Maputo Municipal Council (CMM) and EDM through which EDM collects the municipal fee for solid waste removal (taxa do lixo) as an addition to electricity invoices, and retains a percentage of the amount collected as compensation for its administrative costs thus eliminating the need for CMM to organize an independent billing and collection system.

It should be noted that the National Energy Policy affirms a policy of decentralization and the abolition of monopolies in electric energy production and distribution through the involvement of both the private sector and local authorities in order to guarantee more efficiency and competitiveness. This policy would seem to entail some transfer of the public service of electricity provision to the local authorities. However, by contrast, electricity is noticeably absent from the list of competences to be assumed by the municípios over the coming three to five years, as expressed in D33/2006. Implicitly, there seems to have been a policy decision not to transfer either commercial electricity supply or public lighting to the municípios for the foreseeable future.

Municipal Planning

Spatial strategies for urban development are needed to accommodate both the distribution of investments within municipalities and the role municipalities in broader regional development. Balancing municipal initiatives between urban centers and their peri-urban areas requires explicit consideration of the spatial distribution of population, public facilities, and private sector economic opportunities so that the benefits of urban development, municipality development are distributed between the more prosperous core prosperous core and poverty-dominated peripheral neighborhoods. Because municipalities play important roles in regional economic development, the urban development plans need to consider their regional context so that urban centers are able to fulfill their role as growth poles and sources if support for rural development. While, the development of municipalities in the central and northern regions is intimately linked to the effectiveness of the Beira and Nacala corridors, which are the foundations for regional economic development strategies in Mozambique.

Recommendations 
The spatial planning is key to effective municipal planning, an important first step would be to create or strengthen (where they exist) planning/implement units in the municipalities. Their first task should be the elaboration of local plans that fall under their responsibility. These units could gradually become consolidated planning departments or services in the municipalities where these functions do not yet exist. The process of elaboration of these plans should be participative, and could draw on city consultation processes, participatory local planning processes and definitions of priority action programs as a part of municipal “requalificação” or deconcentration programs.

An institutionalized mechanism is already in place (with the Faculty of Architecture and Physical Planning has designed urban plans for Maputo and Matola munipalities) to support additional municipalities in carrying out planning and thereby developing capacity through on-the-job training. There is a need for a national network, agency or department to support municipalities in developing plans and, in the process, develop local capacity to implement and revise plans. Such a mechanism needs to be explored based on the complementary strengths of the various potential contributors such as the Ministry of the (MICOA) and various tertiary institutions.

Municipal Finance

Challenges
Municipal finances are very limited in terms of their ability to cover the range of services and activities under municipal responsibility. Some municipalities have made significant progress in revenue enhancement and financial management during the last ten years, but overall a lack of resources and weak financial management systems continue to be major limiting factors for them to comply with their mandates. Total municipal budgets in Mozambique are about  $12US per capita which is strikingly low, even compared to those of other countries in the region, like for example Tanzania at $23US per capita. Nevertheless, while municipal revenue and expenditure functions are constrained on a number of fronts, there is also considerable room for improvement through national and municipal efforts.

Recommendations
Own-source generation can be improved, especially with regards to property taxes (IPRA) in urban areas. Some municipalities (mostly the small ones and those with a high rural composition) do not have the tax base to benefit from a wide use of taxes, but the large and more urbanized ones do. There are still some legal limitations on the use of IPRA, but municipalities can take better advantage of property taxes by expanding the number of taxable properties (updating the cadastral rolls) and updating the property values. Another important measure will be to revise the tax exemption regime and get rid of unnecessary exemptions that do not contribute to the fairness of the tax system.

The government should not transfer new responsibilities to municipalities without transferring corresponding resources. A major issue of concern is there is not yet clarity on the financing mechanisms for the newly transferred responsibilities to municipalities in the social sector under Decree 33/06, especially when considering that provision of currently mandated services is far from being met. There is a risk of spreading resources even more thinly or resulting in further spatial inequality between the urban “core” and the fast growing peri-urban and more rural municipal territories. Therefore, if this transfer of additional responsibilities is to be a successful process, the central government must ensure that the appropriate financial, material and human resources accompany it. The financing should take the form of block grants to the dedicated services.

A major investment is needed to strengthen and improve financial management systems in municipalities. Financial management systems in municipalities, with some exceptions, are generally weak and fragmented and preclude municipalities from planning, exceptions and controlling their budgets in an effective and integrated manner. Municipal budgets also tend to be input-driven rather than activity or program-based, compromising the usefulness of the budget as a planning instrument to identify and execute priorities, and to monitor outcomes effectively. In order to improve their overall performance, municipalities should invest on complete yet simple financial management systems that allow them to perform all financial transactions in a standardized, efficient, and controlled manner. The donor community has shown interest in supporting such activities. Any financial management change should be done in accordance with the legislation, notably with the SISTAFE  law, and all the financial management systems should be fully compatible with central government’s e-SISTAFE.

Water Supply

Challenges
There is lack of clarity in some urban areas as to the authority for water supply and the specific roles that municipalities can and district governments have to take primary responsibility for running water supply systems and yet they are not defined as the authority under current law, although municipal legislation indicates shared responsibility for municipalities. The role of the municipalities is not yet fully clear in respect of the proposals for the AIAS (Water and Sanitation Investment Agency) and CPAS (Provincial Water and Sanitation Boards), which will contract operators in urban areas in 3 pilot provinces.

Recommendations
Clarify the role municipalities should play in water supply in the future. The current view from the water sector is that municipalities must decide if they want to be investors and asset owners, operators, or regulators. Regulation may be the best function of municipal responsibility. Each of these roles, however, has different responsibilities and they cannot be easily combined. This is a large task for the municipalities at this time. Also, it would be important for central level agencies to ensure that the municipalities understand the impacts associated with the newly created AIAS/CPAS that seem like a very promising model and help them to participate in organized and systematic manner. From a municipal perspective, even if municipal provision is not encouraged, there are important opportunities to clarify the roles of municipalities vis-à-vis operators and the asset holding companies, as municipalities claim that it is not unusual that consumers bring their complaints about water to them. The water complaints of the served citizens must be sent to the Operator and Regulator, as they have the mandates to attend to the complaints. It is important that the water sector engages more actively with the municipalities in governance and planning of water operations in urban areas. An initial concrete step recommended by the Coordinating Forum for Delegated Management (FCGD) and endorsed in the current CAPS/AIAS proposals is the establishment of formal written agreements between the asset holding agencies and Local Authorities.

Sanitation

Challenges
Technology, awareness and recourse limitations are constraining the roll of on-site sanitation. In terms of technology the most urgent problem, in the absence of significant capital investment in sewerage systems, is the rollout of low cost on-site sanitation options such as improved pit latrines or similar technologies will be needed to suit economic and physical conditions and not are fully developed. There is also need to ensure that septic tank and pit latrine emptying services are in place, Bay opening up space for and developing private sector service providers. Hygienic treatment and disposal of waste thus collected is also a major needed.
However, it should be recognized that this is a complex service that may not have optimal solutions in the short term in a number of municipalities.

Recommendations
A national sanitation program is needed with financial support from central government in order to roll out sanitation delivery to meet slum upgrading and health MDGs. For on-site sanitation, local governments (municipalities and districts) need to work within a supportive national program to assist households in the implementation of effective solutions. A national program under the Ministry of Public Works (MOPH/DNA) that provides ongoing health and hygiene promotion (with assistance for sanitation. This might take the form of subsidies for critical inputs such as slabs or pit emptying equipment, or a national sanitation fund, which provides for transfers to municipalities for urban sanitation programs. While municipalities are responsible for sanitation delivery they do not have Access to necessary resources. With time a transferor could be phased out, perhaps over 10 years, as local sources of revenue are built up. It is important, however, to recognize that investment in sanitation through municipalities has an essential role to play in helping to meet not only the MDGs related to slum upgrading but also those MDGs focused on health outcomes.

Conclusion

Most municipalities have reorganized themselves to some extent and a number have undertaken initiatives that are beginning to bear fruit, but remains a long way to go, however, before municipalities need to be more robust enough to offer infrastructure that can deliver good quality service. While there is a danger that the pace of municipal technical and financial capacity development has been overtaken by the growing municipal population with the growing social and security problems

Despite that, some of municipalities have managed to deliver some planning which if is well implemented can overcome some of their organizational challenges and have achieved positive improvements in service delivery. 

The Public Private Partnerships (PPPs) is and alternative models of service delivery municipalities have entered into partnerships with local companies for social projects, including a sugar company in Manhiça, coconut oil processing companies in Maxixe, mineral water bottling company in Manhica, and a cement company in Dondo. Maputo City has set up a PPP department and has signed 12 contracts totaling over  $7 million in investments, and further contracts valued over $50 million are negotiation.

Although the demands for service delivery are generally articulated on a sector-by-sector basis, a sector specific response to these challenges has limitations. Municipalities’ ability to deliver in any sector is strongly influenced by a number of elements that work as a system. The weakness of many of these elements constitutes constraints that need to be more debated at national and regional fora. In order to do so the ANAMM needs to reinforce its membership to include all the stakeholder on municipality development.




References 

Helling A. L. (2008). The Legal and Institutional Context for Urban And Municipal Development in Mozambique. ANAMM, Maputo

Cabannes Y. (2008). Local Governance and Planning, ANAMM, Maputo
Table of contents: title: Contents; title: Introduction; title: Legal and Policy Framework; title: The Municipal Development in Mozambique; title: Municipal VS state Roles in the Provision of Urban Infrastructure; title: •	Urban roads; title: •	Water; title: •	Sanitation; title: •	Electricity; title: Municipal Planning; title: Municipal Finance; title: Water Supply; title: Sanitation; title: Conclusion