The Financial Management of Jimma Town

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Addis Ababa University


Urban centres constitute an important part of local government in Ethiopia. They serve as the centre of services, manufacturing and markets for both urban and rural people. Thus, improving urban management should be part of the national development endeavor. One of the important conditions in this regard is improving the financial management of the urban centres. This in turn calls for improving revenue bases, proper allocation, spending and record keeping. However, the fact that urban centres in Ethiopia are being governed by age-old rules and regulations, lack of viable revenue bases, less buoyant sources, lack of stable management and poor municipal staff profile have obstructed municipalities ji-om providing urban services to their residents in a meaningful manner. This paper analyses the financial management of Jimma town in light of the above issues. It appears that the financial management of the city is characterized by dual problems of scarcity of fimds on the one hand and inappropriate management of those which are available on the other. These problems are analyzed in terms of the revenue structure of the city, its collection process and the problems encountered. It also critically assesses the allocation and spending which includes the budgeting process, record keeping and inspection. Then in its conclusive remarks, the paper tries to suggest ways and means to improve sources of revenues and their management. This last part consists of two issues. Since urban centres are affected by both internal and external forces, any attempt to reform urban finance must take duly these factors in to account. Internal financial issues include effective institutional capacity that could enable the municipal government to manage its financial resources. External factors include the removal of heavy hands of higher tiers which in this case includes zonal administration and zonal bureau of works and urban development.



Financial Management