Urban Governance for Resource Mobilization: The Case of Revenue Generation and Investment Promotion in Jimma Town; Oromia National Regional State, Ethiopia.
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Date
2008-10
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Addis Ababa University
Abstract
Urban governance is one of those facto rs that affect the level of urban development. The
quality of municipal governance plays determinant role in accelerating the development
of municipal services, facilities and infrastructure. This further contributes towards the
betterment of quality of life for urban residents. This case study is conducted in 1imma
Town of Oromia National Regional State specifically emphasizing on the governance of
revenue generation and investment promotion by the Municipal Government. The major
objective of the paper was to asses how much the quality of governance in the Municipal
Government affects generation of revenue from internal sources and promotion of
investment to attract private capital for the Town's development. The study specifically
focused on assessing the governance related challenges faced by the Municipal
Government in resource generation and investment promotion. It also examined what
efforts have been exerted by the Municipal Government to promote investment and the
patterns of investment growth in the Town. The methods employed in collecting data
were more of qualitative in nature with some inclusion of quantitative data. These
methods include; interview with key informants in the Municipal Government, Focus
Group discussion held with potential investors in the Town, questionnaire distributed
among the business community in the Town and document review that included reports,
books and articles that in any way supplement relevant data to the study.
The study finally revealed that, governance related problems like; lack of accountability,
transparency, weak in ~ titutional capacity and lack of permanent, envisioned and public!)!
elected Municipal Administration affected the governance of resource mobili zation in the
Town. These problems are impinging on every activities related to revenue generation
like; identification of sources, revenue collection, system of valuat ion, nurturing
voluntary compliance, legal enforcement and administration of complaints. Moreover, it
was also revealed that, investment promotion is at its nascent stage manifested through
lack of appropriate institutional mechanisms and instruments to do so. The Municipal
Government managed to attract very less private investment compared to the resource
potential of the Town and its surrounding. This is because of lack of transparency, the
prevalence of disincentives like long procedures, ethnic problems (discrimination), lack
of transparent land administration system, less participation of residents, potential
investors and other stakeholders in the development activities of the Town. Therefore, the
Municipal Government should improve governance of revenue generation by
strengthening its organizational capacity through better man power, materials and
logistics support. Increasing taxpayers' ,?articipation in revenue related affairs, instituting
objective and reliable valuation system and installing appropriate institutionalmechanisr,\
to address complaints by taxpayers' could be among the most vital areas on which
measures have to be taken. Moreover, much attention should also be given to the task of
investment promotion by instituting an ofJice which is responsible lor it. The Munici;Jal
Government should work closely with the business community in the Town to make
them part of its development process. The cost and burden of undertaking new
investment activates has to be dealt by streamlining investment services and shortening
decision making channels. In·stituting transparent and accountable land administration
and distribution system should also be given due attention.
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Keywords
Resource Mobilization