Treasury Admits Failure To Meet 5% Devolution Allocation

Deputy Finance Minister Kudakwashe Mnangagwa has admitted that Treasury has for years failed to comply with a key constitutional requirement to allocate at least five per cent of national revenue to provinces and local authorities under the devolution framework.

Section 301(3) of the Constitution obliges the State to transfer not less than five per cent of nationally raised revenue each financial year to provinces and local authorities.

Mnangagwa told Parliament that the Ministry has failed to meet the threshold over the past five years.

“When discussing policy in line with devolution, it is important to note that devolution is enshrined in the Constitution. The law requires that five per cent of national revenue collected be allocated to devolution,” Mnangagwa said.

“Over the past five years, as a Ministry, we have not been able to meet that constitutional obligation, and as we speak, we are still falling short of fulfilling it.”

Mnangagwa attributed the shortfall to fiscal constraints, saying competing national priorities and limited revenue had made it difficult to meet the five per cent threshold.

“There is an acknowledgement that, in the past, we have failed to meet our constitutional obligations due to prevailing fiscal constraints,” he said.

“As matters stand today, I would not say that we are fully up to date in meeting those obligations.

“However, the will is there, Mr Speaker, and we will continue to work with all relevant stakeholders to ensure that we fulfil our responsibilities with regard to devolution.”

Mnangagwa said the pace of disbursements has been hampered by administrative shortcomings within local authorities.

He said councils must comply with the procedures set out in the Intergovernmental Transfer Programme manual before funds can be released, and that many have failed to meet those requirements.

“There is a prescribed process that must be followed before devolution funds can be disbursed,” he said.

“As a ministry, we are ready and willing to disburse these funds, but we can not do so when local authorities have not fulfilled the mandatory requirements. This remains one of the key bottlenecks preventing local authorities from accessing devolution funds.”