Sénégal: TVA Collectivités Territoriales Hausse Proposed for 69 Billion CFA

• Sénégal could secure an additional 69 billion CFA francs for local collectivities by increasing the TVA indexation rate to 10%.
• Arona Ba, Director of Territorial Collectivities, announced this proposal during a seminar on local governance and transferred competencies.
• Current financial transfers to local funds amount to 84.7 billion CFA francs this year, based on a 5.5% TVA indexation rate from the previous year.
• The Director emphasized that increased funding must be coupled with enhanced accountability, performance, and rigorous management from local administrations.
• A reform of the Decentralization Endowment Fund's regulatory framework is planned to resolve resource allocation delays caused by an outdated 2008 decree.

The imperative to augment resources at the local level is critically important, though this financial commitment must be paired with heightened expectations for rigorous management and transparent accountability.

Sénégal is poised to significantly increase financial allocations to its local collectivities, with a proposed adjustment to the Value Added Tax (TVA) indexation rate. Arona Ba, the Director of Territorial Collectivities, announced on Friday that raising this rate to 10% could inject an additional 69 billion CFA francs into local budgets. This potential increase aims to bolster the financial autonomy and operational capacity of territorial administrations across the nation.

Currently, the endowment fund and equipment fund for local collectivities receive 5.5% of the TVA collected in the preceding year. This year, financial transfers to the Decentralization Endowment Fund (FDD) and the Territorial Collectivities Equipment Fund (FECT) have reached approximately 84.7 billion CFA francs. The proposed 10% indexation rate would specifically generate the aforementioned 69 billion CFA francs in additional funding, demonstrating a clear path to enhanced local resources.

The Director further elaborated on the potential for even greater financial support, indicating that a 20% indexation rate could mobilize an additional 223 billion CFA francs, while a 30% rate might yield over 360 billion CFA francs. These figures underscore the government's exploration of various options to substantially empower local governance structures. Mr. Ba's remarks were made during a seminar focused on the current status, challenges, and future prospects of competencies transferred to territorial collectivities, particularly in the critical sectors of education, youth, and sports. The event was organized by the National Assembly's commission dedicated to these areas, with its president, El Hadji Guèye, in attendance.

The initiative to increase resources for local collectivities is a strategic move aligned with broader national objectives, including the implementation of public policy territorialization and the establishment of territorial poles. Arona Ba emphasized the critical importance of augmenting financial resources at the local level, recognizing it as a cornerstone for effective decentralized governance. However, this financial commitment comes with a crucial caveat: the imperative for heightened accountability and rigorous management.

Mr. Ba stressed that any increase in funding directed towards local collectivities must be accompanied by a robust framework for performance and results. He advocated for fostering a culture where local administrations are held to account for the utilization of these enhanced resources. This approach seeks to ensure that the additional funds translate directly into tangible improvements and efficient service delivery for citizens.

Furthermore, the Director highlighted the necessity of better integrating national policies with their local implementation. He explained that territorialization involves adapting national sectoral indicators to the commune level, thereby creating a unified logical framework for the state, territorial collectivities, and partners. This collaborative model is expected to streamline the monitoring and evaluation of public policy impacts, particularly through parliamentary oversight. A primary goal is to enable local collectivities to effectively align with national public policy indicators, though this will require strengthening the capacities of communes to fully execute their roles in territorialized public policies.

In a significant move to address systemic inefficiencies, the Director of Territorial Collectivities also announced plans to revise the regulatory framework governing the Decentralization Endowment Fund (FDD). This reform is specifically targeted at resolving persistent delays in the allocation and availability of resources to local collectivities. The current decree, which dates back to 2008, has become outdated, referencing institutions such as former rural communities and regional councils that no longer align with Sénégal's contemporary territorial organization.

This anachronistic regulatory document is identified as the root cause of the recurrent delays in the FDD's operations. The proposed reform aims to modernize this framework, ensuring it reflects the current administrative landscape and facilitates a more efficient flow of funds. A key objective of this revision is to ensure that the joint decrees necessary for the distribution of funds are finalized and made available by January 15 at the latest, thereby guaranteeing that resources are disbursed promptly to the collectivities.

Source: Reporting from Senegalese media.