Local governments are leading the COVID-19 responses around the world. They are on the front line of citizen engagement, service delivery and management of public space. Every preventive and containment measure require resources and has a fiscal aspect. To finance their epidemic response, local governments rely on three major sources: own revenues, intergovernmental transfers and subnational borrowing. The United Nations Capital Development Fund’s (UNCDF) expertise in local development finance can offer immediate options to help channel necessary resources to support local government officials to meet the needs of the immediate crisis, as well as strengthen their capacity to deliver services to their citizens afterwards.
As a result of the COVID-19 pandemic, local governments will face a severe reduction in fiscal space whilst being expected to support the recovery and ensure social inclusion and local economic development. Central governments will also face a fiscal challenge. UNCDF will provide support policy and regulatory support to ensure that local governments can rebuild their local fiscal space and local economies, including by driving local economic development that benefits local income, reviewing arrangements for fiscal transfers and the structure of local revenue sources – given that some sectors will gain and others will lose from the post Covid19 economy.
In order to explore the impact of the pandemic on local fiscal space, UNCDF organized the online Rebuilding Local Fiscal Space Conference on November 17, 2020.
The event brought together mayors and local government officials of the participating cities (Kumasi, Ghana; Chandpur, Bangladesh; Gulu, Uganda; Telita, Moldova; Chiapas, Mexico; Chefchaouen, Morocco), central government representatives and high-level participants from development partners, with the objective to:
- Present the findings of the initial study on local fiscal space in the context of COVID-19 challenges;
- Discuss and explore the measures to accelerate economic and fiscal recovery;
- Raise awareness of the imperative of rebuilding local fiscal space.
The content of the conference is available on YouTube at:
UNCDF Rebuilding Local Fiscal Space Conference (November 17, 2020)