9 months ago

BusinessDay 09 Apr 2018


16 BUSINESS DAY C002D5556 Monday 09 April 2018 In Association With “ Taxes and taxis How African cities can pay for their own upkeep Kampala shows the way WE PAY our money and you see how it looks,” says Aggrey Batwala, leaning out of his minibus in Kampala’s muddy taxi park. Shared taxis used to pay city authorities 120,000 shillings ($32) a month for the right to ferry commuters into the Ugandan capital. But in September indignant drivers stopped coughing up. They later complained to the president, who ordered that the levy be halved. The city appealed against his decision and the drivers still aren’t paying. The stand-off could cost it 21bn shillings this year. Kampala shows why African cities struggle to raise revenues, squeezed as they are between poor citizens and overweening central governments. But it also proves that doing better is possible. In 2010-11 the city collected just 30bn shillings (see chart). Last year it raised 89bn shillings, about a third of its nonaid budget (the rest comes from central government). Its experience offers lessons for African cities, which will triple in size by 2050. They need roads, drains and lights. Yet many look to central governments for funds rather than seek ways to raise their own. The change in Kampala began in 2011 with the creation of the London’s bleeding Knife crime is surging in London There were more murders in March than in any month for more than a decade IT WAS another bloody week in London. On April 4th a young man was stabbed to death in the street. Earlier that day, a man died in a bookmaker’s and, across town, another was fatally stabbed. On April 3rd a 16-year-old boy died from gunshot wounds. The day before, a 17-year-old died in her mother’s arms after being shot from a passing car. On April 1st a 20-year-old was stabbed to death. So far this year, the capital has seen 51 murders. The press is alarmed. Last weekend the Sunday Times claimed that London “is starting to look a bit like New York once did”. That is overstating things. London’s murder tally last year was far lower than that of New York, let alone that city’s peak of 2,245 in 1990. There were 130 murders in London in 2017, compared with Kampala Capital City Authority, a group of unelected technocrats which assumed most of the powers of the old city council. It took over a city with too many official bank accounts. Revenue collection was farmed out to middlemen who beat money out of taxi drivers, handing only a fraction to public coffers. The first step was sorting out administration and compliance. Collection was brought in-house. A new system allowed citizens to pay on their mobile phones. Early gains came from taxi 292 across the pond. Though London’s total was a little higher than New York’s in February and March, it was far lower in January. Yet there are good reasons for Londoners to be concerned. There were more murders in March than in any month for more than a decade. Violent crime involving a knife rose fees and business licences. They are predictably unpopular. Betty Ssuubi, who sells clothes downtown, says the licence for which she pays 210,000 shillings annually is too high. “Just look at this business,” she says, her shop barely bigger than a wardrobe. Next came a drive to collect more property taxes. These should fall more heavily on the rich, rise as better services push up house prices and be harder to dodge. But the most recent valuation was in 2005, so new malls and office blocks were not on the by a third in the 12 months to July 2017. The victims are often young and are disproportionately black. Why is London getting so bloody? About 40% of youth homicides are gang-related. Some target teenagers who are being used to run cash and drugs to lucrative markets beyond the capital. Feuds escalate more quickly register. That is not unusual in Africa. Nairobi has not updated its roll since 1982. Valuers are now traipsing around Kampala, registering properties on tablet computers. In the business district they counted 16,000 buildings, doubling the size of the roll and tripling revenues from the area. Fred Andema, the city’s chief taxman, hopes to raise 50bn shillings a year from property once the valuation exercise is complete. But he also estimates that he loses 20bn shillings because national than in the past, because rival gangs goad each other on social media, police say. Others point to the dwindling number of coppers on the beat: the number of officers in England and Wales has fallen by 19% since its peak in 2010. “Neighbourhood policing has all but vanished,” says David Lammy, a Labour MP in north London. “The intelligence that police pick up on the ground isn’t really there.” London’s newish chief of police, Cressida Dick, agrees with the mayor that the force should reverse the decline in the use of stop-and-search powers, which have been criticised for targeting ethnic minorities. She also wants knife crime to be regarded as a public-health issue, making it a priority for the health service and councils as well as the police. Such measures will come too late for Tanesha Melbourne-Blake, the 17-year-old law exempts owners who occupy their properties from paying the tax. That suggests the third and, perhaps, most important step: better policies. Often national politicians get in the way. Consider borrowing, which might benefit some cities (though not all). Kampala secured its first credit rating in 2015, but has not issued a bond because of a centralgovernment cap on city debts. That year Senegal’s government forced Dakar to abandon a bond just two days before the planned issue. Civil servants cited regulations; cynics noted the mayor’s rivalry with the president. Politics is not always a hindrance. Opposition governors in Lagos see tax reform as a way to transform the city and build their base. In Kampala democracy has been sidestepped. Jennifer Musisi, the city’s top technocrat, says that gives her “more freedom to do what is right”. Ms Musisi points to better services and smoother roads. But the scale of the city’s problems still dwarfs the available resources. And her tough approach has more admirers on the affluent hillsides than in the slums between them. “It’s not fair,” says John Dungu, a shopkeeper. When it rains, he notes, the valleys still flood. who died on April 2nd. “To my baby Nesha,” her mother wrote on a note attached to flowers she left at the scene, “I’m gonna miss you so much.”

Monday 09 April 2018 C002D5556 BUSINESS DAY 17

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