decentralization in senegal

Module A

Decentralization Policies and Practices

Case Study Senegal

Participants’ Manual

June 2003

Module A: Decentralisation Policies and Practices

Participants’ Manual Case Study Senegal i

Table of Contents Module A Case Study Senegal Table of Contents Module A Case Study Senegal....................................................... i Context to decentralization.......................................................................................... 1 Central government decentralization objectives........................................................ 1 Legal and Institutional Framework.............................................................................. 2

The region................................................................................................................... 2 The Department .......................................................................................................... 2 The Town.................................................................................................................... 2 The Arrondissement.................................................................................................... 3 The Village.................................................................................................................. 3

National policies and programs on decentralization ................................................. 3 The Reforms before 1972 ........................................................................................... 3 The Reforms between 1972 and 1996 ........................................................................ 3 The 1996 Reform Known as Regionalization............................................................... 4

The institutional stake.................................................................................................. 4 The legal stake.............................................................................................................. 5 Financing Sub-National Governments (SNG)............................................................. 6

Table 1: The composition of SNG revenue in Senegal .................................. 6 Financial autonomy and budget management of local authorities ............................... 6

SNG’s overall resource base ....................................................................................... 7 SNG involvement in infrastructure and service provision (ISP)................................ 7

Table 2: The involvement of SNGs in ISP in Senegal (and five other countries): .................................................................................................... 8

Local government accountability................................................................................ 8 Citizen participation ..................................................................................................... 9 Main issues and challenges to be addressed............................................................. 9

National Requests for Long-Term Planning of ISP ...................................................... 9 Autonomy vis-à-vis the Ministry of Finance ............................................................... 10 Autonomy in Decision-Making as regards Capital Expenditure ................................. 10 Operational Contraints in relation to the Sharing of Responsibilities between the Towns and the Communes of Arrondissement.......................................................... 11


Participants’ Manual Case Study Senegal Page 1

Module A Decentralization Policies and Practices. Case Study Senegal1 Participants’ manual ______________________________________________________________________

Context to decentralization The implementation of decentralization in Senegal officially started before the country gained independence. Indeed, the practice of decentralization was granted to all the former French, English, Spanish and Portuguese speaking black African colonies whereas, in Senegal, it was actually conquered by the populations of Saint Louis. On the initiative of 177 mulattos and 150 blacks, these populations had, well before the 1789 French Revolution, sent a petition to the King of France through the then governor of Saint-Louis, Blanchot DE VERLY, demanding that Saint-Louis be upgraded to a munici-pal status. This petition only received a favourable response through the decree of August 10, 1872 signed by the President of the French Republic, Mr Adolphe THIERS, establishing the communes of Saint – Louis and Gorée. This decree marks the beginning of the first stage of decentralization known as “COMMUNALISATION”. The second stage, which started in 1972, is known as “RURALISATION” because, for the first time in Senegal, citizens of rural areas were involved in the implementation of decentralization through their representatives elected by universal suffrage. As to the third stage, which was achieved in 1996, it is known as REGIONALIZATION as it marks the birth of the region as a territorial community enjoying legal status and financial autonomy. Thus, before the 1972 reform and for a transitional period of 100 years, the Senegalese society was characterised by a duality with two completely different types of citizens. On the one hand, the citizens of the communes participated in the political and administrative life and enjoyed economic competitiveness; On the other hand, the citizens of the rural areas were faced with a poor political and social system, illiteracy, inadequate administration, a lack of equipment and small-scale agriculture.

Central government decentralization objectives The objectives of the central government are :

• Decentralization, which is gradually to devolve more and more tasks and functions to the SNGs ;

The principles of SNG are laid down in the Constitution, which says that:

1 This case study has made extensive use of the study carried out by J. Steffensen and S. Trollegaard on Fiscal Decentralization and Sub-National Finance in Relation to Service Provision, Synthesis Report of six Sub-Saharan African Country Studies/ Country Report of Uganda; the study was directed by the World Bank and financed by DANIDA, Denmark with support from USAID; the web site for the for the full report and each of the six country reports is: http://www.1.worldbank.org/ wbiep/ decentralization/africa/africa.htm. Other sources that have been consulted are: Alain Rochegude (2000), ‘Decentralization, foncier et acteurs locaux’ in: Politique de Decentralization en Afrique de L’Ouest – Rapport de Synthese & Fiches de Pays, Municipal Development Program, Cotonou; Bamidele Olowu (2001) African Decentralization Policies and Practices from 1980s and Beyond, ISS working Paper 334, The Hague; Anders Danielson (2001) Economic and Institutional Reforms in French-speaking West Africa, UNU/WIDER Discussion Paper No 2001/28, Helsinki; Ribot C. Jesse (2002) African Decentralization- Local Actors, Powers and Accountability;



”The local authorities of the Republic are: the region, the municipalities and the rural authorities. In accordance with the laws and regulations, the local authorities are freely administered by elected councillors”.

The recent reform in l996 contained the third stage of this process and contained the following main elements:

• Establishment of 10 regional councils • Transfer of new functions to the local authorities • Increase the autonomy of the SNGs vis-à-vis the central government and change

the relationship from a process of an exante (prior) control to legal ex post supervision

• Establish a clear separation of power between central and local government administration

Legal and Institutional Framework The unitary State of Senegal is based on a deconcentrated and Decentralized administrative and territorial organisation. The territory of the Republic is divided into ten regions. Each region includes three departments in which we have the communes (local authorities). The department is divided into arrondissements, which are divided into rural communities. The rural community is the level where populations may participate; and it includes a number of villages. The village comprises several families and it is the basic administrative unit.

The region A governor, who is appointed by decree, administers the region. He is a civil servant of hierarchy “A,” belonging to the civil administrators’ body. He is compelled to live in the region’s capital. He is the delegate of the President of the Republic, and he represents the Prime Minister and the ministers. Two deputies assist him in the exercise of his duties; they are appointed under the same conditions. In the region, the governor exercises the role entrusted to him by the laws and regulations.

The Department A prefect who is appointed by decree administers the department. The prefect is also a civil servant of hierarchy “A,” belonging to the civil administrators’ body. He is under the hierarchical authority of the governor; he is the delegate of the President of the Republic and he represents the Prime Minister and the Ministers. He conducts and co-ordinates the actions of sub-prefects, and he also exercises, within the communes, the duties entrusted to him by the texts on decentralization (laws and regulations).

The Town The town is a ‘commune’ (local authority) divided into ‘arrondissement’. The ‘arrondissement’ is a part of a town, and it enjoys a legal status and financial autonomy.



The Arrondissement A civil servant, appointed by decree and called sub-prefect, administers the arrondissement. In his area, the sub-prefect is the delegate of the President of the Republic and represents the Prime Minister and the other ministers. He exercises, within the rural communities, the attributions entrusted to him by the texts in force.

The Village In Senegal, the village is the basic human settlement and administrative unit. The chief of the village has no power of his own; however, he is responsible for the enforcement of laws and regulations, as well as the decisions taken by the administrative authority and the rural council. He is appointed by a decision taken by the prefect upon the advice of his entourage and upon the proposal of the sub-prefect. The Ministry of Interior should approve the decision. To date, 13, 500 villages have been recorded in Senegal, and the attributions devolved to their chiefs are defined by decree 72-636 of May 31st, 1972. As a result of the regional, municipal and rural elections held on November 24th, 1996, the composition of local authorities is as follows:

National policies and programs on decentralization As from Senegal’s accession to independence, the country’s public authorities clearly opted for a gradual and careful implementation of a decentralization policy.

The Reforms before 1972 When it gained independence, Senegal already had 34 full-fledged communes with elected councils and mayors. Law 64 - 02 of January 19th, 1964 established a municipal system for major communes. This was a departure from the common law, as an administrator having the power to authorise expenditures was appointed by the central government. This innovation resulted from a political willingness to further control municipalities, as they had to be preserved from the adverse effects of political forces.

The Reforms between 1972 and 1996 Law 72- 25 of April 19th, 1972 established the rural communities. In spite of this innovation, the central power continued to strengthen its control on local authorities. Indeed, the sub-prefects of arrondissements appointed by the central government were now in charge of the management of this new level of local authority, i.e. the rural community. Under this law, the sub-prefect authorises budget expenditures and is in charge of implementing the rural council’s deliberations, whereas the approval of decisions taken by rural communities falls within the competence of the prefect or governor according to their nature. Subsequently, a new reform was implemented through law 90 – 35 of October 8th, 1990 abolishing the special status of the communes, which hitherto enjoyed a regime



departing from the common law. From then onwards, communes were no longer administered by an administrator but by a mayor elected by universal suffrage. Law 90 – 37 of October 8th, 1990 transfers the management of rural communities from the Sub- prefect to the President of the Rural Council. These reforms are a step forward, insofar as they bestowed more responsibilities upon the councillors for the management of their communities. However, the principle of prior control has always been in force; but, with the passing of time, the system proved to be inefficient and too heavily centralised. This situation resulted in longer procedures and delayed implementation of decisions. The fact that prior control had to be exercised on the opportunities of decisions taken by councillors discouraged initiatives from these councillors and the populations themselves.

The 1996 Reform Known as Regionalization The 1996 reform originates from the public authorities' willingness to enable local authorities to plan and enhance economic and social development at the local level by granting them more autonomy vis-à-vis the central government. This new stage of the decentralization policy known as “Regionalization”, which focuses on an institutional reform of the region, should be regarded as a political willingness of the public authorities to reduce the State’s control of the nation’s political and administrative life. It aims, among other objectives, at:

• Fostering local democracy • Ensuring a free administration of local authorities • Promoting local development • Promoting good local governance

In order to reach these objectives, Regionalization should change the relations between the State and the local authorities by carrying out the following three main actions:

• To establish a clear distinction between State administration and local administration through the creation of real local public services

• To set up a new a posterior control on legality by the administration and the courts in lieu of the traditional system of tutorship and a priori control on opportuneness

• To transfer to local authorities the competencies they are in a better position to exercise at each level and to support the process of power sharing between the State and the local authorities, through a real transfer of decision-making and management powers as well as of financial, human and material resources

In the context of these guidelines, the institutional, thematic and instrumental approaches and the system for the financing of local authorities are the main stakes of Regionalization that should be reviewed.

The institutional stake Decentralization proceeds from the fact that the State recognises the existence of specific local collective interests that are different from national interests (local affairs) and that develop into autonomous decision-making centres distinct from the State itself. The State also recognises, therefore, the necessity to establish public legal entities (local



authorities) as the legal impersonation of these local collective interests, in the same way as the State is the legal impersonation of the Nation. That is indeed the institutional stake. It is specified in the legal provisions pertaining to decentralization, through law 96 - 06 of March 22nd, 1996, establishing the renovation and revitalisation of communes and rural communities, on the one hand, and the creation of a new intermediate structure that is the region, on the other hand. This new structure is intended to serve as a framework for the planning of local development and for the co-ordination of State actions with those of local authorities. In Senegal, the decentralization process is perceived as a democratic requirement and a necessity to ensure economic efficiency. It is also viewed as a means to achieve institu-tional and territorial balance. Therefore, the key issue in setting up the region was, notably, the determination of a minimum capacity to administer the region’s economy. This is always a difficult task, as it is linked to historical, geographical, economic, sociological and cultural parameters. The creation of the region results from the issue of setting up an essential component of the democratic State likely to serve as a focal point of local development plans. Senegal’s present institutional landscape which, combines all these social and economic parameters, is as follows:

• 10 regions • 60 communes governed by common law, including 4 towns • 43 communes of arrondissement • 320 rural communities

This represents a total of 433 local authorities After the commune and the rural community, the region is the third level of local authority. However, there is no hierarchy among these three levels. The institutional approach is aimed at enhancing the importance of local power, and this led to a new political and institutional logic: one of proximity, solidarity and neighbourhood. This spirit of proximity was behind law 96-09 of March 22nd, 1996, which specified the administrative and financial organisation of the commune of arrondissement and its relations with the town. By virtue of this law, the towns of Dakar, Pikine, Guédiawaye and Rufisque were divided into, respectively, 19, 16, 5 and 3 communes of arrondissement in order to promote the proximity management of local affairs.

The legal stake The principle of free administration of local authorities is a constitutional norm that was introduced in the legal provisions pertaining to Regionalization from the provisions of article 90 of the Constitution. This principle was first briefly mentioned in article 39 of the Constitution of August 29th, 1960, before being removed from the texts with the constitutional law 63 – 22 of March 7th, 1963. It was reintroduced in article 90 of the fundamental law through law 94 – 55 of June 13th, 1994, which reads as follows:

“The Local Authorities of the Republic shall be: the region, the commune and the rural community. In observance of the laws and regulations, Local Authorities shall be freely administered by elected councillors”.

This principle of free administration of local authorities is of paramount importance in the decentralization system. In addition to the autonomy conferred to local authorities, it



gives them the constitutional guarantee, which cannot be questioned even by the State, in regard to their rights to exist or in regard to their freedom of action. This principle originates from the public authorities’ willingness to promote local authorities by granting them the status of major institutions, thus restricting the omnipresence of the State. For such an ambitious reform, it was essential to ensure its coherence and to strengthen its legal scope by asserting the existence of local authorities in the fundamental law of the country. The free administration of local authorities is materialised by the exercise of a posterior control on most usual decisions; a priori control being maintained only for decisions that strongly and durably commit the State’s authority. A posteriori legal control is based on three principles:

• The decisions of local authorities are enforceable • The control focuses on the legality, not on the appropriateness, of decisions • The control involves the representative of the central State at local level: that is to

say, The governor for the region, the prerfect for the commune, the sub-prefect for the rural community or the administrative judge (Council of State)

Financing Sub-National Governments (SNG) The composition of SNG revenue in Senegal is shown in table 1 Table 1: The composition of SNG revenue in Senegal Own taxes

Shared taxes

User fees / charges

Single source revenues

Transfers from central governm.

Donor contributions

Other non-tax revenues

Borrowing Total

43

1

23

0

22

0

11

0

100

Based on the above figures, the following observations can be made:

• SNGs rely very strongly on their own sources of revenue, which in its quasi totality come from local (non) tax sources and user fees/charges; this is way above the average of 32 percent for the six countries covered by the World Bank study

• A relatively low dependency rate on transfers from central government • None or hardly any other sources of revenue such as borrowing

Financial autonomy and budget management of local authorities The authority exercised by the central government on the budgets (procedure and approval) varies between the period before and after 1996. Before the 1996 reform, the authority above the local authorities (Ministry of the Interior) exercised an appropriate control on the budget expenditures of local authorities. This authority according to its own management criteria approved the project revenues and expenditures. As from 1997, the control over the elaboration of the local authorities’ budget has been transferred to the State’s representative at local level (the governor for the region, the prefect for the commune and the sub-prefect for the rural community). However, it should be noted that a significant change took place: the control exercised on the local authority’s budget is no longer appropriate control but a legal control only on the balance of the budget and the listing of compulsory expenditures.



The local budget is divided in two parts: the investment budget and the operating budget. The investment budget comprises the extraordinary revenues and expenditures. The operating budget comprises the ordinary revenues and expenditures. These parts are divided into sections and items according to the nature of the expenditures or revenues. The classification of expenditures and revenues by chapters and articles results from a general nomenclature common to all the local authorities (article 243 to 254 of the Code of Local Authorities, law 96-06 of 22/03/96). Thus, the budget nomenclature is the same as the accounting nomenclature derived from the accounting plan of local authorities.

SNG’s overall resource base o In general, the resource base is inadequate to carry out the mandates as provided by

law; o The main sources of income are as shown above, which are own revenue, user

fees/ charges and central government transfers; the ratio between current and capital expenditure is in the order of 78 and 22 percent whereby the latter is growing more rapidly than the former;

o Local tax revenue vary greatly from year to year and among SNG hence a decrease compared to central government funds; this is explained by a weak tax administration in terms of the tax base, control of payments and sanctions on non-payment (unaccounted expenditure due to unpaid bills); potential tax revenue is much higher than the present collected resources;

o SNG do not receive full compensation for the cost of new tasks (unfunded mandates);

o The principle of distribution of state transfers is very general and not sufficiently related to the SNGs’ specific expenditure needs. Administration seems to be lengthy, the volumes are not adjusted for inflation and transfers are not made on a regular basis;

o A number of taxes is collected by one authority (central government), but revenues are assigned 100% to another authority. This may reduce the incentive to efficiently collect taxes. Involvement of the SNGs in the tax administration is very limited;

o There are difficulties in defining appropriate user fees and lack of a clear methodology;

o Many tax exemptions are awarded without the proper involvement of the SNGs; o SNGs do not administer their own surplus, as this must be forwarded to the State

Treasury. However, a draft law has been prepared granting local authorities the freedom to manage their own surplus funds, and future innovations in this area are anticipated.

SNG involvement in infrastructure and service provision (ISP) Senegal has decided to fully devolve and decentralise ISP, but to do so in two stages. The first stage is limited (e.g. not comprising water supply and sewerage) and the intention is gradually to build competence and operational capacity at the local level before entering into the second stage, where additional responsibilities will be transferred, e.g. education, environmental protection and regional planning. Table 2 shows the involvement of SNGs in ISP in Senegal (and five other countries):



Table 2: The involvement of SNGs in ISP in Senegal (and five other countries):

The field of town planning has been entirely transferred to SNGs. Before the reform, elaboration of master town plans was the task of town planning services of the central government. These tasks also include handling of the town planning master plans, development plans, operational town planning on parcels of land and other renewal projects and, finally, the town planning acts (building permits, certificates of conformity, town planning certificates and demolition certificates). In Senegal, a very interesting and convincing new organisational set-up for ISP is in operation. The central government supports the SNGs through specialised agencies such as AGETIP (agency for the execution of public works) through various borrowing arrangements. Reference is made to Module D for a more detailed description of these development agencies.

Local government accountability In Senegal, councilors and mayors are elected; in many instances councilors are also members of the parliament. This provides the basis for a dual loyalty (upward and downward accountability). Like in most countries, the central government (often the minister of local government) has the power to investigate and even dismiss a council in situations where irregularities have appeared. In a number of areas, SNG tasks are not clearly defined in terms of responsibility and financial accountability is in a moderate stage (e.g. audit is still weak). Yet, central government control is still strong, but more stable, transparent and regulated. In the field of land development and planning SNG have no control or ownership rights. In this context, the following observations are relevant:



o Nationally registered political parties present a slate of candidates for rural council elections;

o The slate fills three fourths of the rural council, while one fourth of the representatives are chosen by a general council of produces and marketing co-operatives and associations (such as youth and women);

o Independent candidates cannot run for rural councils; o A sizeable proportion of council presidents live in the capital; quite often they

combine their council function with other political functions (deputy to the National Assembly or a high government function such as Minister);

These points indicate a strong politicization of the rural councils, which will have an effect on the direction and level of accountability of the elected councils members and on the way they serve the interests of the community.

Citizen participation Several formal mechanisms allow citizens to participate in the democratic process and development policies and programmes, such as: - the right to vote; - coordinating bodies for the input into development plans; - associations of citizens (at neighborhood and village level) In addition, there is the presence of NGO that often focus on special areas of ISP such as education and cultur with programmes and initiatives at the local level. However, studies have shown that the links and co-operation between NGOs and the SNGs are generally weak and that the NGOs have stronger ties to the external donor community in serving the interests of the communities where they operate. Citizen’s access to and possibilities for control of SNG budget and accounts is generally limited to the budget preparatory stage, when meetings to discuss budgets are open for the public. It becomes more difficult to have control over decisions that are finally made, the budgets voted for specific purposes and how the money has been spent. (financial control and audit). Based on the observations made in the previous section, it is obvious that party politics is undermining popular participation.

Main issues and challenges to be addressed National Requests for Long-Term Planning of ISP National planning is not a constraint in relation to the implementation of local plans. The development of the national economic and social development plan is the responsibility of the Direction of Planning (Ministry of Economy, Finance and Planning). The national plan should reflect the basis preoccupations and, therefore, should include the comprehensive regional development plans (for the regions), the communal investment plans (for the communes) and the local development plans (for the rural communities). A better co-ordination between the various levels will be achieved through the regional planning services and the rural promotion centres that assist the local authorities in drafting their plan. Within the framework of the 1996 reform, a Regional Development Agency placed under the authority of the Regional Council was set up to ensure the cohesion of the various plans at regional level. The trend observed is the implementation



of local plans supported and financed by development partners (through AGETIP, ADM and NGOs).

Autonomy vis-à-vis the Ministry of Finance The local authorities’ relations with the Ministry of Finances are strictly of a financial and accounting nature. In terms of accounting relations, procedures for receiving and disbursing funds follow public accounting rules. In terms of financial relations, the resources of the local authorities are placed in the accounts of the public Treasury (except for municipal tax collection). This practice makes the Treasury the local authorities’ banker who manages their funds and, if need be, grants them advances. In terms of fiscal decentralization, the following the following are among the key issues :

• Expenditures are very much directed towards general public services/ administration

• The SNGs have limited financial capacity, e.g. they constitute a very small proportion of the total public expenditure and of GDP

• The revenue sources are unstable and vary greatly from year to year; this is a serious constraint on their creditworthiness

• The SNGs have not received full compensation for the costs of new tasks (a number of unfunded mandates have been transferred)

• Transfers from central government have increased during the period but not sufficiently compared to the extra costs imposed by the new functions (partly unfunded mandates). The transfers from the central government and the shared taxes, i.e. comparable small, especially the shared taxes;

• The principle of distribution of state transfers is very general and not sufficiently related to the SNGs’ specific expenditure needs; administration seems to be lengthy, the volumes are not adjusted for inflation and transfers are not made on a regular basis;

• A number of taxes are collected by one authority (central government), but revenues are assigned 100% to another authority. This may reduce the incentive to efficiently collect taxes. Involvement of the SNGs in the tax administration is very limited

• There are difficulties in defining appropriate user fees and lack of a clear methodology

• The tax administration is generally weak in terms of setting the tax base, assessing the revenue, collecting revenue and sanctioning tax defaulters; the potential revenue increase from strengthening the tax administration (with the same tax level) is approx. 50%

• Many tax exemptions are awarded without the proper involvement of the SNGs • There is a lack of co-operation between the officials involved in tax assessment

and collection

Autonomy in Decision-Making as regards Capital Expenditure The approval of investment budgets by the State's representative does not concern the opportuneness of the capital expenditures but rather concerns the legality of the expenditures. These expenditures should be provided for by the law and, therefore, should be listed in the budget and be the subject matter of a deliberation by the municipal, regional or rural council.



The State’s representative may only reject the budget in the following cases: • When the budget is not actually balanced (when he deems that the resources

corresponding to the expenditures do not exist) • The revenues or expenditures are illegal as they are not provided for by the law • Compulsory expenditures provided for by the law are not listed in the budget • Operational Constraints in relation to the Sharing of Responsibilities between the

Towns and the Communes of Arrondissement

Operational Contraints in relation to the Sharing of Responsibilities between the Towns and the Communes of Arrondissement In order to ensure a proximity management, the towns of the region of Dakar - namely Dakar, Pikine, Guédiawaye and Rufisque - were respectively divided, on a trial basis, into 19, 16, 5 and 3 communes of arrondissement. This subdivision was in accordance with the provisions of law 96-09 of March 22nd, 1996, pending the possible application of such a division to the town of the other regions. This is a highly political approach, because it meets the aspirations of the citizens and contributes to enhancing local democracy. However, it must be recognised that in the region of Dakar, the sharing of markets between the towns and the communes of arrondissement, as regards the allocation of fiscal revenues, resulted in conflicts between the mayors of towns and those of communes of arrondissement. These conflicts represent heavy constraints on the good implementation of the 1996 reform.

decentralization in senegal

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