With the help of the International Centre for Local Democracy (ICLD), United Nations Capital Development Fund (UNCDF) and the Swedish International Development Cooperation Agency (SIDA), the town of Luangwa, located in eastern Zambia, has implemented an innovative program to increase revenue collections and economic stability in the face of mounting climate change impacts.
According to a detailed report by local officials, Luangwa has been plagued by increased flooding in recent years due to climate change. The floods have led to repeated business closures and economic disruption. This spelled trouble for the Luangwa Town Council, which relies heavily on local revenue sources like markets and shops for its budget.
Overall revenue collection was meeting 92% of estimates, but revenue specifically from local sources languished at just 74% of expectations in 2022. Not only did this impact the council’s expenditures and services, but a portion of the tax proceeds had to be spent on tax collection itself.
Faced with this crisis, Luangwa officials developed a multi-pronged strategy focused on long-term financial health, economic pivoting, and tapping new revenue streams. Central to the plan were core values of participation, transparency, accountability, and equity/inclusion.
Specific initiatives included:
- Frequent audits by the Town Council’s audit department decreased the risk of revenue loss by 41%. This provided greater oversight and transparency.
- Construction of an elevated market in a flood-resistant area aimed to directly replace vulnerable revenue sources. The new market has already drawn many new women shopkeepers.
- An 80% increase in women operating shops and stalls at the market. Officials noted the importance of inclusion and participation by this marginalized group.
- A 10% increase in total revenue generation from the new market area. This provided a direct offset to losses from flooding.
- Engagement efforts leading to a 30% increase in community participation in Town Council meetings. This boosted input on spending priorities.
- A 38% increase in community input on the Town Council’s annual budget. Promoting participation and transparency.
- Economic stability during downturns improved by 40% due to diversified revenue sources. This increased overall resilience.
- The town’s ability to pivot to market changes increased by 50%. This adaptation promotes long-term viability.
- Total revenue available for investment and growth increased 38% from 2021 to 2022. This supports future sustainability.
The comprehensive plan promoted inclusion, transparency, and participation by marginalized groups like women and youth. Officials credited this community engagement with the program’s success.
Total locally generated revenue increased 38% year-over-year, indicating improved economic stability despite climate change impacts. Officials say increased revenues will allow expanded services and local development.
“Working closely with our core values allowed us to constantly audit revenue flow,” said the Luangwa team. “Increased stability benefits our whole community.” Their innovative model provides a blueprint for other towns facing climate change worldwide.
