African Cities Strengthen Local Finance to Accelerate Sustainable Growth

As cities across Africa grow at an unprecedented pace, the pressure on local governments to deliver essential services and infrastructure with limited financial resources is intensifying. Yet amid these challenges, a new wave of fiscal innovation and reform is taking root in some of the continent’s most dynamic urban centers.

At a recent high-level side event co-organized by the UN Economic Commission for Africa (ECA), UN-Habitat, and the United Nations Capital Development Fund (UNCDF), African city leaders highlighted encouraging progress in enhancing public finance systems. The session, held on the sidelines of the Fourth International Conference on Financing for Development (FfD4) in Seville, Spain, focused on how cities can mobilize domestic resources and improve financial governance to advance the Sustainable Development Goals (SDGs) and Agenda 2063.

Progress in Revenue Mobilization and Financial Management

James Muchiri, Deputy Governor of Nairobi City County, revealed that the Kenyan capital has seen significant revenue growth. “In the last financial year alone, Nairobi’s local revenue rose by one billion shillings, and the year before, by nearly the same amount,” he stated.

This sentiment was echoed by Chilando Chitangala, Mayor of Lusaka, Zambia, who shared that the city has made strides in addressing revenue leakages and building systems for better accountability. “We are learning how to collect more effectively and manage what we collect with greater transparency,” she noted.

Both cities are part of a broader movement under the DA-15 project, a collaborative initiative between ECA, UN-Habitat, and UNCDF aimed at strengthening local public finance in six African cities: Nairobi, Lusaka, Addis Ababa, Dar es Salaam, Kigali, and Yaoundé.

DA-15 Project: Fiscal Diagnostics and Reform Tools

The DA-15 project is a multi-phased initiative that began with comprehensive financial diagnostics across participating cities. These assessments uncovered critical gaps in:

• Revenue collection mechanisms

• Expenditure controls

• Investment planning

• Fiscal sustainability

However, the diagnostics also identified high-potential areas for reform.

“By using ECA’s methodology, we got a report that was independent of our own systems,” said Mr. Muchiri. “It surfaced issues we hadn’t seen before and gave us something concrete to act on.”

To support implementation, ECA has introduced the Fiscal Space Performance and Monitoring Dashboard—a digital tool designed to help cities monitor real-time fiscal health indicators such as liquidity, solvency, and revenue efficiency.

Hana Morsy, Deputy Executive Secretary of ECA, described the dashboard as a breakthrough for transparency and local decision-making. “It enhances accountability and supports smarter, data-driven decisions by city leaders,” she explained.

Building Capacity and Political Will

While technology and diagnostics are essential, both Nairobi and Lusaka underscored that sustainable reforms depend on local capacity development and political commitment.

“We now have the skills and structure to move forward,” said Ms. Chitangala. “And we hope this knowledge can benefit other cities across Zambia as well.”

Mr. Muchiri emphasized that Nairobi’s ultimate goal is to reduce dependency on central government transfers. “To do that, we must build strong, reliable systems that let us collect and manage our own revenue with confidence,” he said.

Rethinking City Roles: From Beneficiaries to Leaders

Ms. Morsy of ECA urged national governments, development partners, and private sector actors to shift their perspectives on urban development. “What if we stopped viewing cities as beneficiaries,” she asked, “and started empowering them as leaders of national development?”

Her call to action was reinforced by Atkeyelsh Persson, Chief of Urbanization and Development at ECA, who stressed the importance of scaling lessons learned.

“It’s encouraging to see real impact on the ground,” said Ms. Persson. “But the capacity built through this work must go beyond Nairobi or Lusaka—it must reach other cities in Kenya, Zambia, and across the continent.”

Urban Transformation for a Sustainable Future

Africa’s urban areas are projected to house over 1.5 billion people by 2050, making effective urban governance not just a development issue, but a global imperative. With the right financial systems, tools, and local leadership, African cities can become engines of economic transformation, innovation, and sustainability.

The DA-15 initiative, and the reform journeys of cities like Nairobi and Lusaka, illustrate what is possible when local governments are equipped with the knowledge, resources, and autonomy to lead.