Abstract

The putting in place of Decentralization in Cameroon had as aim to bring development nearer to the people and take care of their specificities at the local level. As a result of this, powers were dissolved by the state to RLA’s. The creation of RLA’s with no clear-cut jurisdictional limits has led to a number of conflicts in most areas especially between City Councils and Sub-divisional Councils.

As a result of the above scenario, the study sets out to examine the impact of interference of the Limbe City Council on the rate of revenue collection of Limbe 1 Council. In order to attain the objective, the study made use of a structured questionnaire to collect first-hand data from  50 workers of the Limbe 1 Council, and secondary data from the Limbe City Council was used.. The major findings revealed that there is a negative and significant effect of interference of the Limbe City Council on the revenue collection of Limbe 1 Council.

This was as a result of political influence , non mastery of legal provision by the finance agents of Limbe 1 Council, overlapping of areas of jurisdiction, absence of sensitization campaigns on taxpayers by the Limbe 1 Council just to cite a few.

A series of recommendations have been made to the authorities of the Limbe  1 Council and the state which includes;  recruitment of more professional staff into the finance service of Limbe 1 Council, the Government should put up clear texts that define the jurisdictional limits of each Council, regular sensitization campaigns should be carried out on the taxpayers by the Limbe I Council, markets should be well classified so that each Council should know where to operate, SDO’s should be fair in handling issues concerning Councils.

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background of the study

According to the adoption of Decentralization in Cameroon as a system of governance, councils were created to perform certain duties at promoting the wellbeing of the local population. As per section 55(1) of the 1996 constitution Decentralisation shall be two tiers, comprising Regional Authorities on the one hand and Local Authorities on the other hand. Regional Authorities shall consist of Regional councils, while Local Authorities shall consist of City councils, sub-divisional councils, and councils.

Regional and Local authorities are dismemberments of the state on which the state devolves some of its powers as a mechanism to bring development nearer to the people and take care of their specificities at the local level. So local authorities are created to take care mostly of local interests.

In order to effectively enable the local authorities to carry out the missions assigned to them, the state endowed them with certain powers and resources. Equally, their leadership is elective, to give them the much-required management autonomy.

In 2010 the first transfer of competence and resources to councils was carried out. On February 24th, 2018 the Prime Minister signed a text which made an effective transfer of financial resources to local councils across the country; a groundbreaking decision for an effective decentralization process.

To this effect, the sale of automobile stamps, windscreen licenses, local development taxes, now pertain to councils. Part of forest revenues and funds collected by the treasury has been given to councils through FEICOM (the Special Council Support Fund for Mutual Assistance).

The national decentralization board chaired by the prime minister, the inter-ministerial committee of local services, and the national committee for local services are all following up on steps taken. The state has and continues working on improving management skills of local authorities.

The missions of Local and Regional Authorities is to promote the economic, social, health, educational, culture and sports development of their populations.

These missions can only be accomplished if the said authorities have adequate resources, notably financial resources. In order for this to take place, the law has made provisions for councils to raise revenue through the taxes and added revenue article 2(1) of law no 2004/017 of 22nd July 2006 on the orientation of decentralization is to the effect that “Decentralization shall consist of the evolution by the state of special powers and appropriate resources to regional and local authority’ Today, we have a total number of 374 councils in Cameroon divided as follows;

• 14 city councils
• 45Sub divisional councils
• 315 Councils

In our contemporary time, councils are bothered with the task of sourcing for revenue in order to achieve their developmental objectives towards the local population. In the city of Limbe before 2007 there existed the Limbe urban council with special status. No, inter council relationship existed as a result of the non-existence of Limbe one, Limbe Two, and Limbe Three Councils respectively.

The Limbe urban council had the monopoly of collecting all the revenue with no obstacles. Today, there is a doubt to settle which of the councils is territorially competent to collect certain revenues in towns with city councils and Limbe not left out with three (3) divisional councils.

The purpose of the study is to examine the impact of interference of the Limbe City Council on the rate of revenue collection of Limbe 1 Council and aims at bringing recommendations to salvage this problem.

The inception of councils in Cameroon date as far back as 1884 during the German colonial era, the Germans upon signing the treaty with the Duala chiefs, consolidated their economy and commercial interest which was materialized through the creation of the administrative units in Victoria (Limbe),

Kribi respectively. These units were headed by an administrative officer assisted by a council of six (6) members. Though this was a legacy of the German colonial master, the present form of council institution in Cameroon is a hybrid of the French and English colonial administrations.

In 1974, two (2) types of councils were created in Cameroon namely; the urban and the rural council. This was evidenced through law NO 74/23 of 5th December 1974 which later on underwent amendments especially in 1987 through law No 87/015 of July 1987 creating the city of Yaoundé and Douala respectively thereby giving birth to the sub-divisional councils in Yaoundé and Douala witnessing three and two more councils by 1993.

On the 25th of November 1993, a presidential decree assigned a special status to councils in the town of Bafoussam, Ebolowa, Edea, Garoua, Maroua, Limbe, Bamenda, and Limbe. These were therefore to be headed by government delegates and not Mayors.  In 2004, laws No 2004 /17, 18, 19, and 22nd July 2004, were enacted on the orientation of Decentralisation, to lay down rules applicable to councils and regions respectively.

In 2007, things took a different turn with the creation of sub-divisional councils, with the town of Limbe being one of such towns, three sub-divisional towns were created being Limbe I, II, and III councils respectively as per degree No 2007/015 of 23rd April 2007. The first issue to settle was how to share the assets of the defunct Limbe urban council especially with the advent of the Limbe city council in 2008 through degree number 2008/026 of 2008.

The advent of the Limbe city council meant that each council was responsible and expected to come out with their projects, collecting their revenue and seeing how to accomplish their projects to benefit their localities but they were supervised by the Government Delegate whereas the law did not provide that.

This, therefore, planted the seed of interference, poor inter council relationship and consequently conflict in terms of who to collect which revenue and this led to serious conflicts that manifested its ugly face in 2008 with open confrontation in the field of building permit fees, tool fees collection, loading, and off-loading fees, motorcycling tax, just to name a few.

Law No 2009/019 of 15 December 2009 on the financial regime of and that on local taxation lay down the taxes, levies, and royalties collected for decentralized structures, hereinafter referred to as “regional and local authorities”.

Article (2) provides that any revenue collected by State or competent taxation services of regional and local authorities for the latter shall be considered as local taxes. All revenue collected shall still be referred to as “local taxes”.

Article (3) says provides that local taxes shall apply to councils, city councils, sub-divisional councils, regions, and to any other type of regional and local authority that may be set up by law.

Article (4) provides “Unless otherwise provided for under specific provisions of this law, the fiscal procedure applicable to State levies and taxes shall be transferred with the necessary changes having been made for the tax base, issue, recovery, prosecution, control, and litigation on taxes, levies and royalties due to councils and regions.

SECTION 2: Local taxes shall include:

• council taxes;
• additional council tax on State taxes and levies;
• council levies;
• Regional taxes and levies; any other levy provided for by law.

SECTION 3: Article (1), A regional or local authority may collect a tax, levy, or royalty only if such a tax, levy, or royalty has been created by law, voted by the legislative body, and approved by the competent supervisory authority.

Article (2), The rates for the collection of the taxes and levies of regional and local authorities shall be fixed by the legislative body. In compliance with the bracket provided for by law.

SECTION 4: Regional and local authorities shall be responsible for the management of the taxes and levies devolved to them, subject to those managed by taxation services.

This law, therefore, gives the rights for councils to collect their taxes within their jurisdiction, but this has not been the case because the Limbe 1 municipality has witnessed a very low rate of revenue collection for 4 years continuously due to high interference from the city council, nonpayment of taxes, poor or unhealthy inter council relationship between the City council and Limbe 1 council and consequently serious conflict.

Secondly, this low rate of revenue and taxes collection by Limbe 1 council has accounted for poor businesses activities in the municipality due to socio-political crisis rocking the two Anglophones regions (Northwest and Southwest) and Limbe being the chief touristic town, the second chief economic town of the Southwest region and recent and in particular in 2020 due to the recent COVID 19 pandemic that rocked the whole world has been greatly affected negatively the developmental activities of the Limbe 1 council.

The Limbe City Council’s highest revenue and taxes come from the activities of businesses and fishing especially those of fishermen by the sea at “down Beach” and Idenau. Therefore, the City Council relies heavily on revenue and taxes from these activities most of which have drastically dropped in this municipality due to the reasons stated above.

The ongoing socio¬-political crisis going on in the northwest and southwest regions of Cameroon has caused a lot of people and most business people in the South West and Fako Division and Limbe Municipality to an extent to flee and some have also lost their lives thus making this municipality to witness a downward trend in economic activities as it harbours the Head Office of CDC (Cameroon Development Corporation) and its many activities of palm, rubber, banana production, it also harbours the site of the only oil refinery in the country called SONARA.

This crisis and recent COVID 19 Pandemic has made business activities to witness a downward trend in poor sales and thus causing many small and medium businesses in this line of activity to be unable to break even talk more of being able to make profits and paying their taxes.

Secondly, the many “ghost towns” days within this period and serious insecurity concerns have also affected the low rate of revenue collection. Many commercial businesses are unable to carry out their daily activities and thus making it difficult for businesses to operate and carry out their activities freely without fear of the unknown has also accounted for this low rate of revenue collection. Some if not many businesses have even closed, some burnt down and destroyed all these going a long way to contribute negatively to the development of the municipality.

As though the ongoing socio¬-political crisis going on in the Northwest and Southwest regions of Cameroon is not enough the outbreak of Corona Virus (COVID 19) which started in December 2019 in Yuan, China and later spread all over the whole world as wildfire has negatively contributed to this low rate of revenue collection in the Limbe city council as a whole and all its sub-divisional councils in particular.

This pandemic which started affecting Cameroon around March 20219 caused the Cameroon government to place short down major populated parts of the country and Limbe municipality was badly affected. Businesses shut down and closed up, people were not allowed to move freely, there was widespread panic and fear as everyone was asked to remain indoors and public gatherings were also banned.

This shutdown, therefore, affected the economy of the most buoyant town in the Southwest Region and therefore contributed low rate of revenue collection because many if not the majority of the businesses were closed up and some shutdown and they could not afford the fund to pay taxes to the councils, therefore, hindering the development of the municipality in general and a whole.

Therefore the aim of this study is to examine the impact of interference of the Limbe City council on the rate of revenue collection of the Limbe 1 council and identifying the reasons and obstacles causing this low rate of revenue collection, determine the impact it has on Limbe 1 municipality, investigate the effects it causes on the municipality and giving recommendations that can go to improve and reduce this rate of interference which has brought about poor and unhealthy relationship and most especially the conflict between the Limbe City council and Limbe 1 council.

1.2 Statement of the research problem

Decentralization is the transfer of authority from central to local government that is to bring administration closer to the local population its main reasons were to ensure the wellbeing of the local population and also to ensure that the whole country develops equally.

Limbe Sub Divisional Council was created under Dec No 2007/015 of 23rd April 2007 relating to the creation of new sub-divisional councils, later on, Limbe city council was created under Decree no 2008/026 of 17th January 2008.

The creation of the City Council was welcomed by the inhabitants of Fako as they knew it will faster development in the city of Limbe which will improve the living standards of the people. On the contrary, it has instead brought about interference, tension, and negative relationship and conflict especially in the collection of revenue between the City Council and the Sub-divisional council.

On January 8th, 1996, the constitution of Cameroon gave birth to decentralization. Article one of the constitutions stipulates that Cameroon is a unitary decentralized state, which meant that decentralized collective activities would be delegated.

Some degree of power and resources to manage their affairs that constitution has been gradually implemented. Regions were created, the senate representing councils were set up, and the administrative and functional autonomy of councils has been assured.

In 2010 the first transfer of competence and resources to councils was done, by December 31, 2015, councils were given full power to carry 60 out of the 63 functions they have, and the Prime Minister’s text of December 16, 2016, was granted them the other Three.

On the 25th of November 1993, a presidential decree assigned a special status to councils These were, therefore, to be headed by government delegates and not Mayors, in 2004, law No 2004 /17, 18, 19, and 22nd July 2004, were enacted on the orientation of, to lay down rules applicable to councils and regions respectively.

In 2007, things took a different turn with the creation of sub-divisional councils. With the town of Limbe being one of such towns. Three sub-divisional towns were created being Limbe one Limbe Two and Limbe Three councils respectively as per degree No 2007/015 of 23rd April 2007. The first issue to settle was how to share the assets of the defunct Limbe urban council especially with the advent of the Limbe city council in 2008 through degree number 2008/026.

The advent of the Limbe 1 city council planted the seed for interference, inter-council relationship, and conflict in terms of who to collect which revenue and this brought about a non-cordial relationship between the two councils and thus brought about conflict between the two councils, in the area of revenue collection of building permit fees, tool fees collection, loading, off-loading fees temporal and occupation of thoroughfare just to name a few.

On February 24 this 2017 the Prime Minister signed a text which makes the effective transfer of financial resources to local councils across the country, a ground-breaking decision for an effective decentralization process.

To this effect, the sale of automobile stamps, windscreen licenses, local development taxes now pertains to councils. Part of forest revenues and funds collected by the treasury has been given to councils through the rural assistance fund known by its French acronym, (FEICOM) but this not been fully respected because there are still situations.

This conflict and tension has been seen in different forms that is physical and verbal confrontation, writing of petition and some even took the legal form. All these interferences have caused a conflict in the process of revenue collection amongst these councils couple with the socio-political crisis in the Northwest and Southwest regions of the country and the recent COVID 19 Pandemic thus accounting for the low rate of revenue collection in the Limbe 1 council and therefore slowing down development in Limbe 1 municipality.

Therefore, this research is set out to seek a solution to the above problem and breach this gap to reduce the level of interference, improve the level of relationship between the City Council and sub-divisional Council in Limbe Municipality.

1.3 Research Questions

1. What are the causes of interference/conflict between Limbe city council and Limbe1 council?
2. What are the sources of revenue for Limbe city council and Limbe1 council?
3. To what extend does interference of Limbe city council cause a low rate of revenue collection to the Limbe 1 council?
4. What are the strategies put in place to reduce interference and avoid conflict to enhance a cordial relationship?