Cities, states to drive patchwork tax scene in Africa

Significance

Several major regional cities and states are using new devolved powers or tax innovations to increase their locally generated revenue (LGR), but the results are mixed.

Impacts

• Poor services will not hurt national leaders' support in rural areas, where patronage and traditional leaders are more critical.
• Cities with concentrations of corporate headquarters will benefit from economic 'cluster' effects, increasing their innovation potential.
• However, poor and often dangerous transport systems, along with severe congestion, impede major SSA cities' competitiveness.
• With a few exceptions, funding constraints will degrade the diplomatic capacity of SSA cities.