By Collins Mtika
The Mzuzu City Council (MCC) is grappling with a severe financial crisis as it attempts to modernize its land-based revenue collection system.
The city’s latest financial performance report reveals significant shortfalls in both revenue generation and expenditure efficiency, raising concerns about its ability to fund essential infrastructure and public services.
Despite ambitious budgetary plans, the council has collected only 37% of its projected revenue for the second quarter of 2024. Government transfers have also fallen short, totalling MWK 1.23 billion, which is just 31% of the target.
Locally generated revenue fared slightly better at 45%, but property tax collections, a key component of the modernization initiative, remain alarmingly low.

Property tax compliance rates are estimated to be between 20% and 40%, leading to a staggering MWK 3 billion in arrears by June 2024. The modernization project, supported by a $24 million grant from the United States Millennium Challenge Corporation (MCC), aims to address these issues by digitizing property records and updating valuations.
However, the city’s infrastructure plans are severely underfunded. Only MWK 581 million (15%) of the MWK 3.9 billion budgeted for capital outlay has been spent, impacting critical projects like road construction and water development. These projects are essential for Mzuzu’s long-term growth and its goal of becoming a vibrant city by 2030.
On the expenditure side, MCC has utilized just 27% of its total budget, with personal emoluments and recurrent transactions consuming a significant portion of its limited resources. The slow pace of capital expenditure, coupled with a deficit of MWK 619 million for the first half of 2024, has raised concerns about the council’s ability to implement its development plans.

To address these challenges, MCC has passed a resolution to modernise its land-based revenue system, including increasing public awareness of property taxes and strengthening enforcement mechanisms.
The city also plans to allocate 11% of all future revenues towards a Public Service Fund starting from the fiscal year 2025/26, to ensure essential services are provided in all city wards.
The Mayor of Mzuzu has urged residents to support the modernization efforts by paying their property taxes promptly, emphasizing the importance of doing so to enhance service delivery.
However, with outdated property valuations and weak enforcement mechanisms, it remains to be seen whether the council can successfully overcome these challenges and achieve its financial and development goals.