Measuring the Fiscal Health of the Major Cities in Zambia

This study examines the fiscal health of Zambia’s major cities, emphasizing their critical role in national economic activities and public service provision. As urban centers face the dual challenge of increasing service demands from rapidly growing populations and limited fiscal capacities, maintaining financial stability is paramount for both local and national interests. This research employs approaches derived from the works of Slack (2017), Perez-Valbuena and Bonet-Moron (2018), Kooij and Groot (2021), and Ardanaz et al. (2022), while addressing the constraints posed by data unavailability in low-income countries. Findings indicate that Zambian cities are largely in poor fiscal health, characterized by an excessive reliance on intergovernmental transfers, low tax capacities, and inflexible subnational budgets. Financial ratios reveal significant fluctuations, indicative of unstable fiscal conditions, while audit reports highlight deficiencies in management quality. This study contributes to the ongoing discourse on urban fiscal sustainability in low-income contexts, underscoring the necessity for cities to enhance their resource generation capabilities to reduce dependence on central government funding and improve their overall financial health.