Law No. 2019/024 of December 24, 2019, establishing the General Code of Decentralized Territorial Authorities, has undoubtedly made Decentralized Territorial Authorities undeniable and undisputed actors in the socio-economic development of the country. It has also provided a better structure for decentralization through important clarifications regarding the powers transferred.
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However, it should be noted that the financial resources to implement these skills are still insufficient. This situation reflects the military philosophy that for a soldier, everything boils down to the following simple triad: a mission, a leader, and the necessary resources. To illustrate this, we will consider the mission to be all the responsibilities transferred to the municipality aimed at improving the living environment and conditions of the population; the leader to be the Municipality of Djohong, and specifically the Mayor; and finally, the resources to be all possible forms of funding, both internal and external.
We were asked to prepare a presentation on financial constraints. Our task is to create a sort of financial statement for the Djohong Municipality. Not necessarily in the manner of a business, as the municipality is not one, but to list all the assets and liabilities that could facilitate the achievement of the assigned objectives. To effectively address the problems it faces, the municipality needs sufficient resources, both in terms of quality and quantity. Therefore, we will attempt a financial analysis to determine and compare the municipality’s financing needs and possibilities. Ultimately, we must be able to answer the following two questions: Is the Djohong Municipality solvent? Is the Djohong Municipality liquid? But first, we must understand concepts such as: solvency, liquidity, due date, maturity, assets, and liabilities.
Solvency refers to the ability to have sufficient financial resources to pay one’s certain, liquid, and due debts.
Liquidity means the ability of an asset to be converted into a means of payment.
Due date corresponds to the situation at which a creditor can demand payment of their debt.
Maturity, on the other hand, allows for the assessment of liquidity and solvency over a period of approximately one year.
Assets are identifiable items held by the municipality that can generate future economic benefits (e.g., land, buildings, machinery, or equipment).
Liabilities include all debts, equity, and other provisions for the municipality’s risks and expenses.
To answer our twofold question and conduct a proper analysis of the financial constraints, we must look back three fiscal years since 2023 to revisit the financing behavior of the Djohong municipality, specifically its financing needs and possibilities.
The financing needs of the Djohong municipality from 2023 to 2025, according to official documents (the budgets for the relevant fiscal years), are as follows:
| RUBRIC | NEEDS | FUNDING RAISED | GAP |
| Functioning | 1 251 726 916 | 448 120 563 | -803 606 353 |
| Investment | 3 571 651 000 | 1 224 545 167 | -2 347 105 833 |
| 4 823 377 916 | 1 672 665 730 | -3 150 712 186 |
The financial performance of the Commune of Djohong over the three consecutive fiscal years is as follows:
2023
| NEEDS | ACHIEVEMENTS | MUNICIPAL TAXES SUBJECT TO EQUALIZATION | PUBLIC INVESTMENT BUDGET | OWN RESOURCES | PARTNER CONTRIBUTIONS | |
| F | 240 374 916 | 169 889 747 | 123 412 349 | 320 000 000 | 46 477 398 | 200 000 000 |
| I | 1 009 980 000 | 564 576 335 | ||||
| 1 250 354 616 | 734 466 082 | |||||
2024
| NEEDS | ACHIEVEMENTS | MUNICIPAL TAXES SUBJECT TO EQUALIZATION | PUBLIC INVESTMENT BUDGET | OWN RESOURCES | PARTNER CONTRIBUTIONS | |
| F | 562 040 000 | 148 191 964 | 121 545 437 | 267 710 000 | 26 646 527 | 202 000 000 |
| I | 1 139 631 000 | 529 068 832 | ||||
| 1 701 671 000 | 677 260 796 | |||||
2025
| NEEDS | ACHIEVEMENTS | MUNICIPAL TAXES SUBJECT TO EQUALIZATION | PUBLIC INVESTMENT BUDGET | OWN RESOURCES | PARTNER CONTRIBUTIONS | |
| F | 449 312 000 | 130 038 852 | 104 021 277 | 247 000 000 | 26 017 575 | 30 000 000 |
| I | 860 000 000 | 529 068 832 | ||||
| 1 309 312 000 | 659 107 684 | |||||
We can therefore observe a glaring mismatch between funding needs and available funding. The explanation lies in the fact that the responsibilities currently assigned to the municipality of Djohong are numerous and diverse, while its funding capacity or resources are very limited. The identified causes of this resource shortage include, among others:
– The weakness of own resources aggravated by the restrictions imposed by Law No. 2024/020 of December 23, 2025 on taxation;
– The principle of a single treasury fund applied by the State, which seems to render the financial autonomy of local and regional authorities meaningless;
– The weak economic fabric, which is the main indicator of widespread poverty;
– Tax evasion;
– The fragmented distribution of funding from development partners;
– Insufficient resource mobilization.
In conclusion, the Commune of Djohong has a real need for development financing of at least 1,050,237,395 FCFA, or 33.33%.
