Tripled Municipal Revenues Show Local Governance Advancing Toward European Standards

Since 2015, the revenues of Albanian municipalities have tripled, and improvements in public service performance and debt reduction are bringing local government units closer to European standards.
At the conference introducing the municipal performance measurement system, Minister of State for Local Governance Ervin Demo presented the financial and administrative progress of local governments.
According to Minister Demo, municipal own-source revenues reached 44.4 billion ALL in 2024, which is a threefold increase compared to 2015. Property tax revenues increased by 84.6%, rising from 3.9 billion ALL in 2015 to 7.2 billion ALL in 2024. Demo described this as a clear indicator of more efficient local administration.
Another sign of improvement is the reduction in arrears, which dropped from 12 billion ALL in 2015 to 3.1 billion ALL in 2024. According to the minister, this reflects more sustainable financial management at the local level.
In the realm of public services, he emphasized advancements in preschool education, irrigation and drainage, and waste management. Coverage of waste service costs increased from 68% in 2023 to 83% in 2024. Meanwhile, the child-to-teacher ratio in public kindergartens and nurseries is approaching the European Union average.
Minister Demo emphasized that improvements in public service delivery are directly linked to decentralization and territorial reform, which have created better conditions for managing local functions.
A central part of his presentation focused on the Performance-Based Grant, which Demo described as a transformative mechanism for local governance. Thanks to this instrument, he noted, all 61 municipalities now have complete strategic planning documents, which are essential for applying for EU funds.
He announced that municipalities that approve their strategic plans for managing functions in 2025 will benefit from the Performance Grant. He mentioned Mat, Librazhd, Prrenjas, Puka, Dropull, Dibër, Kolonjë, Fushë-Arrëz, and Shijak as beneficiary municipalities, while Shkodër, Lezhë, Selenicë, Gjirokastër, and Korçë were found to have had their management plans in place well before the process began.
Regarding the next assessment phase, Demo stated that the measurement of municipal performance in 2026 will focus on the implementation of approved plans. The mechanism will become fully operational in the 2027 budget. He said that 2026 will be a pivotal year for establishing a sustainable, advanced performance measurement model based on lessons learned from the current evaluation cycle.
The minister also announced cooperation with INSTAT and other institutions to create an integrated local data system. This system will enable continuous performance evaluation and more accurate long-term planning.