During the session of the SDG Local Solutions Series, held on 8 April 2025, and co-organized by UNDP and Global Fund for Cities Development, two municipalities — Mahajanga (Madagascar) and São Paulo (Brazil) — presented their strategies to overcome financial limitations and improve public service delivery. The dialogue highlighted the importance of context-responsive solutions, strong local leadership, and institutional innovation to finance urban development in equitable and sustainable ways.
The video recording can be watched on our YouTube channel — in English, Spanish and French.
Mahajanga, Madagascar
Challenges
- The Commune Urbaine of Mahajanga faced chronic underperformance in its tax collection system, particularly regarding market taxes (taxes from vendors operating in public markets).
- The collection of taxes was mainly cash-based, vulnerable to leakages, inefficiencies, and lack of transparency.
- The city’s own-source revenues were insufficient to support adequate service delivery, with outdated administrative processes and limited digital infrastructure.
Solutions
- Implementation of mobile money systems for tax collection, allowing vendors to pay taxes via mobile banking platforms.
- Partnership with a telecommunications provider compliant with financial regulatory standards.
- Deployment of IT equipment and reliable internet to tax collection agents and administrators.
- Training programs for both market vendors and municipal staff to adopt the new system.
Results
- Own-source revenues reached 4 billion Malagasy Ariary (MGA) in 2023, equivalent to €83,000.
- This represents a 4.5-fold increase in revenues over 12 years, highlighting a sustained and transformational impact.
- Increase in market tax compliance rates due to ease and security of mobile payments.
- Reduction in cash leakages and informal handling of funds, improving accountability and citizen trust.
Learnings
- Even mid-sized cities in low-income countries can digitize municipal finance effectively when political will, legal frameworks, and technical partnerships are aligned.
- The “virtuous circle” created by increased revenue, better services, and higher compliance shows the systemic potential of such innovations.
- Success factors included: enabling legislation, technical standards, digital literacy training, and reliable infrastructure.
São Paulo, Brazil
Challenges
- As one of the largest cities in Latin America, São Paulo must finance complex infrastructure demands while reducing emissions and social inequality.
- The transport sector was a major source of urban pollution and congestion.
- Public policies were not always aligned or financed in an integrated way with the sustainable development framework.
Solutions
- The city implemented a legally binding framework that requires alignment of all municipal policies with the SDGs.
- Developed a strategic program to decarbonize public transport by introducing 2,600 electric buses by the end of 2024 — the largest electric fleet transition in Latin America.
- Engaged with more than 20 national and international partners, including C40 Cities and ZEBRA, to structure financing and technical support.
- Used financial innovations, including SDG-linked funding instruments, PPPs, and green financial mechanisms to secure investments.
Results
- >20 public-private-technical partners collaborating, showing deep integration across sectors and levels.
- 2,600 electric buses by end of 2024, transforming 20% of the fleet.
- Reductions in GHG emissions from the public transport system expected to reach significant levels (exact CO₂ metrics under calculation).
Learnings
- Large-scale SDG financing demands institutional integration: political will, legal mandates, and technical coordination.
- “Financing sustainable mobility is financing the SDGs” became a central motto, reinforcing the need for holistic financial planning.
Conclusions
The two case studies underscore that local governments are not passive actors in development finance — they are innovators. Whether by digitizing tax collection in Madagascar or deploying electric bus fleets in Brazil through public-private partnerships and sustainable targets, Municipalities are finding their own methods to gather resources for delivering public services and achieving SDGs through finance. What unites these cases is not their scale, but their ability to connect challenges to action, and to generate measurable impact through local leadership and partnerships.
