Financing Local Level Development Through the District Assemblies' Common Fund in the Upper East and Upper West Regions of Ghana

Abstract

One of the key components under any decentralisation policy is the devolution of means. In the past, decentralisation policies of many developing countries failed to produce the desired impact because the issue of fiscal devolution was downplayed. In Ghana, it has been realised that the inability to decentralise fiscal resources, IS one of the major causes of the failure of successive local governments. This is because the central government had, over the years, transferred responsibilities to the local government units without· the corresponding means. To address this problem, the cornerstone of the new decentralisation policy was the transfer of means to the local governments to make them efficient and effective. The focus of this study was on the utilisation of financial resources by District Assemblies, with particular reference to the Bolgatanga in the Upper East Region and the Sissala and Nadowli Districts in the Upper West Region. The work sought to critically examine the prospects and problems of the District Assemblies' Common Fund (DACF), with respect to its utilisation at the district levels, with a view to assessing its effectiveness as a medium for promoting local level development. Three key issues were addressed. These were: 1) the effect of the DACF on the local revenue generation effort of the Assemblies. 2) the impact of the DACF on local level development; and 3) the capacity of the Assemblies to effectively and efficiently promote local level development. In addressing the above issues, data from both secondary a nd primary sources, relating to the DACF at the national, regional, district and local levels were collected and analysed using both quantitative and qualitative techniques. The study found that the DACF had a dominating effect on the expenditure and revenue patterns of the districts, and also contributed substantially to local level development. It further revealed that the Assemblies had limited capacity in terms of the quantity and quality of human and material resources to efficiently and effectively discharge their assigned development functions. The study recommended: • the strengthening of the capacities of the Assemblies to effectively manage development projects and efficiently utilise resources from the DACF. • an increase in the current allocation of the districts to reflect the provision made in the Constitution; and • greater autonomy to the districts to utilise the DACF to be in tandem with national policy guidelines, the general legal framework, the financial, human and material resources they possess and the physical and cultural environment within which they are ensconced.