Assessment of local revenue mobilisation of district and municipal assemblies in the Upper East region

Abstract

Under the current democratic dispensation, Metropolitan, Municipal and District Assemblies (MMDAs) in Ghana are no longer there just to discharge administrative functions. They are deeply involved in collective participation of governance, encourage physical and economic development, create the conditions for job creation within their localities and provide social services that will improve the well-being of their people. But for MMDAs to perform these functions effectively and efficiently, it is important for them to maximize their local revenue mobilization in the short-run and to gain financial autonomy in the long-run. This research was therefore carried out to assess local revenue mobilization of the Municipal and District Assemblies in the Upper East Region and provide proposals for the way forward to help MMDAs in Ghana to optimise their local revenue mobilisation and gain financial autonomy in the long-run. A sample of 110 was selected from 135 people made up of MDCEs, MDCDs, MDDCDs, MDFOs, MDBAs, DDAS, RAs and RCs. Out of the 110 who were given questionnaires, 103 representing 93.64 percent responded. The results of the study revealed that local revenue mobilization, which should have been the major source of local government revenue, has rather become an obstacle in the concept of decentralization in Ghana due to politicisation and weak administration combined with lack of political will. As a result, most of the Metropolitan, Municipal and District Assemblies (MMDAs) in Ghana periodically continue to experience dwindling revenue mobilization characterized by annual budget deficits and insufficient funds for meaningful growth and viable project development. To this end, most of them depend heavily on Central Government for financial support to execute their projects and programmes. This supports the assertions made by the administrator of the District Assembly Common Fund, Mr. M.N. Joshua (Ghana Broadcasting Corporation, 2009), Mr. Bintim, former minister for Local Government and Rural Development (Ghana Districts, 2008), Mr. Robert Wavei, District Chief Executive of Sissala West District (The Ghanaian Times, 2009) and Mr. Isaac Edumadze, a former Central Regional Minister (Ghana News Agency, 2008) that local revenue mobilisation is the biggest challenge the MMDAs face. Most importantly, the findings support the assertions that most local governments in Africa; (1) are unable to often meet their local revenue collection targets and (2) depend heavily on central government for financial support to execute their programmes (Pablong, 2006). However, most of the MMDAs have the potential to become financial giants. To achieve this, the study recommends the following actions to be taken; (1) develop sound database of clients for local revenue mobilisation, (2) put in place an effective and efficient internal control system over local revenue collection, (3) embark on vigorous education of clients on the need to meet their tax obligation, (4) provide the necessary logistics for revenue collection officers to carry out their work, (5) make available adequate incentives to motivate revenue collection officers, (6) involve clients, revenue accountants and revenue collectors in fixing fees, rates and setting revenue collection targets, (7) conduct a study to determine the local revenue potentials of all the MMDAs and finally, the Ministry of Local Government and Rural Development should resolve to make the MMDAs financially autonomous within a time frame.