Guidelines Undermine Decentralisation— Expert

By Stephen Kwabena Effah
Monday, 07 January 2008

A Local Government expert has said that the central government’s guidelines on how allocations from the District Assemblies Common Fund (DACF) to the assemblies should be expended are undermining fiscal decentralisation in the country.

Kwamena Ahwoi, a Senior Lecturer at the Ghana Institute of Management and Public Administration, said the assemblies were expected to use the DACF to finance "development needs and priorities determined by themselves, not by the central government".

The allocations come with directives as to how they should be expended and according to Mr. Ahwoi, this does not give the assemblies the free hand to use the funds as they deem fit.

"Clearly, the purpose for which the DACF was set up by the Constitution is being undermined with these guidelines," Mr. Ahwoi, a former Local Government Minister in the NDC administration, said at a symposium at the ongoing annual New Year School at Legon on Saturday.

The Common Fund Act states: "The Minister of Finance in consultation with the Minister responsible for Local Government, shall determine the category of expenditure of the approved development budget of the district assemblies that must in each year be met out of amounts received by the assembly from the fund."

Mr.Ahwoi who was speaking, on the topic: "Resourcing District Assemblies for Effective Local Governance", pointed out that the guidelines, the first of which were issued in 1994 and the recent one last year, "represent excellent examples of the extent of the central government control over what are meant to be resources belonging to the assemblies".

The situation, he explained, has resulted in a number of problems for the assemblies including delays in releasing funds allocated to them, such as occurred in 2003 when arrears of over one year accrued.

He said that the constitutionality of allocating a percentage of the fund to Members of Parliament is doubtful, adding, "the constitution only requires parliament to approve the formula for disbursement; the disbursements themselves are to go to the MMDAs"

"By dictating beneficiaries of the disbursement other than MMDAs, Parliament has gone beyond approval of disbursement," he said.

In the same vein, the constitutionality of the allocations to the Ministry of Local Government, the Regional Coordinating Councils and the Common Fund Administrator is similarly doubtful".

Mr. Ahwoi therefore called for the scrapping of the guidelines and repeal of the section of the DACF Act that empowers the Minister of Local Government and the Minister of Finance to issue those guidelines.

"Total fiscal decentralisation will require that the development and investment budgets of the decentralised departments be wholly transferred to the district level and relocated in and integrated with the budgets of assemblies," he suggested.

He said the surest way of keeping finances and functions of assemblies in equilibrium is to operationalise the district composite budget concept that was conceptualised in 1993.

The other speakers at the symposium called for reforms in the country’s decentralisation process, especially in revenue generation, human resource development and their functions to make it more effective and efficient.

Nana Boachie-Danquah, Chairman of the Local Government Council, one of the speakers, said that there are too many central directives and instructions to assemblies arising out of unequal and unaligned power relations.