District Assemblies Expenditure and Local Economic Development (LED): a case study of Ejisu-Juabeng District Assembly of Ashanti Region

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Since 1988 the Government of Ghana has been implementing a decentralized system of decision making with the aim of creating democracy that will promote the development of people, their economies and localities. Decentralization implies a good measure of self-reliance, which in turn depends on productive local efforts in order to generate resources for economic expansion and development. Although the developmental functions of local government have been recognized, real economic developments of local areas in Ghana have not been given practical focus by District Assemblies. The roles played by District Assemblies towards development are tuned more towards the provision of Social Overhead Capital (SOC) to the neglect of Direct Productive Activities (DPA). Hirschman (1958) stated that though there is a dichotomy between Social Overhead Capital (SOC) and Direct Productive Activity (DPA), the two combine to promote growth and development in an economy. For this reason any economy that promotes one at the expense of the other stands to loose in terms development. This is because the concentration of SOC without DPA cannot promote growth, as the SOC will be under-utilized. In the same vein the concentration of DPA at the expense of SOC generates deficiency in the economy leading to production bottlenecks, as the DPA will not obtain the appropriate coorperant factors of production. It should be noted however that the putting up of physical infrastructure at huge cost does not necessarily reduce poverty, unemployment or under employment, low production and productivity and do not put the local economy on the path of growth. This however forms the basis of this research on the role of District Assemblies in promoting local economic development. The study was done in Ejisu-Juabemg District Assembly in the Ashanti Region of Ghana. The general objective is to examine the extent District Assemblies provide leading and enabling role in promoting Local Economic Development for sustainable local development. The investment patterns of the DA were examined to know whether they are skewed towards the provision of social overhead capital or direct productive activities in the district economy. Data was gathered from key technocrats at the Ejisu-Juabeng District Assembly and Regional Planning and Coordinating Unit of the Ashanti Regional Coordinating Council, selected Assembly Members and some Heads of Decentralized Departments, people engaged in agriculture, industry, and service delivery. The analysis focused on the major sectors EJDA invest in, the performance of EJDA in promoting investments and the people behind investment promotion in the district. This helped to determine a gap between what is expected of DAs in terms of seeing to the overall development of the district and what is happening on the ground. The research confirmed that development is in favour of the provision of social overhead capital as against direct productive activities. Again it was learnt that the private sector is the agent of investment promotion and when given the necessary support has the capacity to turn the district economy round. There is therefore the need for the EJDA to take a serious look at its operations and help the private sector by way of policy interventions as well as the creation of the enabling environment to facilitate their activities with aim to helping to promote their activities to strengthen the local economy. District Assemblies should act as facilitators, motivators and advocates for economic development if they are to act as catalyst and take leadership role in promoting investments so that government’s efforts of poverty reduction will become a reality.
A thesis submitted to the Board of Postgraduate Graduate Studies Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfillment of the requirements for the degree of Master of Science in Development Policy and Planning, 2005