Modeling of revenue mobilization of District Assemblies: a case study

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The Act 462 of the Parliament of the Republic of Ghana, the Local Government Act empowers the District, Municipal and Metropolitan Assemblies to mobilize revenues within their boundaries, and to receive assistance from the Central Government and Donor Agencies for development. The bulk of revenues to the Assemblies are from the Central Government and Donor Agencies. If the gap between the internally generated revenue and the external source of funding is not bridged, the development of most districts in the country would be dictated from outside. This work was carried out in the Afigya-Sekyere District Assembly to investigate the trends of inflow of revenue into the District and to develop mathematical models which can be used to predict the inflow of revenues into the district in the years ahead. Regression analysis and differential equations were used to model the trend of inflow of revenue, both locally and external. The trends of Ghana's GDP, both nominal and real were also modeled. Nominal GDP gave rise to logistic growth whilst the real GDP gave rise to almost exponential growth. The data on the real GDP of Ghana from 1993 to 2004 were analyzed using a model developed by Chukwu (1993). The model developed by Chukwu (1993), is used to determine whether or not there are oscillations or fluctuations in a country's GDP or GNP using available data. Chukwu's model can be extended to investigate the behaviour of the economy of any district in Ghana provided there are data available. It was realized that there were no oscillations or fluctuations in the trend of the real GDP of Ghana from 1993 to 2004. Two time dependent models for the inflow of revenue into the Assembly were identified: the exponential and the logistic models. The exponential model is expected to work when there is inflation in the country or more sources of revenue are being identified. Logistic model is expected to work for a longer period of time when the economy is be coming stable and almost all the potential sources of internally generated revenues have been identified.
A Thesis submitted to the Department of Mathematics, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of Master of Science.