Financial resource mobilization for development in Dangme West District, Ghana

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The questions of adequate finance for local governments, which will enable them perform their tasks effectively and efficiently is an important one, since this leads to local and ultimately national development. The problem of inadequacy of financial resources in local governments for implementation of development objectives is a crucial one. It is a problem that local governments in Ghana, like in other developing countries, have grappled with since they were established to date. The continued presence of the problem in local governments hinders good local government and as a result local development suffers. Efforts to tackle this difficult problem have to be continued. This study is a humble and earnest contribution to that effort. Dangme West District has been used as a study area on this problem of inadequate financial resources for local development. The district has been chosen since the author has been familiar with the district, and also because there is relatively enough information (data) available on various aspects of the district. The crux of the problem in this study is how the Dangme West District Assembly can generate sufficient financial resources for the accomplishment of development tasks assigned to it by the Central Government through the system of decentralization of government. This calls for the formulation of financial management procedures so as to optimize the financial resources available for the development of the district. The problem of insufficient financial resources in the District Assembly has been diagnosed through this study to originate from several causes, including: — Lack of enough revenue base data which leads to overestimates or underestimates of revenue potential from the various sources assigned to the Assembly by the Local Government Law of 1988 (PNDCL 207). — Newness of the District Assembly, such that the District Administration has to tackle quite many issues at the moment in order to set up the necessary administrative infrastructure for running the district. This situation has compelled the District Assembly at the moment to spend more of its revenue on administration than on development projects. — Inadequate revenue collection efforts and arrangements due to lack of enough revenue collectors, non-involvement of Town and Village Development Committee, lack of taxpayer education, and due to logistics problems such as lack of transport for revenue collectors, lack of security for revenue collectors, and so on. — Lack of investment in (quick) revenue generating projects by the Assembly so as to expand the revenue base of the Assembly. The situation here is exercebated by the District Assembly not borrowing from the financial market in the country to invest in these types of projects, which are capable of repaying the loans. — Uncertain grant-in-aid from the Central Government. The grant is uncertain in the sense that the Assembly does not know whether or not it is going to receive the grant, and how much. This state of affairs makes the budgeting process in the Assembly very uncertain and unreliable. Moreover, the grant is specific, and therefore, may not necessarily help to solve the problems the District Assembly deems urgent and of high priority at the moment. — Lack of involvement of individuals, Communities and non-governmental organizations in implementing well planned and coordinated programs and projects in the district so as to supplement the limited financial resources of the district. Lack of a development plan, in the district greatly contributes to this aspect. Despite the problems above the study has revealed that the district has great potential for development. Given enough time (two to three years), so that adequate administrative mechanisms are put in place in the district, the future of the district is bright. The district is fortunate in that only two years after its establishment the district will have a well documented perspective development plan. This plan document is very instrumental for the development of the district. This study has recommended strict adherence by the district administration to the implementation of the plan. The study has also evolved strategies geared to improving upon the financial resource mobilization efforts of the District Assembly. Specific recommendations have been made to this end.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirements for the award of the Degree of Master of Science in Development Planning and Management, 1991