An assessment of the impact of fiscal gap (deficit) on district capital infrastructure development in Kwaebibirem District in the Eastern Region of Ghana

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May, 2016
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The MMDAs in Ghana are mandated to implement development-oriented projects to improve the standard of living in their jurisdiction. Therefore, the Assemblies need the adequate funding to carry out the implementation of development projects in the local levels in Ghana. However, the fiscal funding sources of the Assemblies fall short of the required amount. The research sought to assess the impact of the fiscal funding gap on the district capital infrastructure development in the Kwaebibirem District in the Eastern Region of Ghana. The causal research approach was used since the objective is to test hypothesis about cause-and-effect relationship using survey methods such as literature and experience surveys. The research objectives: identify the time profiles of fiscal funding sources, find the causes of fiscal funding gaps, conduct the regression analysis of the impact of fiscal funding gap on district capital infrastructure development and assess the strategies of addressing fiscal funding gaps in the district. A sample size of 200 was selected from the 737 study population. Simple random and purposive sampling techniques were used to select respondents. Secondary and primary data were obtained from survey and documentation. The questionnaires and formats were used to collect data, analyzed by the use of SSPS, Eviews, and presented in the graphical forms. The study revealed four major fiscal funding sources, huge gaps and the causes include poor financial management, revenue leakages and poor budget estimates etc. The research revealed no significance impact of fiscal gap on district capital infrastructure development. The study disclose that the prefinance of capital expenditure increase the debt burden of the Assembly. The strategies to bridge the fiscal funding gap include introduction of innovation grant, public private partnership arrangement and access to financial markets.
A thesis submitted to the Department of Economics, in partial fulfillment of the requirement for the award of a Master of Science Degree in Economics (Money, Banking, and Finance),