Support for decentralisation reforms

Project description

Title: Programme of support for decentralisation reforms
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Ghana
Lead executing agency: Ministry of Local Government and Rural Development (MLGRD)
Overall term: 2007 to 2019

Ghana. Public hearing on the local budget. © GIZ

Context

The Ghanaian Government aims to promote democratic development and improve public services through decentralisation. Although progress has been made in the decentralisation process over the past 20 years, there are still challenges to face.

The constitution stipulates that local governments are responsible for public services in the districts. However, the conditions in Ghana's municipalities and communities are still not conducive to effective budget and development planning. Due to the limited revenue obtained from locally raised fees, many districts have to restrict their public services to the bare minimum. They generate only 20 per cent of their budget themselves. The considerable potential for local revenue, primarily from property tax, is not being harnessed.

Non-governmental actors need to be involved in planning and budgeting processes. Local governments are still only partially managing to perform their tasks appropriately and provide public services properly. Public pressure for accountability is low and the influence of civil society is limited.

Objective

The districts collect, manage and plan their finances more effectively and have improved the quality of their development planning.

Approach

The programme is supporting implementation of the decentralisation reforms in Ghana at local level and is building the capacity of the partner institutions in 60 districts. At the same time, it is continuing to take a multi-level approach, promoting coordination mechanisms between regional, local and national actors. To this end, the programme operates in three areas of activity:

  1. Building the institutional capacity of the districts for revenue management
  2. Improving local planning and budgeting
  3. Enhancing cooperation between the key actors in the decentralisation process.

Results

In a previous phase, the programme supported development of a national decentralisation policy, which has since been adopted by the Ghanaian Government. Work focused on:

  • a law on the integration of devolved line ministries
  • advice on developing an auditing handbook, studies on financial administration of local governments and advice on fiscal devolution tasks
  • measures related to the organisational development of institutions at national, regional and local level and training for staff, for example on budget planning and monitoring
  • support for the generation of public revenue, for example by introducing local taxes and public levies
  • advice on devising an urban development strategy and policy in cooperation with neighbouring African countries
  • support for civil society organisations and local media to encourage comprehensive and informed participation by the population in policy-making processes.
Ghana. Registering plots of land for a local fiscal registry. © GIZ

The programme has been supporting selected districts in implementing the decentralisation reforms since 2014. A system has been devised to name streets and register plots of land in a fiscal registry and is now being introduced across the country. Software has been developed to manage local revenue and is also available nationwide.