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The 2020/2021 Budget Framework Paper: How crucial are the Local Governments? Time for a new deal in Devolution.

Published 2 months ago -


Introduction.

The 2nd National Development Plan so much emphasized decentralization and the achievement of the decentralization policy in a bid to pave way for devolution of government functions and program implementation in such a way that it set out inter alia to “strengthen decentralization and improve overall government effectiveness in the execution and implementation of government programs”[1]. It should be appreciated that Local Governments are the front line service delivery points. They derive this mandate from the provisions of the Local Government (Amendment) Act, 2015 CAP 243 bye-laws of the decentralization policy. Government’s focus on Socio-Economic transformation and wealth creation at the household level clearly establishes the local governments as a major channel for development expenditure. A look at Hon. Amama Mbabazi’s proposed sub county model of development in his 2016 Go Forward Manifesto further buttresses the sacrosanct role of local governments and decentralization in the national development agenda.

Budget Allocations in Financial Year 2020/21.

Though only 1.06 trillion shillings is allocated to the Local Government Sector, the entire decentralization process is expected to be allocated a total of 3.5 trillion shillings as per the Budget Framework Paper 2020/21 which has been debated and passed by the 10th Parliament in accordance with the 2015 Public Finance Management provision. The worrying bit about the allocations to local governments is that most of their budgets is meant for recurrent expenditure in wage payment not actually service delivery. This is exemplified by the fact that 2.883 trillion of the 3.5 trillion is meant to cover the recurrent budget while only 688 billion is the development budget. This means that local governments are not prioritized as service delivery points as indicated in the 2nd National Development Plan which refers to them as focal points of service delivery.  Rather they are an added burden onto the government as far as administrative costs are concerned. This is despite the fact that local governments are still understaffed at 56% for districts and 57 percent for the municipal councils; something that has constrained service delivery.

With such a funding dilemma where the recurrent budget is 4.5 times the development budget, it is perhaps pertinent that a review of the decentralization policy is undertaken as suggested by the 2nd National Development Plan to determine the exact place and role of local governments in service provision and the entire governance super structure. The review should have deliverable that inter alia focus on improving functionality of Local Governments for effective service delivery; promoting Local Economic Development; improving governance at LG level; promoting comprehensive physical planning and urban development; improving community mobilization for development; and promoting provision of some key infrastructure services at regional level.

Time for a New Deal ?.

The ultimate end product of such a review should point to devolution or more advanced forms of decentralization such as the regional tier system or even a federal system of government where the entities are given more autonomy to oversee development in their areas of jurisdiction with minimal interference by the central government. From the design of the budget allocations, local governments are tuned to be totally dependent on the central government which has led to the failure of the Decentralization policy. Hence, there is need to go beyond decentralization to actual devolution of powers if the common man and woman is to benefit from the national budgets and other government programs.

[1] National Development Plan 11.

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