Publication date: Monday, 8th August, 2005
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By Denis Ocwich
AT the launch of the Nakaseke district, President Museveni said, “Although a new district takes a lot of money, this is the democracy we fought for. People must ask for what they want and get.”
Nakaseke which split from Luwero is one of the 22 new districts approved by Parliament last week. Fourteen of them took effect this month. Eight others will take off on July 1, 2006. This will raise the number of districts rom 56 to 78 (an increase of 40%).
To politicians, more districts mean more services (hospitals, district headquarters etc) taken closer to the grassroots people. But to economists, more districts mean more money to pay additional number of politicians and bureaucrats, putting up more district structures and buying more vehicles.
Can government run districts?
In the 2005/06 budget, finance minister, Ezra Suruma said sh30b has been made to compensate for the scrapped graduated tax. This includes sh2.7b for the new districts. A further sh4b has been provided for regional tiers.
“This will help to further cushion the local administration against the loss of graduated tax collection,” Suruma said.
In September last year, Prof. Tarsis Kabwegyere, minister for local government announced that the government would start paying a consolidated monthly package of sh2m to district chairpersons.
The district vice chairmen, mayors of municipalities and chairpersons of city divisions will each get sh1m. The district speakers are entitled to sh600,000 and the district executive councillors and deputy mayors sh600,000 per month. The 22 new districts therefore mean about 40% increase in the payments for district and municipal/city top local councillors.
District councillors are not entitled to salaries. They draw only allowances each time they sit on the council.
Each new district will have a town council and district council, with chairpersons, vice-chairpersons, speakers and their deputies, as well as an executive (secretaries) of about six people.
Additional councillors required
Although directly elected local councillors will not change, each of the new districts will have about 12 new councillors representing special interest groups - women, youth and persons with disability.
As stipulated in the Local Government Act, local councils are required to meet at least six times a year. Every time the council meets, each councillor is entitled, on average, to a sitting allowance of sh50,000 per day; accommodation of about sh30,000; and transport of around sh30,000.
Since each local council session lasts about two days, each councillor will need nearly sh1m per year. One district alone has between 15 to 35 councillors, depending on the number of sub-counties. This excludes town council officials.
The annual cost of maintaining additional councillors, thus, would be between sh15m and sh30m per district, adding up to over sh1bn for all the 22 new district councils and 22 town councils.
More women MPs and RDCs
The new districts also mean 22 new women members of parliament. Since each MP earns a monthly consolidated package of about sh5m, it means each new district will need sh60m for a woman MP per year. In total, the Government will spend sh1.3b per year on the 22 new women MPs.
Each of the districts will also have Resident District Commissioners and District Internal Security Officers (DISOs), both of who have to be paid. There will be district service commissions, tender boards, land boards and others who will be paid allowances.
A new district bureaucracy (civil servants) must be created — right from the Chief Administrative Officer, district heads of departments to the office attendants, cleaners and watchmen.
Over sh600m for salaries
According to the 2005 “Financial Report (Revised Copy) on the review and Restructuring of the Local Governments and Staffing Levels,” prepared by the Ministry of Public Service, it costs between sh685m and sh1.031b to pay wages of district civil servants (excluding teachers), annually depending on the size of a district.
The districts have been grouped into three different models. In model one, where most of the new districts will fall, the government spends sh685m per annum to pay the wages of civil servants in each of the 35 districts that fall in this category. This excludes teachers.
The second model has 12 districts, each consuming sh848m per annum in wage bill for civil servants other than teachers. The third model has nine top districts of Lira, Masaka, Masindi, Bushenyi, Kampala, Wakiso, Arua, Mbarara and Mukono.
These districts have more staff, bigger populations and wider geographical coverage. Each of them takes sh1.031b in annual wage bill.
A new district may not need all the above money because some of their new workers will be the same ones shifted from the mother district, which initially shares some of the operational costs with the new one.
The new districts may also not need new teachers because it will be just a matter of changing their centre to a new district. Similarly, some of the officials in the new districts, including assistant Chief Administrative Officers (ACAOs) in-charge counties, LC3 chairmen, sub-county production coordinators, and rural-based health workers will only change district headquarters from the mother district to the new one.
District headquarters
The new districts and their town councils will obviously need new buildings, including council halls, district administration headquarters, production offices, perhaps staff quarters and many other departmental structures.
Each district needs between sh500m and sh1b to put up decent headquarters.
“Building district offices and council halls normally requires locally raised money,” said Edwin Yakobo Komakech, chairman of Pader, which was split from Kitgum in 2000.
“To start a new district is not easy. At the beginning we were depending entirely on the money we get from the centre, and sharing resources and funds with Kitgum,” added Komakech. “Sometimes the local councils don’t even function if there is no money.”
Let alone the cost of purchasing stationery, furniture and vehicles for the new districts, the Government will have to dig deep into the treasury to put the new districts on their feet.
Funds from central Govt
“Normally the central Government gives them (each new district) about sh500m to take off with few staff. As they pick up, they will then start to recruit more staff,” said Captain John Emily Otekat, chairman of Uganda Local Authorities Association (ULAA), an umbrella body for district leaders.
Capt. Otekat, is also chairman of Soroti district. Each of the old districts, he said, operates on an annual budget of between sh10b to sh12b, much of it funded by the central government.
Some districts get funding directly from NGOs, foreign governments and international development agencies.
Local governments are expected to meet a good percentage of their annual budgets.
But with their main source of revenue, graduated tax, already scrapped by the Government, they will find it hard to fill the gap.
“Graduated tax was 80% of our local revenues. But now we will be left with only 10% of local revenue, mainly from market dues, bus/taxi park tenders, landing sites and property tax,” said Capt. Otekat.
Implications
On average, each district will require a lot of money for paying civil servants’ salaries, building a district headquarters, and allowances for politicians, let alone the cost of acquiring new vehicles, office equipment and other necessities. Regardless of the cost-implications, Otekat is firm on social benefits that accrue from the new districts. “The creation of these new districts is not a bad idea. It is good to move the services closer to the people; and it reduces conflicts.”
However, economists and technocrats in the ministry of local government and that of finance know the financial implications of having more districts is enormous, especially to a third world country whose budget is nearly 50% donor-funded. They too do not think creating a new district can bring services closer to the people, per se.
With 22 new districts, local government expenditure will have to jump up by about 30%. The overall annual cost of paying district council and municipal executives, resident district commissioners, councils’ sitting allowances, new woman MPs’ salaries, new structures, vehicles, office equipment and salaries for the district bureaucrats will not be less than sh50b for all the new districts.
“The more we increase the number of districts, the more we increase the amount of money spent on local administration only,” said a source from the Local Government Finance Commission, who did not buy the argument that more districts mean better service delivery to the people.
Evolution of Uganda’s districts
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