Can demands for new districts stand
May 13, 2009
IT is something we have heard time and again. Wherever President Museveni pays a visit, someone demands a new district. Parliament has now put its foot down and halted the creation of seven new districts.
By Joshua Kato
IT is something we have heard time and again. Wherever President Museveni pays a visit, someone demands a new district. Parliament has now put its foot down and halted the creation of seven new districts.
This was after the local government minister, Adolf Mwesige, requested for over sh2b for the 2009/10 financial year to facilitate the creation of the districts. Parliament argues that with the over-stretched budget, there is no need to create more districts.
According to the minister, another five districts are to be created in the 2010/11 financial year, bringing the total number to 93.
The proposed new districts include Luuka, Buikwe, Obongi, Buhweju, Budiope, and Kagadi. The new districts, require funding and this further strains the public coffers.
Who qualifies for a district?
According to the rules and regulations governing the creation of new districts, an area must first show proof that it is capable of funding itself. However, in most cases, political muscle overrides this requirement.
Other reasons include bringing services nearer to the people and if the district comprises many tribal and ethnic groupings. Another requirement is sustainable sources of revenue, for example markets, properties and human resources.
Before the district is created, a petition is supposed to go to Parliament for debate. But, in most cases, all it takes is the President’s visit to an area and a petition by the residents.
Districts formed under such criteria include Buikwe and Buvuma from Mukono, Luuka and Budiope from Iganga and Kamuli and Buhweju in Bushenyi.
In some areas, residents used weird methods to demand districts status. In Nakaseke, for example, the residents dug up skulls of the people who died in the bush war and paraded them in the town.
Magnitude of government funding
Districts argue that they are dependent on the central government because they cannot generate enough revenue, especially after the scrapping of graduated tax three years ago. They argue that even the other tax sources, for example market dues, road tolls, bodaboda fees and property taxes were politically instigated.
“Where do we get money from?†asked Steven Ochola, the Soroti district chairman. He said because of these shortfalls, government must continue with the graduated tax compensation.
In the 2006/07 financial year, the Government spent at least sh45b on graduated tax compensation.
Districts like Mukono received sh1.3b in compensation, while Mpigi received about sh780m. However, in the 2007/08 budget, a mere sh12b was shared among 80 districts. “It was peanuts. How could 81 districts share sh12bn?†said John Wycliffe Karazarwe, the president of the Uganda Local Governments Association.
Namutumba, Abim, Dokolo, Kaabong, Bulisa and many of the other new districts districts, will be able to generate only 1% of their budget locally.
Splitting up districts means splitting up local revenue collections. Before Mbarara district was divided into several smaller districts, it ranked among the leading generators of local revenue. But since Isingiro, Ibanda and Kiruhura were carved off, revenue collection in Mbarara has dipped dramatically. The new taxes; the local services tax and the local hotel tax came into existence in July 2008. All districts are now expected to benefit from these new taxes.
However, while Kampala Central Division hoped to get at least sh1.5b from local service tax alone, less than sh300m was raised. Jinja district was able to collect only sh21m from the same tax.
As the old districts continue to limp, without sufficient funds to fund their budgets and as the central government continues to shoulder the burden of financing the districts even during the global financial crisis, do we need new districts that cannot support themselves?
Formation of new districts and its implications
Until 2000, Uganda had only 45 districts. That year, 11 new districts were created, bringing the number to 56.
Fourteen districts were created in July 2005, while another 11 became operational in July 2006.
Since then, another 25 districts have been created.
The creation of the 25 new districts meant that 25 new woman MPs, 25 new resident district commissioners (RDCs) and other civil servants had to be appointed, 25 new LC5 chairpersons had to be elected, 25 district internal security officers had to be appointed and over 100 civil servants had to be recruited for each of the 25 districts.
Since each LC5 chairman earns sh2m per month, the Government is spending an additional sh50m on LC5 chairpersons’ salaries alone; at least sh600m per year.
Since every RDC is paid sh1.2m per month, sh30m is spent on their salary per month; sh420m per year.
MPs earn an average of sh7m per month, which translates to sh175m per month, sh2.1b per year.
With 100 civil servants in each of the districts earning an average of sh0.5m per month, at least sh60m is spent on their salaries per month per district or sh1.2b monthly for the 25 new districts.
Overall, sh19b is spent on salaries of both political leaders and civil servants in the new districts every year.
If the expenses of constructing new office blocks at an average of sh600m, buying new vehicles, furniture and computers and other logistics are considered, the expenses are even higher.
Districts still expect the central Government to fund 93% of their budget.
The districts are required to prepare their budgets in accordance to this money, in addition to funds locally generated within the districts.
The Constitution, the Local Government Act and the Local Government Financial Regulations empower districts to prepare budgets every financial year.
An analysis of the 2008/09 district budgets points at a heavy dependence on the central government.
Of the sh31.7b budget passed by Wakiso district, 94% is expected to come from the central government. Wakiso is able to fund at least 6% of their budget because of their peri-urban location.
In Mpigi, of the sh20b budget passed in 2008, sh17b came from the central government. In Rakai of the sh19b budget passed sh17b came from the central government. Of the 25b budget in Masaka, sh23b came from the central government. In Kabale, of sh23b passed, 93% will come from the central government. In Kamuli, of sh23b passed, 95% came from the central government.
A total of 85% of this money goes into paying salaries for the district staff, while less than 15% goes into infrastructural development.
IT is something we have heard time and again. Wherever President Museveni pays a visit, someone demands a new district. Parliament has now put its foot down and halted the creation of seven new districts.
This was after the local government minister, Adolf Mwesige, requested for over sh2b for the 2009/10 financial year to facilitate the creation of the districts. Parliament argues that with the over-stretched budget, there is no need to create more districts.
According to the minister, another five districts are to be created in the 2010/11 financial year, bringing the total number to 93.
The proposed new districts include Luuka, Buikwe, Obongi, Buhweju, Budiope, and Kagadi. The new districts, require funding and this further strains the public coffers.
Who qualifies for a district?
According to the rules and regulations governing the creation of new districts, an area must first show proof that it is capable of funding itself. However, in most cases, political muscle overrides this requirement.
Other reasons include bringing services nearer to the people and if the district comprises many tribal and ethnic groupings. Another requirement is sustainable sources of revenue, for example markets, properties and human resources.
Before the district is created, a petition is supposed to go to Parliament for debate. But, in most cases, all it takes is the President’s visit to an area and a petition by the residents.
Districts formed under such criteria include Buikwe and Buvuma from Mukono, Luuka and Budiope from Iganga and Kamuli and Buhweju in Bushenyi.
In some areas, residents used weird methods to demand districts status. In Nakaseke, for example, the residents dug up skulls of the people who died in the bush war and paraded them in the town.
Magnitude of government funding
Districts argue that they are dependent on the central government because they cannot generate enough revenue, especially after the scrapping of graduated tax three years ago. They argue that even the other tax sources, for example market dues, road tolls, bodaboda fees and property taxes were politically instigated.
“Where do we get money from?†asked Steven Ochola, the Soroti district chairman. He said because of these shortfalls, government must continue with the graduated tax compensation.
In the 2006/07 financial year, the Government spent at least sh45b on graduated tax compensation.
Districts like Mukono received sh1.3b in compensation, while Mpigi received about sh780m. However, in the 2007/08 budget, a mere sh12b was shared among 80 districts. “It was peanuts. How could 81 districts share sh12bn?†said John Wycliffe Karazarwe, the president of the Uganda Local Governments Association.
Namutumba, Abim, Dokolo, Kaabong, Bulisa and many of the other new districts districts, will be able to generate only 1% of their budget locally.
Splitting up districts means splitting up local revenue collections. Before Mbarara district was divided into several smaller districts, it ranked among the leading generators of local revenue. But since Isingiro, Ibanda and Kiruhura were carved off, revenue collection in Mbarara has dipped dramatically. The new taxes; the local services tax and the local hotel tax came into existence in July 2008. All districts are now expected to benefit from these new taxes.
However, while Kampala Central Division hoped to get at least sh1.5b from local service tax alone, less than sh300m was raised. Jinja district was able to collect only sh21m from the same tax.
As the old districts continue to limp, without sufficient funds to fund their budgets and as the central government continues to shoulder the burden of financing the districts even during the global financial crisis, do we need new districts that cannot support themselves?
Formation of new districts and its implications
Until 2000, Uganda had only 45 districts. That year, 11 new districts were created, bringing the number to 56.
Fourteen districts were created in July 2005, while another 11 became operational in July 2006.
Since then, another 25 districts have been created.
The creation of the 25 new districts meant that 25 new woman MPs, 25 new resident district commissioners (RDCs) and other civil servants had to be appointed, 25 new LC5 chairpersons had to be elected, 25 district internal security officers had to be appointed and over 100 civil servants had to be recruited for each of the 25 districts.
Since each LC5 chairman earns sh2m per month, the Government is spending an additional sh50m on LC5 chairpersons’ salaries alone; at least sh600m per year.
Since every RDC is paid sh1.2m per month, sh30m is spent on their salary per month; sh420m per year.
MPs earn an average of sh7m per month, which translates to sh175m per month, sh2.1b per year.
With 100 civil servants in each of the districts earning an average of sh0.5m per month, at least sh60m is spent on their salaries per month per district or sh1.2b monthly for the 25 new districts.
Overall, sh19b is spent on salaries of both political leaders and civil servants in the new districts every year.
If the expenses of constructing new office blocks at an average of sh600m, buying new vehicles, furniture and computers and other logistics are considered, the expenses are even higher.
Districts still expect the central Government to fund 93% of their budget.
The districts are required to prepare their budgets in accordance to this money, in addition to funds locally generated within the districts.
The Constitution, the Local Government Act and the Local Government Financial Regulations empower districts to prepare budgets every financial year.
An analysis of the 2008/09 district budgets points at a heavy dependence on the central government.
Of the sh31.7b budget passed by Wakiso district, 94% is expected to come from the central government. Wakiso is able to fund at least 6% of their budget because of their peri-urban location.
In Mpigi, of the sh20b budget passed in 2008, sh17b came from the central government. In Rakai of the sh19b budget passed sh17b came from the central government. Of the 25b budget in Masaka, sh23b came from the central government. In Kabale, of sh23b passed, 93% will come from the central government. In Kamuli, of sh23b passed, 95% came from the central government.
A total of 85% of this money goes into paying salaries for the district staff, while less than 15% goes into infrastructural development.