Poor funding, corruption bogged down local governments in 2007
Dec 26, 2007
BY all standards, 2007 was a tough year for Local Governments (LGs). This year, many of their problems came to the front, threatening the decentralisation system. <br>District chairpersons almost boycotted the annual Joint Review of Decentralisation (JARD) meeting, citing government’s failure to
By Joshua Kato
BY all standards, 2007 was a tough year for Local Governments (LGs). This year, many of their problems came to the front, threatening the decentralisation system.
District chairpersons almost boycotted the annual Joint Review of Decentralisation (JARD) meeting, citing government’s failure to address their funding problems.
They also walked out of the Ministry of Finance Budget meeting, claiming the ministry failed to solve the local government financing woes. At the beginning of the year, LGs were assured of graduated tax compensations. They had received sh34b in 2005/06 and expected sh45b this year. Then things fell apart. During the budget reading, this fund was scrapped and replaced with the Local Service Tax and the Hotel and Lodges Tax.
This brought some hope to local leaders, but this hope was shortlived.
“We did not anticipate the bottlenecks that the operationalisation of these new taxes will meet,†Maj. Gen. Kahinda Otafiire, the local government minister, said.
Because of the bottlenecks, collection of the new taxes was put on hold until enabling laws are put in place.
“Lower Local Governments (LLGs) are on the verge of breaking down due to lack of funds,†said John Wycliffe Karazarwe, the president of the Uganda Local Governments Association.
Because of poor revenue collection, LGs depend on funding from the Government, with most rural districts having an average 90% of their budgets funded by the Government, while urban ones have an average of 50% funding from the Government.
The central government budgeted at least sh1trillion or 20% of the national budget for funding LGs. This is why throughout the year, the Government asked LGs to effectively collect taxes. For example, property rates that have the potential of being the biggest source of revenue, are poorly collected.
Besides, even the funds that are available are not properly utilised. According to the Auditor General’s report, local governments rank among the leading corrupt institutions in the country. The report says there is very little value for money in most of the things done at the district level. The call to all local leaders as the year ends is to be more accountable.
However, Vincent Semakula, Rakai LC5 chairman, who is also the Uganda Local Governments Association central region chairman, denied that local governments are corrupt.
“We are tired of being called corrupt, especially by other government officials,†he said. He wondered why LGs are called corrupt, yet they receive little funding.
Whereas 2006 and 2005 saw the creation of several new districts, none was created this year. This, of course, was very disappointing to the people of Bushenyi, Buvuma county in Mukono, Luuka county in Iganga and Budiope county in Kamuli, which were advocating for district status.
However, new sub-counties were created in Mityana, Ntungamo and Bushenyi. The creation of the new districts was frozen due to protests from the donor community over the rising public administration expenses.
Meanwhile, recentralisation of appointment of various district leaders, including chief administrative officers (CAOs), continued to reverberate throughout the year.
Several CAOs in Kayunga and Hoima continued to have conflicts with various local leaders as a result of recentralising their appointment. Thomas Mulondo, Kayunga LC5 chairman, was at war with Maira Mukasa, the CAO, which almost brought the district to a standstill. In the course of the year, the Public Service reshuffled most of the CAOs across the country.
The year also had several district by-elections. In Kamuli, NRM’s Steven Mubiru tussled it out with FDC’s Salaamu Musumba. Mubiru won the elections to become chairman. In Kyenjojo, William Kaija and James Byamukama competed and Byamukama won.
This year, several local leaders were arrested following the report by the Inspector General of Government (IGG) that they embezzled district funds. One of these was Thomas Mulondo, Kayunga’s LC5 chairman. Local leaders ended the year planning how to stop the IGG’s interventions into their work.
Apart from poor funding, maintaining the infrastructure continues to be a big challenge to local governments. Most roads are poor, yet districts have no funds to maintain them. In Kampala, garbage remained a problem, but the city was cleaned during the preparations for the Commonwealth Heads of Government Meeting. However, a month after CHOGM, garbage is back.
It is likely that these will be some of the continuing challenges as 2008 sets in.
The year 2008 might not be different in as far as local government funding is concerned, since the Government does not have an immediate solution.
Local governments may have to wait till the beginning of the financial year in July, when they will have their problems addressed. The highlight of 2008 will, however, be the LC1 elections. It will be interesting to see how multiparty politics plays out at the lowest level of decentralisation.
BY all standards, 2007 was a tough year for Local Governments (LGs). This year, many of their problems came to the front, threatening the decentralisation system.
District chairpersons almost boycotted the annual Joint Review of Decentralisation (JARD) meeting, citing government’s failure to address their funding problems.
They also walked out of the Ministry of Finance Budget meeting, claiming the ministry failed to solve the local government financing woes. At the beginning of the year, LGs were assured of graduated tax compensations. They had received sh34b in 2005/06 and expected sh45b this year. Then things fell apart. During the budget reading, this fund was scrapped and replaced with the Local Service Tax and the Hotel and Lodges Tax.
This brought some hope to local leaders, but this hope was shortlived.
“We did not anticipate the bottlenecks that the operationalisation of these new taxes will meet,†Maj. Gen. Kahinda Otafiire, the local government minister, said.
Because of the bottlenecks, collection of the new taxes was put on hold until enabling laws are put in place.
“Lower Local Governments (LLGs) are on the verge of breaking down due to lack of funds,†said John Wycliffe Karazarwe, the president of the Uganda Local Governments Association.
Because of poor revenue collection, LGs depend on funding from the Government, with most rural districts having an average 90% of their budgets funded by the Government, while urban ones have an average of 50% funding from the Government.
The central government budgeted at least sh1trillion or 20% of the national budget for funding LGs. This is why throughout the year, the Government asked LGs to effectively collect taxes. For example, property rates that have the potential of being the biggest source of revenue, are poorly collected.
Besides, even the funds that are available are not properly utilised. According to the Auditor General’s report, local governments rank among the leading corrupt institutions in the country. The report says there is very little value for money in most of the things done at the district level. The call to all local leaders as the year ends is to be more accountable.
However, Vincent Semakula, Rakai LC5 chairman, who is also the Uganda Local Governments Association central region chairman, denied that local governments are corrupt.
“We are tired of being called corrupt, especially by other government officials,†he said. He wondered why LGs are called corrupt, yet they receive little funding.
Whereas 2006 and 2005 saw the creation of several new districts, none was created this year. This, of course, was very disappointing to the people of Bushenyi, Buvuma county in Mukono, Luuka county in Iganga and Budiope county in Kamuli, which were advocating for district status.
However, new sub-counties were created in Mityana, Ntungamo and Bushenyi. The creation of the new districts was frozen due to protests from the donor community over the rising public administration expenses.
Meanwhile, recentralisation of appointment of various district leaders, including chief administrative officers (CAOs), continued to reverberate throughout the year.
Several CAOs in Kayunga and Hoima continued to have conflicts with various local leaders as a result of recentralising their appointment. Thomas Mulondo, Kayunga LC5 chairman, was at war with Maira Mukasa, the CAO, which almost brought the district to a standstill. In the course of the year, the Public Service reshuffled most of the CAOs across the country.
The year also had several district by-elections. In Kamuli, NRM’s Steven Mubiru tussled it out with FDC’s Salaamu Musumba. Mubiru won the elections to become chairman. In Kyenjojo, William Kaija and James Byamukama competed and Byamukama won.
This year, several local leaders were arrested following the report by the Inspector General of Government (IGG) that they embezzled district funds. One of these was Thomas Mulondo, Kayunga’s LC5 chairman. Local leaders ended the year planning how to stop the IGG’s interventions into their work.
Apart from poor funding, maintaining the infrastructure continues to be a big challenge to local governments. Most roads are poor, yet districts have no funds to maintain them. In Kampala, garbage remained a problem, but the city was cleaned during the preparations for the Commonwealth Heads of Government Meeting. However, a month after CHOGM, garbage is back.
It is likely that these will be some of the continuing challenges as 2008 sets in.
The year 2008 might not be different in as far as local government funding is concerned, since the Government does not have an immediate solution.
Local governments may have to wait till the beginning of the financial year in July, when they will have their problems addressed. The highlight of 2008 will, however, be the LC1 elections. It will be interesting to see how multiparty politics plays out at the lowest level of decentralisation.