THE ROLE OF THE DISTRICT ASSEMBLIES COMMON FUND IN LOCAL DEVELOPMENT: A COMPARATIVE STUDY OF THE JAMAN NORTH AND SOUTH DISTRICTS By JUSTICE SELLE BAVERE A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of COMMONWEALTH EXECUTIVE MASTER IN BUSINESS ADMINISTRATION AUGUST, 2011. i CERTIFICATION I hereby declare that this submission is my own work towards the Commonwealth Executive Masters in Business Administration and that, to the best of my knowledge, it contains no material previously published by another person nor material which has been accepted for the award of any other degree of the University, except where due acknowledgement has been made in the text. Justice Selle Bavere ………………………. ……….……………… Exam No. PG2036208 Signature Date Certified by: Mr. Clifford Amoako ………………………. ……………… (Supervisor) Signature Date Certified by: Prof. Isaac Kwame Dontwi ………………………… ……………… (Dean, Institute of Distance Learning) Signature Date ii DEDICATION To God be the Glory, and to my family, especially to my dear wife Celestina B. Naariyong, my gratitude. To my Son, Emmanuel Naab Selleh and daughter, Emmannuella Ziempog Selleh, I thank you for your love, deed of kindness and acts of caring. IN MEMORIAN To my Sweet Mother, Madam Ganoi Sey (1922-2010): You were a pillar in my life. You left us too soon (22 December, 2010). Your loving care and cheerful smile will always be with me in particular and the entire family in general iii ACKNOWLEDGEMENTS My gratitude goes to the Almighty God for His grace and knowledge He gave me in the course of this study especially during the field survey. My profound gratitude also goes to my supervisor, Mr. Clifford Amoako, of the Department of Planning, Kwame Nkrumah University of Science and Technology for his commitment and dedication to seeing the success of this work through to the end. I would also want to thank the officials, Jaman South and North District Assemblies for their profound assistance towards this work. Again, I am grateful for the services of my enumerators in the persons of Emmanuel Osei-Mensah, Emmanuel Otutei and Emmanuel Frimpong Boamah for their assistance in gathering data for this study. Finally, I thank the Assembly members, the Area Council Chairpersons, the Unit committee members, the traditional authorities and the community members in these two districts who provided information for this study. May the good Lord bless you all. iv ABSTRACT Local development has become a component of mainstream thinking about increasing productivity, creating jobs and wealth, promoting entrepreneurship, human capacity building and improving incomes at the grassroot level. With these objectives, central and local governments in Ghana have been planning, implementing and financing local development activities in their various jurisdictions. One of the major sources of funds for local development activities in the country is the District Assemblies‟ Common Fund (DACF). This study is thus an attempt to identify and examine the specific roles DACF plays in promoting local development in the Jaman South and North Districts. To achieve this, the study examined the various contributions to grassroot development in the districts, the institutional and regulatory framework for the use of the Fund and the challenges in the use of the DACF in such activities. In carrying out this study, purposive and simple random techniques were used through a field survey to gather data from a total of 498 respondents and key informants. The study revealed that the DACF is the major source of financing local development activities in both districts contributing an average of 45.10 percent and 55.91 percent of the total revenues of the Jaman South and North District Assemblies respectively. It has improved upon participation in the districts; funded social and economic infrastructure such as schools, health facilities, water and sanitation facilities, roads and markets in both districts. More especially, the Fund has helped in establishing gari processors for eight communities in the Jaman North District. The study therefore recommended that there should be expansion of the IGF base of the two districts and flexibility in MLGRD Guidelines for the utilization of DACF. Again, there should be the allocation of Funds to Sub- District Structures, reduction in Delays in the DACF Allocation and publication of DACF Information by Assembly v TABLE OF CONTENTS Contents Page CERTIFICATION ................................................................................................................... ii DEDICATION........................................................................................................................ iii ACKNOWLEDGEMENTS ................................................................................................... iv ABSTRACT .............................................................................................................................. v TABLE OF CONTENTS ........................................................................................................ v LIST OF TABLES .................................................................................................................. ix LIST OF FIGURES ................................................................................................................. x LIST OF ACRONYMS .......................................................................................................... xi CHAPTER ONE ...................................................................................................................... 1 BACKGROUND TO LOCAL DEVELOPMENT FINANCING ........................................ 1 1.1 Introduction ........................................................................................................................ 1 1.2 Problem Statement............................................................................................................. 3 1.3 Objectives of the Research ................................................................................................ 4 1.4 Research Questions ............................................................................................................ 5 1.5 Scope.................................................................................................................................... 5 1.6 Justification of the Study ................................................................................................... 6 1.7 Organisation of Report ...................................................................................................... 7 CHAPTER TWO ..................................................................................................................... 8 FINANCING LOCAL DEVELOPMENT ............................................................................. 8 2.1 Introduction ........................................................................................................................ 8 2.2 The Concept of Local Development ................................................................................. 8 2.3 Approaches to Local Development ................................................................................... 9 2.3.1 Direct Community Support ............................................................................................... 9 2.3.2 Support to Local Government ......................................................................................... 10 2.3.3 Area-Based Development ............................................................................................... 11 2.3.4 Decentralized Sector Approach ...................................................................................... 12 2.4 Financing Local Development: A Global Perspective .................................................. 13 2.5 Financing Local Development in Ghana........................................................................ 14 2.5.1 Internally Generated Fund (IGF) .................................................................................... 15 vi 2.5.2 Central Government Transfers ........................................................................................ 15 2.5.3 Non-Governmental Organizations (NGOs)/Development Partners ............................... 16 2.6 The DACF and Local Development ............................................................................... 16 2.6.1 Introduction to the Fund.................................................................................................. 16 2.6.2 Institutional and Regulatory Framework for the DACF ................................................. 18 2.6.3 Contribution of the Fund to Local Development ............................................................ 21 2.6.4 Challenges of the DACF ................................................................................................. 23 2.7 Case Studies of Local Development Financing ............................................................. 25 2.7.1 Financing Local Development in Uganda ...................................................................... 25 2.7.2 Financing Local Development in Kenya ........................................................................ 27 2.7.3 Challenges to Local Development Financing in Africa. ................................................. 30 2.8 Lessons from Case Studies .............................................................................................