Ghana Developing Communities Association (GDCA) has held the Northern Regional Dialogue on Local Revenue Generation in Tamale to share the content of the Compendium of Best Practices in revenue generation with the MMDCEs. The compendium Practices in revenue generation covered some selected districts in the northern region, which include; Karaga, Saboba, Kumbungu, Mion, Zabzugu, Tatale-Sanguli districts and Savelugu, Yendi, and Nanumba North Municipalities. Compilation of the Compendium forms part of the governance activities under the E4L Program funded by Ghana Venskab and CISU – Civilsamfund i Udvikling both in Denmark.
Mr. Gmabi Philip, Technical Advisor on Policy and governance at Ghana Developing Communities Association, presenting a brief on the compendium said a key aspect in successful decentralization process is enable local government to generate their own income in order to invest in the provision of public services for the local population. He however noted, the majority of Metropolitan, Municipal and District Assemblies (MMDAs) in Ghana still highly depend on central government transfers to fund their development plans.
“While these transfers remain inadequate and unpredictable, they undermine efficient planning processes. It is in view of the above that GDCA initiated and implemented the initiative of monitoring of internal revenue generation, management and utilization between 2018 and 2021 in collaboration with its Danish partner, Ghana Friends (GF). The initiative was largely driven by Social Accountability (SA) approaches with an integrated application of Social Auditing tools.
He further noted that the main objective of the intervention was to ensure that MMDAs in Ghana are able to improve the wellbeing of the citizens through adequate collection of internally generated funds (IGF).
“This presents some quick facts of the initiative, the methodology, key findings and recommendations. Internally generated funds average only 16.5% of local government revenue in most MMDAs” Mr. Gmabi Philip stated.
The compendium identified the lack of effective communication mechanism and no direct link between mobilized and direct benefits among citizens as some of the challenges affecting revenue mobilization at the local level. Some of the challenges include: Revenue Collectors, who are mostly on Government’s pay-roll are not motivated enough to collect revenue for their particular MMDAs and there is minimal involvement of Assembly Members and Traditional Authority by some MMDAs.
On the compendium key findings and observations, Mr. Gmabi Philip revealed that, the cost of revenue collection is very high in most MMDAs, particularly salaried revenue collectors.
“About twenty percent of the revenue collectors in the district earn a monthly salary that is greater than their revenues collected. This compares unfavorably to commissioned collectors, who earn commission rates ranging from 10 percent to 30 percent of revenue collected. Cash still by far the most common payment for property rates and business licenses, with around 70 percent of payments made in cash in the average MMDA. Cash payments allow for unacceptably high rates of leakages, which reduce funds available for district expenditures” he lamented.
The launch brought together MMDCEs and staff of MDAs, civil society organisations and members of Tax Justice Coalition in the northern region. The Dean of MMDCEs in the northern region who doubles as the Municipal Chief executive of Nanumba South, Abdulai Yaquub commended GDCA for the thorough work it did on the compendium. He also promised on behalf of his colleagues MMDCEs to implement lessons from the compendium in their various MMDAs to shore up revenue mobilization.
He called on civil society organisations and NGOs like GDCA to support MMDAs in the northern region to enable raise revenue to complements central government in their localities.
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