Ghana - Strengthening Local Initiative and Building Local Capacity : Sector Study

Document of The WORLD BANK FOR OFFICIAL USE ONLY CONFIDENTIAL Report No. 11369-GH GHANA STRENGTHENING LOCAL INITIATIVE and BUILDING LOCAL CAPACITY SECTOR STUDY Februnrlv -1,1993 FILE COPY CONFIDENTIAL: Report No.:11369-GH Type: (SEC) Title: STRENGTHENING LOCAL INITIATIVE Author: BAHAL, 3AGDISH Ext.:34562 Room:36029 Dept.:AF41N Infrastructure Operations Division Western Africa Department Africa Region Thi document has a retricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorisation. CURRENCY EQUIVALENTS Currency Unit = Cedi (C) USS1.00 = C380 C1.00 = US$.0026 ABBREVIATIONS and ACRONYMS AF4 Western Africa Department (World Bank) AF4CO Western Africa Department, Country Operations Division (World Bank) AMRU Accra Metropolitan Roads Unit CD Coordinating Director CIDA Canadian International Development Agency DA District Assembly DCD Department of Community Development DCEP District Capitals Electrification Program DEO District Executive Officer DHMT District Health Management Team DFR Department of Feeder Roads DS District Secretary DUR Department of Urban Roads ECG Electricity Corporation of Ghana ERP Economic Reform Program FY Fiscal Year GES Ghana Education Service GHA Ghana Highway Authority GOG Government of Ghana GTZ Gesellschaft fuer Technische Zusammenarbeit GWSC Ghana Water and Sewerage Corporation HQ Headquarters JSS Junior Secondary School KVIP Kumasi Ventilated Improved Pit Latrines LAC Latin America and Caribbean Region (World Bank) MDPI Management Development and Productivity Institute MFED Ministry of Finance and Economic Development MLG Ministry of Local Government MOE Ministry of Education MOEN Ministry of Energy MOH Ministry of Health MWH Ministry of Works and Housing NDPC National Development Planning Commission NED Northern Electricity Department NFRRMP National Feeder Roads Rehabilitation and Maintenance Project NGO Non-Governmental Organization OHCS Office of The Head of The Civil Service PER Public Expenditure Review PHC Public Health Care PIP Public Investment Program PNDC Provisional National Defense Council PSC Public Service Commission RWSS Rural Water Supply Scheme SOE State-Owned Enterprise USAID United States Agency for International Development VRA Volta River Authority WSRP Water Sector Rehabilitation Project FISCAL YEAR January 1 - December 31 GHANA STRENGTHENING LOCAL INITIATIVE and.BUILDING LOCAL CAPACITY TABLE OF CONTENTS Abbreviations and Acronyms Executive Summary ...................................... i I. Study Objectives and Methodology ......................... 1 A. Objectives ................................... 1 B. Background .................................. 2 C. M ethodology .................................. 2 D. Outline ofPaper ............................... 3 11. The Local GovernmentSystem............................ 4 A. Historical Evolution ............................. 5 B. Policy Framework .............................. 6 C. Legal Basis for Structure of Authority .................. 7 D. Current Structure of Authority ...................... 10 E. Demographic and Spatial Variety of Districts ............. 18 F. Current Status and Problems ........................ 18 III. Improving District Infrastructure and Service Delivery: Planning and Implementation ............................ 22 A. Planning for Sustainable Infrastructure Investments ......... 22 B. W ater ..................................... 24 C. Sanitation ................................... 26 D. Roads and Drainage ............................ 29 E. Markets and MotorParks......................... 31 F. Basic Education ............................... 32 G. Primary Health Facilities ......................... 34 H. Electricity Supply .............................. 35 I. Estimates of Capital Requirements to Reach Basic Standards and Annual Maintenance Costs ........... 36 This report is based on the findings of a Bank mission which visited Ghana in March/April 1992 comprising Messrs. Jagdish Bahal, Urban Finance Specialist and Mission Leader; Kingsley Robotham, Urban Planner; Alan Coulthart, Urban Engineer; Jerry Silverman, Management Specialist; Steve Berkman, Training Specialist; Chris Banes, Municipal Engineer (consultant); and Paul Sanderson, Valuation Surveyor (consultant). The Mission was assisted by Messrs. Richard James, consultant; Ken Sigrist and Godfrey Ewool, Resident Mission; Mike Mensah, Ministry of Local Government; and Jonathan Walters, Economist. Secretarial support was provided by Ms. Perla San Juan. IV. Improving District Infrastructure and Service Delivery: Finance ..................................... 38 A. Mobilizing Finance for Sustainable Infrastructure Development ........................ 38 B. Allocating and Managing Expenditure for Sustainable Infrastructure Development ................ 46 C. Strengthening Planning, Revenue Collection and Budgeting ............................ 49 D. Prospects for Improved Financial Performance ............ 52 V. Improving District Infrastructure and Service Delivery: Staffing .................................... 54 A . Policy ..................................... 54 B. Structure of the Civil Service ...................... 55 C. Alternative Personnel Systems: Incentives for Performance .... 57 D. Skills: Training Approaches ....................... 63 VI. Towards a Medium-Term District Development Strategy ........... 66 A . Roles ..................................... 66 B. Organizational Capacity .......................... 71 C. Next Steps: Actions Proposed for 1993 and 1994 .......... 78 Annexes in Text Annex 1 Ghana: Structure of Government Annex 2 Ghana: Ministry of Local Government - Organization Chart Annex 3 Types of Decentralization. Annex 4 Pattern for Discretionary Authority Patten for Principal Agency Annex 5 Sanitation Equipment Owned by District Assemblies Annex 6 Road Types and Conditions Annex 7 Local Government Law 1988, Sixth Schedule Annex 8 Local Government Instrument 1992 (Amendment of Sixth Schedule) Annex 9 Local Government Instrument 1992 (Amendment of Sixth Schedule) Annex 10 Techiman District Assembly Annex 11 Internally Generated Revenue Collected by all DAs Annex 12 Current/Real Per Capita Values for the 12 Sample DAs 1988-1991 Annex 13 Recurrent Revenue and Expenditure (actual) of the 12 Sample DAs 1988-1991 Annex 14 Summary of Internal Revenue of 12 Sample DAs 1988-1991 Annex 15 Summary of Financial Performance of 12 Sample DAs 1988-1991 Annex 16 Total Recurrent Revenue (Growth Rates) Annex 17 Ministry of Local Government, 1991 Development Budget Annex 18 Intergovernmental Transfers as a Proportion of Total GOG Revenue Annex 19 Tamale Municipal Assembly Annex 20 Projected Increase in District Assemblies Internally-Generated Revenue Projected Increase in District Assemblies Total Revenue Projected Per Capita Total Revenue Projected Increasein,Central Government Transfers Annex 21 Estimated Staff by Department, Grade and Level of Government Annex 22 Estimated Staff by Occupational Category (actual Annex 23 Enrollment by Discipline in Tertiary Institutions 1990 Map: IBRD No. 23445 Ghana District Assembly Areas EXECUTIVE SUMMARY 1. In 1988 the Government of Ghana embarked upon an extensive program of decentralization involving the devolution of 22 Central Government ministerial or departmental functions to District Assemblies (DAs). This is perhaps the most ambitious decentralization effort in Africa. Since then, different views among Government agencies concerning practical implementation requirements have emerged. In part, such ambiguities have resulted in some reduced enthusiasm for the decentralization program as assignment of responsibilities to local levels has outpaced financial and institutional capacity at both levels. A practical strategy for phased implementation over the next decade and specific action-plans for moving such a strategy forward over the next five years or so is now needed to ensure that recent, hard won economic gains are not lost and that a firm foundation is established for sustained economic growth with equity. 2. The provisions of the new 1992 Constitution and PNDC Law No. 207 embody Government's policy objectives with respect to the responsibilities of DAs. Nevertheless, Government's objectives regarding the role of DAs should be understood in the context of its broader economic reform policies. An important conclusion of this Review is that there is a significant inconsistency between the current objectives of Ghana's decentralization policy and the structure of authority in place for the performance ofplanning, fjnancing, and personnel management functions. The inconsistency between objectives and implementation arrangemetits, combined with no clearly articulated strategy for phasing in changes, is adversely affecting the functioning of both Central Government and DAs. Significant improvement of public sector performance is not possible until the current inconsistency is resolved. The basic choice facing Ghanaian decision-makers is between adjusting the current decentralization policy to fit current systems or vice verse. Therefore, a coherent strategy is necessary to move from the current reality to the desired objective of efficient and effective performance of the public sector. 3. A further problem is that DAs are not yet ready to assume the whole range of responsibilities assigned to them as a result of resource constraints and lack of management and technical capacity. An important part of the solution to that problem can be found in the changing role of the public sector inherent in Ghana's ERP. Changing the allocation of responsibilities so as to benefit from the comparative advantages ofthe various levels ofgovernment and the private sector should result in the enhanced performance of DAs. If that were accomplished, much of the criticism of DA inefficiencies might be resolved. Thus, programs to improve the performance of DAs should be consistent with the more limited scope of their responsibilities. That being the case, a massive institutional development program should not be required at local levels. Even with such an approach, however, implementation of Ghana's decentralization policy will need to be phased over a period of, perhaps, ten years. i Executive Summary 4. Based on the broad analysis summarized above, four broad issues are identified which Government needs to address if its decentralization policy objectives are to be translated into a practical program over the medium-term: (i) what are the priority investment requirements in five infrastructure-related and two social sector-related subsectors addressed in the Review (Chapter III); (ii) What should be the structure of authority for planning and implementation (Chapter III); (iii) how can compatibility between objectives of decentralization, assignment of responsibilities, and the incentive effects of financial and personnel management systems be ensured (Chapters IV and V); and, (iv) what are the priorities among those functions and subsectors for which DAs have a comparative advantage and what should be the sequence in which those priority functions should be assigned to them (Chapter VI). Objectives 5. The primary objectives of this Review are to: (i) assist GOG to clarify roles and responsibilities under the decentralization program; (ii) identify priorities for the decentralization of functions and services; and (iii) identify critical bottlenecks in the decentralization process and devise feasible and efficient strategies to overcome them. The concluding Chapter of this Review outlines an approach for the further refinement of decentralization policy and a strategy for developing the institutional capacity required to implement it. Government must clarify its intentions concerning the primary functions that DAs should be expected to perform in the medium term and the manner in which Central and District governments should be organized so as to foster mutual support. As implementation of that strategy evolves over time, appropriate systems and procedures can be designed and established to improve the financial and operational efficiency and effectiveness of DAs. Therefore, recommendations concerning decentralization are presented under the two broad headings of Roles and Organizational Capacity. Recommendations 6. Roles. Government needs to clarify its approach to decentralization in the context of the ERP by identifying specific functions within subsectors which ought to be: (i) privatized; (ii) devolved to DAs; (iii) assigned to DAs as principal agents; and/or (iv) delegated to specialized institutions, such as parastatals, teaching or research institutions, or "special districts" (e.g., water districts). All other functions should remain with the Central Government. In addition, decisions also need to be made concerning which Central Government functions ought to be deconcentrated and which ought to be performed at the Center. 7. In order to facilitate appropriate decision-making in the context of that approach, it will be necessary for Government to establish specific criteria to guide such decisions. Suggested criteria are provided in the Review. Oreanizational Capacity 8. The recommended strategy requires priorities to be set and improvements phased. Initial steps for the short-term should include: (i) the preparation and dissemination of a strategy for implementing decentralization policy linked clearly and explicitly to Government's policy objectives; (ii) rationalizing the system for generating and sharing public sector revenue among government levels; (iii) improving expenditure budgeting and control among DAs; and (iv) rationalizing personnel Executive Summary il management. Government should identify a few specific subsectors and economic management functions for which, as a matter of first priority, it wants DAs to assume responsibility. Responsibilities for all other subsectors and economic management functions would, during the first phase of strategy implementation, remain the responsibility of Central Government agencies. However, during the first phase of strategy implementation, programs for improving local financial and human capacity should be designed and implemented so as to sequentially expand the responsibilities of DAs, in line with PNDC Law No. 207, commensurate with their ability to so do.Because improvement of local government performance is contingent on the broader restructuring of the public sector implicit in the strategic nature of Ghana's ERP, the focus of its decentralization program should be integrated, including the entire public sector at all levels (not just district level). As a practical matter, the design of further phases of the program should be the responsibility of broadly representative ad hoc working groups; each of which would: (i) focus on a specific issue affecting priority requirements of reform; (ii) be responsible for collecting and analyzing data; and (iii) preparing recommendations for action in the context of the Government's overall policy framework. Those working groups should not be limited only to government officials. 1 STUDY OBJECTIVES and METHODOLOGY A. Objectives 1.1 In 1988 the Government of Ghana embarked upon an extensive program of decentralization, perhaps the most ambitious in Africa. Since then, different views among Government agencies concerning practical implementation requirements have emerged. In part, such ambiguities have resulted in some reduced enthusiasm for the decentralization program as assignment of responsibilities to local levels has outpaced financial and institutional capacity at both levels. A practical strategy for phased, sequential, implementation over the next decade and specific action-plans for moving such a strategy forward over the next five years or so is now needed to ensure that recent, hard won economic gains are not lost and that a firm foundation is established for sustained economic growth with equity. This study builds on the fiscal decentralization study previously undertaken within the World Bank by AF4CO and various other recent studies undertaken by the Infrastructure and Agriculture divisions of AF4. 1.2 This paper assumes that the current provisions of PNDC Law No. 207 embodies Government's policy objectives with respect to the responsibilities of district assemblies. It also assumes that Government's objectives regarding the role of DAs should be understood in the context of its broader economic reform policies. However, it should be noted that an important conclusion of the Paper is that there is a significant inconsistency between the current objectives of Ghana's decentralization policy and the financial and personnel systems currently in place. The basic choice facing Ghanaian decision-makers is between adjusting the current decentralization policy to fit current systems or vice verse. Therefore, a coherent strategy is necessary to move from the current reality to the desired objective of efficient and effective performance of the public sector. 1.3 In that context, the specific objectives of this study are: (a) To assist GOG to clarify roles and responsibilities under the decentralization program; identify priorities for the decentralization of functions and services, and identify critical bottlenecks in the decentralization process and devise feasible and efficient strategies to overcome them; (b) To assist GOG to develop a medium term (3-5 yr.) program to strengthen the capacity of Central Government institutions involved in the decentralization process and DAs themselves to plan, finance, manage, maintain, and, where necessary, coordinate local infrastructure and service delivery; 2 Chapter 1: Study Ojectives and Methodology (c) To assist GOG to identify the potential for mobilizing local governmental and private initiative in the task of improving infrastructure, services, and resource use, as well as promoting local economic growth; and (d) To provide the basis for sector dialogue, thus ensuring consistency between GOG's medium and long-term development goals and strategies, and the Bank's own policies and programs. B. Background 1.4 Ghana has a population of 14 million people of whom 31% live in some 185 urban areas. The five largest towns account for 50 percent of the urban population. Ghana once enjoyed a relatively high living standard compared with most other West African nations. Poor economic policies and a sharp deterioration in external terms of trade led to a decline in GDP in 1970s and early 1980s. The Provisional National Defence Council (PNDC) introduced the Economic Recovery Program (ERP) in 1983, supported by financial and technical assistance of the World Bank, IMF and multilateral and bilateral donors. The aims of the ERP were to: i) to stimulate growth; ii) improve the efficiency of resource use; and iii) provide an enabling environment for the private sector. In the past nine years, significant progress has been made towards achieving the objectives of the ERP. Price and distribution controls were dismantled on a wide range of products, interest rates were increased, Government concentrated on eliminating subsidies, mobilizing resources through improved tax collection and selective increases in consumption taxes and user charges, and providing for maintenance and capital expenditure. Significant improvements were made in Government's public expenditure policy, exchange rate and trade reforms. In this period, the economy has maintained an average growth rate of 5 percent a year. Late in 1991, the Government reaffirmed its commitment to maintain the course of economic adjustment by introducing a set of initiatives designed to create an environment more conducive to productive investment, especially from the private sector. PNDC has also embarked on a program of democratization of the political system both at the central and local levels. PNDC Law 207 increased the number of district assemblies from 65 to 110. The district level elections were held towards the end of 1988 and elected assemblies are already in place. Government's intention is to decentralize to the district level functions of 22 government ministries/departments. Elections for the Presidency and Parliament are scheduled for November and December 1992, respectively. The elected Government is scheduled to take office in January 1993. C. Methodology 1.5 The Mission visited twelve districts (11%) and met with the District Secretaries and heads of departments of district assemblies; as well as the heads of decentralized government departments operating at the district level. The districts visited were selected in consultation with GOG officials to reflect a representative sample of districts. In addition to the actual visits of the team, a questionnaire was completed by officials in all twelve districts. The questionnaire required information on: (i) revenues, expenditure, sources of funding, and revenue generation and sharing; (ii) legal powers; (iii) systems and procedures for planning and budgeting; (iv) maintenance management; (v) equipment and vehicle availability, condition, and needs; (vi) office accommodation conditions and needs; (vii) district infrastructure conditions, needs, and priorities; (viii) manpower and training needs; and (ix) progress of composite budgeting and other actions programmed to implement the decentralization process. Chapter 1: Study Objectives and Methodology, 3 1.6 The Team also met with officials from two Regional Coordinating Councils (RCC) and key ministries and other agencies involved in the decentralization process. That latter group included the Ministries of Local Government (MLG), Health (MOH), Education (MOE), Finance and Economic Planning (MFEP), and Energy (MOEN), and The National Development Planning Commission (NDPC), Public Service Commission (PSC), Office of The Head of The Civil Service (OHCS), Management Development and Productivity Institute (MDPI), Department of Urban Roads (DUR), Ghana Water and Sewerage Corporation (GWSC), Ghana Highways Authority (GHA), Department of Feeder Roads and the Technical Services Center of the Ministry of Works and Housing (MWH). Special attention was given to issues of revenue generation and sharing in infrastructure-related subsectors to ensure that proposals are feasible, efficient, and equitable. Emphasis was also given to staffing policy, management, and training at all levels. D. Outline of Paper 1.7 Chapter II outlines the historical evolution of DAs responsibilities prior to PNDC Law No. 207; summarizes Ghana's current policy framework and the legal basis for its current structure of governmental authority; describes the current structure of authority in terms of alternative models of decentralization; describes the number, type, and size of Regional and district governments; and identifies the current status and problems related to implementation of PNDC Law No, 207. The remaining five chapters address four broad issues which Government will need to make decisions about in order to transform the policy objective embodied in PNDC Law No. 207 into a practical implementation program over the medium-term. Those issues, and the Chapters which address them, are outlined below: (a) The identification of priority requirements in seven infrastructure-related sub-sectors and the structure of authority for planning and implementation with respect to those sub-sectors is provided in Chapter M; (b) Ensuring compatibility between objectives of decentralization, assignment of responsibilities. and the incentive effects of financial and personnel management systems is addressed in Chapters IV and V; and, finally, (c) Priorities Among Those Functions and Sub-Sectors for Which DAs Have a Comparative Advantage and The Sequence in Which Priority Functions for Which DAs Have a Comparative Advantage Should be Assigned to Them is discussed in Chapter VI which presents a recommended medium-term development strategy. 2 THE LOCAL GOVERNMENT SYSTEM 2.1 Ghana's policy with respect to decentralization is embodied primarily in: (i) The 1992 Constitution of The Republic of Ghana (effective January 7, 1993); (ii) the Local Government Law 207 (1988); (iii) various Local Government (District Assembly) (Establishment) Instruments; and (iv) the Local Government (Urban, Zonal, Town Councils and Unit Committees) (Establishment) Instrument (1991). 2.2 Chapter 20 of the new Constitution (consisting of 17 Articles) is devoted entirely to "Decentralization and Local Government." It establishes that "Ghana shall have a system of local government and administration which shall, as far as practicable, be decentralized." The term "decentralization" is not further defined, except by inference (see para. - below). 2.3 PNDC Law No. 207, which preceded the 1992 Constitution, is more specific. It assigns directly to DAs the responsibility for performing those functions previously performed at local levels by the deconcentrated arms of 22 Central Government "Departments/ Organizations;" including the Departments of: (i) Community Development; (ii) Town and Country Planning; (iii) Public Works; (iv) Feeder Roads; and (v) - (ix) Five departments responsible for various functions within the agriculture sector; as well as the (x) Ghana Education Service; (xi) Ghana Highways Authority; and (xii) Office of the District Medical Officer for Heilth (see Attachment 2 for complete list). 2.4 In addition, the individual Establishing Acts for each of the 110 DAs, which supplements PNDC Law No. 207, all include a list of 86 specific responsibilities. Among those are responsibilities for various aspects of: Helth (other than sanitation/9 clauses); construction, rehabilitation, and maintenance of buildings (8 clauses); agricultur and livestock (6 clauses); roads/streets and education (4 clauses); markets and sanitation (3 clauses each); water (2 clauses); and electricity, car parks, conservation, and community development (1 clause each, although the CD category is a "catch-all" involving a wide-range of functions particular to rural areas). 2.5 With reference to responsibilities currently assigned to DAs, it is the clear intention that they will have complete, devolved, responsibility for policy formulation and planning for the sectors assigned to them; as well as the management of investment project implementation and on-going operations and maintenance. However, district assemblies have direct access to only limited sources of revenue to finance their own discretionary decisions with respect to such measures (see Chapter IV). 2.6 This Chapter provides an overview of decentralized institutional arrangements within the Government of Ghana (GOG): (i) the historical evolution of local government responsibilities; (ii) 51 Chapter 2: The Local Govemment System the current policy framework; (iii) the legal basis for distribution of responsibilities among levels; (iv) vertical relationships among levels of government, including different forms of decentralization itself; (v) horizontal relationships at each level of government, including cross-sectoral coordination and relationships among legislative, executive and judicial functions; and (vi) number, type and size of non-central governments. A. Historical Evolution 2.7 Ghana's experience with alternative forms of local government spans several decades. Since 1957, there have been eleven Commissions of Enquiry on local government structures and functions in Ghana and sixteen laws or decrees related to decentralization. The most recent change embodied in PNDC Law No. 207 represents a fourth phase in the historical evolution of local government. A brief summary of all four phases follows. First Phase: 1951 - 1965 2.8 The first phase covers the period from the establishment of the Local Government Ordinance (951) to that of the Local Government Act (Amendment Three) of 1965. That period was initially characterized by a two-tier local government structure consisting of 280 district, municipal, urban, and local councils. The multiplicity of local jurisdictions, each with relatively small populations, were viewed by many officials as a weakness. Therefore, that system was changed in 1961 in favor of a one-tier system of 140 larger district councils. By February 1966, the local government system consisted of three City Councils, three Municipal Councils, 22 Urban Councils, and 115 Local Councils. Nevertheless, despite a well-articulated local government structure, actual performance of local administrative functions had deteriorated substantially. Second Phase: 1966 - 1974 2.9 In 1965, the Local Government Act (Amendment 3) removed from the Local Government Service Commission, which had been created in 1958, responsibility for hiring, firing, and paying local government employees. Those responsibilities were transferred to a newly established Ministry for Local Government (MLG). Central government took over responsibility for collecting property taxes on behalf of local government. The Central Government's funding for local government, which had already declined from 1960 levels, was successively reduced and transfers from the center to local governments suffered increasingly long delays. This period was, in effect, an extended period of transition characterized by two different Commissions of Inquiry within a year of each other; ie, the Mills-Odoi Commission of 1967 and the Siriboe Commission of 1968. Although the recommendations of those Commissions for a new system of local government were incorporated in the 1969 Constitution, Government did not implement those reforms. Nevertheless, it was during this period that the conceptual framework of Ghana's current local government system was formulated. Third Phase: 1974 - 1988 2.10 This phase witnessed the introduction of the 1967 recommendations of the Mills-Odoi Commission, duly endorsed by the subsequent Okoh Commission in 1974. However, popular participation at the local level was not part of its design as two-thirds of district council members were government nominees and one-third represented traditional authorities. The key feature of this system was an attempt to integrate all agencies of line ministries at the local level under the authority of the district administration. In any event, this system was no more successful than previous local Chapter 2. The Local Govemment System 6 government arrangements, as by 1974 the MLG was significantly weaker than the line ministries which continued to maintain their own units at local levels. Six changes of minister between 1972 and 1977 weakened the capacity of the MLG to implement the 1974 reforms. By 1978, the Ministry had been formally shorn of two new functions (revenue sources, and statistics, research and programming) which had been assigned to it in 1974. Its primary functions continued to be general administration, the inspectorate unit, and property tax valuation. The result was, in fact, common to many local government systems in Africa (i.e. in Zambia and Tanzania); a weak ministry of local government relative to other central government ministries which made the actual operational role of local governments peripheral to the deconcentrated operations of central government line ministries. Even within their limited scope, the discretion of local governments was limited by the excessive controls exercised by the ministry of local government (discussed further in Section D). Fourth Phase: 1988 - Present 2.11 The Local Government Law. 1988. PNDC Law No. 207, created 110 new district assemblies. Significant discretionary authority has been assigned to the district assemblies, two-thirds of whose members are elected. The first and most recent of those elections were completed in early 1989. However, to date, the effective transfer of actual authority and resources necessary to give practical application to the Law has not yet occurred. Thus, the remainder of this paper has been prepared to assist Government to improve its performance in the framework of this fourth phase in the evolution of local government in Ghana. B. Policy Framework 2.12 The structure of government provides organizational channels through which functions are performed to achieve strategic and operational objectives. The institutional framework is best viewed as a means to an end. Therefore, Government's overall policy objectives provide the context for assessing the comparative advantage of district assemblies for the implementation of aspects of an institutional strategy. This Section provides brief summaries of the relationships among three key elements of Ghana's current policy framework: (i) decentralization; (ii) economic reform; and (iii) the role of the public sector. Decentralization Policy 2.13 It can be inferred from documents, speeches, and discussions with Government officials at both central and local government levels, that the objectives of Ghana's decentralization policy are essentially five-fold: (i) enable access to political and economic decision-makers for a majority of Ghanaians; (ii) increase direct popular participation in programs directed to meeting "basic needs;" (iii) abolish the parallelism between Central and local government units at the district level, especially with respect to the 22 functional areas targeted for decentralization by PNDC Law No. 207; (iv) restructure allocation of resources and increase the efficiency of resource utilization; and (v) improve managerial and administrative efficiency by providing for flexible adaptation to unique circumstances which, in different locations, might affect development efforts in different ways. 2.14 A problem arises from the assumption that all five of those objectives are compatible in all respects. For example, what might most likely foster popular participation in discretionary decision- making might sub-optimize managerial efficiency. More importantly, popular participation could mitigate against local revenue generation on the one hand, and/or demands for increased expenditures 7 Chapter 2: The Local Govemment System on the other hand. Thus, specifying political and economic objectives and clarifying priorities is important for assessing alternative decentralization arrangements. Economic Policy Reform 2.15 Ghana's decentralization efforts need to be consistent with its overall economic reform program (ERP). An important feature of that broader policy framework are principles concerning the changing role and responsibilities of the GOG and the expanding role of the private sector, both in the sense of private commercial entrepreneurship and voluntary community initiatives. The fundamental institutional aspect of Ghana's overall economic policy framework is that the public sector is shifting from attempts to control economic behavior through inappropriate regulation and/or through direct and dominant participation in the production of goods and services to the more limited role of providing an enabling environment for private sector economic competition. Such a shift in public sector roles and responsibilities is expected to result in improved economic efficiency and growth through the operation of market mechanisms. In its most general terms, this requires the public sector to limit its role to: (i) establishing appropriate policies and regulations for the efficient and effective operation of market mechanisms; (ii) developing human resources; (iii) facilitating the construction and maintenance of appropriate physical infrastructure; and (iv) facilitating the provision of appropriate services. Role of Public Sector 2.16 Ghana's ERP provides implicit criteria for evaluating the appropriate role of Government in the economy. Thus, while the GOG is responsible for financing "Dublic" goods and services, it need not be directly involved in the actual production of the goods and services financed by it. From a practical perspective, "nublfic" goods and services are understood to be those which are deemed to be high priority for economic growth and public welfare, which the private sector cannot reasonably be expected to provide in sufficient quantity. Distinguishing between financing and producing public goods and services helps to identify the types of economic management functions which ought to be maintained within Ghana's public sector in support of economic reform measures, and those functions which ought to be reassigned to the private sector. It also helps to assess the potential impact of alternative assignments of functions to district assemblies to achieve economic policy objectives. The implications of that broad policy for the role of DAs is discussed further in Chapter Ell. C. Legal Basis for Structure of Authority 2.17 The legal basis for district assemblies in Ghana is provided through the 1992 Constitution, PNDC Law No. 207, and the enabling legislation for each of the 110 individual districts. However, adequate administrative guidelines for implementation by central, regional and district governments have not yet been prepared. Constitutional Provisions 2.18 The constitutionally mandated relationship among central government levels and non-central government levels within unitary systems is relatively straightforward as decentralization is legally a function of grants of authority to subordinate jurisdictions. Thus, in unitary systems, provincial and local governments are legally subject to the ultimate "sovereignty" of the gntral government in all matters. The role of local government in Ghana must be assessed in that context. Chapter 2: The Local Govemment System 8 2.19 Nevertheless, constitutional provision for local government provides some legal protection to non-central government authorities. Thus, it is significant that the 1992 Constitution, which was supported by approximately 80 percent of the popular vote in the Referendum of April 28, 1992 devotes an entire Chapter to the subject of "Decentralization and Local Government." It is useful, for the purposes of this paper, to differentiate among Articles according to whether they address policy objectives, the role of regional and central government, the role of the district or the structure of authority at district level. 2.20 Policy Objectives. Three of the significant provisions of the constitution establishing the policy objectives for decentralization in Ghana are: (a) "Local government and administration ... shall, as far as practicable, be decentralized" (Article 240[1]); (b) "To ensure the accountability of local government authorities, people in particular local government areas shall, as far as practicable, be afforded the opportunity to participate effectively in their governance" (Article 240[2][e]); and (c) "A District Assembly shall be the highest political authority in the district, and shall have deliberative, legislative, and executive powers" (Article 241[3], emphasis added). 2.21 Central and Regional Government. Nine of the significant provisions of the Constitution address the role of central government with respect to its relationship to district level governments in Ghana. Six of those provisions specify responsibilities of Parliament: (a) "Parliament shall enact appropriate laws to ensure that functions, powers, responsibilities and resources are at all times transferred from the Central Government to local government units in a coordinated manner" (Article 240[2] [a]); (b) "Parliament shall by law provide for the taking of such measures as are necessary to enhance the capacity of local government authorities to [carry-out their responsibilities]" (Article 240[21[b]; (c) "Parliament may by law make provision for the redrawing of the boundaries of districts or for reconstituting the districts" (Article 241[2]); (d) Parliament shall, by law, prescribe the functions of DAs and the levying and collection of taxes, rates, duties and fees (Article 245; see Chapter IV); (e) "Parliament shall annually make provision for the allocation of not less than five per cent of the total revenues of Ghana to the DAs for development" (Article 252[2]; see Chapter IV for a fuller discussion of this provision); (f) "Parliament shall enact laws and take steps necessary for further decentralization of the administrative functions and projects of the Central Government but shall not exercise any control over the DAs that is incompatible with their decentralized status, or otherwise contrary to law" (Article 254). 9 Chapter 2: The Local Govemment System One additional provision specifies that "the member or members of Parliament from the constituencies that fall within the area of authority of the DA [shall be] members [of the District Assembly] without the right to vote (Article 242[b]). Another two significant provisions specify responsibilities of the President: (a) The President, in consultation with the traditional authorities and other interest groups in the district shall appoint not more than thirty per cent of all the members of the DA (Article 242[d]); and (b) The President shall appoint a District Chief Executive for every district with the prior approval of not less than two-thirds majority of members of the Assembly present and voting (Article 243[1]); Finally, "the Auditor-General shall audit the accounts of the DAs annually and shall submit his reports on the audit to Parliament" (Article 253). 2.22 Role of Districts. The role of district governments is implied in Article 240[2][b] in which Parliament has the responsibility for ensuring that local governments have the capacity to "plan, initiate, coordinate, manage and execute policies in respect of all matters affecting the people within their areas, with the view to ultimately achieving localization of those activities. To that end, "a sound financial base with adequate and reliable sources of revenue" shall be established of local governments (Article 240[2][cJ) and "as far as practicable, persons in the service of local government shall be subject to the effective control of local authorities" (Article 240[2][d]). 2.23 Structure of Authority at District Level. A detailed discussion of the structure of authority for performing legislative and executive functions at district level is provided further below (paras. 2.51 - 2.56). Suffice it to state here that DA are responsible for performing legislative functions and the Executive Committee of district assemblies are responsible for performing executive functions. Although there is some overlapping membership between the two groups, the influence of the Central Government is more significant and direct with respect to its relationship with Executive Committees. The intended role of the Assemblies is to represent the interests of their constituents within the districts. 2.24 The 1992 constitutional provisions with respect to decentralization are quite specific concerning the ultimate responsibilities of Parliament. However, with respect to the specific responsibilities of district assemblies, the Constitution's language is quite broad. More importantly, the structure of relationships between the executive departments of Central Government, statutory public corporations and district assemblies is not substantively addressed. Also, no differentiation is made in the Constitution of the choices made among different forms of decentralization, as discussed in this Paper. Legislative Provisions 2.25 The current Local Government Law. 1988 is essentially an executive order with the force of ordinary legislation. This study is based on the assumption that PNDC Law No. 207 embodies the policy of the GOG and, therefore, analyses and recommendations provided in this paper take the provisions of that law as given. Nevertheless, experience elsewhere suggests that simple majorities in national legislatures can change the scope of local government responsibilities and their access to types and amounts of resources. Thus, any authority assigned to district assemblies by PNDC Law No. 207 can be revised. Calculating the risk of such legislation remaining in force is likely to be Cha,ter 2: The Local Govemment System 10 important to decision-makers and staff at district level to enable them to plan and design program or project implementation arrangements. Therefore if the expectation within district assemblies leans more toward successive changes than stability, their medium or longer term programs are likely to be adversely affected. 2.26 A Government Committee, under the chairmanship of MLG, is currently preparing recommendations for changes in PNDC Law No. 207 in order to ensure consistency with the new Constitution. There are indications that the allocation of functions within the various Establishment Acts might be amended so as to require non-decentralized Government entities (e.g., Ghana Water and Sewerage Corporation [GWSC], Ghana Housing Authority [GHA]) to be more directly responsible to district assemblies. Staffing issues are also being addressed. Thus, it will be recommended by the Committee that the staff of the 22 decentralized departments should be formally transferred to district assemblies, and those ministries appropriately restructured. Administrative Provisions 2.27 Even with the Constitutional and legislative provisions for local governments identified above, administrative regulations, circulars, or memoranda are also required to provide guidelines and/or specify procedures for implementation. However, such administrative regulations sometimes create what are, in effect, new, more or less "legal," systems. Composite Budgeting, an integral part of GOG's decentralization strategy, is an example of an administrative provision which can significantly influence the manner in which the system is ultimately implemented (see Chapter IV). D. Current Structure of Authority 2.28 PNDC Law No. 207 envisaged a fundamental shift in governmental authority with respect to the responsibilities performed by 22 departments of the central government. That shift of authority is supposed to occur in two directions; vertically from those 22 departments to district assemblies, and horizontally, at the district level, from government staff performing executive functions to assembly members performing legislative functions.. Therefore, this Section will discuss both vertical and horizontal structural relationships. Vertical Relationships 2.29 Like most African countries, Ghana remains highly centralized; although that is not the intention of Law 207. By some measures, Ghana has been one of the most highly centralized countries in the world. A study completed in 1989 reported that, with respect to share of total government spending, Ghana ranked fifteenth among a sample of eighteen countries; exceeding only Costa Rica, the Gambia, and Sri Lanka. In terms of reliance by local governments on transfers from the center, Ghana was about average; an indicator of a high degree of de facto centralization (see Chapter IV). 2.30 Nevertheless, empirical evidence suggests that strong and effective local government requires strong central government. Many public sector economic management functions need to be performed at both central and local levels, although the practical scope and purpose of each function is often different among levels. It is, therefore, necessary to establish mutually supportive links among levels within system-wide institutional arrangements. In Ghana, weaknesses of many Central Government ministries and agencies compound inadequate capacity at local levels. 11 Chapter 2: The Local Government System 2.31 The vertical structure of government and administration in Ghana is illustrated in Annex 1. Although the principal political and administrative component of the decentralization strategy is the DA, there are several levels of organization involved, each of which plays an operational, coordinating or consent role in support of district development activities. Key organizations are identified below. 2.32 National Level. There are currently six key organizations at the national level that impact directly on the cross-sectoral operations of DAs: (i) the Provisional National Defense Council (PNDC); (ii) the Ministry of Local Government (MLG); (iii) the Ministry of Finance and Economic Planning (MFEP); (iv) the National Development Planning Commission (NDPC); (v) the Office of The Head of The Civil Service (OHCS); and (vi) the Public Service Commission (PSC). To those must be added the roles of Parliament and the President under the terms of the new 1992 Constitution, which becomes effective on January 7, 1993. Summary descriptions of the future role of Parliament and the President have already been provided above. Summary descriptions of the responsibilities of the six organizations identified above are provided below. 2.33 Provisional National Defense Council (PNDC). The Provisional National Defense Council or "Council" is, at the present time, the highest political authority in Ghana. With respect to decentralized operations, its role is to approve district development plans and budgets forwarded to it through RCCs. At the national level, coordination of plans is the responsibility of the NDPC which forwards recommendations to the PNDC via a Committee of Secretaries. The PNDC maintains executive authority over DAs and can create or dissolve Assemblies, alter district boundaries and change Assembly functions by way of legislative instrument. It is clear that the PNDC exercised powerful authority over the conduct of DAs. Nevertheless, under the terms of the new 1992 Constitution, the PNDC will cease to exist (Clause 36[1] of the Transitional Provisions). Its role with respect to relations with DAs is assumed by Parliament and the President. 2.34 Ministry of Local Government (MLG). The MLG is responsible for: (i) developing policies and legislation with respect to local government; (ii) supervising and monitoring of local administration; (iii) monitoring the implementation of PNDC Law No. 207, including assisting district assemblies in drafting by-laws and vetting such by-laws on behalf of the PNDC; (iv) auditing of district assemblies; (v) providing guidelines to district assemblies with respect to procurement, property tax rates, and so forth; (vi) allocating shares among districts of aggregate Central Government financial transfers (that responsibility will be assumed by Parliament under the new Constitution); and (vii) facilitating provision of offices and residential accommodation for DAs. In addition, in the absence of actual implementation of composite budgeting, the MLG serves as an interlocutor between district assemblies and international donor agencies with respect to projects which are appropriately implemented by the authorities at district levels; e.g., Koforidua and Kumasi Human Waste Management Projects. 2.35 In order to carry-out its responsibilities, the MLG is organized into five departments, the Environmental Protection Council (EPC); and 3 units; as illustrated in Annex 2. As is the case with all Government ministries, the new constitution does not make explicit provision for the MLG. Therefore, it might be expected that it will continue, during the immediate future, with the same mandate and structure as described above. However, the possibility of transferring MLG's line implementation functions to other government bodies and transforming it into a Secretariat with responsibilities limited to policy formulation, coordination, and monitoring is being considered by some officials within GOG. A proposal to that effect was submitted by MLG to PNDC some time ago, although not currently pending officially, its terms are instructive. Thus, under the terms of that earlier proposal, MLG's five current Departments would be transferred to other Government entities, Chapter 2: The Local Govemment System 12 as follows: (i) Community Development to the Ministry of Mobilization and Social Welfare; (ii) Parks and Gardens to the Ministry of Lands and Natural Resources; (iii) Town and Country Planning to NDPC; (iv) Births and Deaths to the Statistical Service of MFEP; and (v) Rural Housing and Cottage Industries split among the Ministry of Works and the Ministry of Industry, respectively. Responsibility for the Environmental Protection Council (EPC) would be transferred from MLG to the Ministry of Lands and Natural Resources or the EPC would be established as an autonomous council with its own statutory authority. The Inspectorate, Planning, and General Administration units of MLG would transfer as part of the proposed new Local Government Secretariat. Such a role would be consistent with the basic principles on which Ghana's decentralization policy is based. 2.36 Ministry of Finance and Economic Planning (MFEP). MFEP is responsible for the formulation of Ghana's macroeconomic policy in collaboration with the Bank of Ghana and for implementing of its fiscal policy. In addition to those broader system-wide responsibilities, MFEP is tasked with the review of composite budgets prepared by district assemblies. However, as discussed in Chapter m, MFEP has not yet begun to give practical effect to the preparation of such budgets. Budget allocations for recurrent expenditures at district levels are released by MFEP directly to the Regional level offices of the various Government departments. With respect to district assemblies, the regional administrative officers of MLG disburse Central Government transfers received from MFEP. Until October 1992, ministries, regional administrations, and district assemblies paid private sector contractors employed by them directly. However, as of that recent date, such payments have been re-centralized in MFEP. 2.37 National Development Planning Commission (NDPC). At the present time, the NDPC's role and operations have not been institutionalized. However, its mandate is to: (i) assist district assemblies in the preparation of their development plans; (ii) coordinate "development planning" for the GOG; and (iii) provide related technical assistance and training. District level planners, recruited by the NDPC, are being assigned to all District Executive Committees. The employment status of such Planning Officers is not clear as to whether they are in the districts to prepare district plans acceptable to NDPC or they are there to assist DAs to develop strategic and investment plans at the Assemblies' own initiative. Operationally the NDPC acts as a conduit of district level plans to the PNDC. Despite current ambiguities about its function, the NDPC is only one of two organizations discussed here which is provided for explicitly in the new 1992 Constitution (the other is the Public Service Commission. The constitutional role of the NDPC will include, among others, "mak[ing] proposals [to the President] for ensuring the even development of the districts of Ghana by the effective utilization of available resources." The role of NDPC is discussed more fully in Chapter if. 2.38 Office of The Head of The Civil Service (OHCS). The OHCS shares with the Public Service Commission line responsibility over all government positions and staff. More specifically, the OHCS is responsible for: (i) overall management of the civil service; (ii) recruitment of Category C staff in the "General Classes" of the Civil Service; (iii) the posting of staff; and (iv) approval of manpower ceilings. The Head of the Civil Service also chairs the Oversight Committee for the Civil Service Reform Program (OCCSRP; see,Chapter V). The OHCS establishes new positions and manages the Civil Service itself; including transfers and recommendations regarding promotions and dismissals. The role of OHCS is discussed more fully in Chapter V. 2.39 Public Service Commission. The Public Service Commission shares with the OHCS ultimate line responsibility over all government positions and staff. The PSC is responsible for: (i) determining the qualifications for all authorized positions within Government (i.e, the Establishment; (ii) designing and conducting the examinations required of all candidates for such positions; (iii) 13 Chapter 2: The Local Govemment System hiring all employees based on those examinations; and (iv) serving as the ultimate authority on promotions and dismissals. However, during the on-going Civil Service Reform Program (CSRP), the PSC's role is modified somewhat by the assumption of some responsibilities by the OCCSRP. The PSC is explicitly provided for in the new 1992 Constitution (Article 194, but its responsibilities are not specified; i.e., it "shall perform such functions as assigned to it by this Constitution [of which there are none] or any other law." The role of the PSC is discussed more fully in Chapter V. 2.40 Regional Level. The primary link between district and central level governments in Ghana are the 10 ]M. The ten RCCs operate as administrative bodies and have no direct executive authority over DAs. Rather, they meet once a year (minimum) to review, coordinate and submit to the PNDC for approval the plans and budgets of DAs in their region. Their key role is to assure that projects which encompass multiple districts are properly coordinated. Membership of Regional Councils comprises all District Secretaries and Presiding Members of DAs in a region, a Regional Secretary (appointed by PNDC) and his/her ex officio deputies. Therefore, like the NDPC, the 10 Regional Coordinating Councils serve primarily as conduits to the PNDC. The RCCs have very limited powers to substantively review proposed projects which involve more than one district. The role of the PNDC will cease on January 7, 1993 and, with the inauguration of the new Constitution, the structure of the RCCs will be expanded. The Regional Secretary will be replaced by the Regional Minister and will be appointed by the President, District Executives will replace District Secretaries as members, and the Presiding Members (i.e., the elected Chairpersons of DAs) and two Chiefs from the Regional House of Chiefs will join the Councils. In addition, "the Regional Heads of decentralized ministries in the region [will join] as members without the right to vote." The responsibilities of the RCCs are unspecified; i.e., "the functions of a Regional Coordinating Council shall be as prescribed by Act of Parliament." 2.41 District Level. The 110 DAs, including three Municipal Assemblies (MAs, are the key legislative and administrative bodies of the decentralized system. The three urban areas of Accra, Kumasi, and Sekondi-Takoradi are governed by MAs with powers similar to DAs. Both DAs and MAs have legal and executive authority over all government activities in a given district. The corporate character of DAs/MAs as juridical persons in law is important. Thus, they can be direct parties to legally enforceable contracts. As the lowest units of Government with that status, DAs often act as guarantors of contractual commitments made by village-level groups which do not, themselves, have the legal authority to do so (see para. 2._ below). Until January 7, 1993, DAs and MAs are accountable to the PNDC. However, under the terms of the new Constitution, they will be accountable to the President through the MLG. For more details on the structure of District and Metropolitan Assemblies, see paras. 2.56 to 2.61. 2.42 Sub-District Level. Although DAs are the lowest level of government with formal legislative powers, their area of responsibility remains too large to be local in the sense of a small "community" within which people easily interact and identify common interests. Within Ghana, such communities are organized in villages and, for some purposes, larger special purpose groups. 2.43 Village Level. Although Village Committees/Groups were abolished as formal organizations by the Local Government (Urban, Zonal, Town Councils and Unit Committees) (Establishment) Instrument (L.I. 1514) in 1991, villages continue to be informally "governed" by various forms of local leadership (i.e., chiefs and traditional councils). A formal constitutional role for traditional authorities at the village level was established in 1971 by The Ghana Chieftaincy Act and has been again enshrined in the new Constitution (Chapter 22). Nevertheless, the selection and terms of service of chiefs (and queenmothers), as well as traditional councils, are determined by the customary law and usage of each "paramountcy." The jurisdiction of chiefs and councils is limited, primarily, Chapter 2: The Local Govemment System 14 to family law. However, it does extend in practice to the use-rights of land and water within the domain of the "stool." Regional and National Houses of Chiefs constitute the structure of traditional governance with two principal functions: (i) to monitor appointments and comportment of chiefs and (ii) to act as appellate courts for all matters relating to customary law and usage. In addition, regional and national houses can perform any function that Parliament may confer upon them except that Parliament is not authorized to interfere with the two principal functions identified above. Finally, it is important to note that chiefs do not have formal legal authority to raise revenue. Therefore, although the institutions of chiefs and traditional councils are formally recognized in Ghana, village government does not, itself, have legal status as either a unit of the Government of Ghana nor as a juridical person with powers to enter into enforceable contracts. 2.44 Other semi-formal and informal "associations" exist where members of such associations assume mutual obligations to fellow members, even though they have no formal legal status. Such "associations" are sometimes the continuation, on an Id h= basis, of the recently abolished, but previously Government-sponsored Village Committees/Groups. Since the inception of the decentralization strategy, there appears to have been some increase in the number of such village-level groups, the majority of which have been organized by various government departments to assist efforts in a given sector. "Village Road Committees" of the Department of Feeder Roads (DFR) are examples of this level of organization. It is in support of such groups, either in the form of the "village government" or "associations," that DA often act as legal guarantors. However, other informal or semi-formal associations formed for economic purposes also exist within villages which have been completely independent of Government recognition or sponsorship. 2.45 In addition to semi-formal or informal "associations," persons at local levels can organize themselves as formal organizations. Two types of formal organizations are available: (i) "cooperatives" and "limited companies." Both types have status as "juridical persons" and can enter into legally enforceable contracts. Cooperatives have legal status as bodies registered under the terms of the Cooperative Societies Decree (1968, NLCD 252). Limited companies have legal status under the terms of the Companies Code (1963, Act 179). In practice very few village-based groups have sought the status of either cooperatives or limited companies as informal associations seem to work quite effectively. 2.46 Special Purpose Groups. Semi-formal and informal groups sometimes organize for particular purposes around an activity or service at a level larger than a "village." An example would be a group of parents organized around support of school activities. Such organizations are more inclusive geographically than village-level organizations, but are more narrowly focussed with respect to activities. Although most often semi-formal, organizations of this type could also be established as cooperatives or limited companies. 2.47 Sub-District Administrative Units. In recognition of the need for a Government administrative presence between villages and DAs, Town/Area Councils, Urban and Zonal Councils, and Unit Committees have been created. Under the terms of the new Constitution, the number and boundaries of these sub-district administrative units are established by the Secretary for Local Government (MLG) on the advice of DAs and with the approval of the President. However, in actual practice, their geographical boundaries all conform to the boundaries of the electoral districts within each District. The responsibilities of these sub-district organizations are at the discretion of district authorities, as specified in PNDC Law No. 207. Thus, these councils and committees are deconcentrated entities of District Assemblies. 15 Chapter 2: The Local Government System 2.48 Types of Decentralization. Although Ghana's organizational hierarchy appears to be relatively straight-forward, its governmental structure is complex. Thus, even with the introduction of PNDC Law No. 207, Ghana's current governmental structure is characterized by a mixture of all four "pure" types of decentralization encountered in the world: (i) deconcentration Cig,, assigning functions to branch offices at regional or local levels within sector ministries); (ii) delegation Cig, assigning responsibilities for implementation or maintaining sector investments to a parastatal or other semi-autonomous government agency); (iii) devolution (allowing local governments to both legislate and execute their own, self-initiated, decisions concerning the allocation of resources); and (iv) principal agency (assigning responsibility for performing executive implementation responsibilities to one level of government as agents of another level of government and under the latter's direction). Because conceptual clarity is essential for substantive understanding, communication, and decision- making about a subject, each of these four types, plus the more complex hybrid type, are discussed in more detail in Annex 3. The discussion which follows is limited primarily to devolution and principal agency because devolution is clearly the objective of PNDC Law No. 207 while the actual system currently in place in Ghana is more akin to a form of principal agency. 2.49 Discretionary Authority. As a Discretionary Authority, a DA exercises devolved responsibility. To the extent that district assemblies have discretionary authority, they can do essentially what they decide to do bound only by: (i) broad national policy guidelines; (ii) their own financial, human and material capacities; and (iii) the physical environment within which they operate. For example, the organization and management of markets is a discretionary activity already fully controlled at the district level. The exercise of effective discretion largely depends on districts' abilities to generate their own financial and staff resources to implement the decisions which they, themselves, make. That means that financial transfers from central to district governments are less likely to support local discretionary decision-making than a restructuring of revenue sources, issues of equity notwithstanding. That, in turn, has a direct bearing on who hires, pays for, assigns, promotes, transfers, and dismisses staff responsible for implementing the decisions of DAs in the performance of their role as discretionary authorities. An essential characteristic of discretionary authority is that the oversight role of Central Government over DAs should be limited to ensuring that local governments operate within broad national policy guidelines. Given the necessary characteristics of the discretionary authority model, a major theme of this Review is that there is a substantial gap between the formal system set forth in Law 207 and the manner in which governmental functions are actually performed in Ghana. That conforms with experience in a large number of countries world-wide. 2.50 It is a common error to define decentralization as being synonymous with devolution or discretionary authority. Narrowly defining decentralization in that way can have at least three negative consequences: (a) Formal commitments to decentralization intended as devolution by national level political leaders are reinterpreted by senior officials in central government ministries to mean deconcentration (an approach which reinforces the power of those central government ministries rather than local governments); (b) The full diversity of institutional arrangements available to decision-makers for the achievement of their objectives is obscured; and (c) The design of institutional arrangements is limited to choices among the extremes of full devolution or centralization, neither of which are fully suitable for the performance of all public sector functions. Chapter 2: The Local Govemment System 16 Under such conditions, Ghana has experienced cyclical movement from the extremes of centralization to decentralization and back again, as each system has failed in turn. Such instability has clearly had a debilitating affect on overall Government performance. 2.51 Principal Agency. Principal agency denotes a form of intergovernmental relationships in which responsibilities for performing executive functions are assigned by one level of government to another on their behalf. Thus, Central Government entities can serve as principal agents of local governments or vice verse. If, for example, DAs serve as principal agents of Central Government, they would be exercising responsibilities on behalf of higher authorities. Principal agency is significantly different than internal deconcentration of responsibilities within central government departments or of delegation to semi-autonomous SOEs. Thus, when acting as Principal Agents under such circumstances, local governments do so under the direction of a "Principal;" jL, the central government agency concerned. They do so according to directives, and under the supervision of Central Government agencies. Although not the intention of Ghanaian policy, a key principle of principal agency is that if and when district assemblies act as agents of Central Government, the latter should be responsible for financing the costs of programs concerned. Thus, it is legitimate and should be expected that any discretion exercised by DAs as principal agents is subject to decisions by Central Government. The characteristics of principal agency summarized above do not depend on the extent to which district assemblies are autonomous with respect to any other functions they might undertake. 2.52 A primary reason for using DAs as principal agents instead of deconcentrating authority within Central Government agencies is that, for a particular program, local participation is deemed important. For example, in the case of rural water supplies where extensive direct community participation will be involved, decisions such as agreeing on annual construction programs should properly be made by the DA in which the communities are represented. Another reason for selecting the principal agency mode is when, as a matter of policy, DAs are expected to eventually assume the responsibility for the program as a function of their discretionary authority and a phase of principal agency can assist them to develop the capacity to so do. 2.53 As indicated above, it is also possible for higher levels of government or government parastatals to act as agents of DAs or directly as agents of beneficiaries/users/clients. Under these arrangements, the responsibility for funding should remain with the lower level of government or the agency/group appointing the "agent." Such practices are, in effect, a variation of "contracting-out;" the difference being that the "contractor" is another government agency rather than a private sector enterprise. Horizontal Relationships at District Level 2.54 There are important horizontal dimensions to GOG's decentralization program especially with reference to the relationship between the legislative and executive functions which are discussed below. 2.55 Legislative Functions. Policy-making, including the rules/laws which give legal effect to such decisions, is essentially a legislative function while program and project implementation activities are essentially executive functions. An emphasis on the performance of legislative functions at the district level is an essential feature of local discretionary authority. PNDC Law No. 207 clearly intends to empower district assemblies with legislative responsibilities. The specified powers under the law include: 17 Chapter 2. The Local Government System (a) Overall district development, including formulation of strategies and programs for mobilizing and utilizing local human, economic and financial resources, and support of productive activity and social development; (b) Initiation and implementation of programs to manage, maintain, rehabilitate and develop local infrastructure and services, including physical, environmental, social and economic services; (c) Preparation and submission of annual development plans and composite budgets reflecting the operating and developmental plans of districts as well as those of the decentralized arms of the 22 ministries and central agencies now under district authority; and (d) Coordination and supervision of the operations of the non-decentralized arms of central government ministries at the district level. Although that list includes both legislative and executive functions, it is clear that DAs are envisaged as the cornerstones of political authority and decision-making at local levels. 2.56 DAs comprise one representative from each sub-district electoral area, a District Secretary and additional centrally appointed members not exceeding one-third of total membership. Appointed members, comprising one-third of the Assembly, are typically selected in consultation with chiefs and other community, educational, religious, NGO, private sector or similar groups. Assemblies generally consist of about thirty to sixty members although some approach 100 members. Each Assembly elects a Presiding Member by two-thirds majority who serves for one year. Assemblies are required to meet at least four times per year. 2.57 Just as policy-making is a legislative function, so also are decisions relating to revenue generation and expenditure. The extent to which district assemblies have authority to make decisions about their budgets is not only an important aspect of DA structure, but central to the discretionary authority model described above. Thus, when district assemblies decide and manage their own budgets, they are exercising legislative and executive functions. However, when DAs collect taxes legislated by others and spend money as directed by others, they are exercising executive functions only. Law 207 specifies that DAs shall have administrative and financial control over the district level operations of the 22 Central Government departments and agencies. In that regard, a key element of the fiscal decentralization process is the development of a "composite" budget to integrate the recurrent and capital budgets of both decentralized departments of central government and district assemblies. Nevertheless, to date, composite budgeting has not yet been actually implemented. 2.58 Executive Functions. Executive functions can be addressed in more technical terms related to the achievement of stated objectives (see Chapter III). Performance of executive functions at local levels, without responsibility for the performance of legislative functions at those subordinate levels, is the primary characteristic of deconcentrated or principal agency models of decentralization. 2.59 In Ghana, performance of the executive function is the responsibility of an Executive Committee comprising no more than one-third of the total DAs. That committee meets during interim periods between Assembly sessions to exercise executive and coordinating functions. The Executive Committee assists the District Secretary to manage the day-to-day administration of the District. It plays the key role in linking the larger political Assembly to district management, primarily by overseeing the following standard sub-committees: Chapter 2: The Local Government System 18 - Economic and Social Development - Social Services - Technical Infrastructure - Justice and Security - Finance and Administration - Ad hoc and district-specific sub-committees. 2.60 Heads of departments at district level are required to attend meetings of relevant sub- committees, as non-voting members, to advise on their sectoral activities. The staff of the 22 "decentralized departments" stationed at the district level are expected to be responsive to the decisions of the DA. For example, the staff of the Department of Feeder Roads are expected to attend meetings of the Technical Infrastructure Sub-Committee and be available for on-going consultation with the members of that Committee. In that way, local legislative and executive functions are merged at the top within district assemblies. 2.61 There are, however, anomalies with respect to the ultimate legislative and executive responsibilities outlined above. A District Secretary (DS), as the principal administrator in each district: (i) serves as Chairperson of the Executive Committee; (ii) serves, along with the Presiding Member of the DA, as a voting member of the RCC; and (iii) supervises the day-to-day operations of the DA on behalf of the Assembly. Yet s/he is appointed by the Central Government and can be transferred or removed by Central Government. This pattern holds for all senior government officials assigned to district assemblies, including the deputy directors responsible for planning and budgeting, administration, all internal auditors, and heads of all departments. Discussions are currently underway within an inter-ministerial "Task Force for Programming and Implementation of Decentralization" to yet another Central Government appointee to serve as a "Coordinating Director" (CD) of district staff directly under the DS. The CD's role as a regular civil servant would emphasize management and could provide continuity, while the DS would concentrate on "political and policy" matters which, at least according to PNDC Law No. 207 should now be the responsibility of the Assembly itself. However, no decision has yet been made on that proposal. E. Demographic and Spatial Variety of Districts 2.62 Since the passage of PNDC Law No. 207 in 1988, the former boundaries of local government districts have been redrawn and the number increased from 65 to 110. On the basis of 1991 estimates, the average district population has been reduced from 226,000 persons to 134,000. Nevertheless, there is considerable variation in the size and population of districts. At the extremes, Accra Metropolitan District has a population of approximately 1,300,000, while Ejura/Sekye Domase in the Ashanti has a population of only 34,000. Kumasi and Sekondi-Takoradi, the two other metropolitan districts, have populations of 600,000 and 300,000 respectively, but the population of most districts is in the 80-150,000 range. Because of these variations in population, area and resource bases, districts have significantly different needs and capacities. Yet, apart from recognizing the special nature of the three metropolitan districts, Law 207 provides only uniform structures and responsibilities for all districts. F. Current Status and Problems 2.63 A 1989 World Bank report on fiscal decentralization was quite optimistic about the ability of district assemblies to assume their new responsibilities under the terms of Law 207. 79. Chapter 2: The Local Govemment System Most district assemblies are functional, their sub- committees established, and decisions are being taken on a range of issues which tend to vary widely from district to district. The overall impression of the district assemblies is one of energy, vibrancy, and a new sense of responsibility [italics added]. 2.64 Such an assessment is no longer accurate. Much of that energy and vibrancy has been frustrated by the dysfunctional relationship between responsibilities assigned to district assemblies and their financial and staffing capacities to implement such responsibilities. Those two issues are the subject of their own chapters (IV and V) and, therefore, will not be fully discussed here. Suffice it to re-emphasize that a fundamental premise underlying the analyses in this paper is that the structure of authority regarding the acquisition of financial resources, the expenditure of those resources, and the careers of political decision-makers and government staff influence incentives for performance. 2.65 By the early 1980s, the history of local government in Ghana had been marked by almost constant structural change coincident with the maintenance of strong administrative and financial ties to Central Government. That history is characterized by cyclical movement towards and away from decentralization at the official level, yet the persistence of actual retention by Central Government of control over financial and staff resource. Thus, to date, no decentralized department has transferred budget or administrative control to districts. However, some departments have begun to place staff under district supervision, particularly those departments that were already deeply involved with local operations prior to Law 207. This, for example, is the case with the Department of Community Development where district community development officers are under the jurisdiction of the DS. Nevertheless, the budget of this department has not yet been decentralized. It also appears that the Ministry of Agriculture has gone to great lengths to disaggregate its budget to the district level, but this too is not an entirely new departure for this already highly deconcentrated ministry. 2.66 The continuity of actual controls at the Center might account for the fact that significant ambiguities exist within the current system in Ghana concerning whether it is discretionary authority or top-down principal agency or a combination of both, which is actually intended for district assemblies. The legal assignment of responsibilities explicitly emphasizes the exercise of discretionary authority by local governments, but the structure of incentives is skewed toward support of principal agency. Formulating and implementing policies and/or specific investments are likely to be difficult under such circumstances. Annex 4 illustrates the appropriate distribution of responsibilities which characterize a system of district level discretionary authority and principal agency. 2.67 Part of the lack of clarity on fiscal and budgetary issues stems from ill-defined roles and responsibilities at both central and local levels. Also, a strong decentralized system needs a strong center and there are weaknesses at both central and local levels. In addition, the smaller average size of districts means that duplicating the complete administrative structure mandated by Law 207 in every district within the immediate future is likely to divert resources away from provision of essential services. A further complication is posed by the fact that the boundaries of many departments and ministries are not coterminous with current district boundaries. Thus, for example, Chapter 2: The Local Govemment System 20 Ministry of Roads and Highways, Ministry of Agriculture, Ministry of Health, and Ministry of Works and Housing will all need to undergo substantial reorganization along spatial lines if PNDC Law No. 207 is to be fully implemented. 2.68 In addition, other specific issues which need to be addressed are summarized below. (a) The role and responsibilities of key ministries and agencies, including the MPEP, Controller and Accountant General's Department (CAC), Audit Service, MLG, NDPC, and the line ministries which have departments and responsibilities at the local level have not been fully delineated. (b) Of particular concern is the lack of clarity concerning the respective roles of the MFEP and NDPC in respect of the capital budget and the public investment program. This is a major issue because, until their respective roles are clarified and clearly understood and accepted by the parties involved, neither reform of the investment programming and budgeting process nor the need to integrate the capital and recurrent budgets can be accomplished at either the Central or local levels. (c) The structure and functions of the Regional Coordinating Councils (RCC's) are defined in Law 207 and in the National Development Planning law of 1989. The RCC's have been meeting, but the units which are supposed to act as their secretariats have not yet been properly established. Also, no mechanism has been established to facilitate effective coordination between the various ministries, departments, state corporations and non-governmental agencies in the region. (d) In order to ensure efficient resource allocation, the level of representation of ministries and central agencies at the local level needs to be carefully considered, bearing in mind the functions and capacities of the ministries and agencies, and the needs and capacities of districts. This does not in any way conflict with the composite budgeting process. It only requires that effective means of central/local coordination be developed. (e) At the local level, the responsibilities and functions are too broadly defined, and include many developmental functions that can only be realistically performed at the central or regional levels-at least in most districts for the foreseeable future. (f) Although current policy clearly mandates that district executives and heads of decentralized ministries and agencies at district level should be integrated into the DA structure, the reporting and managerial among sector ministries and the heads of decentralized departments have not been defined. Further, personnel systems consistent with the objectives of PNDC Law No. 207 have not been designed nor established (See Chapter V). (g) There is a danger that in the zeal for decentralizing responsibilities within the public sector, the potential for private participation in the delivery of goods and services at both central and local levels might be overlooked or, at least, placed on the "back burner." Recognition of the need for continued restructuring at both central and local levels should be maintained. 21 Chapter 2: The Local Government System (h) Finally, to the extent that the objective of GOG's current decentralization policy is truly the exercise of real substantive discretionary authority by DA members in their role as legislators, programs to improve the capacity of both decision-making and implementation at local levels will need to focus on them as well as those staff performing executive functions. 2.69 The litany of issues identified here is not meant to suggest that the objectives of PNDC Law No. 207 are inappropriate. Rather, a realistic assessment provides the foundation for designing a feasible program which can ultimately achieve those objectives. The remainder of this paper is devoted to outlining the basis for such a program with respect to five infrastructure-related sub- sectors: water, sanitation, roads, markets and motor parks, and electricity supply; and two social subsectors: primary education and primary health. 2.70 This Chapter has identified the subject of decentralization as being about alternative structures of authority which should be viewed as instruments for the achievement of the strategic and operational objectives of the ERP; especially the intention to focus the public sector on the planning and financing, rather than production functions. From that perspective, there are three fundamental requirements for choosing institutional arrangements which will maximize efficient and effective performance: (i) assignment of planning and finance functions to different levels and/or organizations of government based on the comparative advantages of each level; (ii) ensuring that the links between levels of government are systematic and mutually supportive for the performance of all functions which are dependent on each other; and (iii) organizing financial and personnel systems so that they provide positive incentives for performance of functions as assigned and cooperation between government levels as required. Therefore, Chapter EII addresses the planning function as currently prescribed by PNDC Law No. 207 and current issues concerning the actual relationships with respect to that function. Chapters IV and V address the third requirement; ie, incentive affects of the current financial and personnel management systems respectively, as compared to the objectives of PNDC Law No. 207. Chapter VI concludes with suggestions for operational responses to the issues raised in Chapters M - V. 3 IMPROVING DISTRICT INFRASTRUCTURE AND SERVICE DELIVERY: PLANNING AND IMPLEMENTATION 3.1 This Chapter identifies priority requirements and describes the manner in which planning functions are assigned in Ghana with respect to five infrastructure-related sub-sectors: water, sanitation, roads, markets, motor parks and electricity supply; and two social sectors: primary education and primary health. At present the planning function provides some scope to DAs to exercise discretionary authority. However, control over finances and personnel remain largely in the hands of Central Government (Chapters IV and V). Thus, discretionary decision-making at district level is limited largely to the preparation of proposals by DAs which might, or might not, be approved for financing by Central Government. Hence, local planning, in the current Ghanaian context, is an activity which might result in financing for specific. investments at local levels, but specific proposals remain dependent on Central Government decisions. To fully appreciate that situation, it is first necessary to distinguish between different types of planning and then identify who does what kind of planning for which purpose. 3.2 Section A of this Chapter identifies key planning functions and describes how each would be performed under the discretionary authority, principal agency, and hybrid structures of authority. Sections B - H summarize the current situation in each sub-sector in terms of: (i) priority needs; (ii) which organizations perform planning functions; and (iii) sub-sectoral policies. Finally, Section I provides estimates of costs for restoring design capacity and/or level of performance and meeting official government targets. A. Planning for Sustainable Infrastructure Investments 3.3 It is through the planning function that decisions are made concerning what goods and services will be provided by the public sector and the quantity and quality of those goods and services, although it is not necessary that such functions are performed by separate, specialized, planning agencies. The planning function encompasses decisions concerning: (i) what types of public goods and services ought to be financed by the public sector; (ii) the quantity and quality of such goods and services; (iii) how and by whom such goods and services ought to be produced; (iv) the type of regulation which ought to be applied to private sector production of such goods and services; and (v) how the production of such goods and services will be monitored. Such decisions are made in the context of four distinct types of planning: (i) planning related tothe formulation of economic policy and cross-sectoral prioritization; (ii) sectoral investment planning; (iii) project implementation planning; and (iv) planning for recurrent operations and maintenance ((&M). All four types of planning are essential for provision (as 'defined and discussed in Chapter II). 23 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 3.4 There is an emphasis within Ghana's ERP on transforming centralized planning to decentralized planning within broad national guidelines. For such a system to operate as intended, it is necessary to differentiate between three planning areas: (i) sub-sectors in which DAs act as Principal Agents of Central Government and, therefore, require planning guidelines from the Center; (ii) sub-sectors in which DAs have full discretionary authority and, therefore, establish their own planning guidelines; and (iii) sub-sectors in which DAs exercise discretionary authority in a manner which provides added value to Central Government programs, in which case it is necessary to ensure that a District's own planning guidelines are consistent with the planning guidelines of others. Polic Setting and Cross-Sectoral Priorities 3.5 Without systematic planning at the system-wide level, inter-sectoral priorities cannot be established to guide financing and allocation decisions. Notwithstanding the creation of the NDPC, the recognition of the need for planning has not yet resulted in effective performance of the cross- sectoral planning function in Ghana. Sectoral Investment Planning 3.6 The practice of limiting the concern of sectoral planners to the internal economic and technical feasibility of potential projects on a discrete basis is no longer sufficient. Rather, sectoral planners need to formulate integrated sectoral investment strategies. Sector program strategies and component investments should be identified and financed by sector ministries at central government level when the consequences are national in scope. In those cases, some roles can be performed by DAs as principal agents within national planning guidelines. 3.7 Given the changing role of central planners toward strategic planning and the formulation of cross-sectoral planning guidelines, the role of sectoral ministries and DAs in investment and implementation planning should be enhanced. Project-specific planning requires technical and location-specific information. Scarce technically-skilled staff are concentrated in sectoral ministries and other central government agencies. However, although sectoral ministries should be better qualified than either MFEP or NDPC to address technical issues of project implementation within sectors, they also suffer from inadequate information about location-specific conditions and priorities of potential beneficiaries. Recurrent Operations and Maintenance (O&M) 3.8 The ultimate measure of the success of project implementation is the sustainability of efficient and effective operations over the long-term. Planning for O&M requires the appropriate design of initial project implementation arrangements and provision for recurrent cost and staffing requirements. Financial and staffing requirements are discussed further in Chapters IV and V. 3.9 The sustainability of post-project benefits has become an issue of increasing concern, particularly in terms of the relationship between the organizational arrangements for project implementation and institutional requirements for subsequent O&M. Assigning responsibility for design, implementation, and operations phases of an investment project to different organizations at different levels of government can adversely affect the sustainability of operations over the longer term. When the responsibility for planning an investment is at the national level but responsibility for planning O&M is at the DA level, it is essential that links are established to facilitate proper coordination. Such links should be explicitly addressed during the investment planning process. In Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 24 practice, DAs are seldom directly involved in decisions made by central governments concerning the location, specifications or recurrent cost implications of specific investments. B. Water Backround 3.10 The PNDC Law 207 assign responsibility for providing adequate and wholesome water to DAs; although decisions must be taken in consultation with Ghana Water and Sewerage Corporation (GWSC). In fact, virtually all piped systems and systems using water points were constructed and are being operated and maintained by GWSC. GWSC operates under the direction of the Ministry of Works and Housing (MWH) and is governed by a Board of Directors appointed by central government. Administratively, it functions through a head office and ten regional offices. The corporate structure includes district representation though, at present, only 65 out of the 110 districts are actually covered and, in some cases, districts have been grouped. Functions covered at the district level include production, maintenance, commercial activities and rural water supply. Priority Needs 3.11 Based on data from 12 districts, it is estimated that improved water and sanitation services is likely to be the first investment priority of approximately half of the 110 DAs. The basic need in both urban and rural areas is for more water from protected sources. Nevertheless, operational priorities are different between urban and rural areas. 3.12 Urban Areas. The first priority in urban areas is rehabilitation of existing water works including the restoration of designed capacity, improved service reliability and product quality. The Water Sector Rehabilitation Project (WSRP) has initiated a program for achieving that objective. Nevertheless, although an important first step, merely restoring the design capacity of existing works at an estimated cost of C106,000 million (US$265m) at current prices, will not be sufficient to provide the minimum per capita consumption, as recommended by the World Bank, of 801//h/day and 201/h/day for house connections and standpipes respectively. This will require further investments to develop new sources. 3.13 Government is already committed to investments (Water Sector Rehabilitation, ATMA Water and Sewerage Rehabilitation, Water Supplies for Regional Capitals and, Rehabilitation and Development of Major and Minor Water Supplies) totalling around C106,000 million (US$265m) to restore the capacity of existing water supplies and provide modest expansion in urban areas. Further investments of e40,O00 million (US$100 m) are estimated to be necessary by the year 2000 to cope with further increases in demand arising out of population growth. An equally important requirement for improved water delivery in urban areas is the improved management efficiency and effectiveness of the GWSC. In preparing the WSRP, GWSC's operating and maintenance costs (including parts, labor, chemicals, power and overheads) were projected at C7,581 million for 1997. Until the revenue generated can cover depreciation and loan repayment costs, further improvements to supplies will be dependant on donor assistance and government grants. 3.14 Although measures for achieving this have been incorporated into the WSRP, they have not yet borne fruit. Management problems have increased over the past three years because senior personnel have left and it has not been possible to recruit suitably qualified and experienced replacements. Analysis of water supply projects funded by the Bank throughout the world in the past 25 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 15 years has revealed that management autonomy is the primary criterion for success. Institutional development and improved financial performance are central components of the project, although expanded scope for the private provision of services needs also to be established. Alternatives range from contracting out services such as bulk supply, as hasbeen done in Abidjan for the past decade, to total divestment, as has recently been carried out in Britain. 3.15 GWSC does not have the financial or organizational and management capacity to provide water supplies throughout the country. Central Government could decide that GWSC should continue as a deconcentrated parastatal through its existing regional organization, focusing its efforts on urban water supplies; i&, to communities with populations greater than 5,000 where supplies and distribution networks are more technically complex because of the quantities of water and extent of distribution system involved. The WSRP currently being implemented is a first step towards improving supplies. The institutional development components of this project particularly those focussing on improved financial performance are of greater importance than the physical components. 3.16 Currently because GWSC is not one of the 22 decentralized departments, urban DAs have little influence on GWSC's policies and performance. Greater consultation and involvement of consumers through DAs could assist in educating consumers of the need for economic tariffs to enable existing supplies to be improved and expanded to meet future demand. However, because of the comparatively specialized nature of urban water supply provision and the shortage of suitably qualified personnel in the country, any consideration for devolution of responsibility to DAs must take account of these factors. 3.17 Rural Areas. Recent studies by the World Bank of both the urban and rural water sectors revealed that access to protected water sources (piped or handpump supplies) is around 70 percent and 20 percent respectively. Rural dwellers are, therefore, considerably disadvantaged. While it could be argued that the need for protected sources is comparatively less in terms of health risk exposure, there is nevertheless a significant suppressed demand. This demand is evident by rural dwellers willingness to participate in Bilateral (CIDA and GTZ) and NGO (Catholic Diocese, Water Aid, World Vision) sponsored projects involving contributions either financial or in kind by the community. 3.18 In preparing for a Rural Water Sector Project which is scheduled to start in 1994, the World Bank has estimated that US$165 m (1991 prices) will be required to provide protected water supplies to 90 percent of the rural population by the year 2010. It is envisaged that 75 percent of the necessary funding will have to come from concessionary loans or grants from the donor community. Although several bilateral donors have indicated their interest in participating, no firm pledges have, as yet, been received. Of the remaining 25 percent, the communities will be expected to meet 10 percent, some of which may be in-kind through the provision of labor and construction materials. The balance, representing operational costs of the Rural Water Supply and Sanitation (RWSS) division within GWSC, would be met by Central Government. 3.19 The appropriate level of technology in rural areas will be, for the most part, wells either hand-dug or drilled depending on the depth of water table, fitted with handpumps. With suitable professional support through the RWSS of GWSC in the fields of hydrogeology and contract management, DAs could handle such works. Operation and maintenance costs, which for the technically simpler facilities used in rural areas will be much less per m of water than in urban areas, are estimated at around 1 percent of capital investment per year; ie, for a machine drilled borehole with a handpump, the cost would be approximately 032,000 (US$80) per year. Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 26 3.20 It appears that GOG has already accepted the idea of DAs acting as principal agents for the supply of water to rural communities. There is, however, much to be done to translate this policy decision into actions on the ground. The five main components to be addressed in initiating the rural water supply program are: (i) design of the overall program, (ii) formation of GWSC's RWSS division to provide the necessary technical expertise, (iii) investment and finance planning including donor coordination, (iv) development of training materials and methods for all participants from RWSS staff to the communities themselves, and (v) implementation of pilot projects. The proposed World Bank Rural Water Supply and Sanitation Project should provide the necessary catalyst for that to happen. 3.21 At a National Water Supply and Sanitation Conference held in Accra in 1987, attended by all government departments and donor organizations involved in the sector, it was concluded that GWSC should focus its attention on communities with populations in excess of 5,000, i&, the major cities and towns. Elsewhere, broadly defined as the rural areas, it was felt that communities would be best served by becoming responsible for the operation and management of their own water supplies with the support and guidance of DAs. GWSC would, however, retain an advisory role on technical matters in the rural areas. 3.22 As regards rural water supplies, no significant policy developments have been implemented since the 1987 conference. It is understood, however, that government has accepted the principle that rural communities should be responsible for their own water supplies with the support of DAs, and a decentralized RWSS division is to be established within GWSC. It is expected that this new division will have more budgetary and staff resources and will therefore be able to act with greater independence than the existing Rural Water Department. Total autonomy on the lines of the Department of Feeder Roads within the Ministry of Roads and Highway was considered, but rejected. The reason given was that such an arrangement would be too costly. C. Sanitation Human Waste 3.23 Background. Apart from three water borne sewer systems in Accra, Tema and Akosombo, sanitation services are provided exclusively by DAs. Such responsibilities encompass the collection and disposal of human, domestic and commercial waste. The capacity of DAs to provide services for the sanitation of human waste varies significantly. More than half of the DAs had no cesspit emptier; a necessity for periodically desludging septic tanks and intensively used public Kumasi Ventilated Improved Pit Latrines (KVIPs). The private sector is able to provide these services in the larger urban DAs, but effective incentives do not currently exist in rural areas. 3.24 Priority Needs. Sanitation is primarily a public health issue. The first priority therefore needs to be to educate people on the link between poor sanitary practices, such as indiscriminate defecation and water related diseases. Such awareness should provide the necessary motivation for people to improve their sanitary facilities, either by providing their own latrine or contributing towards a community facility. 27 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 3.25 A World Bank study found that 40 percent of the population or around 5.7 million, currently has no access to toilets. Assuming that one million of this total are urban poor who would be most appropriately served by communal latrines, there is a need for around 2,000 ten- seater Kumasi KVIPs. This would require an investment of around C4,000 million (US$10 million) at a unit cost of C2 million (US$5,000). Provision in rural areas will be slower as the perceived need there is less. However, an investment of similar order for communal latrines in rural areas would be appropriate over the next ten years. 3.26 Except for densely populated areas of the three main cities, pipe borne sewerage is not currently affordable in Ghana. Properly constructed and designed on-site facilities are able to meet public health objectives and provide acceptable standards. Depending on level of affluence, such facilities can range from water borne systems discharging to septic tanks to KVIPs or the cheaper Mozambique type pit latrines. A concrete block built KVIP, which is regarded as the most affordable form of sanitation for urban areas, suitable for a typical extended family (research indicates that this can comprise up to 25 people) costs around e240,000 (US$600). This cost may be reduced by using cheaper locally sourced materials gL mud bricks, but space restrictions generally dictate that KVIPs have to be built into houses which requires more reliable structural materials. Communal KVIPs suitable for use as public toilets at motor parks, markets and high density, low-income residential areas cost around 2 million (US$5,000) for a ten seater capable of serving up to 500 people. The phasing out of bucket latrines should continue to be a priority to eliminate public health hazards arising out of improper disposal by conservancy workers and to the workers themselves. Pilot exercises have been successfully tried in Kumasi and Accra, and experience exists at the Training Network Center in Kumasi. DAs' recurrent costs would also be reduced by eliminating the need for conservancy workers. In many cases, it will be possible to convert bucket latrines to affordable pit latrines. 3.27 The most appropriate form of sanitation in rural areas, the Ghana modified Mozambique ventilated pit latrine, which is capable of serving a single family, can be built almost entirely of local materials and on a self-help basis for as little as V10,000 (US$25). The reason for the large difference in price between these and KVIPs designed for the urban environment lies in the greater space available which enables them to be built separately from the house. This means that pits do not have to be lined and that the screening material does not have to be as structurally sound. The operation and maintenance costs for both types of pit latrines units are minimal. However, communal latrines, because of the heavy use to which they are subjected, require desludging at roughly four month intervals by a cesspit emptier. Groups of DAs could share the costs and services of a cesspit emptier. Communal toilets should be funded either by the DAs or directly by the communities. Private latrines should be the responsibility of property owners. 3.28 Pglicy. To avoid pollution of water sources and to encourage widespread use of latrines particularly amongst children, it is essential that good practice should be promoted at the district level by the RWSS and Department of Community Development (DCD) of MLG. At the national level, spreading community awareness of the benefits of safe sanitation practices is likely to be most effectively done by the MOH through clinics, and the MOE through schools. Particular attention should be paid to providing well designed and maintained facilities at schools to ensure that future generations recognize the importance of hygienic sanitation practices. DAs could pass by-laws requiring property owners to undertake bucket latrine conversions or build new KVIPs or Mozambique type VIPs, which have minimal maintenance requirements. Such programs have already been successfully undertaken in Accra and Kumasi. Priority should also be given to the conversion or replacement of public communal bucket latrines. Chapter 3: Imprving District Infrastructure and Service Delivery: Planning and Implementation 28 Refuse Collection 3.29 Backrund. Refuse collection is the responsibility of DAs. Accra and Kumasi Metropolitan Assemblies, which have benefitted from bilateral donor funded projects in the late 1980's, now provide effective refuse collection and disposal services. Skips are conveniently located at collection points, refuse is collected at regular intervals by specially designed trucks, and refuse is transported to properly designed disposal sites. However, revenue collected is insufficient to meet amortization costs and efficiency will decrease as the vehicle fleet ages. Similar, though less comprehensive assistance, will be provided to Tema, Sekondi-Takoradi and Tamale under the Bank funded Urban H project. 3.30 In World Bank funded projects in other countries, solid waste management services have been most effectively provided by the private sector. However, experience has shown that contractors perform best when approximately 25 percent of the service is retained within the public sector to provide an ongoing basis for monitoring the performance of private contractors. Therefore, private sector involvement should be encouraged in Ghana to overcome resource constraints preventing DAs from purchasing new equipment and improve operational efficiency. 3.31 Priority Needs. The main needs are for refuse to be regularly removed from the proximity of properties and disposed of in a cost-effective manner that minimizes the risks to people and the environment. Priority should be given to removing refuse from markets and high density residential areas. Lower cost technologies, including manual loading of basic tipper trucks contracted from the private sector, should be the first choice of DAs. Appropriate and affordable technologies and methods for solid waste management need to be identified. Under the Bank supported Urban II Project pilot studies on these issues are currently being carried out in Tamale. Projects involving conventional truck based collections are also under way in Accra and Kumasi. 3.32 Annex 5 indicates the sanitation equipment in good working order that was owned in March 1992 by each of the twelve sample districts. It can be seen that apart from Accra Metropolitan Assembly, which has recently benefitted from a bilateral aid funded project, very little equipment is available. Five of the DAs reported having no equipment at all. In districts outside of Accra house to house collections are made in low density upper-income housing areas. However, in other areas, collections are limited to communal collection points. 3.33 Poicy (a) It seems unlikely that full direct cost recovery for refuse services will be practicable other than in the large metropolitan areas and, even there, in the medium term, it is likely to be limited to operating costs. In the case of markets, the cost can be incorporated into the daily license fee. For domestic premises, where owners or tenants are expected to carry their own refuse to a communal collection point, it would seem appropriate to incorporate the cost either into the basic rate or into property tax. (b) Appropriate and affordable technologies and methods for solid waste management need to be identified. Under the Urban II Project, pilot studies on these issues are currently being carried out in Tamale. Projects involving conventional truck based collections are also under way in Accra and Kumasi. 29 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation (c) Private sector involvement should be encouraged both as a means of overcoming resource constraints, which prevent assemblies from purchasing new equipment and to improve operational efficiency. (d) Markets and high density residential areas should be targeted as priority areas for refuse removal. D. Roads and Drainage Background 3.34 Roads. Three agencies are currently responsible for providing and maintaining roads in Ghana: (i) the Ghana Highways Authority (GHA), responsible for trunk roads; (ii) the Department of Feeder Roads (DFR), responsible for rural roads; and (iii) the Department of Urban Roads (DUR), responsible for the provision of roads, other than trunk roads, in the metropolitan areas of Accra, Kumasi, Sekondi-Takoradi and Tema. All three agencies are responsible to the Ministry of Roads and Highways. Nevertheless, DAs also have some legal responsibilities for roads. The capacity of these agencies varies by district or region. The DFR road districts are generally equipped with 2 tipper trucks, 3 tractors, 6 trailers and handtools. Graders are assigned to Regions which usually have 2 mobile teams which carry out work in the Districts in accordance with a program agreed between the RCC and respective DAs. These agreed maintenance programs are to be published in the press under new DFR procedures to avoid any misunderstandings regarding the agreed programs and to inform the public. A high proportion of maintenance works is being carried out either by contract or using hired equipment; gL, Techiman 90 percent using hired equipment, Tamale 80 percent by contract, Wa 70 percent by contract. 3.35 As set out in PNDC Law 207 of 1988, those responsibilities are to: (i) construct,repair and maintain and keep clean all streets; (ii) construct, repair and maintain all public roads other than trunk roads but including feeder roads and undertake road rehabilitation programs within the district; and (iii) maintain, as agents of the Ghana Highway Authority, trunk roads lying within the boundaries of the area of authority of the Assembly. Nevertheless, in practice, most of the DAs have not yet begun to exercise those responsibilities. 3.36 The maintenance of roads in the three major urban areas is carried out by District Roads Units under DUR. However, those units work closely with the respective Metropolitan and DAs (except in Accra, where the Metropolitan Assembly has direct responsibility for the Accra Metropolitan Roads Unit; AMRU). Major trunk road construction carried out by GHA is not the responsibility of the roads districts or maintenance units but is organized from headquarters in Accra and from the Regional offices. Like GHA, DFR works through the Regions where Regional Engineers are posted. However, in their 10 road districts DFR has appointed foremen to each DA area to work closely with the DA staff on routine maintenance programs. Each road district is headed by an Area Engineer who provides technical guidance and supervision to the 3 or 4 DA foremen working within the particular road district. 3.37 Several steps have been taken or are planned to establish some consistency between the organizational boundaries of Central Government agencies and those of DAs. Thus, GHA have modified the jurisdictional areas of their 32 road districts so that the boundaries embrace 3 or 4 DA boundaries. Ten of the 32 district offices are located at the 10 regional capitals and are headed by a Regional Engineer, who is senior to District Engineers. The DFR also plans to adopt the same 32 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 30 road districts, but only 10 such districts have been established to date and a further 5 are under formation. DFR's district headquarters are not in every case the same as GHA's. Both GHA and DFR district road unit engineers attend the "technical infrastructure sub-committee " meetings of each of the DAs making up the respective road district area. 3.38 Under the new World Bank supported National Feeder Roads Rehabilitation and Maintenance Project (NFRRMP), district programs will be formulated by DAs and reviewed by Regional Secretaries to ensure compliance with budgetary guidelines. DFR Regional Engineers will be responsible for the design and procurement of works, but submission of recommendations for contract award to District or Regional Tender Boards shall be subject to clearance by DFR HQ. 3.39 However, the elected DAs are in a better position to mobilize communities to carry out technically simple, labor intensive works such as routine maintenance (g,., grass cutting and drain cleaning) and should be encouraged to do so. GHA and DFR are attempting to involve the DAs in such routine maintenance programs. Currently, routine maintenance work is carried out by: (i) direct labor or force account for patching roads; (ii) single man contractors for grass cutting, grading ditches and cleaning culverts; and (iii) local private contractors for grading, shaping roads and ditches and graveling. 3.40 Stormwater drainage. Responsibilities for drainage, where drainage is not part of the road system, are unclear. Outside of the main cities little attention is given to the provision and maintenance of drains and drainage was not included as a function of the DAs in the 1988 legislation. It would be important to address this omission. Priority Needs 3.41 Considerable further investment is required in all categories of road (primary, secondary, feeder and urban) in order to establish an efficient network (See Annex 6 for cost estimates). The Ghana Highway Authority (GHA) estimates that 80 percent of the 14,410 km. of primary and secondary roads are classified as either fair or poor and therefore need reconstruction and/or rehabilitation. The cost of bringing all primary and secondary roads up to "good" condition would be e440,472 million (US$1,159 M). 3.42 There are an estimated 21,300 km of feeder roads of which only 16 percent are considered to be in good condition. Of the balance, 12,900 km (60%) are in poor condition and 5,100 km (24%) are considered to be fair. The cost to rehabilitate the poor roads and to regravel those in fair condition would be around 126,150 million, or US$332 million at the exchange rate of US$1 = C380 million. Unsurfaced roads, such as these, have a relatively high periodic and routine maintenance requirement. The annual maintenance cost is estimated to be C1,900 million (US$5 M). 3.43 Due to deferred maintenance, around 50% of the urban road network requires reconstruction or major rehabilitation. Kumasi and Tema have relatively better roads because they have benefitted from recent projects. Further improvements are planned for Accra and Sekondi-Takoradi. However, much still needs to be done. An indication of the road network requiring major rehabilitation or reconstruction in the five main cities is given. The cost of rehabilitation and reconstruction is considerable 0320,000 million (US$842 million). Smaller towns such as Cape Coast, Koforidua and Bolgatanga also need to be taken into account. Their needs are probably greater in terms of percentage of the total network though lesser in terms of total kilometers. Of the DAs visited, the need for road improvements was often listed as an infrastructure priority although rarely as the highest priority, probably, a reflection of the poor level of service in other sectors (LL, water). 31 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 3.44 Within the next ten years, there is unlikely to be sufficient funds or implementation capacity available to achieve all of the reconstruction/rehabilitation and maintenance works identified. As the economic return on periodic and routine maintenance is almost always significantly higher than that for new investment, maintenance should be given highest priority. For reconstruction/ rehabilitation it will be necessary for GOG to set criteria to rank roads to determine an order of implementation. Conventionally, roads are ranked by economic rate of return. In determining the rate of return, the main benefit arises out of reduced vehicle operating costs which are largely dependant on traffic volume and surface roughness. Other things being equal, prioritizing on this basis will tend to favor the major cities where traffic volumes are highest. Government might, however, decide to introduce other factors to take account of regional equity and wider macroeconomic concerns. It should be noted that as the stock of road in "good" condition increases through rehabilitation/reconstruction, so too will the annual expenditure on maintenance. 3.45 In order to preserve the benefits arising from the substantial capital investment which will be required, it is necessary to carry out regular and periodic maintenance. The former is carried out annually while the latter should normally follow a seven year cycle. The annual cost of effectively maintaining all roads in Ghana would be around e16,750 million (US$44 M). 3.47 The GHA and the DFR are two of the 22 central government agencies to be decentralized under PNDC Law 207. Devolution of these two agencies into 110 roads units to carry out the above functions has not yet happened. Their view is that it would not be efficient in the medium-term to do so to the degree envisaged in Law 207. 3.48 The position of the agencies would appear to have some merit from a technical viewpoint as the Districts vary in size, population and corresponding road needs. GHA consider that the optimum size for a roads maintenance unit, taking account of available funding and manpower resources, should be based on an area with at least 300 km. within its boundaries. Many districts have less than this. DFR take the position that routine maintenance of feeder roads should be decentralized with DAs acting as principal agents. At present, periodic maintenance requiring use of graders, as well as reconstruction and rehabilitation, is still organized from the regional offices or headquarters respectively. From the organizational point of view, establishing separate DFR and GHA roads units in each of the 110 districts will not be a cost effective option for the foreseeable future because of limited financial and manpower resources. The most practical option is to proceed with the planned 32 roads districts, but with GHA and DFR combining resources as much as possible by using the same district HQ facilities and forming joint maintenance units. However, to promote DA participation, GOG should: (i) involve the DAs to a greater extent in the planning process; (ii) more fully reflect the needs and priorities of the DAs, subject to technical, economic and financial criteria being met; and (iii) make the funding process transparent. E. Markets and Motor Parks Background 3.49 Public sector markets and motor parks are provided exclusively by DAs. That includes building, equipping, maintaining, regulating and controlling them. The capacity of DAs and administrations to fulfill those responsibilities vary, but a majority of DAs are providing and managing these services effectively. Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 32 3.50 Markets and motor parks are one of the Major revenue earners for DAs. In 1990 Techiman and Keta raised C76 million (073 million of which was attributable to the market) and C9 million, which were 70 percent and 47 percent of total internal revenue collected, respectively. In Techiman, traders pay up to 03,000 per month for a concrete block lockable stall - lesser facilities attract lower charges. In addition, every trader is supposed to pay C50 per day to operate in the market. Charges in Keta were lower at C1,500 per month for a lock-up stall, reflecting the lower earning potential in Keta. 3.51 The officers in both of these districts feel there is much untapped potential in the markets. In Techiman, the DA were in the process, with financial assistance from some of the traders themselves, of building around fifty new concrete block units to replace wood and thatch structures. The DA felt that this investment would have a very short pay-back period. There seems little doubt that the opportunity exists for a high rate of return on investment in markets provided costs are properly controlled and appropriate rents are charged. The DA also had plans for erecting boundary walls and fences, to reduce daily fee evasion, and to better organize vehicular traffic. 3.52 Accra has been investing on a much larger scale on new markets and motor park facilities in recent years. Examples include the new market at Agbobloshie and the surfacing, draining and provision of toilet facilities at Tema Station lorry park. Kumasi has similar plans for the future. Priority Needs 3.53 Although investments in improvements and maintenance are continuing in the majority of the sample districts, there is clearly much more that could be done to improve operations for traders and customers alike. Improvements should include: more secure and weatherproof stalls; better layouts to improve customer circulation; electric lighting to extend operating hours; the provision of telephone services in the larger urban markets; installation of adequate water supplies and toilets; surfacing of heavily trafficked areas; the provision of drainage; and effective refuse collection. Polics 3.54 Given the relative ease of revenue collection in markets and motor parks, there seems no reason why most assemblies could not embark on improvement programs comprising some or all of the elements listed above. The key criteria should be an adequate rate of return on investment. In many cases, it may be possible to persuade market traders to at least partially prefinance works. The type of works involved are relatively simple and well within the capabilities of local contractors throughout the country. DAs would benefit from having a catalogue of standard designs and simple contract documents and procedures, which could be prepared by consultants and disseminated by MLG. F. Basic Education Background 3.55 Law 207 requires DAs to be responsible for the provision and maintenance of basic education (primary and junior secondary level) infrastructure. Funding of teacher's salaries, and textbooks remain the responsibility of GOG through the Ghana Education Service (GES), although administratively they are to be paid by the DAs. Secondary education (senior secondary schools) remains the responsibility of GOG although communities may raise funds to improve facilities. 33 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 3.56 To support the decentralization process MOE has placed District Education Officers (DEOs) and a core staff in 80 of the 110 Districts to date. They also retain Regional Education Officers through whom most GOG funds to the districts are still channelled. The Regional Officers are responsible for compiling and reviewing plans and budgets emanating from within their regions. 3.57 The planning division of MOE has prepared guidelines for the provision and planning of schools which are operated by the respective DEOs. The location and siting of facilities is decided upon after consultation with the DAs. However, contracting of school construction and furniture is still, for the most part, carried out through central or regional administrations. 3.58 MOE reviews proposals by communities through DAs to rationalize the provision of new schools to avoid over-provision in an area. In some parts of the country, there is overcrowding of classrooms, more than 45, while elsewhere average class sizes can be as low as 15. Priority Needs 3.59 A number of districts place education at the top of their list of priorities and it is a major item of capital expenditure in most Districts. Currently, there are over 10,000 primary schools in the country and some 5,000 junior secondary schools. The goal of GOG's ERP is to enable 98 percent of children aged 6-11 years to have primary education by the year 2000. Two thousand new primary schools have been built since 1987 and enrollment had increased to 84 percent by 1992. However, when account is taken of population growth projections classroom space will be required for an additional 890 thousand children by the year 2000. The additional numbers entering primary school will also increase Junior Secondary School (JSS) classroom requirements by 490 thousand places. If the maximum number of pupils per classroom is taken as 45, there is an overall requirement for an additional 30,600 classrooms. The objective of increasing access to pre-school education to 30 percent of children 6 years of age and under by the year 2000 would require classroom places for a further 860 thousand; i.e, 19,100 classrooms. 3.60 Classrooms to build or expand schools for basic education are normally provided in blocks of three, with three blocks forming a standard primary school or junior secondary school. Current costs to construct a block are approximately 02.7 million i.e., 0.9 million per classroom. Thirty thousand, six hundred new primary and JSS classrooms and 19,100 pre-school classrooms are required to achieve GOG's targeted coverage of 100 percent and 30 percent respectively. The cost per classroom is 80.9 million (US$2,250). Annual maintenance costs per classroom are around 2.5 percent of capital cost, C22,500 (US$100) per classroom. Total cost by the year 2000 is therefore 27,540 million (US$72.5 million). Providing the pre-school classrooms to meet the ERP target would cost a further el7,190 million (US$45.2 million). Additional expenditure will be necessary to rehabilitate many of the existing school buildings which are in poor condition. Also, routine maintenance programs need to be established for all schools, and an appropriate investment in routine maintenance is estimated at e3,600 million (US$9.5 million) per year. 3.61 In 1987, GOG launched an Education Reform Program (ERP) the focus of which is to improve and expand the coverage of basic education. Particular emphasis was to be placed on remote relatively disadvantaged areas. The main objectives of the ERP are to increase primary school enrollment from 65 percent (in 1987) to 98 percent by 2000 and to increase preschool enrollment from 10 percent to 30 percent by the year 2000. Chapter 3: Impmving District Infrastructure and Service Delivery: Plenning and Implementation 34 3.62 In recent years, the MOE introduced an incentive scheme to encourage community participation in construction of basic education facilities. A community through the DA may receive a grant for two-thirds of the capital cost of a facility. The remaining one-third may be provided in cash or kind by the community. 3.63 Primary education functions are largely "decentralized" and have been for many years. The matching grant system currently available through MOE has encouraged DAs to invest in new primary schools/classrooms and appears to have fostered community participation; largely through the provision of labor (see Chapter IV). MOE should retain a broad planning and monitoring role to ensure that scarce resources are used efficiently and that optimum use is made of existing facilities. G. Primary Health Facilities Background 3.64 Law 207 states that DAs are " to promote and safeguard public health and for this purpose the Ministry of Health (MOH) are to assign Medical officers of Health, health inspectors and other staff as appropriate." DAs are also required "to establish and operate Clinics and Dressing Stations in consultation with the Ministry of Health." 3.65 In 1990 there were 1,405 facilities providing primary health care. Of these 584 were managed by MOH, the balance being operated by quasi-government organizations and NGOs. In 1989, primary health care coverage was 92 percent and 45 percent in urban and rural areas respectively. Provision at the district level is through a three tier system: level A (the lowest) comprises community workers selected and paid by communities themselves; level B operates through health centers and posts located throughout the district; and level C comprises the District Health Management Team (DHMT). The functions of the DHMTs are to plan, budget, administer, supervise, monitor and evaluate the health services in the district, and to manage the human, physical and financial resources. The teams are ultimately responsible to the MOH (who pays their salaries) but they work with the DAs. The final decisions on health planning, programming, budgeting and spending (including award of contracts) are made at the central or regional level. Regional Health Teams monitor the districts. 3.66 DAs do not have the necessary human and financial resources at present to provide and/or to operate facilities for primary health care. The system therefore remains largely centralized. Physical facilities are generally in a poor state of repair as little maintenance has been carried out for many years. Priority Needs 3.67 In the sample districts, Public Health Care (PHC) facilities were not identified as a priority; although infrastructure elements with a strong health improvement focus were: M, KVIPs and clean water supply. It might be that the infrastructure sub-sectors that were accorded greater priority such as water supply, schools and roads, are seen as bringing more tangible benefits. 3.68 Implementation of Government's PHC decentralization policy to achieve the desired improvements in efficiency and equity should be accorded high priority. From the physical infrastructure perspective, MOH has prescribed a target of one health institution within a radius of 8km of any community which results in a requirement of an additional 429 facilities. The average 35 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation estimated cost to build, furnish and equip each of these facilities is C400 million (US$1.1 million). The overall cost of the required 429 facilities would therefore be around Q:171,600 million (US$451.6 million) at 1992 prices. EQlicW 3.69 It is important for GOG and the DAs as they develop the capacity for policy formulation to clarify the relative importance of the different infrastructure sub-sectors. Given the relatively low priority currently given to health care, there would appear to be need for an educational campaign on the advantages of preventative health measures. 3.70 As in other infrastructure sub-sectors the ability of DAs, commensurate with their gradual assumption of responsibility from the MOH to operate and maintain existing facilities needs to be assured before new investments are embarked upon. H. Electricity Supply Priority Needs 3.71 Although many of the smaller district capitals do not have an electricity supply (LL, Birim North and Bongo); the District Capitals Electrification Program (DCEP) is intended to address these deficiencies as a matter of priority. The electrification of District Capitals is being financed under the World Bank-assisted National Electrification Project. There is a major role for DAs to further expand the rural electrification by mobilizing their constituencies to meet the criteria for participation in self-help schemes. 3.72 The Ministry of Energy (formerly Fuel and Power) has responsibility for electricity supply policy. There are two power sector entities; i&, the Volta River Authority (VRA) and the Electricity Supply Corporation of Ghana (ECG). VRA generates and supplies electricity in bulk to ECG (and other major industrial consumers and for export) for distribution to consumers in the southern part of the country (6 regions). Since mid-1987, in the northern part of the country (4 regions- Brong Ahafo, Northern, Upper East and Upper West), VRA also distributes electricity through its Northern Electricity Department (NED). Approximately 35 percent of the nation's population has access to electricity supply, although it is available to only about 10 percent of the rural population. The northern grid extension project and the National Electrification program has in recent years increased the numbers having access to supply but much still needs to be done to meet the government target of making electricity available to everyone by the year 2000. 3.73 Law 207 and its related legal instruments state that it is a DA function" ... where necessary to provide and maintain electricity supply in consultation with the Electricity Corporation" and also " to provide or arrange for electric lighting in streets and other public places." To date, however, no DA has undertaken responsibility for the provision of electricity. The metropolitan and municipal DAs do attempt to collect revenues for, and maintain, street lighting. To pay for streetlighting the ECG charges all customers 0.20 Cedis/kwh consumed. It is unlikely that revenues accruing from this street-lighting supplement will cover all costs (including maintenance). 3.74 The main issue in this sector is to decide on the optimum demarcation between the centrally controlled utilities and the DAs given DAs' financial and human resource constraints. Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation 36 PWlic 3.75 The main policy issue in this sector is to decide on the optimum demarcation between the centrally controlled utilities and the DAs. Given DAs' financial and human resource constraints, it seems likely that, in the short term, DAs' role will have to be limited to community mobilization. 3.76 To pay for streetlighting, the ECG charges all customers 0.20 Cedis/kwh consumed. It is unlikely that revenues accruing from this streetlighting supplement will cover costs. For lighting schemes to be properly maintained, DAs would thus need to raise additional funds for maintenance. I. Estimates of Capital Requirements to Reach Basic Standards and Annual Maintenance Costs 3.77 Figure III-1 provides estimates of the capital requirements to provide new, and to rehabilitate existing, works to reach basic standards for each infrastructure sub-sector . These "standards" are, in the case of roads and water supply, restoring design levels of performance and capacities with some modest expansion, and in the case of health and education, meeting stated government objectives. 3.78 The capital requirement of C1,071,160 million (US$2,819 million) is dominated by the rehabilitation/reconstruction needs of the road sub-sector which accounts for 59 percent of the total. This huge investment need has arisen because of inadequate maintenance over the past two decades. The road sector also dominates annual maintenance requirements accounting for 62 percent of the estimated total of e60,769 million (US$160 million). It is of critical importance that the ongoing costs of maintenance are taken into account when making decisions on the level of capital investment. New capital investment should be conditional on sufficient recurrent funds being available for periodic and routine maintenance of all roads in "good" condition. 37 Chapter 3: Improving District Infrastructure and Service Delivery: Planning and Implementation Figure r-1 CAPITAL REQUIREMENTS For INFRASTRUCTURE INFRASTRUCTURE CAPITAL NEEDS CAPITAL ANNUAL ELEMENT COSTS FOR NEW AND MAINTENANCE COSTS REHAB. WORKS (CEDI MILLION/ (CEDI MILLION) ANNUM) WATER -Rural 15,000 boreholes/wells 66,000 1,610 -Urban All existing systems 146,000 7,581 rehabilitated and some limited expansion SANITATION -Rural 1,000 communal KVIPs 4,000 120 -Urban 1,000 communal KVIPs 4,000 120 ROADS -Trunk/Town Reconstruct/Rehabilitate 508,680 16,308 12,000km. -Feeder Rehabilitate/Regravel 126,150 21,300 18,000km. BASIC EDUCATION Primary and JSS Build 30,600 classrooms 27,540 3,600 Pre-school Build 19,100 classrooms 17,190 PRIMARY HEALTH -Clinics/Posts Build 429 171,600 10,130 [ TOTALS 1,071,160 60,769 4 IMPROVING DISTRICT INFRASTRUCTURE AND SERVICE DELIVERY: FINANCE 4.1 DAs can exercise significant initiative in formulating investment proposals for financing to Central Government. Yet effective decisions continue to be made at Central Government level by MLG, MFEP, sector ministries, and parastatals such as GWSC. Central Government's effective control over such decisions is exercised primarily through the finance and personnel management functions. 4.2 The structure of authority for the exercise of the finance function is the subject of this Chapter. Sections A and B address the overall system for managing revenue mobilization and expenditures. Section C provides recommendations for strengthening planning, coordinating, budgeting, and reporting systems. Section D discusses prospects for enhanced financial resources at district level and summarizes this Chapter's conclusions. (See Annexes 7, 8 and 9 for the legislation regulating financial relationships between central government and DAs, with amendments reflecting changes in policy. Annexes 11 - 16 provide details of the financial performance of the sample DAs for the period 1988-1991.) A. Mobilizing FInance for Sustainable Infrastructure Development Objectives of Fiscal Decentralization 4.3 The objectives of Ghana's fiscal decentralization program include: (i) increased local resource mobilization; (ii) restructure allocation of resources and increase the efficiency and effectiveness of resource utilization; (iii) improved efficiency of DAs; and (iv) reduced number of national agencies operating at local level. Such expectations assume that collections are easier in close proximity to those who are required to pay taxes and users' fees, elected DAs have greater legitimacy and are more responsive to citizen preferences, and users' can see a direct link between payments and services when financed and implemented locally. Sources of Revenue 4.4 For the purpose of analyzing the current revenue system in Ghana, DA revenues are classified under five broad categories. The first type, intergovernmental transfers, creates a dependency of DAs on Central Government. The second type, loans, should, theoretically, force efficiencies on DA investment decisions because of the need to compete for credit in the market and obtain a reasonable rate of return on borrowings. The third through fifth types - ie., local taxes; users'fees; and non- monetary contributions - create DA dependencies on local residents who pay taxes and fees or contribute labor or other goods to the economic endeavors of DAs. 39 Chapter 4: Improving District Infrastructure and Service Delivery: Finance 4.5 Dependence on Central Government: Intergovernmental Transfers. Financial resources available to DAs from internally generated revenue (Annex 11) are very small compared to such resources collected by the Central Government. Aggregate revenues generated locally by all 110 districts in Ghana, equalled less than 2 percent of total Central Government revenues during 1989 and 1990. However, there is considerable variation between the smaller rural sample districts and the large commercial centers of Accra and Techiman. It should be noted that for many of the DAs, total per capita revenue has remained reasonably constant in real value terms over the period 1988 - 1991 (Annex 12). 4.6 As in most developing countries, transfers from Central Government is the primary source of DA revenue in Ghana. The main objectives of Central Government transfers to DAs include: (i) financing, in whole or in part, the cost of services or development programs of national significance; (ii) encouraging DAs to develop programs and services in line with national policy; (iii) stimulating growth in local economies so as to contribute to national growth and reduce inter-regional disparities; (iv) controlling expenditures by DAs to ensure compliance with national policies or standards; (v) securing an equitable standard of services; (vi) compensating DAs Assemblies with a narrow revenue base for raising internally generated revenues; and (vii) assisting DAs to cope with unforeseen short-term difficulties. 4.7 Grants. Central Government transfers take the form of both block grants (available for unrestricted use within broad guidelines) and targeted grants (provided for specific programs or items). In Ghana, transfers to DAs most often take the form of targeted grants. Of those, some grants are matching and some are non-matching. Matching grants are meant to create an incentive for raising revenue locally by ensuring that DAs receive an amount equal to some percentage of monies they raise themselves. In Ghana, such grants include: (i) fifty-percent of salaries and benefits for mostly Category D staff employed by DAs; and (ii) some proportion of finance for capital expenditure in various sectors. Non-matching grants include: (i) those provided by MLG for the provision of office or other accommodation required for forty five newly created DAs in 1988 or the expansion of responsibilities mandated for previously existing sixty five DAs by PNDC Law No. 207 (see Annex 17); and (ii) those provided for payment of salaries and benefits for category A - C staff assigned to district government (paras. 4.9 -4.10 below). 4.8 Several ministries, other than MFEP and MLG, also provide matching grants to DAs. For example, the Ministry of Education provides matching grants to cover two-thirds of the cost of senior secondary school construction when DAs meet the remaining one-third of the cost. Matching grants are invariably targeted for purposes and according to criteria established by Central Government. 4.9 Constitutionally-Mandated Transfers. Article 252 of the new Constitution establishes a District Assemblies Common Fund which is to receive an annual financial allocation by Parliament of not less than five per cent of total Government of Ghana revenues. The resources of the Fund are to be allocated to DAs for development. Allocations to the districts will be made according to a formula "approved by Parliament". 1982 was the last year that Central to district government transfers equalled more than the new constitutionally mandated minimum of 5 percent. 4.10 Salary Gran. There are effectively two elements to the Salary Grant. The first consists of payment by Central Government of 100 percent of salary costs of Category A - C staff assigned to district level including from the 22 decentralized departments. The second element is a Central Government grant at 50 percent of the salary cost of Category D staff employed directly by DAs. The balance of Category D salaries are met by the DAs from their own locally-generated revenue. Chapter 4: Improving District Infrastructure and Service Delivery: Finance 40 4.11 On average, the Salary Grant contributes 30 - 40 percent of total recurrent revenues among the twelve sample DAs. However, differences are significant, with the Salary Grant accounting for 39 percent in Accra (1988) and 72 percent in East Akyem (1988). Although the Salaries Grant has increased in absolute terms each year over the period 1988-91, it has generally declined as a proportion of total revenue due to increases in internally generated revenue. For example, in Accra, the Salaries Grant represented 39 percent of total revenue in 1988, but declined to 17 percent in 1991. The incentive affects of Salary Grants are discussed further in Chapter V. 4.12 Grants in Lieu of Rates. Property owned by the Central Government is not subject to taxation (L&, rates). Therefore, the Central Government provides grants in lieu of rates to DAs to compensate them for what otherwise would be income from such property. The amount of such revenue is insignificant because the grant is arbitrarily determined rather than being based upon the amount of rates that would have been payable in respect of GOG properties if they were not exempt. However, it is understood that GOG is considering changing this arrangement with effect from January 1, 1993 so that the grant equivalent to the actual rates payable on the properties of new decentralized departments will be paid to respective DAs. 4.13 Ceded Revenue. Ceded Revenues, comprising entertainment duty, casino revenue, betting tax, gambling tax, business registration fees, advertisement tax and daily transport tax are collected by Central Government and assigned to DAs. Annex 11 presents the total amount of Ceded Revenue distributed to DAs during the period 1990 - 1992. The increase from 1990 in the total amount distributed is dramatic, amounting to 1,070 percent in nominal terms and a significant 556 percent in real terms. On average, the amount increased from V1.86 million in 1990 to 021.8 million per DA in 1992. That increase is due primarily to an expansion of sources of revenue now assigned to DAs; even though they continue to be collected by Central Government. However, several of the sample DAs showed no Ceded Revenue in their annual budgets as they consider it an inconsistent source of revenue. Of those including Ceded Revenues in their accounts, its highest share of total recurrent revenue was 27 percent in Birim North (1991), while in Accra it accounted for only 0.48 percent in the same year. For 1992 and beyond, it is likely to be a significant source of revenue for small DAs as the sources of ceded revenue are being further expanded. 4.14 Any one of three alternative systems could be used for the allocation of Ceded Revenues. Each DA could receive from Central Government an amount equal to the amount collected by Central Government within its borders. Alternatively, as is currently the case in Ghana, the total amount collected can be pooled and distributed according to criteria which are not directly related to points of origin. Finally, a more fundamental alternative would be that revenue currently collected by Central Government and ceded to DAs would be collected directly by those Assemblies and a portion of the amount collected by "richer" districts would be ceded to Central Government in payment of services rendered and for redistribution to "poorer" districts. This latter alternative is, for example, the one employed in China. 4.15 The current system in Ghana provides for collection by Central Government and redistribution to DAs in any one fiscal year of an amount equal to the amount of tax collected from Ceded Revenue sources by the Internal Revenue Service (IRS) during the previous year and paid into the Fund Account, controlled by MLG, quarterly. MLG determines the actual distribution to each of the 110 DAs according to a formula based on the number of towns Ui, development status) and the total population in a district, modified by considerations of equity among districts. Disbursements are normally made in one lump sum each year. 41 Chapter 4: Improving District Infrastructure and Service Delivery: Finance 4.16 Some argue that Ceded Revenue is not a form of Central Government transfer because it is revenue to which DAs are legally entitled which is merely collected and redistributed by Central Government. However, because Central Government determines the formula to distribute ceded revenue to the districts, the incentive affects are similar to those of grant transfers. 4.17 In practice, the system for distributing Ceded Revenues introduced in 1989 has been unsatisfactory. The actual annual amount of transfers to individual districts is always uncertain and irregular. The basis of distribution is unclear to DAs who are unable to ascertain their entitlement and, therefore, do not include Ceded Revenues in their budgets. Thus, in practice, many DAs regard such transfers as "windfall gains." MLG has now issued guidelines to DAs to reflect the ceded revenue in their financial reports. 4.18 Some DAs receive revenue in the form of royalties from the exploitation of such resources as timber and minerals. Royalties are collected by the relevant Central Government agency or parastatal concerned and a proportion of the royalty is remitted to the appropriate DAs. That system shares the same problems of uncertainty, irregularity, and obscurity identified above for Ceded Revenues (para.4.12). 4.19 Incentive Effects. Annex 18 shows the amount of transfers from Central Government to DAs over the period 1976 to 1990. The proportion of national revenue transferred to DAs has declined from 6 percent in 1981 to 1.5 percent in 1990. That is expected to change in future when the constitutionally mandated transfer of at least 5 percent of aggregate Central Government revenue to district assemblies becomes fully effective (see para. 4.9 above). 4.20 Reliance on intergovernmental transfers creates incentives for DAs to devote their time and energy to lobbying central government bureaucrats and politicians rather than improving local revenue generation. That is particularly the case in respect of targeted grants. For example, when substantial matching grants were introduced by the MOE to assist in the construction of schools, the perception was that some DAs diverted budget proposals to education that otherwise would have been used for other priority areas such as water supply projects.. Such behavior is likely to continue as long as Central Government grants remain the major source of capital finance for DAs. 4.21 Targeted matching grants create an incentive for DAs to invest their own money in Central Government priorities, which negatively affects DAs' exercise of discretionary authority (Figure IV. 1). Thus, the system for intergovernmental transfers, as currently established, encourages a relationship between central and DAs more akin to principal agency, rather than one of discretionary authority of DAs. Figure IV.2 (page 50) illustrates the contradiction between the purpose of PNDC Law No. 207 and the manner in which incentives are structured by the targeted financial transfer system currently in place. Chapter 4: Improving District Infrastructure and Service Delivery: Finance 42 Figure IV.1 INCENTIVE AFFECTS OF GRANTS TO LOWER-LEVEL GOVERNMENTS Income Effect Price Effect Total Effect Impact On Grant Types A U A U A U Expenditure Welfare Selective MatchinR i. Open-ended + + + - + + - Higher LOw ii. Close-ended + + + - + + - High Lower Selective & Non- Matching + + na na + + Low High General Non-matching + + na na + + LOw Higher Notes: A = Assisted functions (i.e., financed, at least partially, by central government on a targeted basis). U = Unassisted functions (i.e., no direct targeted financing by central government). Source: Anwar Shah, Perspectives on The Design of Intergovernmental Fiscal Relations. Working Paper WPS (Washington, D.C., The World Bank, 1991). 4.22 Sharing of Ceded Revenue does not suffer from the same disincentive effects on discretionary authority as do targeted matching grants because Ceded Revenues take the form of a block grant. Therefore, DAs retain discretion concerning the purpose to which the revenue is allocated. Figure IV.2 INTERGOVERNMENTAL TRANSFERS: RELATIONSHIP OF DESIGN TO OBJECTIVES Design Objective General Conditional Matching Non-Matching 1. Enhances discretionary use of local govts.' own yes no no no revenues? 2. Reduces income maybe yes no yes disparities? 3. Increases specific service? no yes yes maybe 4. Equalizes specific services regionally? no yes maybe maybe Source: Adapted from Richard Musgrave and Perry Musgrave, Public Finance in Theory and Practice, Fifth Edition (New York: McGraw - Hill, 1983). 43 Chapter 4: Improving District Infrastructure and Service Delivery: Finance 4.23 Criteria for Transfers. A criteria to counter the disincentive effects of transfers commonly include some combination of: (i) population size; (ii) level of social development; (iii) minimum physical infrastructure targets; (iv) national integration objectives; (v) minimum service delivery obligations of DAs; and (vii) local revenue generation efforts. 4.24 A search for appropriate criteria is currently underway in Ghana. Government consultants Plan Consult have proposed a formula encompassing specific criteria in their report titled Revenue Generation and Sharing Study. Unfortunately, those recommendations do not appear to adequately reflect the varying needs and capacities of different DAs. The suggestion that 37 percent of total national revenues should be transferred from Central Government to DAs appears wholly arbitrary because no link is made between that amount of transfer and any identified expenditure requirements. Further, the Consultant's report does not identify revenue increases required by DAs as a prerequisite for establishing appropriate levels of Central Government transfers. Finally, although the Consultants' proposals do recognize the need to ensure that poorer districts receive proportionately larger shares than those with greater fiscal capacity, the proposed formula does not adequately distinguish between DAs which have considerable potential for internal revenue generation, but which are inefficient in collection from those which have a much lower potential for internal revenue generation due to the nature of their economic base. 4.25 Whatever criteria is eventually established, it should be recognized that subjective judgments are to some degree inherent in the formula by which criteria are combined and weighted. Thus, such formula seldom satisfy the competing interests of different districts or constituent groups and, in any case, are not adhered to in actual practice. Therefore, three basic requirements should be met by any decentralized system which relies to any significant extent on central government transfers: (i) the amount and frequency of such transfers must be predictable; (ii) they must be transparent through explicit and identifiable entries in government budgets at both national and local levels; and (iii) they must be pre-determined rather than left open-ended. 4.26 Competing in Financial Markets: Loans. DAs are empowered to borrow funds under the provisions of PNDC Law No. 207. The property and revenues of DAs can legally be used as collateral for such loans. However, in practice, commercial lending institutions are not willing to lend to DAs. If the efficiency gains, which can result from disciplined borrowing in the market are to accrue to DAs, a number of conditions would need to be met. Such conditions include: (a) Government guarantees may be given for financing selected DA capital projects with initial focus on revenue-generating projects. (b) DAs should meet project selection criteria jointly established by Government and DAs, which would encourage efficient use of resources and cost recovery. (c) DAs should prepare medium term development plans clearly identifying their investments and funding priorities. 4.27 Ability to meet those conditions will require serious efforts by DAs over the medium-term. Therefore, the option of establishing a targeted Municipal Development Fund might be considered as an interim measure. 4.28 Own Resources. Effective exercise of discretionary authority by DAs ultimately depends on their ability to raise their own revenue to finance their own decisions. Eventually, borrowing might Chapter 4: Improving District Infrastructure and Service Delivery: Finance 44 provide significant opportunities in that respect. Nevertheless, DAs will need to rely primarily on local taxes, users'fees, and non-monetary contributions for the medium-term. 4.29 The total amount of internal revenue generated during 1988-1991 varied from a maximum of Q1062 million in 1991 by Accra to a minimum of C2.9 million in 1988 by Bongo (Annex 4). Such substantial variation in the capacity of DAs to generate revenue is due to differences in size, population, location, economic base and other factors. It also reflects the difference between well- established DAs and those created in 1988. Leaving aside the extremes of Accra and Bongo, sample districts raised between Q25 million and C120 million during 1991. Total internal revenue accounted for 60 - 70 percent of total recurrent revenue for most of the sample districts; with the highest percentage being 86 percent in Techiman in 1990 and the lowest share being in the range of 30 - 50 percent in Tamale during the period 1988 - 1991. In most of the sample districts, the trend has been for internal revenue to increase as a proportion of total recurrent revenue. The amount of internal revenue is less than total recurrent expenditure. Therefore, DAs could not operate at their present level without financial transfers from Central Government. For example, internal revenue in Tamale represented 38 percent of total recurrent expenditure in 1988; declining to 31 percent in 1991. There are exceptions to that general trend, recurrent expenditure in Adansi West represented 70 percent of internally generated revenue both in 1990 and 1991, resulting in a surplus of internally generated revenue over recurrent expenditure that was therefore available for capital expenditure. 4.30 Depending on Constituents: Local Taxes. PNDC Law No. 207 empowers DAs to generate revenue from levies, fees, and licenses for specified activities (Annex 7). The law provides that such revenue shall be taxed or collected exclusively by DAs, although they may authorize another government body to collect revenue on their behalf. Some taxes (land and tribunal fees) are collected by Central Government on behalf of all DAs and redistributed to them. Local taxes can take the form of either general rates, which are levied uniformly within an entire district, or special rates, which are levied over a particular area of the district for the purpose of specific projects in that area. Property rates may be levied upon the owner of property based on its value. In addition, a basic rate, which is effectively a poll tax payable by all adults residing in an area, can also be levied. 4.31 In spite of a long list of revenue sources available to DAs, the reality is that, in aggregate, they have access to the least remunerative types. One major exception is taxes on real property which are potentially lucrative; particularly in large urban areas. For example, in Accra, where the property rating system was substantially enhanced with the assistance of a World Bank project (ADRP), property rates have produced the highest single source of internally-generated revenue in each of the years 1988 - 1991. Nevertheless, even that performance is less than the estimated potential of the system when fully implemented and efficiently operated. Because property taxes are essentially urban, relying on them as the primary source of revenue at district level is likely to create imbalances of services between urban and rural populations. In practice, many of the urban districts have not established a system of property rates; in part because they do not have Valuation Lists containing rateable values which are a prerequisite for establishing such a system. Therefore, cadastral surveys will be required to delineate personal property holdings. That will be a problem where land is not legally owned by private individuals. Although the preparation of an appropriate property tax system and the capacity to implement it is likely to require significant investment, the potential increases in internal revenue will far outweigh the costs involved. With the assistance of an ongoing World Bank assisted project (Urban II), the property rating system in Tamale, Kumasi, Tema and Sekondi/Takoradi will be substantially enhanced. 4.32 Collection of basic rates is also inadequate. For example, in Accra, the largest metropolitan area in Ghana with an estimated population of 1.3 million, only C17.6 million was collected in 1988; 46 Chapter 4: Improving District Infrastructure and Service Delivery: Fnaance an amount equal to about 5 percent of total internal revenue. That amount is only about 11 percent of the estimated potential of C160 million. Similarly, Wa district collected 1.6 million in basic rates in 1991, although by its own estimate it should have collected e22.2 million. The collection record of many other DAs is no better. The poor performance of most DAs in generating revenue from basic rates is due to poor collection and enforcement action. The scattered nature of the population in most districts increases collection difficulties. In addition, the regressive nature of the tax raises equity issues. Finally, many of those liable to pay the tax receive very little in the way of services from their DAs. All of those factors raise questions about the appropriateness of basic rates as a source of revenue. 4.33 Collection of revenue, other than Ceded Revenue, is undertaken by DAs' own staff and commissioned agents. Collection machinery is manual and cumbersome, billing procedures are inadequate, and supervision and control is limited. There is little consideration of the cost effectiveness of either the various sources of revenue nor current collection performance. Charges are arbitrary and are often unrelated to the value of the activity being taxed or the taxpayer's ability to pay. 4.34 It is clear that substantial efforts should be undertaken to improve tax collection performance. Nevertheless, it should also be understood that taxes, by themselves, cannot fully satisfy all of the objectives sought by alternative local revenue systems. Therefore, while relying on an efficient tax system for some proportion of public sector revenue, other revenue instruments such as users' fees and non-monetary contributions must also be established. 4.35 Depending on Constituents: Users' Fees. Until recently, charging fees for the provision of public services was given low priority. That situation has changed. Currently, the list of services for which users' fees can be charged by DAs is extensive. However, the reason for the long list is to embrace all economic activities whether or not they are undertaken in a particular area. Very few districts are in a position to collect revenues from all, or even most, of the sources on the list. The most lucrative sources of internal revenue are those related to economic activities and commercial user charges. For example, during 1988 and 1989, Techiman obtained over 70 percent of its total internally generated revenue from market tolls. However, in Tamale, the market tolls produced only 6 percent of such revenue in 1990, whereas other fees produced over 60 percent of internal revenue in that district. Analysis of actual revenues generated by each of the various fee "headings" indicates that few produced any significant level of revenue. In fact, it is estimated that costs of collection exceed revenue generated in many cases. 4.36 An important feature of Ghana's system of users' fees is that the Central Government, through MLG, establishes the maximum amount that DAs can charge for each service or license. Those guidelines distinguish the maximum amounts that can be charged by different categories of districts. The guidelines also provide the criteria which DAs must apply when establishing fee schedules within the limits established by the MLG. For example, DAs must consider, among other things, the purposes that the fee will serve, the capacity to collect, and the capacity and willingness of the population to pay. Central Government believes that such limits and criteria are necessary to achieve fairness in cost recovery; promote and encourage particular activities; deter unwanted activities; and enforce registration, regulation and control. 4.37 Depending on Constituents: Non-Monetary Contributions. Where the informal economic sector still predominates and cash resources are scarce, non-monetary contributions in the form of labor or materials can supplement DA budgets. However, establishing mutual, and appropriate, relationships between DAs as agencies of government and the efforts of constituents as part of the Chapter 4: Improving District Infrastructure and Service Delivery: Finance 46 private sector can be a complex process. The need is to respond to constituent initiatives in a manner which ensures that the burden is equitably distributed among those likely to benefit from the infrastructure or service provided. 4.38 In order to mobilize non-financial contributions as a form of DA revenue, the following concerns ought to be addressed: (a) That for an adequate incentive to exist for individuals to voluntarily contribute non- monetary resources, the equivalent of a market determined price can be calculated for both the contribution made and the benefit derived by each of those specific individuals (ie., those not contributing can be excluded from enjoying the benefits and the possibilities of "free-riding" do not exist); (b) That governments do not involve themselves in self-help initiatives which are most appropriately established and maintained exclusively in the private sector; (c) That voluntary contributions made to public sector "stock" do not automatically require the Government to finance the recurrent costs required to operate and maintain the new facilities; and (d) That the non-monetary contribution is truly voluntary or, alternatively, is provided as a substitute for a legitimate fee or tax. 4.39 The experience with local participation shows non-monetary contributions can result in substantial benefits to both the revenue side and the sustainability of investments. A related point is that services that involve or promote employment for community residents can increase the capacity of people to pay for services. In practice, most DAs have, in fact, only been able to undertake projects in which communities have provided labor. For example, almost 50 percent of Tamale's total capital expenditure in 1990 was attributed to self-help projects (see Annex 19). B. Allocating and Managing Expenditure for Sustainable Infrastructure Development 4.40 The public expenditure function is solely related to provision of public goods and services. Whether or not the public sector produces such goods and services, it should finance it (for discussion of provision and production, see Chapter II). DAs currently generate a very small amount of total public sector revenue in Ghana. Indeed DAs generate only a small amount of the total revenue that they themselves spend. A further review of current DAs' budgets reveals that expenditure patterns are devoted primarily to routine recurrent expenditures, rather than discretionary capital/investment expenditures. District Budgets: Content 4.41 Recurrent Expenditure. Recurrent expenditure includes: (i) salaries, wages, overtime payments, and allowances; (ii) transport and travelling costs; (iii) maintenance and repairs; and (iv) overhead and operating expenses. Of those items, salary costs, with the exception of the major urban districts, generally exceed 80 percent of total recurrent expenditure at district level; in some cases salary costs exceed 90 percent of recurrent expenditure. Equally significant is the fact that salary costs account for 48 - 63 percent of all expenditures, recurrent and capital, by DAs. That is due to 47 Chapter 4: Improving District Infrastructure and Service Delivery: Finance the fact that recurrent expenditure consumes 60 - 70 percent of total revenue for most of the 12 sample districts; although in Bongo District in 1990 and in Wa District in 1991, salaries accounted for as much as 90 percent of total revenue. 4.42 In real terms, recurrent expenditure increased in the 12 sample districts at a rate of 40 - 50 percent during 1988 - 1991. That compares with increases of 29 percent in Accra during the same period; although in Accra internally generated revenue and total revenue increased by 310 percent and 365 percent, respectively. Thus, Accra's expenditures grew at a slower rate than the sample districts while its revenues grew at a substantially faster rate. The result is that Accra, Adansi West, and Techiman, are generating surpluses from internally-generated revenue in excess of their recurrent expenditure. In the other sample districts, however, total recurrent expenditure exceeded total internally-generated revenue. Thus, most DAs are dependent on Central Government to meet a significant proportion of their recurrent expenditure requirements. 4.43 Capital Expenditure. Sources of capital finance currently available to DAs are either a surplus of total revenue over recurrent expenditure or Central Government transfers in the form of targeted matching or non-matching grants. Although DAs are empowered to borrow, in practice they cannot do so because they are perceived as poor credit risks by lending institutions. 4.44 It is very difficult to estimate the total share of revenue available to DAs for capital investment because of anomalies in the way they present their budgets and accounts. For example, in some cases, salary grants are shown as revenue, but the actual payments to staff are not recorded as salary expenditures in those district budgets. In yet other cases, both grant revenues and salary expenditures are accounted for, but the 50 percent District's own share of salaries for staff employed by the DA is not shown. Therefore, the actual surplus of total revenue over recurrent expenditure is likely to be overstated in such cases. 4.45 Thus, estimates derived from data collected for the 12 sample districts must be viewed with caution. Nevertheless, it appears reasonable to conclude from the data that about 10 percent of total revenues are available to most DAs for capital investment. However, many DAs have budgeted substantially more for capital expenditure in their 1992 Estimates. Thus, it is doubtful that such targets can be met within current financial and implementation capacity constraints. Previous years have shown that actual capital expenditure has normally been well below the estimated budget as approved. For example, the 1991 estimate for capital expenditure in Adansi West was C168 million compared with actual expenditures of C39 million. The DA has still included Q:182 million for capital expenditure in its 1992 budget. The Budget Process 4.46 Budget Formulation and Approval. Integrating recurrent and capital estimates and consolidating the entire public sector budget for purposes of monetary and fiscal policy can be extremely difficult in a decentralized system. If budgetary guidelines from Central Government are not well articulated, decentralization can lead to increased and inappropriate spending through intergovernmental duplication, contradictions and transfers of previous central government expenditures to DAs, with or without a corresponding reduction of central government expenditures. Distinguishing between principal agencY and discretionary authority at district levels can help simplify such issues. 4.47 Discretionary Authority versus Principal Agency. In some countries, the desire for a system of discretionary authority at local levels is sacrificed in the belief that the exercise of such discretion REPUBLIC OF GHANA SAMPLE DISTRICT ASSEMBLIES (DAs) Finances - (1988-91) DA'S REVENUE VS CENTRAL GOVT. CONTRIB. DA's REVENUE VS EXPENSES 500 AMA. date omitted to avoid dstorton. 500- AMA*s date omitted to avoid distortion 400- 400 * 3004' 300 200 200 100 100. 0 AMA EAK KET TEC WA TAM BON WME AGO JB AW BN 0 I AMA EAK KET TEC WA TAM DON WME AGO JB AW BN Total D.A. Rev. Cent. Govt. Contrib. D.A. Intemal Rev. Total Rev. E Total Exp. AMA Local Govt. Revenue - 2.7 BI & Central Govt. Contrib. - 1.8 B Cedle AMA Rev - 4.5 bit; Exp - 4.8 bil Cedis Legend AMA = Accra Metro. Assembly EAK = East Akim District KET = Keta District TEC = Techiman District WA = Wa District TAM = Tamale District BON = Bongo District WME = Wassa Mphor East AGO = Agona District JB = Juabeso-Bia Dist. AW = Adansi West Dist. BN = Birim North District Chapter 4: Improving District Infrastructure and Service Delivery: Fiance 48 makes Central Governments' management of monetary and fiscal policy too difficult. Central Governments' concern is that if DAs exercise discretionary authority with respect to expenditure decisions, they are likely to create deficits which might fuel inflation and require accommodation by the Central Bank. Such concerns often subject DA budgetary decisions to Central Government review and approval, even if Central Government financing of such decisions is minimal. That, however, need not be the case. Decisions to centralize or rely on principal agency overlook other, more indirect, mechanisms for avoiding deficit financing at district levels. 4.48 It should be remembered that the Central Government, through its exclusive control over the money supply, has the greatest potential to spend more than it can raise in taxes and borrowing. Expenditures by DAs, on the other hand, are limited to income from: (i) revenue collected directly by them: (ii) borrowing from the private and/or public sectors with Central Government approval; and (iii) direct or indirect grants from the Central Government. It has been argued throughout this paper that the exercise of discretionary authority by DAs should be limited to funds raised by themselves locally, which currently constitute less than 2 percent of Central Government revenue. Potential increases in locally-generated district revenue would continue to represent a small fraction of total government revenue in Ghana for the foreseeable future. Any additional revenue resulting from Central Government transfers should appropriately be controlled as instruments which finance DAs as principal agents. 4.49 Therefore, the primary risk that DAs in Ghana might increase public sector deficits is their link to direct or indirect Central Government financing or access to guaranteed credit. That being the case, some combination of the following four policy responses ought to adequately regulate potential risks of discretionary budgeting at district level: (a) The specific subsectors subject to discretionary authority at district level could be limited, while within those subsectors, significant discretion could be allowed; (b) Central Government could rely on market-based competition among DAs for allocation of its financial transfers and competition among them and with the private sector for access to credit; (c) Central Government could terminate block grant transfers for discretionary use by DAs and limit its financing to those activities for which DAs act as principal agents; and (d) Central Government could exercise control over fiscal stabilization efforts by managing small fraction of aggregate public revenues and expenditures rather than all public revenues and expenditures. 4.50 No distinctions have been made in PNDC Law No. 207 between systems of discretionary authority and principal agency. Thus, the appropriate balance of financing managed under each of those two systems, operating in parallel with each other, has not yet been addressed. That has resulted in excessive Central Government control over the entire range of budgetary decisions at local levels and the requirement that it approve all expenditures in the context of composite budgets. 4.51 Composite Budgets. One of the main instruments for fostering both financial discipline at district levels and Central Government control over expenditure decisions is the introduction of composite budgets. The intention is to integrate the budgets of DAs and the budgets of the 22 decentralized Central Government departments and organizations in each district into a single budget 49 Chapter 4: Improving District Infrastructure and Service Delivery: Finance document. DAs are now required to prepare composite budgets which specify both their own financial planning and that of the 22 decentralized agencies. 4.52 There are, however, several problems affecting the implementation of composite budgeting. For example, there has not yet been a clear definition of what items should be included in composite budgets. Possible elements include the recurrent expenditure of the 22 decentralized departments. Another definition might add other departments and agencies of Central Government operating within districts in a deconcentrated, rather than a discretionary authority or principal agency, mode. Other elements which might be included in a composite budget include: expenditures financed by DAs' own internally-generated revenue; expenditures financed by Ceded Revenue; and expenditure financed by Central Government grants. Currently, the content of composite budgeting, as required by Central Government, is not clear. 4.53 The role of Regional Offices creates yet another anomaly with respect to composite budgeting. Regional Offices are supposed to act as intermediaries by aggregating composite budgets prepared by DAs. However, they are prohibited from altering or adjusting those budgets. Nevertheless, the mere fact of aggregating the composite budgets of multiple DAs effectively negates the objective of composite budgeting because it masks the choices that the individual budgets are intended to make transparent. 4.54 A further difficulty with respect to composite budgeting is that budget hearing continue to focus on presentations by sectors rather than in composite form. Budget hearings define and validate what is truly part of the Central Government budget, alhet indirectly. The effect is that composite budgets do not, in reality, exist. The 12 sample DAs have, as yet, not prepared composite budgets; although some have collated some of the decentralized sectoral budgets into a single document. 4.55 Financial Management. The concern for rationalizing public expenditure should not end with the budget formulation and approval process. Public expenditure and investment reviews must be prepared and the actual implementation of decisions based on such analyses must remain paramount. Thus, the monitoring and control of actual disbursements is of fundamental concern. The objective of financial management should be to achieve an appropriate balance between the need for sufficient controls on abuse of expenditure authority and the need for efficient and effective implementation of policy decisions at the operational level. In that regard, too much emphasis has been placed on the control function; responsibility for which has been retained primarily by Central Government. Specifying the appropriate role of Central Government with respect to the accounting and auditing functions should be related to funding sources; that is, whether DAs are managing monies as principal agents or as discretionary authorities. Therefore, the role of Central Government in the performance of accounting and auditing functions at district level should be compatible with their financing of DA expenditures. In practice, however, only a few large districts are likely to attract competent private auditors while in most areas the Central Audit Services will audit expenditures financed locally by DAs. C. Strengthening Planning, Revenue Collection, and Budgeting 4.56 The first step toward improving the planning (Chapter III) and Budgeting system is to differentiate between the need for systems improvement and the need for staff with technical skills necessary for proper planning and financial management. The second step is differentiating between systems required for exercising responsibilities for discretionary authorityfinanced exclusively from Chapter 4: Improving District Infrastructure and Service Delivery: Finance 50 internally generated revenue and the requirements for exercising responsibilities as principal agents with revenue transferred to districts by Central Government. System Improvement 4.57 For the exercise of discretionary authority, the principle should be that the design of planning and budgeting systems should be left to the discretion of each DA. However, in actual practice, that principle needs to be modified toward uniformity among districts for the following reasons: (a) For the foreseeable future, it can be expected that the exercise of discretion by DAs will be limited primarily to supplementation of Central Government programs implemented by DAs as principal agents and, therefore, planning and budgeting formats of each part of such programs should be consistent with each other; and (b) Consistency among systems allows for economies of scale with respect to training of district level planning, budgeting, and accounting staff. 4.58 The one main area of difference between district planning and budgeting as discretionary authorities and for principal agency is that, for the former, plans and budgets should not be subject to approval by the Central Government. Composite budget documents which are submitted to Central Government for approval should both include and be limited to all items financed by Central Government at district level. Items financed at the discretion of DAs from their own revenue can be included in composite budgets for the information of the Central Government. However, from practical viewpoint, it is likely that all items will be included in the composite budget. 4.59 Principal Agency. The primary proposal in this paper for strengthening the financial planning and management system relates to improving composite budgeting in the context of the performance of responsibilities by DAs as principal agents. In that context, procedures for composite budgeting need to be clarified and, if they are to be properly implemented, existing financial and other linkages between the decentralized district officials attached to DAs and their parent ministries must be reviewed. If DAs are to be given control over the preparation of whole, or part, of decentralized budgets, decisions need to be made about the advisory role of district officials and the participation, if any, of appropriate ministries and other Central Government agencies. Differentiating between principal agency and discretionary authority, as well as addressing the need for some fundamental changes in personnel policy and management (as discussed in Chapter V), should make the rationalization of such issues easier. 4.60 There is also the need to ensure that activities undertaken by DAs as principal agents, as reflected in their composite budgets, are fully consistent with Central Government policy and the medium and long-term plans prepared by NDPC and MFEP. That, in turn, requires that clear guidelines be written and effectively communicated to DAs and their planning staffs. More importantly, the budget system will need to more accurately reflect actual financial planning decisions. Based on reviews of the budgets of the 12 sample districts, it is clear that revenue and expenditure estimates are often substantially different from the actual performance in prior years. Budgets are not routinely updated and amended during the course of the financial year and, thus, do not reflect actual performance. For capital projects, planning and budget documents do not, with some exceptions, reflect considerations of economic and financial viability, priorities, or phasing of actual expenditures. In most cases, the reality of capital expenditure budgeting at the district level is no more than a list of development project desires identified for possible Central Government funding. 61 Chapter 4: Improving District Infrastructure and Service Delivery: Finance 4.61 Accounting systems, and auditing of DAs use of funds, also need to be enhanced to ensure that financial management information required for effective decision-making is accurate and available when needed by decision-makers. Currently, DAs operate an accounting system prescribed by MLG, which consists of monthly trial balances together with a final set of annual accounts based on receipts and payments. That system relies on manual recording and lead inevitably to incomplete and unreliable reporting. Effective policy-making, budgeting, and expenditure control requires reliable information; both on current performance and projected trends and the probable consequences of alternative options. Existing procedures for accounting and auditing do not provide such information in a timely manner. Therefore, both the Local Government Inspector of MLG, currently responsible for internal auditing, and the Auditor General, responsible for external auditing, will need to improve performance through, at least in part, system reforms. 4.62 Discretionary Authority. If Central Government desires that discretionary authority is effectively exercised at district levels, a significant proportion of the proposed 5% transfer of Government revenue to districts will have to be in the form of a block grant and DAs would need to have direct access to a wider-range of revenue sources. Therefore, a study will need to be undertaken to ascertain: (i) the appropriateness of alternative tax regimes in the context of the structure of incentives; (ii) the current capacity of tax administration; (iii) the financial and other costs to improve such capacity; and (iv) the medium-term nature of any capacity-building effort. Thus, a variety of improvements can be undertaken by DAs to enhance their capacity to collect increased amounts of internally-generated revenue. 4.63 More specifically, DAs with large urban areas should be encouraged to adopt a property rating system based on up-to-date, reliable, and complete Valuation Lists. DAs which already have a system of property rating should ensure that the tax base is complete (LL, all rateable properties are entered on the Valuation List at up-to-date levels of assessment) and the tax rate differential is appropriate for obtaining optimum yields. Manpower, Equipment and Training Needs 4.64 To achieve the level of financial management capacity required of DAs, improvements in manpower, equipment, and training need to be implemented as a matter of urgency. Existing manpower available to DAs to perform planning and financial management tasks is not sufficient in both qualitative and quantitative terms. Many of the important posts at senior level are not filled and some staff responsible for financial planning, budgeting, revenue collection, expenditure control, accounting and auditing functions do not have the requisite level skills or experience. An example of the problem is provided by the 1992 Budget Estimate for Tamale Municipal Assembly wherein employing literate collectors of market tolls was established as an objective. Thus, effective performance of the fiscal responsibilities allocated to DAs by PNDC Law No. 207 require that such improvements be introduced before significant reforms are undertaken so as to ensure that the institutional capacity exists to effectively operate within such new systems. 4.65 Equipment and facilities available for the performance of the planning, budgeting, and financial management functions are also inadequate in most districts. Requirements include basic stationery, calculators, office furniture and equipment, vehicles (particularly relevant to assist revenue collection operations) and office and housing accommodation. Although advanced data processing equipment is not necessary, a simple standard computer program and basic hardware and software for budget and accounting systems for at least the larger districts would substantially improve the provision of reliable and consistent financial information. Chapter 4: Improving District Infrastructure and Service Delivery: Finance 52 4.66 Institutional strengthening, through improvement of systems, staff skills, and equipment and facilities are discussed further in Chapter V. D. Prospects for Improved Financial Performance 4.67 Establishing revenue sharing instruments which are consistent with and reinforce the type of decentralized system desired by the Government of Ghana is a fundamental policy issue. Requirements for such systems are significantly different depending on whether: (a) Central Government truly intends that DAs should exercise real discretionary authority concerning policy formulation, investment decisions, and operational priorities with respect to all of the former responsibilities of the 22 decentralized department and organizations and the 83 specific functions specified in the various Establishment Acts; or (b) Central Government instead actually expects that DAs will serve as principal agents for the more efficient and effective implementation of its own policy, investment, and operational decisions and priorities; or (c) Central Government desires a mutually supportive, and substantive, partnership between itself and DAs in which the latter act as principal agents with respect to nationally significant programs while exercising discretion with respect to programs having local, but not significantly national, importance. 4.68 If the objective is essentially 4.67(c) above, Central Government should provide targeted matching grants to DAs for the performance of those functions in which the latter are performing as principal agents for the former and block grants or direct access to a substantially broader revenue base for the performance of those functions where DAs will exercise discretionary authority. That system should, however, be combined with a policy to allow DAs direct access to a substantially broader revenue base. Financing Principal Agency 4.69 If aggregate transfers from Central Government to DAs were increased to an amount equal to 5 percent of total Government revenue with effect from 1993 as provided in the 1992 Constitution rather than the current level of 2 percent, the impact would be as shown in Annex 20. That amount would be significant. The impact on proper financial planning and effective performance monitoring would be further enhanced by a transparent and even flow of such transfers when DAs act as principal agents. In that context, performance targets will need to be realistic, attainable, and subject to revision in line with clear guidelines. It will also be necessary to clarify the extent of central control and direction attaching to the transfer of funds from Central Government to DAs and the nature of central monitoring required to ensure policy objectives are being achieved. Targeted capital investment grants should be provided for particular services or projects. Financing (Discretionary) Authority 4.70 As discussed above (para. 4.9), Government has decided to transfer 5% of its revenue to DAs based on a formula approved by parliament. Such block grant transfers are intended to increase revenue available to DAs for discretionary authority. The possible disincentive effects of such 53 Chapter 4: Improving District Infrastructure and Service Delivery: Finance measures on internal revenue generation have been discussed above (paras. 4.19 - 4.21). That is an issue because it would be counterproductive to negatively effect DAs considerable potential for increasing the amount of internally-generated revenue. The absence of systematic attempts to reliably determine potential revenue capacities at district levels throughout Ghana has reinforced the practice of relying on transfers from the Center. Following that path of least resistance is unfortunate because it is estimated that internally-generated revenue for an average DA could possibly increase from Q42.7 million in 1990 to e92.5 million in 1997 based on the following assumptions: (i) current levels of internally-generated revenue serves as the base; (ii) the most viable sources of revenue received concentrated attention; and (iii) the administration and supervision of collection is improved. It is likely that the introduction of a property rating system in urban areas would produce total increases far exceeding the average per capita internally-generated revenue estimated above. Summary Conclusion 4.71 The average transfers from Central Government to DAs will increase significantly as according to the 1992 Constitution, 5 percent of Government revenue will be transferred to DAs. It is estimated that average revenue per DA will increase from 078.2 million in 1990 to C401.6 million in 1997. The per capita revenue is likely to be C2,553 in 1997 compared to :593 in 1990 (Annex 20). 4.72 In order for these optimistic projections to be achieved, current planning, revenue collection, and budgeting systems will need to be reformed; as well as improving the technical skills of staff and the facilities and equipment available to them. That is the subject of the next Section. 5 IMPRO VING DISTRICT INFRASTRUCTURE AND SER VICE DELIVERY: STAFFING 5.1 The structure of authority for the exercise of the staffing function is as important as finance in terms of affecting incentives for performance. Discretionary authority over local government employment is as significant for the effective exercise of devolved authority as is the discretionary use of financial resources. Therefore, a similar level of attention should be devoted to personnel policy issues as is devoted to those of financial authority. Accordingly, Section A of this Chapter presents information on the current public sector employment policy context. Section B describes the current structure of the Civil Service. Section C presents an analysis of how alternative personnel management policies are likely to affect incentives for public sector performance. Finally, ecion D discusses training approaches to current technical skill deficiencies. A. Poic 5.2 Ghana has been implementing a comprehensive Civil Service Reform Program (CSRP) since 1987. The three key features of that program have been: (i) a retrenchment program which has removed 57 - 60 thousand civil servants from the payroll for a net reduction of approximately 45 thousand persons (as of end 1991); (ii) an on-going review toward the design of a new pay and grading structure so as to increase overall pay levels and pay differentials, overhaul the largely unworkable pay and grading framework, and introduce merit-pay; and (iii) an on-going institutional development program to strengthen the Office of the Head of the Civil Service (OHCS) as the agency primarily responsible for management of the Civil Service. 5.3 With specific reference to district level employment, three different legal instruments establish the structure and procedures of Government's staffing system: (i) the new 1992 Constitution (which became effective January 7, 1993); (ii) the Civil Service Act. 1960 (and related Civil Service [Interim] Regulations, 1960) and (ii) Local Government Law 207, 1988. The Constitution establishes a "Public Service" consisting of the "Civil Service" plus 14 other "services" (Article 190[1]). Although each of these services has somewhat different terms and conditions of service, they are all based at the Center; i&, each service is centralized and includes all non-parastatal public employees wherever in the country they serve. The essential features of that system were established by the 1960 Civil Service Act, as amended. Ultimate authority over all government positions and staff is retained by the Central Government; primarily through the OHCS and the Public Service Commission (PSC). 5.4 With respect to the objectives of PNDC Law No. 207, the structure of authority for hiring, promotion, transfer, and dismissal decisions is problematic in at least three respects: (i) the structure of public employment; (ii) incentives for performance; and (iii) staff skills. 55 Chapter 5: ImprovIng District Infrastructure and Service Delivery: Staffing B. Structure of The Civil Service Oreanization 5.5 The Ghanaian Civil Service is divided by career stream and four broad grades applicable to each stream (Categories A [top] to D [bottom]). Under normal circumstances, the PSC is responsible for: (i) determining the qualifications for all authorized positions within Government (i.e., the Establishment); (ii) designing and conducting the examinations required of all candidates for such positions; (iii) hiring all employees based on those examinations; and (iv) serving as the ultimate authority on promotions and dismissals. The OHCS establishes new positions and manages the Civil Service itself; including transfers and recommendations regarding promotions and dismissals. However, as an interim measure for the implementation of the CSRP, two additional organizations have been created. (a) The Oversight Committee for the Civil Service Reform Program (OCCSRP) is responsible for overall implementation of the CSRP. This Committee is chaired by the Head of the Civil Service (also Secretary to the Cabinet) with representation from agencies having a significant role in civil service management. The role of OCCSRP is to manage consultancies, mobilize counterpart staff, review proposals emerging from the various sub-committees established to deal with the main components of the program, coordinate reform components, consult with the political level of the Committee of Secretaries (COS), and monitor reform implementation. (b) The Redeployment Management Committee (RMC) is responsible for overseeing the retrenchment program. This Committee is chaired by the Minister of Mobilization and Social Welfare; with overlapping representation from the OCCSRP. Its role is to coordinate the various agencies concerned with retrenchment and outplacement programs. 5.6 In any event, the PSC and the OHCS continue to perform their routine responsibilities; with donor-financed technical assistance provided to the OHCS. In practice, the Head of the Civil Service acknowledges that substantial discretion is allowed the various Central Government line ministries and departments with respect to staffing matters. Size and Distribution 5.7 It is important to note that all staffing data for the GOG is estimated in this Chapter because of significant discrepancies between data obtained from the 12 sample DAs and data obtained from the OHCS. Lack of confidence in the validity of staffing data is worrisome because Central Government expenditures are, to some degree, dependent on such data. Thus, as discussed in Chapter IV, 100 percent of authorized Category A - C staff assigned to DAs are financed by Central Government in the form of a salary grant. Monitoring of staff levels in those grades should be relatively easy by linking the amount of the salary grant provided by MoF to OHCS data on actual assignments of Category A - C staff to specific districts. Even so, the CAGD, which is responsible for paying staff, cannot provide current data on the number of such staff in 5 (4.5%) of the districts (and, in any event, its numbers are significantly different from those provided by the 12 sample districts studied directly for this Report). Although the number of districts for which CAGD does not have sufficient data for its own purposes is small, it includes Accra Metropolitan Assembly; the largest in the country. Chapter 6: Improving District Infrastructure and Service Delivery: Staffing 6 5.8 Monitoring of Category D personnel is even more problematic. It is not clear which central agency has responsibility for monitoring the employment of category D personnel at the district level, for which the Central Government is responsible for paying 50 percent of salaries as a match to the district assemblies own payment of 50 percent. Systems are not in place to either ensure that aggregate budget and actual expenditures for personnel emoluments at district level fit within approved ceilings nor to monitor performance at district levels. The Head of the Civil Service purposely minimizes any interference by the OHCS regarding the employment of Category D personnel by DAs. The absence of mechanisms to control DAs deficits has major implications for both the role of the DAs and the ability of Central Government to manage fiscal and monetary policy. Clearly, either Central Government controls need to be tightened or those who might extend overdraft facilities to DAs must be made to understand that such deficits will not be met by the Central Government. 5.9 The estimated number I and distribution of staff by Department, grade, and level of Government, as calculated specifically for this Report, are provided in Annex 21. In summary, excluding the education sector, 2 approximately 3,523 staff in Categories A - C are currently assigned to district level. Of that number, health sector staff account for approximately 45.2 percent of staff (and 72% of Category A staff). Thus, if health sector staff are also excluded from the analysis, only about 5,176 persons in all four grades (A - D) are employed at non-metropolitan district levels; an average of only 48 persons per district (only about 15.47% of whom are in Categories A - C). That is a very small proportion of total staff employed by the public sector in those grades. In that respect, however, Ghana's distribution is normal for LDCs, where very few countries employ public servants locally. Indeed, 42.8 percent of a sample of fourteen African countries employed 100 percent of public sector staff centrally when such comparative figures were compiled during the period 1978 - 1983. In any event, absolute numbers of staff varies significantly among districts. For example, the range among the sample districts is from an estimated high of 2,753 in Accra Metropolitan Assembly to a low of only 27 staff in Wassa Mpohor East District. 5.10 Figure V.1 compares the estimated distribution of staff by grade as calculated for this Report. It is clear that there is a disproportionate number of largely unsidlled Category D staff at district levels. At the same time, there is also a clear insufficiency of Category A and B staff at district levels; especially as compared to the availability of such staff at the Central Government level. Absolute distributions among districts vary significantly, from an estimated ratio of A&B:D staff of 179:0 in East Akim District to 0:132 in Techiman District. 5.11 Annex 22 summarizes the number and distribution of staff by occupational category at district level. The paucity of technical staff is evident. As an example, only the Metropolitan Assemblies currently have any significant numbers of engineers on their staff and almost all of them are actually Estimates were derived by averaging data on personnel from the 11 districts studied (excluding Accra) and multiplying by 107 non-metropolitan districts. 2 Data on the staffing of the education sector at the district level in Ghana is excluded from analysis here because of large-scale discrepancies in the data reported by the 11 non-metropolitan districts which served as the sample for this study. Thus, using the same methodology described in Footnote 1 above, the estimate of total staff employed at district levels in the education sector would be 26,205 based on extrapolations of data reported by grade (A-D). Yet, from data on the number of teachers reported by the same districts, the total number of nursery, primary, and junior secondary teachers alone would be estimated to be 117,472. That is a discrepancy of more than 450 percent (since the numbers reported by grade would also include non-teaching staff). 57 Chapter 5: Improving District Infrastructure and Service Delivery: Staffing seconded from such departments as DUR. FIGURE V.1 ESTIMATED DISTRIBUTION Almost all of the smaller districts share the of EMPLOYMENT by GRADE services of engineers or technicians from 100 various Central Government Departments located at levels intermediate between Central 85 Government and districts. Thus, total 66 numbers of Senior Technical Roads Officers, 70 63 Mechanical Supervisors, and Water Engineers Grade 6o in non-metropolitan districts is estimated to be istribution 55 approximately 78, or about 0.8 percent of otal 5 total staffing at that level. Variations among Employment 40 Within Each 35 districts are even more pronounced. Thus, Lt E 30 of the eleven non-metropolitan sample 25 19 districts, only one district had a Senior 1s Technical Roads Officer in place (Keta); all 6 _2 3 of the Mechanical Supervisors reported 0 n_nnH among the sample were assigned to one Grade Levels A B C D A B C D Including Excluding district (Birim North); and the one Water Health Sector Education & Officer was assigned Tamale. Other districts Staff Health Staff did not report having such personnel in response to specific questions in that regard. The situation with respect to engineers is repeated in one form or another for all professional job categories. 5.12 It is clear that, with the exception of health and primary education sectors, current employment patterns at district level are skewed away from technical operational staff toward staff responsible for performing finance functions. Thus, excluding education, health and veterinary staff, technical staff account for approximately 26.5 percent of district level staff compared to about 72.1 percent of staff at district level assigned to the financial function; a ratio of 2.72 finance staff to each technical staff. Of further interest is the estimate that a full 57.9 percent of staff not assigned to the health, veterinary, or education sectors are employed as revenue collectors. Clearly, assignment of at least one professional staff in each significant occupational category to each of the 110 districts will clearly expand the size of public employment at the district level. C. Alternative Personnel Systems: Incentives for Performance 5.13 It is essential that the incentive structure for staff is consistent with Ghana's actual decentralization objectives. Three broad incentive areas are discussed in this Section: (i) the structure of authority with regard to the performance of the personnel management function; (ii) financial incentives for individuals; and (iii) workplace environmental incentives. Structure of Authority for Personnel Management 5.14 In addition to simply continuing the current single, unified, personnel system, two other options are currently being considered in Ghana for the restructuring of the civil service with respect to staff assigned to district levels. The first option is that of creating a unified Local Government Service, separate from the current comprehensive unified service. The second option is that of either full or partial devolution of responsibilities for local level staffing to DAs. An additional option that could be considered, as a supplement to any of the other three systems, is private sector contracting. Chapter 5: Improving District Infrastructure and Service Delivery: Staffing 58 5.15 Single Unified Central Government Service. Although provision is made under PNDC Law No. 207 sections 29, 30, and 133 (2) for DAs to appoint their own staff, legislation has not yet been passed to give practical effect to those provisions. PNDC Law No. 207 reassigns all personnel previously employed in the 22 decentralized Central Government departments and organizations to DAs. However, all but the lowest ranks continue to be members of a unified Central Government Civil Service, with the same terms and conditions of service throughout the country. All Government staff at District level, whether employed in decentralized departments or not, remain Central Government employees. Countries as different as Uganda, France, and the Republics of the former Soviet Union (LL, Russia) also have this type of system. 5.16 Nevertheless, although primarily characterized by centralized personnel management, this type of system also allows a limited degree of autonomy to local governments to employ lower grade, unskilled, personnel. That limited degree of flexibility is also allowed in Ghana. Thus, DAs also recruit and employ various categories of Category D workers at their own discretion; but within limits established by OHCS and the availability of the 50 percent Central Government grant for such employees. However, with respect to Categories A - C, once the DAs submit their request to fill job vacancies to appropriate Central Government authorities, they have little control over who is selected. 5.17 Because overall responsibility for managing the career Civil Service is at the Center, staff are posted and transferred throughout the country without regard to the individual staff or local managers/supervisors preferences. Although there are examples in Ghana where district level staff have remained in place for long periods of time; periodic rotation appears to be the more prevalent practice. It should, therefore, not be surprising that many senior staff assigned to the district level continue to give primary allegiance to OHCS or sector ministries. Many DA councilors, in turn, continue to regard senior staff as regional representatives of Central Government departments. Consultations with DAs are rare; even on such fundamental matters as the drafting of annual work programs as part of budget preparation. Under such conditions, and with the knowledge that rotation to other assignments is common every few years, it is difficult for DAs to obtain long-term career commitment from senior and mid-level personnel. In such situations, local governments are often reluctant to finance staff training because of the fear that improved proficiencies are likely to accrue to jurisdictions of subsequent assignment. 5.18 The primary benefit attributed to a unified Central Government system is that it maintains parity in terms and conditions of service among those serving within local and central governments and ensures that highly qualified staff are assigned to otherwise disadvantaged areas. Unfortunately, the formalization of a Central personnel function has not been able to fulfill its promise in that respect; other ways are found by the most skilled staff to defeat the system on that score. 5.19 In any event, as currently practiced through the continued application of the Civil Service Law (1960), the personnel management system is designed to support the deconcentrated operations of Central Government agencies at district levels. A unified system of that type is incompatible with both discretionary authority as the ultimate objective of PNDC Law No. 207 and principal agency as a transition mechanism. 5.20 Single Unified Local Government Service. This type of system does not resolve any of the significant problems for local government autonomy identified for unified Central Government Services. Nevertheless, examples of this type of system can be found in Botswana, Tanzania, and Zambia. The only significant difference between this type of system and the single unified Central Government Service described above is that staff in the Local Government Service are limited to assignments at local levels throughout their careers. Terms and conditions of service also normally 59 Chapter 5: Improving District Infrastructure and Service Delivery: Staffing vary between the Central and Local Services; almost always to the disadvantage of the Local Service. That is not, however, always the case. For example, in Tanzania, the relative advantages/ disadvantages between the two services have varied at different times. In any event, within such systems, problems of instability and the difficulty of establishing loyalty to local decision-makers and supervisor remain essentially the same as for single unified Central Government Services. 5.21 Devolved System. Devolved systems can be eitherfully or only partially discretionary. Fully devolved systems are those in which each local government: (i) directly employs, assigns, promotes, transfers (within its own jurisdiction), and terminates its own staff; (ii) determines the numbers, types, and distribution of its own staff; and (iii) establishes its own terms and conditions of service for staff. Partially devolved systems encompass the first, and sometimes the second, of local government powers specified forfully devolved systems, but uniform terms and conditions of service for all employees of local governments are established by Central Government. 5.22 Fully Devolved, Labor Market, System. Fully devolving responsibility to DAs for staff assigned to local levels would be a major change in Ghana's personnel policy history. Therefore, both potential risks and benefits of such systems are summarized here. 5.23 Risks of a fully devolved personnel system are better understood in Ghana than are the potential benefits. Thus, experience elsewhere suggests that significantly increasing reliance on local governments to establish and manage comprehensive personnel systems would likely strain the capacity of DAs in Ghana. The opportunity to manipulate local public sector employment for short- term and narrowly defined political interests has proven to be extremely attractive to local politicians, in democracies throughout the world (including North America and Western Europe). Therefore, it is necessary to carefully analyze and design staffing programs for local levels. Otherwise, devolving responsibilities to DAs is likely to substantially increase the aggregate number of persons employed in the public sector as a whole; formulas for redistributing staff from the center to local levels notwithstanding. Such increases can be expected for several reasons: (a) DAs are likely to duplicate the rigid employment policies and expansive staffing patterns of Central Government, in. part due to lack of sophistication and in part due to the use of the employment function for purposes of political patronage; (b) Financial limitations are likely to affect expenditures for O&M and service delivery before employment is restricted; and (c) The staffing of key functions within a large number of local agencies ( , planning/engineering) will, of necessity, require an expansion of staff for those specific functions which will add to absolute numbers unless reductions in staff are made in other areas. Thus, the act of devolving the employment function to local jurisdictions cannot, by itself, ensure more rational employment policies nor improve the capacity to implement such policies. 5.24 The potential benefits of afully devolved personnel system are less well understood in Ghana. Such benefits include maximizing incentives for staff responsiveness and loyalty to local governments. Such systems are best where local governments are expected to assume significant responsibilities within the overall public sector. In part for that reason, fidly devolved personnel systems have been established in countries as different as Zimbabwe, Brazil, China, Germany, the United Kingdom, and the United States of America. Fully devolving personnel systems also potentially reinforces efficiency Chapter 5: Improving District Infrastructure and Service Delivery: Staffing 60 by establishing a competitive labor market within the public sector. In such systems, successful recruitment of appropriate staff is determined by alternative conditions of service offered by competing institutions. Through trial and error, the most effective incentives can be discovered. That is how conditions of service are established in the private sector. To the extent that significant differences exist among people regarding what does, or does not, motivate them, different schemes could be expected to attract different people with different preferences. To the extent that those attracted are the right people for the job, such systems should be more efficient. Alternatively, to the extent that attitudes towards incentives are shared, different schemes could be expected, at least theoretically, to provide intelligence about the optimal structure of incentives. 5.25 It is clear that Ghana's current policy objective of increasing devolution of broad responsibilities to DAs requires commensurate local government discretion regarding personnel policy and management; it is impossible to achieve one without the other. Symmetry needs to be established between Ghana's overall decentralization policy and its public sector personnel policy. Given the benefits of fully devolving the personnel function summarized above, the fear that it could potentially result in an absolute increase in public sector employment should not stand in the way. Rather, it should be recognized that expansion of public sector employment is not an inevitable consequence of devolution, for at least two reasons. First, employment of Category D personnel within the public service continues to be too large. Thus, although key professional and technical ranks might need to be expanded within many districts, such expansion should be offset by further paring the number of redundant unskilled staff at all levels. Second, the overall role of the public sector is being redefined so as to increase the reliance on contracting with the private sector for the production of public goods and services. Therefore, the on-going reform of the Civil Service in Ghana ought to provide the opportunity to rationalize personnel policies at the local level in that respect. 5.26 Partially Devolved/Controlled System. The partially devolved type of system has been established in many African countries. It retains none of the potentially important efficiency gains offidly devolved systems while retaining the risk that public sector employment will expand. Thus, local governments under such systems have freedom to hire as many staff as they choose (as long as they are able to pay them), but they cannot decide for themselves what salaries or benefits they can provide such staff; that is decided by Central Government and applied to all local governments uniformly. 5.27 Private Sector Contracting. Actual services can be provided by commercial private sector firms or community organizations for specific periods. When commercial firms are used, competition for discrete contracts should be the rule. In some sectors private contractors are already being extensively used for maintenance as well as the construction of new works at the district level. In Northern districts between 70 - 80 percent of feeder road maintenance is carried out by contract. The basic premise of the proposed rural water supply strategy is that the private sector will be able to construct and maintain the necessary facilities. 5.28 In spite of these initial forays into private sector contracting for the delivery of public goods and services, that approach remains a largely uncharted area in Ghana. Similarly uncharted is the scope for supporting local economic development through support to private initiative at the local level. The key issues here are thus not fully known, but include, inter alia: (a) The need to increase the scope for private and community participation in managing or providing water supplies; the maintenance of roads, drains, water supplies, and vehicles; the collection and disposal of solid waste; the operation of markets, and so forth; 61 Chapter 5: Improving District Infrastructure and Service Delivery: Staffig (b) The need to increase the scope for private and community participation in revenue mobilization and collection; (c) The need to encourage the development of local private enterprise through the provision of basic infrastructure and services, or the removal of regulatory or procedural barriers at the local level. 5.29 Further, demand by local governments for private sector production of public goods and services should result, eventually, in the decentralization of much of the private sector itself. In other words, dispersion of demand territorially should result in the dispersion of opportunities for the involvement of smaller scale enterprises which operate within local boundaries as well as the deconcentration and/or delegation within large enterprises located in Accra or other large cities to branches located within local jurisdictions. Thus, such changes in the role of the public sector could result, not only in the creation of mutual dependencies among both local governments and the private sector, but also in enhancing competition in the private sector itself. 5.30 Under such circumstances, DAs should focus on creating an enabling environment and regulating the conduct of the private sector within their broad policy framework. That will require DAs to be able to package works, prepare tender documents, evaluate tenders, award contracts, supervise works and, perhaps most importantly, ensure contractors are paid on time. DAs will not need the technical manpower resources to comprehensively perform all of those functions either. They can employ consultants to perform at least some of those tasks. The primary requirements are that DAs have sufficient expertise to prepare the terms of reference for consultants and supervise performance. Finally, if the private sector is expected to be responsible for sustaining services provided by public sector financed projects, then it should also be competitively involved in upstream project preparation phases. 5.31 Another form of private sector contracting is referred to as personnel services contracts. Thus, because of non-competitive salaries and benefits, inefficient employment policies and procedures, and public sector retrenchment programs, specialized technical staff have sometimes be recruited as contract personnel outside of normal Civil Service. Such contracts usually include enhanced salaries over that of the regular civil service because such employment is temporary and compensation for retirement and other related benefits are not provided. As a result: (i) the number of pensionable staff can be maintained at substantially lower levels than would otherwise be the case; (ii) DAs would have enhanced flexibility for employing only those personnel they need as they need them; and (iii) morale of such staff should be enhanced as they earn higher incomes than would otherwise be the case; at least in the short to medium-term. 5.32 Therefore, decisions concerning the appropriate personnel management system will need to address trade-offs among less-than-ideal alternative solutions. One option is to create .a system whereby DAs employ senior staff on the recommendation of the PSC or sector ministries when informed of vacancies by the former. Under such a system, candidates would be selected by DAs and the terms and conditions of employment would be determined by them. Yet there would be some check on totally inappropriate decisions by virtue of the involvement, although not control, of some Central Government participation. The alternative of a national Local Government Service, separate from both the Central Government and DAs, does not resolve any of the significant disincentive effects described above for the unified Central Government Service. Chapter 5: Improving District Infrastructure and Service Delivery: Stafing 62 FMinancial Incentives: The Subsistence Threshold. 5.33 Too many civil servants in Ghana are paid salaries and benefits below subsistence requirements. These subsistence civil servants cannot be expected to approach the performance of their official tasks with sufficient degrees of commitment to efficient and effective performance. The subsistence status of many civil servants is crucial in its effect on motivation. Thus, when regular civil service emoluments are already below the subsistence level and are, thus, the equivalent of part- time salaries; the result is often part-time performance in jobs formally established as full-time. Nevertheless, while insufficient for individuals and their families, the cost of salaries in aggregate already overwhelms recurrent public sector budgets. For example, during 1991, 76 percent of Tamale's recurrent budget and 91 percent of Adansi's recurrent budget were consumed by their wage bill. In districts existing prior to 1988, much of the problem is due to overstaffing. One reason for apparent overstaffing is that some DAs save their 50 percent matching requirement for Category D wages by employing on a part-time basis twice the number of staff required. By so doing, they cover the entire cost from Central Government's matching grant. 5.34 The principle enunciated above is essential for the effective exercise of discretionary authority by DAs. Nevertheless, the corollary is that, for such a policy to be both efficient in financial terms and effective in performance terms, it will be necessary that DAs strongly control employment levels, as well as any tendency toward deficit financing. That might be more than can reasonably be expected in the near term. Nevertheless, the principle should be maintained. Thus, DAs should be assigned discretionary authority commensurate with there ability or willingness exercise disciplined financial management; particularly with respect to employment. When making any such decisions, it should also be kept in mind that the expected performance of DAs in this respect ought to be considered in comparison to the requisite discipline of Central Government; not to some idealized expectation of Central Government potential in that regard. 5.35 The solution to potential problems of public employment at local levels will eventually require a combination of actions by Central Government and individual DAs. Under the current system, terms and conditions of service are established centrally. However, under a labor market approach, as discussed above, DAs would be expected to establish their own individual terms and conditions of service. Such terms would need to be affordable within the boundaries set by internally-generated revenue and the additional terms negotiated between DAs and Central Government for the former's performance of tasks as principal agents. The Accra Metropolitan Assembly is already undertaking some employment on that basis although this is an exception. Workplace Environment Incentives 5.36 The specific incentives which might further improve staff performance are likely to be more complex and particularistic for those above subsistence than for those below that level. Many of those incentives are also likely to be non-financial in nature. Non-financial incentives can be classified into two categories: (i) generic incentives and (ii) incentives associated directly with public sector employment at local levels. 5.37 Incentives Common to Service at both Central or Local Levels. Generic incentives include, such considerations as: (i) opportunities for significant career advancement over time; (ii) potential for exercising power and influence; (iii) pleasant and effective working relationships with supervisors and colleagues; (iv) access to appropriate facilities (LL, office or work space, tools and equipment, lighting and airconditioning, and so forth); and (v) status and prestige. The extent to which local governments can provide such facilities to staff whose remuneration exceeds subsistence levels, especially as compared to such conditions offered elsewhere, can have significant impact on their 63 Chapter 6: Improving District Infrastructure and Service Deivery: Staffing performance. Administrators, technical specialists and workers alike, no matter how well they are trained or qualified, cannot perform tasks efficiently and effectively in a poor workplace environment. The workplace environment encompasses both the physical environment Ci,.,, offices and workshops) and the tools, equipment and supplies required. Whether in the office or in the field, employees must have the essential resources to carry-out their assigned tasks. In this regard, the shortages of resources among most DAs are so severe that the productivity of their employees is reduced to extremely low levels. 5.38 Incentives Specific to Service at Local Levels. Some of the elements which might contribute to positive incentives for seeking employment in districts rather than Central Government includes: (i) ability to work close to home and in own cultural environment; (ii) stability of location of employment/avoiding prospects of frequent country-wide reassignments; (iii) expectation of observable impact of performance on own community's environment; (iv) reduced costs of living outside of Accra; (v) reduced disruptions in life-style and/or employment of spouses and children; and (vi) entry into organized political parties or local groups of political influence. 5.39 The advantages of public sector employment have traditionally centered around job security and access to benefits such as housing, transportation, special allowances and pensions which tend to offset the negative aspects of low public sector wages. In today's environment, these conditions are a critical factor in attracting qualified administrators and technical specialists for posting in all but the choicest urban centers. Typical comments on why staff cannot be found for key positions in rural DAs include (i) lack of adequate housing, (ii) lack of infrastructure U, electricity, telephones, water supply), and (iii) poor quality of family services Q&,, health, education). In addition, other factors such as greater uncertainty of getting paid on time, distance from professional colleagues and relatives, and being away from mainstream activities in their sectors, all combine to deter qualified staff from taking rural postings. D. Skills: Training Approaches 5.40 Ghana is sufficiently endowed with persons possessing required skills. The problem, however, is that qualified persons are either not attracted to public service or, their performance is sub-optimal. The inadequate performance at the district level is due to: (i) maldistribution of staff between District and Central Government levels and (ii) inadequate incentives for qualified persons to join government service or, for those in government service, to employ any new skills for improved performance. Nevertheless, sustaining improved performance of any organization is to some extent a function of staff training. Thus, the Government's approach to training continues to require attention. Current Training System: Supply-Driven 5.41 Relevant pre-employment and in-service training is provided in Ghana. Pre-Employment education and training is provided by three universities, six polytechnics, and seven colleges with a combined enrollment of 23,412 students (1990). Education and training is provided in a wide range of disciplines; including engineering, science, agriculture, medicine, law, administration, and other subjects (See Annex 23). However, a full 32 percent of students in tertiary education in 1990 were enrolled in teacher training programs (3,237/14%) and arts and social studies (4,217/18%). In addition, 250 secondary schools throughout the country enrolled 128,000 students; approximately 35,000 of whom are expected to graduate annually through 1993. Chapter 5: Improving District Infrastructure and Service Delivery: Stating 64 5.42 Relevant in-service training is provided by the six polytechnics on a part-time basis; as well as the Institute of Professional Studies (IPS), the Management Development and Productivity Institute (MDPI), and the Ghana Institute of Management and Public Administration (GIMPA). More specialized training is provided by the MLG's own Local Government Training School (LGTS) in Accra. The LGTS is responsible for providing short-term orientation and upgrading courses in local government administration and finance. To date, training provided by LGTS has been inferior to that provided by other Ghanaian institutions. Under the terms of the current Bank-financed Urban H Project, approximately US$1.9 million is being invested to rehabilitate the LGTS and a similar school in Tamale which had been closed for several years. 5.43 In-house training is also provided within various sector ministries and public enterprises. However, sector-specific training institutions often receive substantially inadequate budgets. Estimated numbers of employees to receive training are almost never realized (often below 50%), while the overstaffing of training centers causes a continual drain on meager budgets. In addition, training facilities, student lodging, and other infrastructure are not fully utilized because of incomplete works, poor maintenance, and general deterioration. 5.44 As in many LDCs, the training system provides a rigid syllabus related to promotion requirements, as defined by the qualification statements for each position within the Civil Service Establishment. Completing specific courses at institutions like GIMPA is a prerequisite for promotion to specific positions. Thus, training is driven by staff demand to meet rigid promotion criteria rather than by the changing demands of public sector performance. An additional problem is that training is often used to reward local government employees to compensate for low salaries and other benefits. This is particularly true of donor-financed overseas training for senior and mid-level staff. 5.45 As a result of the rigid structure of the current training system, no direct link has been identified between training programs and improvements in the delivery of government goods and services. Typically, training in a supply-driven system is characterized by objectives such as producing a given number of trainees in specific subject areas; as pre-determined by the training institutions which are financed independently. Such systems do not foster accountability of training institutions to the demands for improved performance of trainees' employing agencies. Under such circumstances, it is likely that investments in the workplace environment, tools, equipment and supplies would produce more immediate and measurable improvements in worker productivity than would additional investments in training as currently organized. Thus, there is a need for a thorough reform of the local government training system. A Demand-Driven Training System 5.46 Training for local government should be part of an overall strategy designed to improve productivity and efficiency in the delivery of government services. In determining what role training should play in that strategy, decision-makers should evaluate: (i) whether the training of individual employees will be of sufficient benefit to the specific DA in which they are employed; (ii) how the results of training can be measured; and (iii) whether in-house or external training institutions provide the most cost-effective way to achieve training goals. 5.47 If DAs are to benefit from training, the criteria for selecting trainees should be based on: (i) identified and measurable improvements and performance indicators resulting from training; (ii) the employee's anticipated length of tenure within the DA; (iii) the relevance of training to the employee's present or future job; and (iv) the impact on operations if the employee must be absent while being trained. Basically, the main question to be answered here is; "What specific tasks will the employee be able to do better as a result of training and how important is it to do so?" It does 65 ChaPter 5: Improving District Infrastructure and Service Delivery: Staffing not suffice to merely assert that if a course in, for example, accounting is completed that the result will be a better accountant. Quite often, the potential trainee has already received previous training in accounting. It is essential to thoroughly analyze what specific tasks the employee is still unable to perform properly ,, set up an accounts ledger, process invoices for payment, and so forth) and design a training program to address these shortcomings. Such an approach is the essence of a demand-driven training system as compared to the supply-driven system currently in place. 5.48 Serious consideration should also be given to systematic on-the-job training programs. Such programs, when conducted by experienced supervisors and senior staff and guided by professional trainers, are often the least costly and most effective. On-the-job training can also be enhanced through in-house courses presented by senior staff and specialists employed by external training institutions. Nevertheless, the key to effective on-the-job training is for trainees to learn-by-doing. That also includes learning from mistakes through systematic feedback from supervisors, senior staff, and trainers. 6 TOWARDS A MEDIUM-TERM DISTRICT DEVELOPMENT STRATEGY 6.1 A fundamental inconsistency currently exists between the devolutionary objectives of PNDC Law No. 207 and the structure of authority in place for the performance of planning, financing, and personnel management functions. In actual practice, the system is largely one of principal agency; where as the PNDC Law 207 envisages a system of discretionary authority. That lack of symmetry between policy and practice is not surprising as in practice some combination of both is required. Further, DAs are not yet ready to assume the whole range of responsibilities assigned to them as a result of resource constraints and lack of management and technical capacity. Therefore, implementation of Ghana's decentralization policy will need to be phased over a period of, perhaps, ten years. 6.2 The inconsistency between objectives and implementation arrangements, combined with no clearly articulated strategy for phasing in changes, is adversely affecting the functioning of both Central Government and DAs. Significant improvement of public sector performance is not possible until the current inconsistency is resolved. This Chapter outlines an approach for the further refinement of decentralization policy and a strategy for developing the institutional capacity required to implement it. Government must clarify its intentions concerning the primary functions that DAs should be expected to perform in the medium term and the manner in which Central and District governments should be organized so as to foster mutual support. As implementation of that strategy evolves over time, appropriate systems and procedures can be designed and established to improve the financial and operational efficiency and effectiveness of DAs. Therefore, recommendations concerning decentralization will be presented under two broad headings: (i) Roles (Section A) and (ii) Organizational Capacity (Section B). A. Roles 6.3 Allocation of expenditure and tax functions to various levels of government would determine the appropriate organizational arrangements. Tax assignment is in general guided by expenditure requirements; and therefore expenditure should precede tax assignment. Therefore Government needs to clarify its approach to decentralization in the context of the current economic reform program by identifying specific functions within subsectors which ought to be: (i)privatized; (ii) devolved to DAs; (iii) assigned to DAs as principal agents; and/or (iv) delegated to specialized institutions, such as parastatals, teaching or research institutions, or "special districts" eL, water districts). All other functions would then, remain with the Central Government. In addition decisions would also need to be made concerning which Central Government functions ought to be deconcentrated and which ought to be performed at the Center. 67 Chapter 6: Towards a Medium-Term District Development Strategy 6.4 In order to facilitate appropriate decision-making in the context of that approach, it will be necessary for Government to establish specific criteria to guide such decisions and some criteria which might usefully be considered is outlined below. Criteria for Assigning Functions 6.5 Role of Public Sector: Implications for Local Government. As discussed in Chapter II, Ghana's decentralization efforts need to be consistent with its overall economic reform program (ERP). An important feature of that broader policy framework are principles concerning the changing role and responsibilities of the public sector and the expanding role of the private sector. From that perspective, the discretionary responsibilities of DAs should be limited largely to deciding the quantity and quality of public goods and services to be provided and the monitoring and regulation of production of those goods and services. Actual production can then be left to the private sector (see Chapter II). International experience suggests that many reasons given as justification for decentralization relate to financing functions, while much of the criticism relates to lack of capacity to perform productio functions. Removing responsibility for production from DAs substantially reduces the need for many types of technical capacity at DA level. 6.6 Therefore, the skills required at the district level are primarily those of political decision- making, planning, and financing rather than those of actual infrastructure construction or management of service delivery. The former skills are those in which local authorities share a mutually supporting advantage with Central Government. For example Central Government has the comparative advantage on national, inter-sectoral integration issues and macroeconomic priority setting, where as local authorities have the comparative advantage on location specific investments and service delivery. In the case of financing, comparative advantage is largely determined by the sources of such financing. 6.7 Ghana's current system of decentralization, in pratic, reverses the relationship between local and central governments; giving central government responsibility for financing and assigning DAs responsibilities for production. Changing the allocation of responsibilities so as to benefit from the comparative advantages of the various levels of government and the private sector should result in the enhanced performance of DAs. If that is accomplished, it will not be necessary to undertake massive institutional development programs at district level. 6.8 Assignment of Functions: A Technical Checklist. The minimum economic responsibilities of Central Government include: (i) responsibility for managing monetary aggregates; (ii) elimination or minimization of internal tariffs; (iii) coordinating external tariffs; and (iv) maintaining coordinated legal and judicial systems protecting property and contracts. Under normal circumstances, centrally collected tax systems and central government control over DA expenditures are not necessary for central governments to maintain sound macroeconomic policies. However, as discussed in Chapters IV and V, if DAs are irresponsible with respect to deficit financing, Central Government control might be necessary. In such cases, discretionary authority models of decentralization are not appropriate. In addition, discretionary authority should not be devolved to DAs with respect to activities which have high national priority; except in those cases where local commitment to support the activity cannot be achieved without the direct participation of DAs. 6.9 Based on the discussion above, some possible technical criteria are presented below which might usefully be considered when assessing which functions ought to be: (1) assigned to any level of government, or to government parastatals, acting as principal agents ofbeneficiaries/clients/users; (2) devolved to DAs as discretionary authorities; (3) assigned to DAs acting as principal agents of Chapter 6. Towards a Medium-Term District Development Strategy 68 central governments; (4) deconcentrated to local levels within sector department; (5) delegated to parastatals, "special districts," or project management units; and (6) retained by central government. 6.10 Criteria for Top-Down Principal Agency. Consideration could be given by government to delegating to DAs responsibilities as Principal Agents for projects and operations which: (a) Have significant consequences for priority objectives of the country as a whole; (b) Require some location-specific adaptation to somewhat unique features of the environment within which project implementation and/or subsequent operations will need to take place; (c) Have relatively medium-range economies of scale as compared to implementation or operation on either a strictly local or country-wide scale; (d) Are relatively small-scale and labor intensive, but require significant levels of technical, logistical, and/or managerial backup and support; (e) Are more easily contracted-out to the private sector at local levels than would be the case at national or regional level; and/or (f) Involve activities which DAs do not now have the capacity to implement but for which it is desired they develop such capacity so as to serve as discretionary authorities in future. 6.11 Criteria for Bottom-Up Principal Agency at Community Level. Consideration could be given to assigning responsibilities to governments as Principal Agents of beneficiaries/clients/users for services which: (a) Require community-level location-specific decision-making because the area served has relatively unique characteristics- in terms of service requirements; (b) Do not have significant consequences for priority objectives of the country as a whole; (c) Require local participation, as determined by a community's population itself; and (d) Are not capital intensive; but (e) Have relatively high economies of scale; and (f) Do require supporting actions by other agencies of government or the private sector because of significant technical requirements in the design, implementation, or operation of the activity. 6.12 Criteria for Devolution (Local Discretionary Authority. Consideration could be given to devolving discretionary authority for planning and implementing projects and on-going operations which: 69 Chapter 6: Towards a Medium-Term District Development Strategy (a) Require location-specific decision-making because the area served by the project has relatively unique characteristics in terms of impact on project implementation and subsequent operations; (b) Do not have significant consequences for priority objectives of the country as a whole; (c) Have relatively low economies of scale as compared to implementation or operation on a country-wide scale; (d) Are relatively small-scale and labor intensive; (e) Can easily be contracted-out to the private sector for technical design, implementation, and operations; and/or (f) Do not require significant supporting actions by other agencies of government, either at higher levels or among semi-autonomous corporations (except, in the latter case, as contractors responsible to the local authority). 6.13 Criteria for Delegation to Parastatals, "Special Districts," or PMUs. Criteria varies somewhat depending on the type of organization to which responsibilities are delegated. Criteria for delegation to any type of organization include: (a) Requirements are technical and capital, rather than labor, intensive; and (b) Do not require significant supporting actions by other agencies of government. Criteria particular to one or another type of organization can also be specified: (a) Parastatals - - The range of activities are focussed on the delivery of a single, discrete, service (or very limited range of discrete services); and - The activities to be performed are of a commercial or quasi-commercial nature (but are considered "public goods" by virtue of tending toward natural monopolies). (b) Special Districts - - The range of activities are focussed on the delivery of a single, discrete, service (or very limited range of discrete services) and they are of a commercial or quasi- commercial nature (as in the case of other parastatals); but - Efficient and effective delivery of services require location-specfic decision-making because the area served has relatively unique characteristics; and - Such unique characteristics do not conform to the administrative boundaries of any of the more ordinary administrative boundaries of Government (e.g. DAs). (c) Project Management Units - limited to functions which are performed on a temporary basis and are not expected to be performed beyond the life of the project. For example, hiring consultants or technical assistance personnel and for procuring goods which are imposed by Chapter 6. Towards a Medium-Term District Development Strategy 70 each donor agency can usefully be performed by a "Project Management Unit;" as long as such units do not also perform functions which it is expected will be sustained beyond the foreign investment phase of the project. 6.14 Criteria for Deconcentration Within Departments or Other Agencies. Criteria for deconcentrating authority within various departments or other organizations are similar, but not exactly the same, as for delegating to DAs as principal agents. The one significant difference is that activities for which DAs are not likely to be assigned responsibility during the foreseeable future, but which do meet the other requirements of principal agency, should be deconcentrated in order to relieve district authorities of the burdens of implementation. 6.15 Retaining Authority at Center. At one level, criteria for retaining authority at Central Government level is the easiest to identify because it includes anything which is not devolved, delegated, deconcentrated, or organized in terms of principal agency. Nevertheless, from a more substantive perspective, the responsibilities of central governments should include: (1) responsibility for managing monetary aggregates; (2) elimination or minimization of internal tariffs; (3) coordinating external tariffs; and (4) maintaining coordinated legal and judicial systems protecting property and contracts. In addition, it is not prudent to assign discretionary authority to DAs for activities which have high priority for a country as a whole because it is unlikely that central governments will sustain local discretion over the longer-term. Anything about which central governments feel strongly enough that discretion is not a real political option should not, by definition, be devolved to any other level of government. 6.16 Fifially, as currently constituted, the regional level is a deconcentrated arm of Central Government. The logic of its position within the system suggests that it could have an over-sight role to play with regard to delegated and deconcentrated relationships between the center and districts; but that its role would be limited in the same way as the center's role under conditions of devolved discretionary authority at district level. Illustration 6.17 Applying the above criteria, it might reasonably be decided that in the primary education sub- sector, DAs would be responsible for: (i) selecting sites for primary schools; (ii) determining the specifications for construction and geographic coverage of each school; (iii) financing the basic construction of such schools; and (iv) hiring, promoting and dismissing teachers and school administrators. The central government Ministry of Education might reasonably be responsible for: (i) establishing basic curriculum standards; (ii) establishing professional qualifications for teachers and school administrators; (iii) financing basic curriculum materials; and (iv) setting examination standards. Monitoring adherence of district council schools to those standards appropriately set by the central government should also be the responsibility of the Ministry of Education, but such monitoring might appropriately be deconcentrated to the Ministry's professional staff assigned to provincial or district levels. This example should be viewed as illustrative, rather than prescriptive. The important point is that the assignment of responsibilities should not be defined in terms of an entire sub-sector, but rather in terms of specific functions within the sub-sector. Having done so, mutually reinforcing institutional arrangements among levels can be determined. 6.18 There are at least seven important implications of an approach which limits the responsibilities of DAs to the financing of nublig goods and services: 71 Chapter 6: Towards a Medium-Term District Development Strategy (a) The functions of Government, including DAs, would be substantially reduced in scope; (b) DAs would be more likely to have the capacity to perform the more limited range of economic management activities required; (c) Potential DA expenditures on commercial investments in private goods and services and the maintenance of such investments would be clearly prohibited in favor of private sector investment; (d) By not assuming responsibilities for providing and maintaining private goods and services and for producing and maintaining public goods and services, it should be possible to substantially limit DA expenditures on staffing; (e) Assuming a requirement that DA budgets must be balanced and that actual expenditures must remain within budget, district level expenditures will not negatively affect aggregate public sector deficits (where this is not the case and local credit markets are not well developed and capable of adequately appraising the credit- worthiness of DAs, discretionary authority ought not to be an option in any event); (f) A public sector service industry can be expected to evolve in the private sector to produce public sector goods and services provided by DAs, with the economic benefits which should accrue from competition in response to public sector demand; and (g) Competition within the private sector itself would be both enhanced and dispersed. 6.19 The decentralization system in Ghana does not fully recognize such criteria for determining the assignment of responsibilities among levels of government. Changing the allocation of responsibilities so as to benefit from the comparative advantages of the various levels of government and the private sector should result in the enhanced.performance of DAs. If that were accomplished, much of the criticism of DA inefficiencies might be resolved. Thus, the improvement of district administration sufficient to meet the more limited scope of its responsibilities would not require any massive institutional development program at local levels. Nevertheless, to effectively perform even these more limited responsibilities, it will be necessary to establish District Planning Units (DPUs), define their functions and roles clearly, and provide them with trained personnel and technical staff. B. Organizational Capacity 6.20 In order to develop adequate capacity to implement an effective decentralization policy, the strategy recommended here places particular stress on the need for: (i) program integration; (ii) appropriate phasing; and (iii) new approaches to Technical Assistance (TA) and training. Program Integration 6.21 Chapters m - V demonstrate the mutual incentive effects of systems for planning, financial management, and personnel management. Therefore, effectiveness of Ghana's decentralization policy requires mutual compatibility of the systems in place for the performance of those functions. In particular, reform of public sector performance is contingent on the broader restructuring of the Chapter 6. Towards a Medium-Term District Development Strategy 72 public sector implicit in the requirements of both Government's ERP and its policy of decentralization. In that regard, the focus of reform should be integrated, including the entire public sector at all levels; not just district level. Given the impact of DA economic, financial, and employment behavior on public sector performance, Government should fine-tune its decentralization arrangements. To do so effectively, it will need to involve a wide-range of organizational stakeholders; in particular MFEP, NDPC, MLG, key sector ministries, OHCS, PSC, and representatives from among DA members and staff assigned to district levels. 6.22 Therefore, the process should include assignment of responsibilities to broadly representative ad hoc working groups; each of which would: (i) focus on a specific issue affecting priority requirements of reform; (ii) be responsible for collecting and analyzing data; and (iii) preparing recommendations for action in the context of the Government's overall policy framework. Those working groups should not, in all cases, be limited only to government officials. The process recommended here requires that all participants are fully aware and understand the specific nature of policy constraints and the reasons for such constraints. The approach recommended here also requires that the working groups are held responsible for the work assigned to them. Although such groups should, when necessary, be assisted by specialized TA consultants/ advisors in order to benefit from relevant experience elsewhere. Phasing 6.23 Notwithstanding the interrelated nature of various program elements, it would not be possible to take all actions simultaneously. Therefore the strategy requires priorities to be set and improvements phased as: (i) no organization, including Government, is capable of undertaking all of the actions required simultaneously; (ii) staffing requirements to accomplish improvement objectives require increasing levels of professional skills; (iii) some actions are contingent on the completion of other actions; (iv) some actions require longer periods of time to accomplish than other actions; and (vi) the brief review of current performance demonstrates clearly that the initial building blocks for other actions are not yet effective or in place. Therefore, although the long-term objective is to comprehensively improve public sector performance in the context of its changing role, the recommendations provided in this report are based on the awareness that any such program must be appropriately phased over time. The discussion in this Section will be limited to identifying contingent relationships and the need to differentiate among short term actions from those requiring a longer term perspective. 6.24 The remainder of this Chapter will emphasize initial steps which could be initiated in the short-term, including (i) the preparation and dissemination of a strategy for implementing decentralization policy linked clearly and explicitly to Government's policy objectives; (ii) rationalizing the system for generating and sharing public sector revenue among government levels; (iii) improving expenditure budgeting and control among DAs; and (iv) rationalizing personnel management. 6.25 Decentralization Strategy Statement. Effective implementation of Government's decentralization program requires an explicit and clearly articulated Policy Statement which sets forth the framework guiding Government's reform effort; including a discussion of the changing role of the public sector and identification of cross-sectoral priorities within the scope of such changes. Too many government officials are not clear of the overall policy framework which ought to guide their own operational decision-making. Government's economic policy objective, its redefined role in the economy for the achievement of that objective, and the limited resources available require decisions on its investment and operational priorities. Priorities need to be clearly established for redistributing Chapter 6: Towards a Medium-Term District Development Strategy 72 public sector implicit in the requirements of both Government's ERP and its policy of decentralization. In that regard, the focus of reform should be integrated, including the entire public sector at all levels; not just district level. Given the impact of DA economic, financial, and employment behavior on public sector performance, Government should fine-tune its decentralization arrangements. To do so effectively, it will need to involve a wide-range of organizational stakeholders; in particular MFEP, NDPC, MLG, key sector ministries, OHCS, PSC, and representatives from among DA members and staff assigned to district levels. 6.22 Therefore, the process should include assignment of responsibilities to broadly representative gd hg& working groups; each of which would: (i) focus on a specific issue affecting priority requirements of reform; (ii) be responsible for collecting and analyzing data; and (iii) preparing recommendations for action in the context of the Government's overall policy framework. Those working groups should not, in all cases, be limited only to government officials. The process recommended here requires that all participants are fully aware and understand the specific nature of policy constraints and the reasons for such constraints. The approach recommended here also requires that the working groups are held responsible for the work assigned to them. Although such groups should, when necessary, be assisted by specialized TA consultants/ advisors in order to benefit from relevant experience elsewhere. Phasing 6.23 Notwithstanding the interrelated nature of various program elements, it would not be possible to take all actions simultaneously. Therefore the strategy requires priorities to be set and improvements phased as: (i) no organization, including Government, is capable of undertaking all of the actions required simultaneously; (ii) staffing requirements to accomplish improvement objectives require increasing levels of professional skills; (iii) some actions are contingent on the completion of other actions; (iv) some actions require longer periods of time to accomplish than other actions; and (vi) the brief review of current performance demonstrates clearly that the initial building blocks for other actions are not yet effective or in place. Therefore, although the long-term objective is to comprehensively improve public sector performance in the context of its changing role, the recommendations provided in this report are based on the awareness that any such program must be appropriately phased over time. The discussion in this Section will be limited to identifying contingent relationships and the need to differentiate among short term actions from those requiring a longer term perspective. 6.24 The remainder of this Chapter will emphasize initial steps which could be initiated in the short-term, including (i) the preparation and dissemination of a strategy for implementing decentralization policy linked clearly and explicitly to Government's policy objectives; (ii) rationalizing the system for generating and sharing public sector revenue among government levels; (iii) improving expenditure budgeting and control among DAs; and (iv) rationalizing personnel management. 6.25 Decentralization Strategy Statement. Effective implementation of Government's decentralization program requires an explicit and clarly articulated Policy Statement which sets forth the framework guiding Government's reform effort; including a discussion of the changing role of the public sector and identification of cross-sectoralpriorities within the scope of such changes. Too many government officials are not clear of the overall policy framework which ought to guide their own operational decision-making. Government's economic policy objective, its redefined role in the economy for the achievement of that objective, and the limited resources available require decisions on its investment and operational priorities. Priorities need to be clearly established for redistributing 73 Chapter 6: Towards a Medium-Term District Development Strategy scarce resources so that high priority operations are emphasized and can be implemented. Among those high priority operations is the reform of public sector management to improve Government's capacity to plan and manage its financial and human resources. In the absence of such reallocation of resources, Government function will remain under-funded and sub-optimization will continue. 6.26 Determination of economic development priorities requires a focus along two dimensions: (i) the actual financing and production of priority public goods and services and (ii) the functions which Government needs to perform so as to provide such public goods and services. Improving performance within high priority sub-sectors should be the focus of Government's program to improve the performance of the public service through decentralization. 6.27 In the short term, Government should identify a few specific sub-sectors and economic management functions for which, as a matter of first priority, it wants DAs to assume responsibility. Responsibilities for all other sub-sectors and economic management functions would, during the first phase of strategy implementation, remain the responsibility of Central Government agencies. However, during the first phase of strategy implementation, programs for improving local financial and human capacity should be designed and implemented so as to sequentially expand the responsibilities of DAs, in line with PNDC Law No. 207, commensurate with their ability to so do. 6.28 Collecting and Sharing Public Sector Revenue. Little incentive currently exists for DAs to improve the effectiveness of local revenue collection because of the perception that the central government will come to the financial rescue when necessary. Three significant changes must occur if that situation is to be improved. Thus, DAs must: (i) be held to the same strict standard of expenditure ceilings and control to which Government is now committed to holding Central Government ministries; (ii) have access to adequate sources of revenue; and (iii) improve their technical ability to design, establish, and implement revenue systems. 6.29 Although DAs are authorized to levy and collect property taxes, their capacity to assess and collect such taxes is severely limited. This problem has been addressed in Accra through a World Bank funded Accra District Rehabilitation Project completed on June 30, 1992. All properties in Accra have been revalued and a billing and collection system based on revised assessments has been installed. The property rates revenue has increased from e71 million in 1988 to 160 million in 1991. There is still considerable potential to further improve the collection performance of Accra Metropolitan Authority. Similar assistance is being provided to other four largest urban districts (Tamale, Kumasi, Tema and Sekondi/Takoradi) through World Bank assisted Urban II Project. However, it is unlikely that property taxes would provide a sufficient revenue base for the rural districts. Therefore, the comprehensive review of the national tax structure recommended in Chapter IV should include explicit attention to the resource requirements of DAs and reassignment of one or more tax sources from central to local levels. To undertake such a review and assist DAs to improve their revenue generating capacity under any new public sector revenue system, technical assistance should be provided to both central and district levels of government. 6.30 Reducing Central Government Transfers. As a first step it may be advisable to cease general payment of DA staff salaries and convert this salary grant into a recurrent revenue grant payable on a monthly basis. Appropriate safeguards would need to be incorporated to ensure the purpose of the payment was being achieved, and such a change would raise other personnel and staffing issues which would have to be addressed. This action should remove the incentive for overstaffing at DA level. It will be necessary to implement changes incrementally so that, for example, a specifically identified element of one or more decentralized budgets could be the subject of transfer from GOG to the appropriate DA depending upon the latter's capacity. As experience develops, gradual transition to the ultimate objective could be achieved. Chapter 6. Towards a Medium-Term District Development Strategy 74 6.31 Providing Access to Investment Credit. Under the provisions of LAW 207, DAs have the authority to obtain loans from domestic sources. However under current conditions, DAs are not considered credit-worthy. Although various options might be considered to provide credit facilities to DAs i.e., GOG could guaranty such loans or the GOG could establish a revolving development fund that could be used to provide capital for selected types of DA), the recommendation is repeated here (see Chapters IV and V) that credit to district level government be subject to Central Government approval. Such approvals should be limited to a very small number of priority developments with simple selection criteria. Such facilities could be expanded gradually as experience was gained, the financial discipline of individual districts established, and appropriate expertise developed. Proposals for creating district development funds should be subjected to the limitations expressed above. Great care should be exercised in assessing the conditions, potential effectiveness, and risks of establishing such funds in the near term. The first priority at this point should be to establish mechanisms for effectively monitoring the financial performance of DAs during the first 3 or 4 years under the new 1992 Constitution. 6.32 Improving Expenditure Budgeting and Control. Effective control over actual expenditures is an absolute prerequisite to achieving fiscal stabilization in the short-term and improving public service performance over the longer term. Without financial discipline, policies, plans, and budgets have little, if any, impact on the actual use of resources. At best, high priority initiatives will succumb to procedural inertia; at worst, resources will continue to be maldistributed in the interests of those with actual expenditure authority and/or physical access to such resources. This is particularly the case with reference to public service reform. For example, initial targets for staff retrenchment should be established in fiscal terms, rather than in terms of specific numbers of personnel or positions to be reduced. However, such an approach cannot be implemented without effective expenditure control. Budgets should be seen as an input to financial planning and provide targets against which actual performance should be measured on a continual basis so that management can take corrective actions as and when necessary. The financial resources available to district assemblies will increase significantly as Government's decision to transfer 5% of total Government revenue is implemented in 1993 and sources of ceded revenue are expanded. In addition, DAs, particularly the large urban ones, are improving their own internal revenue generation by updating their tax and user charge bases and improving their billing and collection performance. Therefore the system of accounting and auditing for these large sums must be improved to ensure that effective reporting systems for both revenue and expenditure are in place and that precise financial status of DAs could be determined at any given time. 6.33 Rationalizing Personnel Management. The overall responsibility for all government positions and staff is retained by Central Government in accordance with the Civil Service Act 1960 and the new Constitution of 1992. However, in terms of the objectives of PNDC Law No. 207, two options for the restructuring of the Civil Service are being considered in Ghana. The first option is that of dividing responsibilities for local level staffing to DAs, and the second is that of creating a unified DA service. The issue essentially is to provide right environment to attract and retain qualified staff in DAs and provide adequate resources to enable them to carry out their job functions. 6.34 Moving Toward Devolved Personnel Policy and Management. Inherent in the promulgation of Law 207, is the requirement for a critical mass of competent decision makers, technocrats and workers within the jurisdiction of each of the DAs. This critical mass is, and will be, a primary consideration in determining the success or otherwise of the decentralization objectives of the government. For whatever physical and financial resources are ultimately available to the DA's, their effective use can only be accomplished through competent decisions and actions taken by the leaders 75 Chapter 6: Towards a Medium-Term District Development Strategy and workers in each District. In this regard, it is essential to relate the present capacity of the workforce in the DA sector to the demands presented by the new DA structures so that a coherent strategy can be developed to correct workforce deficiencies. 6.35 Data collected on the personnel levels in the sample districts provide only limited information on numbers of staff, grade levels, job categories, and ratios of approved positions to staff in post. Additional information is provided on total salary costs and budgeted payrolls versus actual payrolls. While this information shows a variety of employment patterns between the different districts, there are no data to suggest whether those employed are effectively utilized or are adequately qualified for their job positions. There are indications however, that based upon the limited amount of functions performed and services delivered, the capacity of DA personnel to make decisions and carry out work assignments is severely limited. These limitations are, due to a wide range of financial, physical, administrative, and individual competency constraints that impact upon workers ability to carry out their jobs. Another critical factor affecting performance at the DA level, is that policy decisions are often made without regard to implementation capacity of available workforce. As a result, decisions are frequently made to embark upon one exercise or another without the necessary human resource base to carry them out. 6.36 Despite the poor performance indicators noted above, there is ample evidence to show that in fact, there exists in Ghana a sizable potential pool of human resources that would, if properly recruited and managed, be able to adequately respond to the requirements of Law 207. This evidence includes (a) the large numbers of graduates from the secondary and tertiary education systems who are present in the country, (b) the extensive training and technical assistance inputs provided to the sector over the past decade, and (c) the existence of a variety of schools and training centers capable of improving the competence of DA personnel (see Annex 23). In addition, a review of the various functions outlined in Law 207 indicates that there are few, if any, job skills that are not related to normal occupational categories (e.g. bookkeeping, office management, surveying, teaching, etc.) for which existing members of the workforce have already been trained, and/or for which related training is available in country. 6.37 The key therefore to addressing the human resource aspects of DA performance, rests with the proper matching of available financial and physical resources with a compatible human resource management plan that will make maximum use of all resources in an integrated manner, while ng setting objectives that are beyond the capacity of implementing personnel. The issue thus becomes one of establishing priorities in terms of government's willingness to provide the right environment to attract and retain qualified DA employees, and provide adequate resources so that they can carry out their job functions. 6.38 In response to the analysis of the human resource factors and issues reviewed in this study, a viable strategy can be developed to permit a logical evolution of the DA functions proposed in Law 207. This strategy must be closely integrated with other aspects of the Law so that the level of human resources available at any given time match the tasks at hand. Thus, objectives requiring better qualified, workers than existing, or available from the labor market, should be reduced in scope or delayed until such workers are in place. It is this issue of properly matching resources to desired goals, or vice versa, that should be the guiding principle for implementing the following: (a) Attracting and Retaining DA Employees. No matter what structural and organizational arrangements are made in the implementation of Law 207, Government should improve career opportunities in the sector. In this regard, Government should articulate a career structure for each occupational category that Chapter 6: Towards a Medium-Term District Development Strategy 76 includes (i) professional recognition, (ii) competitive salaries and benefits, and (iii) procedures for career advancement based upon merit. It must be understood that without suitable incentives to attract and retain qualified workers, the sector will continue to face severe workforce shortages thus preventing the achievement of the objectives of Law 207. (b) Standardized Procedures for Functional Planning. Recognizing the need for a consistent approach to functional planning that would facilitate optimum use of human resources, Government should encourage standardized procedures that would permit planners at the DA level to correlate political choices and decision making with the implementation capacity of DA personnel. Through this approach, planners would be provided with criteria that would stimulate more logical thinking in balancing available resources with DA objectives. (c) Personnel Management. At present little attention is paid to proper management of the workforce at the DA level. Although the personnel management function exists, it is almost always focussed upon record keeping, without any consideration of proper staff deployment or efficient use of worker capacity. Government should encourage the dissemination of good personnel management practices through support to DA management training programs and a communication network that would focus upon issues of concern to DA managers. (d) Training for DA Workers. Under the World Bank assisted Urban II Project, DA training facilities are being expanded and strengthened. In addition given many common occupational skill categories required for DA occupations, Government should ensure that existing administrative, management and technical training institutions are provided with adequate support and resources so that they can offer in-service courses, workshops, and other training services to the sector on a continual basis. 6.39 In this regard, no amount of training, emoluments, or other inducements will have any impact upon productivity unless those responsible for the delivery of DA services are also given the means to do so. In order to address this issue, the following actions are suggested: (a) Resource Management. There is a need to establish specific resource requirements needed to enable DA's to deliver the services for which they are responsible. These requirements include equipment, tool and material schedules for each DA department which would be related to (i) the extent of work planned during the fiscal year, and (ii) the amount of work that is expected to be delivered by each employee or groups of employees. These schedules would then form the basis for planning the delivery of all DA services and would help to bring political decisions in line with local capacity. (b) Rehabilitation. The establishment of planned workplace rehabilitation programs that would combine the requirements noted in (a) above with annual budgetary allocations that would permit building and facility repairs, and the purchase of new tools, equipment and materials to bring the implementation capacity of the DA's up to acceptable levels. 6.40 It is not possible to provide detailed estimates of costs for achieving necessary improvements because needs vary from one district to another. Therefore, a detailed appraisal is necessary on a 77 Chapter 6: Towards a Medium-Term District Development Strategy district-by-district basis. Nevertheless, only a broad estimate of potential costs is possible. Such costs could be spread across several DAs and, perhaps shared, with Central Government where a clear benefit accrued to it because of the responsibilities assumed by DAs as principal agents. There is also considerable potential for increasing both the quality and quantity of staff at district levels through the transfer of appropriately qualified staff from Central Government. 6.41 There are three possible ways in which the present situation could be improved upon to closer meet the goals of decentralization. Most of the central government departments already have spatial structures based on groups of districts, but the groupings vary between different departments. If these could be rationalized, economies of scale, certainly in support functions and probably even in the overall number of professional staff required, could be achieved. A second alternative would be to form similar groups at the regional level. The third option would be for districts to be allocated general purpose engineers who would be responsible for those sub-sectors where DAs would be the discretionary authority and the principal agent. They would also be the technical liaison with those central government departments and corporations which retain responsibility. Given the fairly extensive use of the private sector already and government's policy to extend this, there seems to be no professional reason why a single engineer could not handle all of these functions at all DAs other than the large municipal and metropolitan ones. The logical home, if realistic career aspirations are to be met, for these personnel would be the MLG. However, it is to be expected that the existing departments such as DFR, PWD, etc. would resist losing a substantial proportion of their staff. A combined approach may be best where, initially, the mobile units are set up. As staff become more familiar with their group of districts and their needs, specific district postings could be made and the mobile units gradually wound up. Five years would be a realistic time scale for achieving this. Technical Assistance and Training 6.42 Technical Assistance (TA). Significant amounts of TA should not be required for implementation of improved public sector performance at district levels. Rather, the program to address the issues discussed in this report should rely on local institutions within which relevant local knowledge already exists. Nevertheless, to the limited extent that some TA inputs might be necessary to assist Ghanaian organizations and staff in the implementation of a program to improve local government performance, it should take the form of "coaching" or "mobilizing" on-the-job experience of teams composed of Government staff, rather than on individual Government staff counterparts. Such an approach requires qualitatively different behavior on the part of TA personnel than that required for the performance of a specific function to meet a critical short-term requirement. It also requires a different relationship with those Government staff with whom TA advisors/consultants work. Key to TA in support of institutional development is that responsibility for specific outputs, other than improved capacity itself, remains with Government staff and is not transferred to the advisor/consultant. An important principle of such an approach is that any TA personnel employed to assist the GOG in their local government reform effort should not reside for any lengthy period in Ghana in order to avoid the tendency to "take over" the substantive work from GOG staff. Rather they should return to Ghana on a regularly scheduled basis to: (i) review the work undertaken under the terms of previously established quarterly work plans; (ii) assist GOG staff to correct technical faults in such work; and (iii) assist in the formulation of the next quarterly work plan. Successive visits of ten days or so every three or four months should be sufficient to provide such assistance. 6.43 Training. Training by itself will not achieve improved performance if the systems within which staff must operate and incentives for staff are inappropriate. With that qualification in mind, the first priority, and immediate, training requirement is for "accountants" (bookkeepers) within ministries and DAs. Longer term training should focus on basic budget preparation skills and on-the- Chapter 6: Towards a Medium-Term District Development Strategy 78 job experience related to structured interaction with TA personnel. The training component under the Bank assisted Urban II project should provide the framework for achieving the stated objectives as facilities are being expanded and improved, and capacity for assessing, implementing and monitoring of training in MLG is being enhanced. C. Next Steps: Actions Proposed for 1993 and 1994 6.44 At the beginning of this Chapter, it was suggested that achieving the full objectives of Ghana's decentralization policy is likely to require an implementation program phased over a period of, perhaps, ten years. The elements of such a program have been outlined in Sections A and B above. Although it might take as much as ten years to fully implement program components that address each of those elements, improvements in the functioning of Ghana's decentralized system should be observable within three years following commencement of the program. An initial 36 month action program is outlined in Figure VI-1. 6.45 The most fundamental problem affecting Ghana's current attempt to implement the decentralization policy embodied in PNDC Law No. 207 and the new Constitution is the inconsistency between the devolutionary objectives of PNDC Law No. 207 and the structure of authority in place for the performance of planning, financing, and personnel management functions (see Chapters M - V). As stressed throughout this Report, the system in place is largely one of principal agency rather than devolution as envisaged in PNDC Law No. 207. Significant improvement of public sector performance in Ghana is not possible until that inconsistency is resolved. Resolving that asymmetry between systems in place and the Government's stated policy objective must be the cornerstone of its strategy for implementing decentralization. 6.46 Preparing an appropriate policy framework and implementation strategy which can be expected to gain sufficient support for effective action is difficult in Ghana. A relatively large number of interests are potentially affected by decentralization efforts. In addition to the five-fold objectives of Ghana's decentralization policy itself (as outlined in Chapter II), alternative forms of decentralization are likely to have different types of impact on at least two other of Ghana's strategic ERP objectives: (i) encouraging private sector investment/operations and (ii) effectively managing monetary and fiscal policies by avoiding local government deficit financing and/or borrowing. Finally, the bureaucratic interests of Central Government decision-makers and staff can also be affected. Therefore, the implementation program outlined in Figure VI-1 should be understood, at least in its initial phases, as a process to facilitate explicit attention to the trade-offs among those seven policy objectives when making decisions with respect to decentralization policy and action. Such trade-offs should be viewed as relative, not absolute; that is as matters of emphasis rather than in terms of absolute choices among one or another. All of the objectives should be achievable to some degree. However, to do so will require a strategy of optimization, rather than idealization. 6.47 The current situation, as outlined in this Report, presents practical decision-makers responsible for refining and implementing Ghana's decentralization policy with very broad choice. Ideally, Ghana's decentralization policy should contribute to the achievement of all of the desired objectives identified above. Yet, contributing to the achievement of all of those objectives in equal measure is impossible. It is essential that assessments of organizational options be made in terms of maximizing preferences among those objectives. Figure VI-1 IMPROVING LOCAL GOVERNMENT PERFORMANCE: INITIAL ACTION PROGRAM Operational Objective Activities Responsible Partycfes) Estimated Time Reaired Prepare and disseminate clear ** Establish specific criteria to guide decisions ** President's Office (in ** Months 1-9 statement of decentralization about which specific functions (e.g., planning, consultation with policy revenue generation, financial policy formulation Parliament) and expenditure management, personnel policy formulation and management, and ON), within specific subsectors, ought, as a matter of National priority, to be: (1) assigned to DAs as Principal Agents; and/or (if) Delegated to specialized institutions, such as parastatals, teaching or research institutions, or "special districts" (e.g., water districts) * Establish a Committee of Parliament * Parliament * Month I * Establish a Working Group of GOG staff and * President's Office (in * Month 2 other interested parties responsible to the consultation with Committee of Parliament Parliament Committee) * Design, organize, and conduct Action-Planning * Orqanized by Working * Months 4-5 Workshops to prepare outline of strategy to Group (w/assistance of be proposed to President's Office. Partici- professionally skilled pants in workshop should include members of workshop facilitators), Parliamentary Committee and Working Group, as sponsored by Parliament well as representatives of MoF, PSC, ONCS, key Committee Line ministries, relevant statutory authorities (LL, DFR, GSC, IDA), DAs, and NGOs. * Assess potential effectiveness of alternative * Working Group and * Months 6-9 initial assignments of responsibilities to DAs Parliamentary Comittee Disseminate policy statement ** MLG ** Month 11 Design orientation program: ** MLG ** Months 11-16 * for DA councilors * for Parliamentarians * Central Government ministries' staff ** Conduct orientation program: -- MLG -- months 18-28, assuming the * for DA councilors following: (i) 3 orien- * for Parliamentarians tation teams; (if) each * Central Government ministries' staff orientation team conducts one orientation session every 3 weeks; (iii) each of 3 KAs oriented separately; (iv) other 107 DAs oriented in groups of 3; (v) 10 orientation sessions are sufficient for Parliamentarians and Central ministries (continued) Figure VI-1 (coninUed) Operational objective Activities Responsible Party(les) Estimated Tise Reuired Based on Statement of -- Establish priorities among economic management - W Norking Group established -- Months 10-23 Decentralization Policy (see functions (e.g., planning, revenue generation, by President (in consult- above), prepare strategy for financial policy formulation and expenditure ation with Parliament) implementing decentralization management, personnet policy formulation and policy linked clearly and management, and O&M) and sub-sectors by explicitly to GOG's strategic * Designing, organizing, and conducting Action- * Working (sub)Group * Months 12-13 economic reform policies Planning Workshop to prepare initial guidance Chaired by MoF with regarding such priorities (participants in mebership of MLG, workshop should include Mebers of Parliament NDPC, and representa- Comfittee and Working Group, as welt as tfon of pilot DAs (see representatives of MoF, PSC, OHCS, key line below) ministries, relevant statutory authorities (s.a,, DFR, GUSC, IDA), DAs, and NG0s) and * Organizing Working Groups/Task Forces to * For economic management * Months 14-17 prepare detailed proposals to President's functions, Working office. (sub) Group (see above; for subsectors, Parliamentary Conittee Design phased Implementation program ** Working (sub)Group Chaired -- Months 18-21 by MoF with membership of NLG, NDPC, and representa- tion of pilot DAs (see below) * Manage implementation program ** MLG -- Month 24 (Initiate) Sharpen DAs' focus on realistic ** Identify a few specific miorit sub-sectors and -- President's Office (in -- Months 18-21 span of responsibilities economic management functions for which gII DAs consultation with should assume responsibility Parliament) -- Among 3 MAs and 2 largest DAs, Individually -- District Assenblies ** Months 22-29 identify a few specific rj economic manage- ment functions, within specific subsectors, on which each of them wilt focus (the coubination of economic management functions and subsectors will vary by individual MA/DA) * Within each of 5 MAs/DAs, establish a working * DEO in consultation * Month 23 group of councilors and staff with Assembly * Design, organize, and conduct Action-Planning * Organized by Working * Months 25-26 Workshops to prepare guidelines for District Group (w/assistance of Development strategy/priorities. Participants professionally skilled in workshop should include members of workshop facilitators), Parliament from district, councilors, and key sponsored by District staff (such as financial officers, planners, AssembL engineers), as well as representatives of relevant statutory authorities (S,&, DFR, GUSC, IDA), and NGOs. * Establish District Planning Units (DPUs) in * 5 KAs/DAs * Month 25 5 MAs/DAs * Clearly define roles and functions DAs (with NDPC) * Months 26-29 * Provide trained personnel * NDPC * Month 26 (continued) Figure VI-1 (conned) Operational Objective Activities ResMonsible Party(fes) Estimted Tim Required Sharpen DAs' focus on realistic ** Repeat above with group of 10 smatter pilot DAs -- MLG Months 25-33 span of responsibilities * select initial group of 10 smatter pilot DAs * MLG * Month 25 (continued) * Within each of the 10 pilot DAs, establish a * DEO in consultation * Month 26 working group of councilors and staff with Assembly * Design, organize, and condcct Action-Planning * Organized by Working * Months 28-29 Workshops to prepare guidelines for District Group (w/assistance of Development strategy/priorities. Participants professionally skilled in workshop should include members of workshop facilitators), Parliament from district, councilors, and key sponsored by District staff (such as financial officers, planners, Assemly engineers), as well as representatives of relevant statutory authorities (L, DFR, GWSC, IDA), and NGOs. * Establish District Plaming Units (OPUs) in * 10 DAs * Months 28-32 all pilot districts * Clearly define roles and functions * DAs (in consultation * Months 29-32 with NDPC) * Provide trained persomet * NDPC * Month 29 ** Repeat above with 2nd group of 10 smter DAs ** MLG -- Months 28-36 * Select 2nd group of 10 pilot DAs * MLG * Month 28 * Within each of the 10 pilot DAs, establish a * DE in consultation * Month 29 working group of councitors and staff with Assenbly * Design, organize, and conduct Action-Plaming * Organized by Working * Months 31-33 Workshops to prepare guidetines for District Group (w/assistance of Development strategy/priorities. Participants professionally skilled in workshop should include meabers of workshop facilitators), Parliament from district, councilors, and key sponsored by District staff (such as financial officers, planers, Assembly engineers), as well as representatives of relevant statutory authorities (,LL, DFR, GWSC, IDA), and NGDs. * Establish District Plaming Units (OPUs) in * 10 DAs * Months 31-35 all pilot districts * clearly define roles and functions * DAs (in consultation * Months 32-35 with NDPC) " Provide trained persomel * NDPC * Month 32 (contimed) Figure VI-1 (continued) -- - - - *----------- * * * -------- - - - - - - - - - - - - - - - . . . . . . . -. . . .. . . . .. . ....... ........ .......... ......... .... Operational Obiective Activities RespMoible Party(ies) Estimated Tim Required Rationalize system for -- Conduct comprehensive review of the national tax --President's Office in --Month 1 - 9 generating and sharing public structure, including explicit attention to consultation with Parliament sector revenue among government resource requirements of DAs (assisted by TA) levels -- Organize Working Group to assess DAs' capacity to --President's Office --Month 1 assess and collect taxes and fees ** Conduct assessment of DAs' capacity to assess Working Group --Month 2 - 5 and collect taxes and fees -- Prepare program to improve DAs capacity to assess --MLG (TA) DAs --Month 6 - 12 and collect taxes and fees ** Cease general payment of DA staff salaries and --President's Office (in con- --Month 13 convert salary grant into a recurrent revenue suttation with Parliament) grant payable on a monthly basis -- organize Working Group to assess appropriateness --President's Office --Month 14 and feasibility of establishing District Development funds -- Assess potential effectiveness, as well as --Working Group --Month 15 - 18 benefits and risks, of establishing District Development Funds -- Implement program to improve DAs capacity to --MLG --Month 19 - 24 assess and collect taxes and fees in 5 MAs/DAs * Design training program * MLG/Training Inst. --Month 10 - 11 * Train trainers * MLG/Training Inst. --Month 12 - 15 * Train 5 MA/DA financial officers in system * MLG/Training Inst. --Month 16 * Assign 5 financial officers to 5 MAs/DAs * Provide appropriate equipment and facilities 5 MAs/DAs --Month 16 -- Implement program to improve DAs capacity to --MLG assess and collect taxes and fees in 1st Group of * 10 DAs --Month 25 - 30 10 regular Pilot DAs * Train additional 10 DA financial officers in * MLG/Training Inst. --Month 25 - 26 system * Assign a trained financial officer to each of * PSC/OHCS --Month 27 10 pilot districts * Provide appropriate equipment and facilities * 10 DAs --Month 27 ** Implement program to improve DAs capacity to --MLG --Nonth 31 - 36 assess and collect taxes and fees in 2nd Group of 10 Pilot DAs * Train additional 10 DA financial officers in * MLG/Training Inst. --Month 31 - 32 system * Assign 2nd group of 10 trained financial * PHC/OHCS --Month 33 officers to 2nd group of pilot districts * Provide appropriate equipment and facilities * 10 DAs --Month 33 -- Provide access to adequate sources of DA revenue MOF/MLG by reassigning one or more tax sources from Central to DA levels (continued) Figure VI-1 (condnued) Oerational Oblective Activities Responsible Party(fes) Estieted Time Requfred Improve expenditure budgeting -- Establish policy for appropriate scope of public President's Office (in con- and control among DAs expenditure at DA levels similar to those to suttation with Parliament) -- Month I - 3 which Central Government ministries must currently adhere -- Disseminate policy, including orientation MLG -- Month 4 - 8 programs for DA level councilors and staff ** Design effective system for monitoring financial MLG ** Month 9 - 12 performance of DAs ** Establish related system for accounting and MLG -- Month 13 * 18 auditing in each of the 3MAs and 2 large DAs * Design training program * MLG/Training Inst./DAs -- Month 13 * Train trainers * MLG/Training Inst. ** Month 14 - 15 * Train 5 MA/DA financial officers in new system * MLG/Training Inst. -- Month 16 - 17 * Assign 5 financial officers to 5 MAs/DAs * PSC/OHCS -- Month 18 * Provide appropriate equipment and facilities * MLG/DAs -- Month 19 Establish related system for accounting and MLG ** Month 20 - 27 auditing in each of 10 regular Pilot DAs * Train additional 10 DA financial officers * Training Inst. -- Month 20 - 22 * Assign trained financial officers to initial * PSC/0HCS ** Month 23 group of 10 pilot districts * Provide appropriate equipment and facilities * NLG/DAS -- Month 23 Establish related system for accounting and MLG -- Month 28 * 34 auditing in each of the group of 10 regular DAs * Train additional 10 DA financial officers * Training Inst. ** Month 28 - 30 * Assign 2nd group of trained financial officers * PSC/OHCS -- Month 31 to 2nd group of regular pilot districts * Provide appropriate equipment and facilities * MLG/DAs -- Month 31 Rationalize Personnel System -- Assess alternative personnel systems ** President's Office (in -* Months 1-9 consultation with Parliament) * Establish a Committee of Parliament * Parliament * Month I * Establish a Working Group of CO staff and * President's Office (in * Month 2 other interested parties responsible to the consultation with Committee of Parliament Parliament Committee) * Design, organize, and conduct Action-Planning * Organized by Working * Months 4-5 Workshops to outLi Review to be conducted by Group (w/assistance of working groups, to result In recommendations Professionally skilled to Parliament through President. Participants workshop facilitators), in workshop should include members of Parlia- sponsored by Parliament mentary Committee and representatives of MLG, Committee MoF, PSC, OHCS, DAs, and National Association of Local Authorities of Ghana (NALAG) * Assess DAs' capacity to establish and manage * Working group * Months 6-9 own personnel policies and systems * Assess Central Government's capacity to manage * Working group * Months 6-9 personneL policies suitable to all DAs (continued) Figure VI-1 (condaued) -- ----------- ----*------..-- ** * -..-* * - - - - - - - - -- - - - - - - - - - . ... - -.. ........... - -- ....-..... ...-. .. . . . - operationl Objective Activities Responsible Party(les) Estimted Time Reqired Rationalize Personnel System -- Assess alternative personnel systems (continued) (cantinued) * Assess costs and benefits of each alternative * Working group * Months 6-9 personnel system in terms of probable impact on DA performance and consistency with overall strategic economic reform model -* Prepare program to improve 5 MAs/DAs capacity to -- Depends; 5 MAs/DAs or PSC -- Months 11-15 establish their own persomret policies (scope and OHCS varies depending on system actually established *- Establish selected personnet system in 5 MAs/DAs -- (as above) -- Months 16-20 * Recruit consultants * (as above) * Months 16-18 * Recruit 5 Personnel Managers and staff * (as above) * Months 16-18 * Design orientation program for councilors * MLG (in consultation * Months 20-23 with PSC and OHCS) * Implement orientation program for councilors * MLG * Month 26 * If labor market system adopted, pass * 5 MAs/DAs * Month 18 legislation establishing personnel policy in each of the 5 MAs/DAs * Recruit staff in each of the 5 MAs/DAs (if * Depends; 5 MAs/DAs g * Month 20 (initiate) labor market system adopted, provide oppor- PSC and OHCS tunities for current Central Government personnel to transfer to direct DA employment) * Provide appropriate equipment and facilities * (as above) * Month 16 -* Establish selected personnet system in initial Depends; 10 DAs 9E PSC and -- Months 18-22 group of 10 regular Pilot DAs OHCS * Recruit 10 Personnel Managers and staff * (as above) * Months 18-20 * Design orientation program for councilors * MLG (in consultation * Months 22-25 with PSC and OHCS) * Implement orientation program for councilors * MLG * Month 28 * If Labor market system adopted, pass 10 DAs * Month 20 legislation establishing personnet policy in each of the initial grou of 10 pilot DAs * Recruit staff in each of the 10 pilot DAs (if * Depends; 10 DAs gE PSC * Month 22 (initiate) tabor market system adopted, as above for and OHCS Central Government personnel) * Provide appropriate equipment and facilities * (as above) * Month 18 -- Establish selected personnel system in 2nd group ** Depends; 10 DAs 9 PSC and ** Months 20-24 of 10 Pilot DAs OHCS * Recruit 10 Personnel Managers and staff * (as above) * Months 20-22 * Design orientation program for councilors * MLG (in consultation * Months 24-27 with PSC and OHCS) * Implement orientation program for councilors * MLG * Month 30 * If labor market system adopted, pass * 10 DAs * Month 22 legislation establishing personnel policy in each of the 2nd group of 10 pilot DAs * Recruit staff in each of the 2nd group of 10 * Depends; 10 DAs g PSC * Month 24 (initiate) pilot DAs (if tabor market system adopted, and OHCS as above for Central Government persomnet) * Provide appropriate equipment and facilities * (as above) * Month 20 Annex 1 GHANA: STRUCTURE OF GOVERNMENT (1992 Constitution) Funerla LEVEL Legislative Fecuti Judicial National Speaker Parliament President Chief CHR Judicial I Attorne Justice &m Councid General AJ Concil Cabinet P S Su cep] of Cout State Ministers Court of USC Appeats DPC Ministries High Court Regionat Regional Ninisterial Regional Minister Branch Tribals Offices Regional Concil District Presiding District District Ministerial Courts of staimry ember y Executive rst Courts Officer Offices Instance = Line Relationship ----------------- Ex Officio or Advisory Annex2 GHANA - MINISTRY of LOCAL GOVERNMENT: ORGANIZATION CHART Minister Chief Director Inspectorate Unit Environmental Protection PLanning Counci L unit General Administration Unit Couunity Parks Toun Births Rural Development and and and Housing Department Gardens Country Deaths and Department Planning Department Cottage Department Industries Department Annex 3 Page 1 of 3 DEFINIIONS: TYPES of DECENTRALIZATION 1. The term decentralization, as currently used by different people in Ghana, encompasses at lease five different structures of vertical organizational arrangements among government levels and a further variety of horizontal arrangements at each level. The nomenclature for three of the vertical types is often encountered in the literature: (i) deconcentration; (ii) delegation; and (iii) devolution. The other two types, princpal agency and Hybrid, identify real situations which are not captured by the other three labels. Deconcentration: Branch Ofice Model 2. In deconcentrated systems, selected functions are assigned to non-central government levels within sector ministries or other sector-specific national agencies. A less abstract way to think about deconcentrated institutional arrangements is in terms of a Branch Office system. In such a system, local governments do not exist as discrete entities; at least with respect to the specific functions for which Central Government ministries are responsible. Thus, with respect to those functions, Government exists at local levels in the form of discrete ministry offices; without any mechanism at the local level for mandatory horizontal integration. Despite geographic dispersion of ministry offices and despite Central Government employees stationed in branch offices, deconcentration centralizes power within Central Government organizations. Delegation: Independent Subsidiary Model 3. Delegation is the assignment of responsibility for planning, implementing, or maintaining sector investments to parastatals and other semi-autonomous government agencies. Examples of such semi-autonomous organizations are: (i) parastatals; (ii) special purpose districts; and (iii) enclave project management units (PMUs). If not wholly independent, semi-autonomous agencies within a delegated system are meant to be only nominally responsible to sector ministries. 4. Examples of delegation to parastatals abound in Africa; at least theoretically. To the extent that state-owned enterprises (SOEs) are allowed substantial autonomy with regard to operational decision-making, the relationship between such enterprises and the governments which own them are appropriately understood to be delegated. It is also sometimes the case that functions are delegated to an entity which, in turn, deconcentrates responsibility for internal managerial and administrative systems to its own subordinate units. It is important to note, however, that the act of delegating responsibility to an organization does not, in itself, ensure internal deconcentration within that organization. 5. In addition to commercially oriented parastatals, semi-autonomous agencies sometimes take the form of special purpose local government units; such as Water, Electricity, or Eduction Districts, transport authorities, wildlife reserves, and so forth. Nevertheless, where such districts are created, only the most limited powers are normally assigned. Another, more particular, form of delegation, limited to the project implementation phase, has come to be known as enclave projects. The organizational structure of Ghana's Northern Region Integrated Development Project (NORRIP) is an example of delegation to a Project Management Unit (PMU) which by-passes the established Annex 3 Page 2 of 3 organizational structures of the GOG and, therefore, is unlikely to be sustainable once donor financing is no longer available. Devolution: Discretionary Authority Model 6. The essence of devolution Is discretionary authority. In devolved systems, responsibilities for a range of operations encompassing more than one sector are assigned to local governments. The range of sectoral responsibilities is one factor which distinguishes devolution from deconcentration. To the extent that local governments have discretionary authority, they can do essentially what they decide to do; bound only by: (i) broad national policy guidelines; (ii) their own financial, human, and material capacities; and (iii) the physical environment within which they must operate. An essential characteristic of discretionary authority is that the oversight role of Central Governments is limited to ensuring that local governments operate within very broad national policy guidelines; at least with respect to those functions for which local governments have the authority to exercise discretion. Principal Agency Model 7. Principal agency denotes a form of intergovernmental relationships in which responsibilities for performing executive functions are assigned by one level of government to another on their behalf. Thus, Central Government entities can serve as principal agents of local governments or vice verse. If, for example, District Assemblies serve as principal agents of Central Government, they would be exercising responsibilities on behalf of higher authorities. A system of principal agency is significantly different than internal deconcentration or delegation. When acting as Principal Agents, local governments act as discrete organizations separate from Central Government, although they do so under the direction of Central Government agencies. Thus, local governments often retain: (i) some scope for the exercise of limited discretion, largely through their technical staff, with regard to specific operational matters and (ii) the option of negotiating the nature of their responsibilities and the scope of their limited discretion in that regard. 8. The characteristics of principal agency summarized above do not depend on the extent to which local governments are, or are not, autonomous with respect to other functions they might undertake. Thus, in some cases, local governments are, in their entirety, no more than principal agents of central governments; in other cases they serve as principal agents in parallel with the performance of other roles. In the first case, Central Government appoints executive officers to manage the activities of each local government. Such officers are responsible for all local government activities; including hiring local government officials in those cases where all government employees at local levels are not employed directly by central governments. Ministries of the Central Government coordinate their local programs through their own officers assigned to local levels; usually by commissions or ministries of local or internal affairs. In such cases, local governments exercise executive functions, but not legislative functions. 9. Alternatively, non-central governments can also be corporate entities in their own right, with elected councils and staff hired, promoted, transferred, and dismissed by the local governments themselves. Such governments can be expected to exercise discretionary authority over investments or other allocations of resources at the same time that they act as principal agents for central governments. Difficulties understanding the actual operations of both local and central governments within decentralized systems are often due to ambiguities as to whether local governments are actually expected to exercise discretionary authority or principal agency functions with respect to specific Annex 3 Page 3 of 3 activities in specific sub-sectors. That is particularly the case when, as often occurs, the legal assignment of responsibilities explicitly emphasizes the exercise of discretionary authority by local governments, but the structure of incentives is skewed toward support of principal agency. Hybrid 10. The confusion about the conceptually discrete roles of local governments under systems of devolution and principal agency noted above is often compounded further by the fact that at the system-wide level, all public sector management systems include elements of all four of the organizational types outline above. Such systems are termed Hybrid, in that they are substantially more complex than would be inferred from an understanding of the discrete characteristics of each of the four pure types alone. Thus, system-wide institutional arrangements are characterized by the coexistence of elements of all four forms of decentralization, together with other highly centralized government functions. Even within individual sectors, responsibility for government decision-making can be distributed in many ways. Some decisions may be centralized (e.g., minimum curriculum standards for primary schools and qualifications of teachers). Other decisions may be devolved (e.g., location and structural characteristics of schools; employment and promotion of teachers; supplemental curriculum beyond centrally mandated minimum standards). Yet other decisions may be deconcentrated (e.g., Inspectorate responsible for ensuring adherence to minimum curriculum or teacher qualification standards). Some decisions may be delegated (e.g., textbook production). The concept of hybrid decentralization describes such combinations. Clearly, the organizational structure of the public sector in Ghana is of a hybrid character. PATTERN FOR DISCRETIONARY AUTHORITY Location o Authority Private Sector District or Fauction Discretionary Authority Central Government Central Govenament Parestatal Economic Pol icy/ lst.rictjAssembties have full discretion Cross-Sectoral to establish economic policy and cross- Policy Formutation sectoral priorities. (provision) Sectoral Investment trct ssembItes have futt discretion Planning & Finance to establish sectoral development (provision) strategies and Investment coqonents which they are able to finance themselves. Project Investment District Asse"lies establish Central Goverrnent might provide Private Sector or Centrat Design and laplementation specifications and supervise technical support at the request Goverranent Parastatal responsible (Provision/Proc tion) Inplementation carried out by others. of District Assemblies. for inptementation as agent of District Assenblies. Recurrent On pi strict Asse"tf*gi supervise ou Private Sector or central (Production) carried-out by private sector or eIEraL noverrnent perastatats operate and governent perastatats. maintain facilities/infrastructure under supervision/monitoring of District Assembtles. 3D ID O PATTERN FOR PRICIPAL AGENCY Location of Authority District Function Discretionary Authority Central Goverinment Economic Policy/Cross-Sectorat Central Goverrnent formulates economic policy and Policy Formulation establishes cross-sectoral priorities for the country as a whole, including actions to be taken at local levels. Sectoral Investment Planning Central Goverrment establishes sectoral and Finance developent strategies and investment components for the country as a whole, including actions to be taken at local levels. Project Investment Design and Central Goverrmnent establishes specifications and inalementatian supervises implementation as carried-out by others, including District Assemblies. Recurrent OM District Asseablies operate and mintain Central Government supervises 0IN carried-out by (production) facilities/ infrastructure under District Assenbtlies, conducts audits of loa supervisfon/monitoring of Central Goverment. moverrwent expenditures and enforces audits. OD fD O 0 :4 0 Annex 5 SANITATION EOUIPMENT OWNED AS AT MARCH 1992 BY DISTRICT ASSEMBLIES DISTRICT SANITATION EQUIPMENT OWNED IN MARCH, 1992 ASSEMBLY REFUSE BUCKET DOZER GENERAL CESSPIT TRUCK LOADER PURPOSE EMPTIER TIPPER ACCRA METRO. 23 2 1 2 9 EAST AKIM KETA I TECHIMAN 1 1 2 WA 1 1 1 TAMALE 3 2 BONGO WASSA MPHOR 1 1 EAST AGONA 2 1 JUABESO-BIA ADANSI 1 BIRIM NORTH Annex 6 DISTRICT ASSEMBLIES ROAD TYPES and CONDITION ROAD CONDITION SURFACING (KM) TOTAL (Primary and Secondary LENGTH Roads) ASPHALT SURFACE GRAVEL (K) DRESSED Good 360 1,323 1,432 3,115 Fair 9 2,646 3,344 5,999 Poor 0 1,143 3,390 5,296 TOTAL ROAD RECONSTRUCTION/REHABILITATION REQUIREMENT LENGTH UNIT COST CATEGORY COST ROAD TYPE & CATEGORY (CEDI (CEDI MILLION) (KM) MILLIONIKM) Fair asphalt roads - rehabilitate 9 180 1,620 Poor surface dressed - reconstruct 1,644 100 164,400 Fair surface dressed - rehabilitate 2,646 72 190,510 Poor and fair gravel roads - rehabilitate 6,995 12 83,940 TOTAL COST OF RECONSTRUCTING/REHABILITATING ALL POOR AND FAIR ROADS 440,470 FEEDER ROAD UPGRADING REQUIREMENTS UNIT COST TOTAL COST ROAD CONDITION LENGTH (CEDI MILLION/KM) (CEDI MILLION) (KM) Poor 12,900 8 103,200 Fair 5,100 4.5 22,950 TOTAL COST TO UPGRADE ALL POOR AND FAIR FEEDER ROADS TO GOOD 126,150 CONDITION URBAN ROAD RECONSTRUCTION/REHABILITATION REQUIREMENTS URBAN ROADS REQUIRING CITIES TOTALS RECONSTRUCTION OR MAJOR REHABILITATION ACCRA KUMASI SEKONDI- TEMA TAMALE TAKORADI Length of Paved Roads (km) 300 100 50 50 40 540 Cost (0million) 180,000 60,000 25,000 15,000 10,000 290,000 Length of Unpaved Roads 140 50 50 30 30 300 (km) Cost (Cmillion) 14,000 5,000 5,000 3,000 3,000 30,000 Cost (Cmillion) 320,000 URB3AN ROAD MAINTENANCE COSTS ROAD TYPE AND CATEGORY Periodic Routine Total emillion cmillion Cmillion Primary and Secondary 10,300 1,900 12,200 Urban 3,000 included above 3,000 Feeder 950 600 1,550 Total cost of maintenance 16,750 Annex 7 Page 1 of 2 [Extract from Local Government Law 1988 (PNDCL 207)] LOCAL GOVERNMENT LAW, 1988 SIXTH SCHEDULE (Section 57) REVENUE OF LOCAL GOVERNMENT BODIES 1. Entertainments Duty under the Entertainments Duty Act 1962, (Act 150); 2. Casino Revenue under the Casino Revenue Tax Decrees, 1973, (N.R.C.D. 200); 3. Betting Tax under the Betting Tax Act 1965, (Act 268); 4. Gambling Tax, under the Gambling Machines Decree 1973, (N.R.C.D. 174); 5. Income Tax (Registration of Trade, Business, Profession or Vocation) Law, 1986 (P.N.D.C.L. 156); 6. Rates and Levy: Crop Levy 7. Fees: (a) Cattle Pounds (b) Conservancy (c) Slaughter House (d) Market Dues (e) Market Stalls/Stores (f) Lorry Park Dues (g) Advertisements (h) Trading Kiosks (i) Restoration of Conservancy Service (j) Graveyard Receipts (k) Bread Bakers (1) Chop Bars (m) Corn Mills (n) Dressing Stations 8. Licenses: (a) Dog Licences (b) Hawkers (c) Extension of Hours (d) Hotels and Restaurants (e) Beer and Wine Sellers Annex 7 Page 2 of 2 (f) Petroleum Installations (g) Palm-wine Sellers (h) Akpeteshie Distillers/Sellers (i) HeiValists () Taxi Cabs (k) Lorry Parks Overseers (1) Taxi Drivers (Driving Licence) (m) Selfiemployed Artisans (n) F.iliijTolls (o) Births andDeaths 9. Miscellaneous: (a) Court,fees/fines and District/Community Public Tribufial fees/fines (b) Town Hall/Community Centre Receipts (c) District Hearse Hiring (d) igslqdging of latrines (e) Hire of Bulldozers/Grader (f) C61edion of Sand/Gravel/Stone (g) Slot Machines (h) StobfLand Revenue (i) Toiret Receipts Annex-8 LOCAL GOVERNMENT INSTRUMENT 1992 (Amendment of Sixth Schedule) IN exercise of the powers conferred on the Provisional National Defence Council Secretary responsible for Local Government by sub-section (4) of section 57 of the Local Government Law, 1988 (PNDCL 207) and in consultation with the Secretary responsible for National Revenue, this Instrument is made this.... 13th.... day of .....March.....1992. Sixth Schedule to PNDCL 207 amended. 1. The Sixth Schedule to the Local Government Law, 1988 (PNDCL 207) is amended by the substitution for item 6 of the following item: "6. Rates and Levies: levy on crops other than cocoa, coffee, and cotton". Prohibition against imposition of levy on goods in transit. 2. No District, Municipal or Metropolitan Assembly shall impose any rate or levy on goods in transit through the territory of the district, municipality or metropolis only. Revocation of L.I. 1344 3. The District Councils (Prohibition of Imposition of Levy on Agricultural Produce) Regulation, 1987 (L.I. 1344) is hereby revoked. Annex 9 Page 1 of 2 LOCAL GOVERNMENT INSTRUMENT, 1992 (Amendment of Sixth Schedule) IN exercise of the powers conferred on the Secretary responsible for Local Government by subsection (4) of section 57 of the Local Government Law, 1988 (PNDCL.207) and in consultation with the Secretary responsible for National Revenue, this Instrument is made this... .8th... .day of ....April ....1992. Sixth Schedule to PNDCL 207 amended. 1. The Sixth Schedule to the Local Government Law, 1988 (PNDCL.207) is amended by the insertion immediately after item 5 of the following items:- Sa. Advertisement Tax Decrees, 1976 (SMSC.43); 5b. Part IV of the Fourth Schedule to the Income Tax Decree, 1975 (SMCD.5) as amended by the Income Tax (Amendment) Law, 1987 (PNDCL.177); Sc. Taxes chargeable on the income of the following categories of self-employed persons: (a) spare parts dealers; (b) chemical sellers; (c) tailors and dress makers; (d) sandcrete blocks manufacturers; (e) musical spinners (f) radio and television repairers (g) professional photographers; (h) gold and silver smiths; (i) drinking bar operators; () chop bar keepers and cooked food sellers; (k) butchers; (1) hair dressers; (m) garage owners; Annex 9 Page 2 of 2 (n) video operators; (o) cornmill owners; (p) co-operative distillers; (q) scrap sellers; (r) livestock breeders and traders; (s) traders; and (t) liquor sellers. Commencement 2. Item 5C of this Instrument shall be deemed to have come into force on the 1st day of January 1991. Revocation 3. The Local Government (Amendment of Sixth Schedule) Instrument, 1990 (L.I.1508) is hereby revoked. Annex 10 Page I of 3 TECHIMAN DISTRICT ASSEMBLY LOCAL GOVERNMENT LAW 1988 (P.N.D.C.L.) The making and levying of the following rates for the financial year 1st January 1992 to 31a December 1992 has been approved by the rating authority. Under Section 67 (1) An annual Basic Rate of 1200.00 and Education Fund of 100.00 payable by all persons of or above the age of 18 years who reside within or own immovable property situated within the Administrative area of the Assembly. Under Section 67 (3) (a) In addition to the basic rate, the following rates per cedi on rateable value of immovable property situated within the area of the Assembly: Category Valued Premises 1991 1992 (i) Residential (old valued premises from 1968-1986 0.30 0.30 (ii) Residential (newly valued premises) 0.005 0.005 (iii) Private Commercial 0.10 0.10 (iv) Quasi Government (Commercial properties) 0.10 0.10 (v) Quasi Government properties on subvention 0.01 0.01 (vi) Residential Commercial 0.01 0.01 Unvalued Premises Residential Commercial 20,000.00 20,000.000 Sandcrete (one-storey) at Techiman town 3,000.00 3,000.00 Landcrete (one-storey) at Techiman town 2,000.00 2,000.00 Wattle and daub (Atakpame) at Techiman town 2,000.00 2,000.00 Unvalued properties at other villages/hamlets 500.00 500.00 Sanitation Rate (a) Undeveloped plots (Techiman Town) 10,000.00 10,000.00 (b) Undeveloped plots (other areas) 1,000.00 1,000.00 (c) Undeveloped plots (commercial) 20,000.00 20,000.00 (d) Church and Shrines 20,000.00 20,000.00 (e) Timber Logs 300.00 - Annex 10 Page 2 of 3 Under Section 67 (4) In addition to the basic rate special rates for the purposes stated below shall be paid by all persons liable to pay the general rates and who reside in the following places: SPECIAL RATE TOWN MAUE FEMUZ PURPosE (a) Techiman ilOO Flat Educational Fund (b) Offuman 1,200.00 700.00 Construction of Schools (c) Tuobodom 2,000.00 1,000.00 Construction of Community Secondary School and Electricity (d) New Kenten 600.00 400.00 Construction of School Bldg. (c) Hansua 200.00 100.00 - do - (f) Tanoboase 100.00 50.00 - do - (g) Asucyi Resident 4,000.00 2,000.00 For construction of JSS block and Non-resident 6,000.00 3,000.00 extension (h) Masidan For 3 year Development Plan. Resident 5,000.00 flat Non-resident 6,000.00 flat (i) Tanoso 100.00 flat Project on electricity. (j) Aworowa Resident 4,000.00 3,000.00 Electricity project/JSS Non-resident 7,000.00 5,000.00 (k) Akrofrom Resident 7,000.00 5,000.00 Electricity project Non-resident (1) Forikrom Resident 4,000.00 3,000.00 5 year development Non-resident 8,000.00 4,000.00 (m) New Takofiano 8,000.00 4,000.00 For development of town. (n) Nsonkone 2,000.00 1,000.00 For primary school building (o) Nkrankrom 1,000.00 500.00 JSS building (p) Atrensu Resident 1,000.00 500.00 Construction of School and pit Non-resident 1,600.00 800.00 latrine (q) Buoyam Resident 2,000.00 1,000.00 Minor Development projects Non-resident 4,000.00 2,000.00 (r) Ayeasu Resident 900.00 500.00 Construction of School and Non-resident 1,500.00 1,000.00 Building of pit latrine (a) Kokroko 600.00 300.00 Renovation of L/A Primary School (t) Tunsuase/Tech. 1,000.00 500.00 Construction of KVIP toilet Annex 10 Page 3 of 3 SPECIAL RATE TowN MALU FEMAL PURPOSE (u) Techiman Area Development Committee (i) A bag of maize, kokonte, pepper, etc. 100.00 (ii) A bag of cola, onions, groundnuts and rice 100.00 To supplement the efforts of (iii) 100 tubers of yam 100.00 Techiman District Assembly (iv) Bundle of sugar-can 50.00 (v) A tine of Akpcteshic 50.00 (vi) Fee on a cow 150.00 (vii) Payment of attendance at KVIP 10.00 (v) Nsuta 5,000.00 2,000.00 Construction of L/A School block (w) WagaralinefTechiman 1,000.00 500.00 Construction of 4 Classrooms for Gyarko JSS (x) Bamiri Resident 1,500.00 1,000.00 For electricity & Chief Palace Non-resident 2,500.00 2,000.00 (y) Subingya 1,000.00 500.00 For construction of 3 classroom block and Community clinic. The making and levying of the above has been approved by the Ministry of Local Government. This notice constitutes the effective making and levy of such rates as from the date of publication. It shall be the duty of every person liable to pay these rates to pay the amount thereof at the office of the Techiman District Assembly, on or before 311 July 1992 unless such person has paid the rates to a Collector or any authorized person at any place prior to that date mentioned, that person shall be liable to pay double the rate mentioned above. Annex 11 DISTRICT ASSEMBLIES INTERNALLY GENERATED REVENUE COLLECTED BY ALL DAs Average per DA in Study* Year Total Collected Average per DA (C millions) (C billions) (C millions) 1989 3.6 32.7 33 1990 4.7 42.7 45 (*NB excludes Accra) GOG TOTAL REVENUE AND GRANTS (billions of cedis) Year Total GOG Revenue Total DA Internally I Generated Revenue %6 1989 193.2 3.6 1.86% 1990 239.5 4.7 1.96% CEDED REVENUE TRANSFERRED TO DAs (millions of cedis) 1990 1991 1992(1) 1992(2) 1990 1991 1992(1) 1992(2) Total Transferred 205 600 1,100 2,400 Average per DA 1.86 5.45 10 21.8 (Source: MLG) Notes (1) Original distribution proposed for 1992 (2) amended distribution proposed for 1992 GHANA CURRENT/REAL PER CAPITA VALUES FOR THE 12 SAMPLE DAs FOR THE PERIOD 1988 - 1991 1. Central Goverrwnt Revenue EAK KET TEC WA TAM BON 1) 1988 227,776,960 27,767,685 15,536,272 19,087,629 10,031,453 35,182,462 0 11) 1989 275,524,948 30,491,227 8,656,145 18,799,862 16,497,238 43,362,854 2,227,758 fit) 1990 317,912,171 31,013,674 16,317,923 17,805,220 27,271,970 58,550.485 8,049,058 Iv) 1991 1,019,130,612 42,199,925 21,835,150 23,389,294 21,294,238 72,969,591 5.060,160 -" " " " " "************* **--------** - * * * -- - *------------------------ ------------. .----- 1,840,344,691 131,472,510 62,345,490 79,082,005 75,094,899 210,065.392 15,336,977 2. Local Government Revenue 1) 1988 343,882,466 10,718,230 12,606,404 44,612,166 14,316,411 20,832,028 2,940,907 If) ¶989 526,583,869 24,003,591 15,871,734 68,394,713 16,264,134 46.368,416 17,153,563 It) 1990 760,935,531 38,235,722 19.279,213 108,164,431 25.714,992 48.049,625 25,066,677 Iv) 1991 1,061,663,055 34,387,412 52,295,817 109,694,318 35.550,737 39,869,697 25.123,272 -"""""""*********---- "***------- **----- ** ------------------------------- ---------- -------------- 2,693,064,921 107,344,956 100,053,168 330,865,628 91,846,274 155,119,766 70,284,419 3. Total Revenue 1) 1988 571,659,426 38,485.915 28,142,676 63,699,795 24,347,864 56,014,490 2,940,907 if) 1989 802,108,817 54,494,818 24,527,879 87,194,575 32,761,372 89,731,270 19,381,321 ii) 1990 1,078,847,702 69,249,396 35,597,136 125.969,651 52.986,962 106,600,110 33,115,735 fv) 1991 2,080,793,667 76,587,337 74,130,967 133,083,612 56,844,975 112,839,288 30,183,432 Current Per Capita Value f) 1988 497 203 164 536 159 329 39 11) 1989 675 279 138 711 207 511 247 111) 1990 880 343 195 996 324 588 409 Iv) 1991 1,645 368 393 1,019 337 603 361 Reat Value Factor 1) 1988 1.00 571,659,426 38,485,915 28,142,676 63,699.795 24,347,864 56,014,490 2,940,907 II) 1989 0.83 665,750,318 45,230,699 20.358,140 72,371,497 27,191,939 74,476,954 16,086,496 111) 1990 0.72 776,770,345 49,859,565 25,629,938 90,698,149 38,150,613 76,752,079 23,843,329 fv) 1991 0.60 1,248,476,200 45,952,402 44,478,580 79,850,167 34,106,985 67,703,573 18,110,059 Real Per Capita Value 1) 1988 497 203 164 536 159 329 39 if) 1989 560 232 115 590 172 424 205 111) 1990 634 247 140 717 233 423 295 Iv) 1991 987 221 236 612 202 362 217 WME AGO JB AW ON 1. Central Goverment Revenue 1) 1988 0 20,739,450 0 21,069,373 2,780,584 iI) 1989 0 20,040,540 7,288,335 23,383,380 5,657,293 iii) 1990 329,906 22,619,739 2,017,400 21,518,273 9,702,876 iv) 1991 50,885,429 65,213,822 6,072,351 37,862,822 13,273,472 51,215,335 128,613,550 15,378,086 103,833,848 31,414,225 2. Local Government Revenue 1) 1988 0 12,326,933 0 39,804,102 0 ii) 1989 4,875,380 20,832,894 12,352,727 47,386,871 9,664,400 ili) 1990 24,359,855 35,366,175 32,095,710 97,662,656 8,709,489 Iv) 1991 30,171,381 9,418,144 35,700,234 120,954,030 5,097,105 59,406,616 77,944,146 80,148,671 305,807,659 23,470,994 3. Total Revenue 1) 1988 0 33,066,383 0 60,873,475 2,780,584 if) 1989 4,875,380 40,873,433 19,61,062 70,770,251 15,321,693 fi) 1990 24,689,761 57,985,914 34,113,110 119,180,929 18,412,365 IV) 1991 81,056,810 74,631,966 41,772,585 158,816,852 18,370,577 Current Per Capita Value 1) 1988 0 320 0 432 28 11) 1989 68 383 130 487 148 1i1) 1990 332 527 219 794 172 iv) 1991 1,055 657 260 1,026 166 Reat Value Factor 1) 1988 1.00 0 33,066,383 0 60,873,475 2,780,584 iI) 1989 0.83 4,046,565 33,924,949 16,302,081 58,739,308 12,717,005 Mti) 1990 0.72 17,776.628 41,749,858 24,561,439 85,810,269 13,256,903 Iv) 1991 0.60 48,634,086 44,779,180 25,063,551 95,290,111 11,022,346 Real Per Capita Value 1) 1988 0 320 0 432 28 11) 1989 56 318 108 404 123 iti) 1990 239 380 157 572 124 iv) 1991 633 394 156 615 100 ( D 0Ili~ GHARA REVENUE AND EXPENDITURE (ACTUAL) OF THE 12 SAMPLE DIST. ASSEMBLIES FOR THE PERIOD 1988-1991 ANA 0 EAX i ET 4 TIC t WA 0 TAN 1988 CENTRAL TRANSFER 227,776,960 27,767,685 15,536,272 19,007,629 10,031,453 35,182,462 Salaries Grant 224,776,960 27,017,685 8,166,503 19,087,629 10,031,453 35,182,462 Grant in Lion of rates 0 0 0 0 0 0 Ceded Revenue 0 0 7,369,769 0 0 0 Other Grants 3,000,000 750,000 0 0 0 0 LOCAL REVENUE 343,882,466 10,718,230 12,606,404 44,612,166 14,316,411 20,832,028 Property Rates 73,808,515 13 837,958 2 0 0 4,319,922 7 1,289,508 5 1,455,497 3 Basic Rates 17,579,410 3 1,976,760 5 865,613 3 2,235,745 4 1,977,725 8 3,248,200 6 Licenses 26,042,377 5 1,231,404 3 1,035,550 4 1,919,639 3 1,686,820 7 1,740,980 3 Market Tolle 36,389,360 6 3,971,930 10 5,397,745 19 33,222,020 52 2,743,290 11 5,204,410 9 Other Fees 53,699,220 9 2,285,533 6 4,225,336 15 1,121,620 2 5,835,173 24 6,640,130 12 Lorry Parks 3,212,180 1 410,645 1 193,640 1 1,465,500 2 274,300 1 1,087,920 2 Rents 6,232,863 1 4,000 0 888,520 3 327,720 1 148,540 1 1,142,300 2 Other/Mise. 126,918,541 22 0 0 0 0 0 0 361,055 1 312,591 1 TOTAL REVs 571,659,426 100 38,485,915 100 28,142,676 100 63,699,795 100 24,347r864 100 56,014,490 100 EXPENDITURES Recurrent 548,263,719 36.058,733 13,446,632 40,679,787 40,188,965 54,525.674 Capital 12,611,245 0 526,324 5,685,688 664,080 500,017 TOTAL EXPs 560,874,964 36,058,733 13,972,956 46,365,475 40,853,045 55,025,691 SURPLUS/DEFICITs 10,784,462 2,427,182 14,169,720 17,334,320 (16505rl81) 988,799 1989 CENTRAL TRANSFER 275,524,948 30,491,227 8,656,145 18,799,862 16.497,238 43,362,854 Salaries Grant 274,747,748 30,491,227 S,656,145 15,799,862 14.488,633 38,238,072 Grant in Lieu of rates 0 0 0 0 0 2,147.320 Ceded Revenue 0 0 0 0 2,000,605 2,977,462 Other Grants 777,200 0 0 3,000,000 0 0 LOCAL REVENUE 526,583,869 24,003,591 15,871,734 68,394,713 16,264,134 46,368,416 Property Rates 115,037,362 14 2,128,126 4 0 0 6,409,848 7 1,474,948 5 2,097,464 2 Basic Rates 15,856,666 2 4,640,880 9 1,492,840 6 3,366,936 4 965,710 3 2,909,230 3 Licenses 62,185,943 8 4,276,235 8 1,739,040 7 2,259,626 3 2,588.721 8 2,208,228 2 Market Tolls 53,119,139 7 6,783,290 12 7,433,168 30 48,962,498 56 4,033,050 12 5,092,660 6 Other Fees 43,510,020 5 3,328,200 6 4,221,706 17 2,285,850 3 6,472,925 20 29,544,070 33 Lorry Parks 7,176,870 1 2,534,960 5 316,200 1 1,688,650 2 597,500 2 2,621,080 3 Rents 2,439,500 0 228,400 0 668,780 3 56,000 0 76,580 0 1,613,977 2 Other/Misc. 227,258,367 28 83,500 0 0 0 3,365,305 4 54,700 0 201,707 0 TOTAL REV$ 802,108,817 100 54,494,818 100 24,527r879 100 87,194,575 100 321761,372 100 89,731r270 100 EXPENDITURES Recurrent 804,102,457 35,069,854 16,699,881 71,971,077 39,690,176 87,708,229 O w Capital 5,677,307 4,443,255 700,340 15,823,583 0 2,283,380 TOTAL EXPs 809,779,764 39,513,109 17,400,221 87,794,660 39,690,176 89,991,609 SURPLUS/DEFICITs (7,670,947) 14,9B1r709 7rl27r658 (600085) (6,92868040 (260.339 лмл в алх в хкт в тнс в ил в тлМ в 1990 CBBтR1►L тRАи8тНR Э17,912,171 31,013,67{ 16,317,923 17,805,220 27,271,970 58,550,аВ5 8е1аг3ов craat з11,269,аs7 29,оое,755 iб,зi7,я2з 17,562,986 z1,2зв,е27 ве,lоi,787 вгааt ia L1oa of ratoe 0 0 0 0 0 2,977,{70 Содод Rovoaa• 5,771,51а 0 0 0 6,037,1{З 6,312,787 OtЬor Gsant• 871,200 2,004,919 0 2{2,23а 0 1,158,{41 LOC1►L АВVНиОВ 760,935,5З1 з8,2Э5,722 19,279,213 108,161,а31 25,714,992 {B,Oa9,62S PropotLy Reto• 207,8{9,201 19 1,215,336 2 905,777 3 11,817,519 9 1,190,878 3 2,З80,778 2 Вавiс Rete• 18,314,366 2 5,137,а29 7 1,Оа1,3{0 з 5,451,160 { 1,609,780 3 2,594,960 2 ьiооnвов 1об,96s,ззs 1о 1s,sa1,936 22 2,оз3,s2о в 8,9s9,662 7 2,бвs,об7 s 2,2во,2iо 2 Market то11в 59,025,780 5 8,888,999 1Э 8,596,5з1 21 72,908,59а 58 7,28б,750 1{ 3,553,280 3 ОtЬог Реее 69,402,253 6 1,812,860 3 4,765,475 1з 2,655,800 2 11,861,806 22 30,9а2,400 29 Lorry Parks 12,783,1{0 1 5,219,130 8 {10,400 1 3,609,800 З 535,500 1 2,920,700 3. Routs 7,871,269 1 359,032 1 956,110 3 119,540 0 1{1,200 0 2,866,200 З ОtЬег/Miec. 278,721,185 26 1,000 0 567,030 2 2,6{2,356 2 1а{,011 0 551,097 1 tOtAL RBVк 1 078 8{7 702 100 69 249 396 100 з5 59Т 1зб 100 125 969 651 100 52 986 962 100 106 600 110 100 BxPниDISURнB Roaarroat 916,123,722 54,5а5,389 28,92{,722 86,768,ба9 51,580,008 97,12а,166 Cepitel 165,002,767 59З,З00 9,998,Оа5 32,621,577 2,000,000 8,292,075 тОSЛL НIРк 1,081,126,489 55,138,689 з8,922,767 119,390,226 53,580,008 105,416,211 BURPL06/DBPICISк (2,278,787) 14,110,707 (3,325,631) 6,579,l25 (593,0{6) 1,183,869 1991 CBB=RAL тААиSlHR 1,019,130,612 {2,199,925 21,835,150 23,з89,29{ 21,29{,238 72,969,591 Ваlакlов бrant Збо,71е,26о в2,i99,925 2i,eзs,iso 2з,3е9,29а 21,29в,2зе 7о,бзо,9sо вгааг ia ьiоа of глtо. о о о о о о Содод Ro�onno 10,2{6,000 0 0 О 0 ОtЬок oreat• ба8,166,з52 0 0 0 2,338,6{1 LOCAL RBVBBUE 1,061,663,055 За,387,{12 52,295,817 109,691,318 35,55о,7з7 39,869,697 Proport� Rato• 256,208,991 12 1,882,999 2 149,600 0 6,032,325 S 8,51S,S62 1S 3,069,127 з Вае1е Reto• 15,546,000 1 2,з71,860 з 339,200 о 2,613,350 2 2,452,500 { 1,667,600 а Llаоавов 229,505,20{ 11 8,61з,577 11 9,029,{50 12 7,357,967 6 2,615,065 5 7,911,445 7 Merkot то11в 63,055,701 3 10,778,096 1а 9,843,010 13 29,049,000 22 7,025,910 12 5,537,560 5 ОtЬог lоое 287,393,044 14 3,049,830 1 3,зб5,556 5 52,63{,100 а0 13,295,900 23 10,291,2]7 9 Lorry Park• 20,а52,500 1 6,132,300 8 182,2З0 0 2,977,350 2 1,570,000 3 582,700 1 Ronts 37,Э62,000 2 296,350 0 722,2{0 1 2,в06,155 2 75,8о0 0 б,з66,150 6 ОtЬок/Мiве. 152,1з9,б15 7 1,262,400 2 28,66{,531 39 6,59{,071 5 0 0 1,443,878 1 тOSAL REVs 2 080 79З 667 100 76,587,зз7 100 7а,130.967 100 13J,083,612 100 56,81а,975 100 112,839,288 100 ElPB1DISORE6 Rocarroat 2,108,126,811 73,686,{85 62,272,071 112,117,069 57,600,000 127,117,570 w� Capital 287,269,869 6,733,014 12,719,698 24,938,236 1,567,000 З,З86,О60 �� iOS1►L ЕlPt 2,395,396,710 82,а19,б99 75,021,769 137,055,з05 59,167,000 130,503,670 � к BURPL08/DBlICIlк (31а 603,013) (5 832,162) (890,802) (3,9Т1,б93) (2,322,0251 (17,бба,за2) N � О W м г 1990 BON NNE AGO JB AW BY CENTRAL TRANSFER 8,049,058 329,906 22,619,739 2,017,400 21,510,273 9,702,876 Salaries Grant 1,958,304 0 20,867,686 0 21,515,984 6,079,332 Grant in Lieu of rates 1,177,758 0 0 0 0 0 Coded Revenue 4,912,996 0 1,752,053 2,017,400 0 1,790,522 Other Grants 0 329,906 0 2,289 1,833,022 LOCAL REVENUE 25,066,677 24,359,855 35,366,175 32,095,710 97,662,656 8,709,489 Property Rates 121,650 0 980,667 4 844,089 1 194,740 1 43,200,090 36 5,274 0 Basic Rates 1,065,350 3 2,426,700 10 1,323,640 2 5,742,680 17 5,439,600 5 2,046,800 11 Licenses 1,997,630 6 3,493,380 14 1,960,070 3 4,156,980 12 4,873,510 4 2,195,910 12 Market Tolle 6,096,412 18 3,417,930 14 13,043,700 22 2,481,630 7 18,585,140 16 1,991,700 11 other Fees 15,380,940 46 3,095,238 13 3,292,980 6 1,226,200 4 13,764,560 12 1,960,970 11 Lorry Parks 0 0 240,050 1 3,527,650 6 0 0 2,615,300 2 0 0 Rents 93,960 0 0 0 242,200 0 0 0 301,380 0 1,800 0 other/Misc. 310,735 1 10,705,890 43 11,131,846 19 18,293,480 54 8,063,076 7 507,035 3 TOTAL REV: 33,115,735 100 24,689,761 100 57,985,914 100 34,113,110 100 119,180,929 100 18,412,365 100 EXPENDITURES Recurrent 22,554,048 20,208,264 48,371,689 22,100,711 71,164,877 14,030,731 capital 3,493,223 4,480,000 10,092,000 11,703,627 54,426,814 1,634,224 TOTAL EXP: 26,047,271 24,688,264 58,463,689 33,804,338 125,591,691 15,664,955 SURPLUS/DEFICIT: 7,068,464 1,497 (477,775) 308,772 (6,410,7621 2,747,410 1991 CENTRAL TRANSFER 5,060,160 50,865,429 65,213,822 6,072,351 37,962,822 13,273,472 Salaries Grant 0 59,997,640 0 32,182,806 8,210,048 Grant in Lieu of rates 5,060,160 0 4,830,162 0 0 0 Coded Revenue 0 4,706,500 386,020 6,072,351 5,680,016 5,063,424 other Grants 0 46,170,929 0 0 0 LOCAL REVENUE 25,123,272 30,171,381 9,418,144 35,700,234 120,954,030 5,097,105 Property Rates 586,365 2 7,038,119 9 216,014 0 0 0 44,569,745 28 2,000 0 Basic Rates 503,015 2 1,938,300 2 116,800 0 6,134,800 15 4,637,600 3 907,600 5 Licenses 1,931,620 6 3,048,040 4 1,337,400 2 6,993,650 17 14,050,650 9 1,823,180 10 Market Tolls 4,721,785 16 2,455,900 3 2,767,100 4 3,522,130 0 23,768,560 is 915,250 5 other Fees 16,893,625 56 8,187,660 10 4,155,925 6 3,065,121 7 20,773,065 13 1,314,450 7 Lorry Parks 0 0 201,200 0 681,805 1 95,000 0 3,071,600 2 120,000 1 Rents 177,652 1 0 0 143,100 0 0 0 218,500 0 4,500 0 other/Misc. 309,210 1 7,302,162 9 0 0 15,889,533 38 9,864,310 6 10,125 0 TOTAL REV: 30,183,432 100 91,056,810 100 74,631,966 100 .41.772.585 100 158,816,852 100 19,370,577 100 0) m m EXPENDITURES >4 Recurrent 18,357,652 20,657,360 20,167,745 22,861,774 84,407,764 11,869,400 kAj .- capital 12,752,802 10,186,439 3,251,840 11,818,963 35,333,290 12,673,781 0 U.) TOTAL EIPS 31,110,454 30,e43,799 23,419,585 34,680,757 119,741,054 24,543,181 r" SURPLUS/DEPICITt (927,0221 50,213,011 51,212,381 7,091,828 39,075.798 (6,172,604) 4' BON NNH E AGO I JB I AW BN I 1988 CENTRAL TRANSFER 0 0 20,739,450 0 21,069,373 2,780,584 Salaries Grant 0 20,739,450 0 21,069,373 2,780,584 Grant in Lieu of rates 0 0 0 0 0 Ceded Revenue 0 0 0 0 0 Other Grants 0 0 0 0 LOCAL REVENUE 2,940,907 0 12,326,933 0 39,804,102 0 Property Rates 0 0 0 317,180 1 0 3,238,335 5 0 Basic Rates 585,620 20 0 1,127,133 3 0 4,337,815 7 0 Licenses 4,900 0 0 923,564 3 0 1,755,069 3 0 Market Tolle 0 0 0 5,404,878 16 0 9,569,450 16 0 Other Fees 2,011,537 68 0 2,862,378 9 0 19,943,037 33 0 Lorry Parke 0 0 0 640,000 2 0 886,700 1 0 Rents 2,600 0 0 116,000 0 0 73,696 0 0 Other/Misc. 336,250 11 0 935,800 3 0 0 0 0 TOTAL REV: 2,940,907 100 0 33r066,383 100 0 60,873,475 100 2,780,584 EXPENDITURES Recurrent 844,095 0 23,914,023 0 42,869,079 0 Capital 0 0 722,030 0 1,626,600 0 TOTAL EXPt 844,095 0 24,636,053 0 44,495,678 0 SURPLUS/DEFICITS 2,096,812 0 8,430,330 0 16,377,797 2,780,584 1989 CENTRAL TRANSFER 2,227,758 0 20,040,540 7,288,335 23,383,380 5,657,293 Salaries Grant 0 0 20,040,540 0 23,383,380 5,657,293 Grant in Lieu of rates 1,727,758 0 0 0 0 0 Ceded Revenue 500,000 0 0 0 0 other Grants 0 7,288,335 0 0 LOCAL REVENUE 17,153,563 4,875,380 20,832,894 12,352,727 47,386,871 9,664,400 Property Rates 8,100 0 0 0 547,997 1 0 0 6,047,115 9 0 0 Basic Rates 839,500 4 2,243,610 46 1,036,685 3 4,216,530 21 5,372,700 8 3,126,800 20 Licenses 569,570 3 90,000 2 912,330 2 2,262,300 12 2,963,520 4 832,650 5 Market Tolls 12,761,355 66 2,328,500 48 8,478,480 21 2,088,370 11 12,214,030 17 2,065,600 13 other Fees 2,950,578 15 112,220 2 4,390,472 11 1,267,815 6 12,855,770 18 2,241,840 15 Lorry Parke 0 0 101,050 2 3,085,070 8 0 0 1,330,200 2 0 0 Rents 17,560 0 0 0 119,800 0 0 0 90,805 0 7,400 0 other/Misc. 6,900 0 0 0 2,262,060 6 2,517,712 13 6,512,731 9 1,390,110 9 TOTAL REV: 19,381r321 100 4r875r380 100 40,873,434 100 19,641,062 100 70,770r251 100 15r321r693 100 EXPENDITURES CD Recurrent 13,185,004 0 25,874,435 13,297,096 54,833,251 7,618,635 Capital 33,900 93,500 3,231,965 21,500 13,221,884 525,810 TOTAL EXPs 13,218,904 93,500 29,106,400 13,318,596 68,055,135 8,144,445 SURPLUS/DEFICITI 6,162,417 4,781,880 11r67r034 _ 6,322r466 2,715.116 7,177248 GHANA SUMMARY OF INTERNAL REVENUE OF 12 SAMPLE DAs FOR THE PERIOD 1988 - 1991 1 2 3 4 5 6 7 AMA % EAK % KET % TEC % WA % TAN X BON % 1988 Property Rates 73,808,515 21 837,958 8 0 0 4,319,922 10 1.289,508 9 1,455,497 7 0 0 Basic Rates 17,579,410 5 1,976,760 18 865,613 7 2,235,745 5 1,977,725 14 3,248,200 16 585,620 20 Licenses 26,042,377 8 1,231,404 11 1,035,550 8 1,919,639 4 1,686,820 12 1,740,980 8 4,900 0 Market Tolls 36,389,360 11 3,971,930 37 5,397,745 43 33,222,020 74 2.743.290 19 5,204,410 25 0 0 Other Fees 53,699,220 16 2,285,533 21 4,225,336 34 1,121,620 3 5,835,173 41 6,640,130 32 2.011,537 68 Lorry Parks 3,212,180 1 410,645 4 193,640 2 1,465,500 3 274,300 2 1,087,920 5 0 0 Rents 6,232,863 2 4,000 0 888,520 7 327,720 1 148,540 1 1,142,300 5 2,600 0 Other/Misc. 126,918,541 37 0 0 0 0 361,055 3 312,591 2 336,250 11 Sub-Tota: 343,882,466 100 10,718,230 100 12,606,404 100 44,612,166 100 14,316,411 100 20,832.028 100 2.940,907 100 ---------W-W----WW-WW-W--------------------g--a------- ---------------g--g-------------g-----g---------g-----------g---g--------------------s 1989 Property Rates 60,869,130 7 2,128,126 9 0 0 6,409,848 9 1,474,948 9 2,097,464 5 8,100 0 Basic Rates 0 0 4,640,880 19 1,492,840 9 3,366,936 5 965,710 6 2,909,230 6 839,500 5 LIcenses 53,119,139 6 4,276,235 18 1,739,040 11 2,259,626 3 2,588,721 16 2,208,228 5 569,570 3 Market Toils 2,439,500 0 6,783,290 28 7,433,168 47 48,962,498 72 4,033,050 25 5,092,660 11 12,761,355 74 Other Fees 227,258,367 26 3,328,200 14 4,221,706 27 2,285,850 3 6,472,925 40 29,544,070 64 2,950,578 17 Lorry Parks 0 2,534,960 11 316,200 2 1,688,650 2 597,500 4 2,621,080 6 0 0 Rents 526,583,869 61 228,400 1 668,780 4 56,000 0 76,580 0 1,613,977 3 17,560 0 Other/Mfsc. 0 83,500 0 0 0 3,365,305 5 54,700 0 281,707 1 6,900 0 Std-Totat: 870,270,005 100 24,003,591 100 15,871,734 100 68,394,713 100 16,264,134 100 46,368,416 100 17,153,563 100 1990 Property Rates 119,288.116 10 1,215,336 3 905,777 5 11,817,519 11 1,490,878 6 2,380,778 5 121,650 0 Basic Rates 0 0 5,137,429 13 1,044,340 5 5,451,160 5 1,609,780 6 2,594,960 5 1,065,350 4 Licenses 59,025,780 5 15,541,936 41 2,033.520 11 8,959,662 8 2,645,067 10 2,240,210 5 1,997,630 8 Market Toil 7,871,269 1 8,888,999 23 8,596,531 45 72,908,594 67 7,286,750 28 3,553,280 7 6,096,412 24 Other Fees 278,724,185 23 1,842,860 5 4,765,475 25 2,655,800 2 11,861,806 46 30,942,400 64 15,380,940 61 Lorry Parks . 0 5,249,130 14 410,400 2 3,609,800 3 535,500 2 2,920,700 6 0 0 Rents 760,935,531 62 359,032 1 956,140 5 119,540 0 141,200 1 2,866,200 6 93,960 0 Other/Misc. . 0 1,000 0 567,030 3 2,642,356 2 144,011 1 551,097 1 310,735 1 Sub-TotaL:1,225,844,881 100 38,235,722 100 19,279,213 100 108,164,431 100 25,714,992 100 48,049,625 100 25,066,677 100 1991 Property Ratesi 159,215,113 9 1,882,999 5 149,600 0 6,032,325 5 8,515,562 24 3,069,127 8 586,365 2 Basic Rates 0 0 2,371,860 7 339,200 1 2,643,350 2 2,452,500 7 4,667,600 12 503,015 2 Licenses 350,448,745 20 8,613,577 25 9,029,450 17 7,357,967 7 2,615,065 7 7,911,445 20 1,931,620 8 Market Tols 37,362,000 2 10,778,096 31 9,843,010 19 29,049,000 26 7,025,910 20 5,537,560 14 4,721,785 19 Other Fees 152,139,615 9 3,049,830 9 3,365,556 6 52,634,100 48 13,295,900 37 10,291,237 26 16,893,625 67 Lorry Parks . 0 6,132,300 18 182,230 0 2,977,350 3 1,570,000 4 582,700 1 0 0 Rents 1,061,663,055 60 296,350 1 722,240 1 2,406,155 2 75,800 0 6,366,150 16 177,652 1 Other/Misc. . 0 1,262,400 4 28,664,531 55 6,594,071 6 0 0 1,443,878 4 309,210 1 Sub-TotaL:1,760,828,528 100 34,387,412 100 52,295,817 100 109,694,318 100 35,550,737 100 39,869,697 100 25,123,272 100 X Grand Tota4,200,825,880 107,344,956 100,053,168 330,865,628 91,846,274 155,119,766 70,284,419 o L mammnemssmssasamnamnasm===manmamammanaamaanawmasassmanassammmmasmamammmwmmmamemnammmaamanamasanmanmawmmaasa 1988 WE % AGO % JB 2 Ai % BN Property Rates 0 317.180 3 0 3,238,335 8 0 Basic Rates 0 1,127.133 9 0 4,337,815 11 0 Licenses 0 923,564 7 0 1,755,069 4 0 Market Toils 0 5,404,878 44 0 9,569,450 24 0 Other Fees 0 2,862,378 23 0 19,943,037 50 0 Lorry Parks 0 640,000 5 0 886,700 2 0 Rents 0 116,000 1 0 73,696 0 0 Other/Misc. 0 935,800 8 0 0 0 0 Sub-TotaL: 0 12,326,933 100 0 0 39,804,102 100 0 0 WWWWWW---WW--------W-----W--W-------W-W-WW---W-WWW-W-WWW-W---- WW-WWW-WW-WW-W-WWW---WWWWWWWW 1989 Property Rates 0 0 547,997 3 0 0 6,047,115 13 0 0 Basic Rates 2,243,610 46 1,036,685 5 4,216,530 34 5,372,700 11 3,126,800 32 Licenses 90,000 2 912,330 4 2,262,300 18 2,963,520 6 832,650 9 Market Toils 2,328,500 48 8,478,480 41 2,088,370 17 12,214,030 26 2,065,600 21 Other Fees 112,220 2 4,390,472 21 1,267,815 10 12,855,770 27 2,241,840 23 Lorry Parks 101,050 2 3,085,070 15 0 0 1,330,200 3 0 0 Rents 0 0 119,800 1 0 0 90,805 0 7,400 0 Other/Misc. 0 0 2,262,060 11 2,517,712 20 6,512,731 14 1,390,110 14 Sub-Total: 4,875,380 100 20,832,894 100 12,352,727 100 47,386,871 100 9,664,400 100 WWERWERWRRWWWWWWWWWWWWWWWERRWWWERWRRWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWRRBMWWWWWWWERRWWWWWWWWWWWWWWWWWWWR-- 1990 Property Rates 980,667 4 844,089 2 194,740 1 43,200,090 44 5,274 0 Basic Rates 2,426,700 10 1,323,640 4 5,742,680 18 5,439,600 6 2,046,800 24 Licenses 3,493,380 14 1,960,070 6 4,156,980 13 4,873,510 5 2,195,910 25 Market Tolls 3,417,930 14 13,043,700 37 2,481,630 8 18,585,140 19 1,991,700 23 Other Fees 3,095,238 13 3,292,980 9 1,226,200 4 13,764,560 14 1,960,970 23 Lorry Parks 240,050 1 3,527,650 10 0 0 2,615,300 3 0 0 Rents 0 0 242,200 1 0 0 301,380 0 1,800 0 Other/Misc. 10,705,890 44 11,131,846 31 18,293,480 57 8,883,076 9 507,035 6 Sub-Total: 24,359,855 100 35,366,175 100 32,095,710 100 97,662,656 100 8,709,489 100 WWWa-saWW------W---------W-WWWWWWWW-W-WW ------W--WaaWW-------W -----ama---ama----SSU a SUSWW-- m- 1991 Property Rates 7,038,119 23 216,014 2 0 0 44,569,745 37 2,000 0 Basic Rates 1,938,300 6 116,800 1 6,134,800 17 4,637,600 4 907,600 18 Licenses 3,048,040 10 1,337,400 14 6,993,650 20 14,050,650 12 1,823,180 36 Market TolLs 2,455,900 8 2,767,100 29 3,522,130 10 23,768,560 20 915,250 18 other Fees 8,187,660 27 4,155,925 44 3,065,121 9 20,773,065 17 1,314,450 26 Lorry Parks 201,200 1 681,805 7 95,000 0 3,071,600 3 120,000 2 Rents 0 0 143,100 2 0 0 218,500 0 4,500 0 Other/Misc. 7,302,162 24 0 0 15,889,533 45 9,864,310 8 10,125 0 -------------------------------------------------------------------------------------------********--- Sub-TotaL: 30,171,381 100 9,418,144 100 35,700,234 100 120,954,030 100 5,097,105 100 Grand Total: 59,406,616 77,944,146 80,148,671 305,807,659 23,470,994 o 0 (D(D 0 -4 GHANA SLMfARY OF FINANCIAL PERFORMANCE OF 12 SAMPLE DAs FOR THE PERIOD 1988 • 1991 AMA EAK KET TEC WA TAM 1. Total Revenue 1) 1988 571,659,426 38,485.915 28.142.676 63,699,795 24,347,864 56,014,490 fl) 1989 802,108,817 54,494.818 24.527,879 87,194,575 32,761,372 89,731,270 III) 1990 1,078,847,702 69,249,396 35,597,136 125,969,651 52,986,962 106,600,110 Iv) 1991 2,080,793,667 76,587,337 74,130,967 133,083,612 56,844,975 112.839,288 4,533,409,612 238,817,466 162,398,658 409,947,633 166,941,173 365,185,158 2. Total Expenditure 1) 1988 560.874,964 36,058,733 13,972,956 46,365,475 40,853,045 55,025,691 II) 1989 809,779,764 39,513,109 17,400,221 87,794,660 39,690,176 89,991,609 iii) 1990 1,081,126,489 55,138,689 38,922,767 119,390,226 53,580,008 105,416,241 iv) 1991 2,395,396,710 82,419,499 75,021,769 137,055,305 59,167,000 130,503,630 4,847,177,927 213,130,030 145,317,713 390,605,666 193,290,229 380,937,171 3. Surplus (Deficit) 1) 1988 10,784,462 2,427,182 14,169,720 17,334,320 (16,505,181) 988,799 i) 1989 (7,670,947) 14,981,709 7,127,658 (600,085) (6,928,804) (260,339) III) 1990 (2,278,787) 14,110,707 (3,325,631) 6.579,425 (593,046) 1,183,869 iv) 1991 (314,603,043) (5,832,162) (890,802) (3,971,693) (2,322,025) (17,664,342) Total X of Sat. Exp. Sal. Exp. 1) 1988 385,594,041 70.33 32,479,927 90.08 12,060,525 89.69 29,292,000 72.01 16,829,162 41.88 48,293,867 88.57 11) 1989 448,992,429 55.84 30,203,040 86.12 14,284,161 85.53 28,896,000 40.15 28,977,267 73.01 78,601,915 89.62 iii) 1990 502,486,367 54.85 29,008,755 53.18 16,024.399 55.40 35,962,000 41.45 38,470,224 74.58 64,312,058 66.22 iv) 1991 566,678,394 26.88 42,149,425 57.20 18,848,042 30.27 44,175,000 39.40 57,600,000 100.00 89,492,886 70.40 1,903,751,231 133,841,147 61,217,127 138,325,000 141,876,653 280,700,726 Total Rec. Exp. 1) 1988 548,263,719 36,058,733 13,446,632 40,679,787 40,188,965 54,525,674 1) 1989 804,102,457 35,069,854 16,699,881 71,971,077 39,690,176 87,708,229 iII) 1990 916,123,722 54,545,389 28,924,722 86,768,649 51,580,008 97,124,166 iv) 1991 2,108,126,841 73,686,485 62,272,071 112,117,069 57,600,000 127,117,570 4,376,616,739 199,360,461 121,343,306 311,536,582 189,059,149 366,475,639 Total X of Tot. Expend. Sal. Exp. 1> 1988 560,874.964 68.75 36,058,733 90.08 13,972,956 86.31 46,365,475 63.18 40,853,045 41.19 55,025,691 87.77 II) 1989 809,779,764 55.45 39,513,109 76.44 17,400,221 82.09 87,794,660 32.91 39,690,176 73.01 89,991,609 87.34 itii) 1990 1,081,126,489 46.48 55,138,689 52.61 38,922,767 41.17 119,390,226 30.12 53,580,008 71.80 105,416,241 61.01 iv) 1991 2,395,396,710 23.66 82,419,499 51.14 75,021,769 25.12 137,055,305 32.23 59,167,000 97.35 130,503,630 68.58 4,847,177,927 213,130,030 145,317,713 390,605,666 193,290,229 380,937,171 BON WME AG Ja AW DR 1. Total Revenu ) 1988 2,940,907 0 33,066,383 0 60,873,475 2,780,584 11) 1989 19,381,321 4,875,380 40,873,433 19,641,062 70,770,251 15,321,693 fil) 1990 33,115,735 24,689,761 57,985,914 34,113,110 119,180,929 18,412,365 tv) 1991 30,183,432 81,056,810 74,631,966 41,772,585 158,816,852 18,370,577 85,621.395 110,621,951 206,557,697 95,526,757 409,641.507 54,885,219 2. Total Expenditure 1) 1988 844,095 0 24,636,053 0 44,495,678 0 fl) 1989 13,218,904 93,500 29,106,400 13,318,596 68,055,135 8,144,445 ii) 1990 26,047,271 24,688,264 58,463,689 33,804,338 125,591,691 15,664,955 Iv) 1991 31,110,454 30,843,799 23,419,585 34,680,757 119,741,054 24,543,181 71,220,724 55,625,563 135,625,727 81,803,691 357,883,558 48,352,581 3. Surptus (Deficit) 1) 1988 2,096,812 0 8,430,330 0 16,377,797 2,780,584 11) 1989 6,162,417 4,781,880 11,767,033 6,322,466 2,715,116 7,177,248 111) 1990 7,068,464 1,497 (477,775) 308,772 (6,410,762) 2,747,410 iv) 1991 (927,022) 50,213,010 51,212,381 7,091,828 39,075,798 (6,172,604) 1 1988 12,000 1.42 0 0.00 22,862,901 95.60 0 0.00 35,289,900 82.32 0 0.00 II) 1989 2,716,400 20.60 0 0.00 23,075,695 89.18 0 0.00 40,484,437 73.83 6,422,535 84.30 111) 1990 6,413,619 28.44 5,970,230 29.54 24,903,500 51.48 0 0.00 38,870,047 54.62 9,712,885 69.23 Iv) 1991 6,928,866 37.74 5,878,452 28.46 14,319,423 71.00 0 0.00 57,694,217 68.35 10,131,650 85.36 16,070,885 11,848,682 85,161,519 0 172,338,601 26,267,070 ) 1988 844,095 0 23,914,023 0 42,869,078 0 11) 1989 13,185,004 0 25,874,435 13,297,0% 54,833,251 7,618,635 fil) 1990 22,554,048 20,208,264 48,371,689 22,100,711 71,164,877 14,030,731 tv) 1991 18,357,652 20,657,360 20,167,745 22,861,774 84,407,764 11,869,400 54,940,799 40,865,624 118,327,892 58,259,581 253,274,970 33,518,766 1) 1988 844,095 1.42 0 0.00 24,636,053 92.80 0 0.00 44,495,678 79.31 0 0.00 i1) 1989 13,218,904 20.55 93,500 0.00 29,106,400 79.28 13,318,596 0.00 68,055,135 59.49 8,144,445 78.86 fil) 1990 26,047,271 24.62 24,688,264 24.18 58,463,689 42.60 33,804,338 0.00 125,591,691 30.95 15,664,955 62.00 0 f Iv) 1991 31,110,454 22.27 30,843,799 19.06 23,419,585 61.14 34,680,757 0.00 119,741,054 48.18 24,543,181 41.28 bx 71,220,724 55,625,563 135,625,727 81,803,691 357,883,558 48,352,581 0 t^ GHANA RECURRENT REVENUE GROUTH RATES OF 12 SAMPLE DAs FOR THE PERIOD 1988-1991 1 2 3 4 5 6 7 8 9 10 11 12 A1A EAK KET TEC WA TAM BON WME AGO J AU BN 1. CentraL Govt. Rev. 1) 1988 Mi) 1989 17.33% 8.93% -79.48% -1.531 39.19% 18.86% 100.00% -3.49% 100.00% 9.90% 50.85% lii) 1990 13.33% 1.68% 46.95% -5.592 39.51% 25.94% 72.322 100.00% 11.40% -261.27% -8.67% 41.69% iv) 1991 68.81% 26.51% 25.27% 23.87% -28.072 19.76% -59.07% 99.35% 65.31% 66.78% 43.17% 26.90% 2. Local Govt. Rev. 1) 1988 Ii) 1989 34.702 55.35% 20.57% 34.77% 11.982 55.072 82.86% 100.00% 40.83% 100.00% 16.00% 100.00% 1ii) 1990 30.80% 37.22% 17.67% 36.772 36.75% 3.50% 31.57% 79.99% 41.09% 61.51% 51.48% -10.96% Iv) 1991 28.33% -11.19% 63.13% 1.39% 27.67% -20.52% 0.23% 19.26% -275.51% 10.10% 19.26% -70.87% 3. Total Revenue 1) 1988 II) 1989 28.73% 29.38% -14.74% 26.95% 25.68% 37.58% 84.83% 100.00% 19.10% 100.002 13.98% 81.85% Iii) 1990 25.65% 21.31% 31.10% 30.782 38.17% 15.82% 41.47% 80.25% 29.51% 42.42% 40.62% 16.79% Iv) 1991 48.15% 9.58% 51.98% 5.352 6.792 5.53Z -9.71% 69.54% 22.30% 18.34% 24.96% -0.23% fD Annex 17 MINISTRY OF LOCAL GOVERNMENT 1991 DEVELOPMENT BUDGET Name of Project Provision 1991 (Cedis) Provision 1992 (Cedis) DECENTRALIZATION PROGRAM 1 Provision of bungalow to be used by 262,000,000 400,000,000 DS and DAO's of 45 new Districts. 2 Renovation of existing 65 Local 83,000,000 80,000,000 Council bldgs. to be used as offices. 3 Const. of JSQ (2 per dist.) Thereafter 114,000,000 168,000,000 45 additional ones will be built. 4 Provision of 1 office blk. for each of 375,000,000 625,000,000 the 45 new districts 5 Renovation and furnishing of old 48,000,000 58,000,000 government bung./resthouses to be used by DS and DAOs as residential facilities. 6 Renovation of Local Gov't Train. 38,000,000 100,000,000 Sch. in Tamale and Accra. 7 Construction of offices and some 50,000,000 60,000,000 facilities in some old districts 8 Tamale Sanitation Project 5,000,000 9 Furnishing of AARRO Reg. Office at 1,000,000 MLG 10 Office Furniture and Equipment for 30,000,000 25,000,000 45 new District Councils 11 Replacement of Broken-down 40,000,000 20,000,000 equipment and Furniture for 65 Existing Old District Councils 12 Cesspit Emptiers and Refuse Truck at 436,000,000 243,000,000 the rate of 1 Cesspit Emptier and Refuse Truck per District. Annex 18 INTERGOVERNMENTAL TRANSFERS AS A PROPORTION OF TOTAL GOG REVENUE (Millions of Cedis) Year 1976/77 197778 1978/79 1979/80 1980/81 1981/82 1. Total 000 Revenue & Grants 1075 1539 2188 3026 3279 4545 2. Transfer to DAs 44 80 106 154 213 274 3. % 4.1 5.2 4.8 5.1 6.5 6.0 1982 1983 1984 1985 1986 1. Total 000 Revenue & Grants 5252 10241 22641 40311 73625 2. Transfer to DAs 309 464 789 580 1256 3. % 5.9 4.5 3.5 1.4 1.7 1987 1988 1989 1990 1. Total GOO Revenue & Grants 111046 153791 214513 267619 2. Transfer to DAs 2314 3543 1960(?) 3947 3. % 2.1 2.3 - 0.9 1.5 (source: Ghana Statistical Service) Annex 19 TAMALE MUNICIPAL ASSEMBLY Extract from 1992 Estimates Actual Capital Expenditure in 1990 DEVELOPMENT PROJECTS CEDIS Self-Help Projects 3,990,604.00 Rehabilitation of Schools 12,900.00 Construction of J.S.S. Workshops 617,971.00 Rehabilitation of Slaughter House 44,500.00 Construction of Slaughter House 2,900,200.00 Purchase of Tractor 550,000.00 Fencing of Central Bus Stop 211,000.00 Adult Literacy Program 60,000.00 TOTAL 8,387,175.00 Annex 20 PROJECTED INCREASE IN DISTRICT ASSEMBLIES' INTERNALLY - GENERATED REVENUE (millions of cedis) 1990 1991 1992 1993 1994 1995 1996 1997 Average per DA 42.7 44.7 49.2 60.7 67.5 75.0 83.3 92.5 PROJECTED INCREASE IN CENTRAL GOVERNMENT TRANSFERS (in million of cedis) 1990 1991 1992 1993 1994 1995 1996 1997 Total Transfer * 3,900 5,200 5,750 22,400 24,900 27,600 30,600 34,000 Average per DA 35.5 47.3 52.3 203.6 226.4 250.9 278.2 309.1 * Based on figures provided by Ghana Statistical Service (GSS) and projections by it and World Bank Staff for GOG future recurrent revenue. PROJECTED INCREASE IN DISTRICT ASSEMBLIES' TOTAL REVENUE (millions of cedis) 1990 1991 1992 1993 - 1994 1995 1996 1997 Average per DA 78.2 92.0 101.5 264.3 293.9 325.9 361.5 401.6 PROJECTED PER CAPITA TOTAL REVENUE (Average DA in cedis) 1990 1991 1992 1993 1994 1995 1996 1997 Capita 593 596 666 1864 2020 2186 2354 2553 0r15: Average DA population projection based on 1990 figure of 14.5 million total population with future annual growth rate of 2.6 percent. Annex 21 ESTIMATED STAFF BY DEPARTMENT, GRADE AND LEVEL OF GOVERNMENT (excluding Education Sector) * NON-METROPOLITAN DISTRICTS Department I I % With Without I Health Staff Health Staff Administration i [2,023] [21.4] P9.0 Grade A 0 .0 .0 B 97 1.0 1.8 C 516 5.4 9.9 D 1,410 14.9 27.2 -F---- - - - - Treasury [2,238] [23.6] [43.2] Grade A 389 4.1 7.5 B 49 .5 .9 C 292 3.0 5.6 D 1,508 15.9 29.1 Works [ 875] [9.21 [16.91 Grade A 97 1.0 1.8 B 10 .1 .1 C 165 1.7 3.1 D 603 6.3 11.6 Health [4,271] [45.2] 1 -.- Grade A 1,303 13.7 - B 30 .3 - C 535 5.6 - D 2,403 25.4 - Other [40] [.4] [.7 Grade A 20 .2 .3 B 10 .1 .1 C 1 10 .1 .1 D - 0 .0 .0 Total a 9,447 N = 9,447- N = 5,176- ________________________________________________ I Anex 22 ESTIMATED STAFF BY OCCUPATIONAL CATEGORY (actual) * Non-Metropolitan Districts Occupational Category % % With without Health staff Health Staff Technical Staff [1.030) [16.2] [26.5] Senior Technical 10 .1 .2 Officer Mechanical 58 | .9 1.4 Supervisor I I Water Engineer 10 .1 .2 Water officer 10 .1 2 Road Foremen 29 .4 .7 Mechanics 29 .4 e .7 Plant Operators 97 1.5 2.5 Agricultural 272 4.2 7.0 Extension Workers Carpenters 233 3.6 6.0 Bricklayers 233 3.6 6.0 Draftsmen 49 .7 1.2 Finance Staff [2,8013 [44.1] [72.12 Accountants 78 1.2 2.0 Accounts Officers 292 4.5 7.5 Revenue Collectors 2,247 35.3 57.9 Audit Staff 184 2.8 4.7 Store Officers 49] [ .7] [1.2 Aninet Health Staff 1 137] [ 2.1] [3.5 Veterinary Doctors 20 .3 .5 Veterinary 1 117 j 1.8 3.0 Attendants * Health Staff 1 [2,334] [36.7] [-.-] Doctors 88 1.3 I - Public Health 223 I 3.5 officers Environmentat 710 11.1 Health Staff Nurses 613 9.6 Mid-Wives a 700 a 11.0 I I I TOTALS a 6,351 eg N= 6,351-- a N = 3,880-- 1 I I _ _ _ _ _I__ _ I Annex 23 ENROLLMENT BY DISCIPLINE Enrollment by Discipline in Tertiary Institutions 1990 DISCIPLINE UNIVERSITIES DIPLOMAS POLYS TOT TOT Arts/Social Sc. 3,677 - 3,677 15.1 Agriculture 783 - - 783 3.4 Business/Mgt. 534 - 2,835 3,369 14.4 Education 921 2,316 - 3,237 13.8 Engineering 844 - 7,211 8,055 34.4 Env. Studies 264 - 264 1.1 Fine Art 327 - 213 540 2.3 Law 44 - - 44 0.2 Medical/Health 893 - 893 3.8 Science Sciences 1,371 - 1,061 2,432 10.4 (Basic/Applied) I I Renewable 188 - 188 0.5 Resources Total 9,776 2,316 11,320 23,412 100.0 Source: MOE/HED/G.E.S. Internal Records IBRD 234 BURKINA FASO 2 .1 Tumu Novrongoo Z6sil G H A N A U P .DISTRICT ASSEMBLY AREAS L.awra UPPER Sandemo BOLGATANGA 12 SAMPLE DISTRICT OJ,ropa Gamb a ASSEMBLIES FOR LOCAL WESo GOVERNMENT SECTOR Nawlh STUDY Walewale - PRIMARY ROADS O DISTRICT CAPITALS 1 REGION CAPITALS 10. Gushiegu NATIONAL CAPITAL - DISTRICT BOUNDARIES - REGION BOUNDARIES Sabobo - INTERNATIONAL SO elu BOUNDARIES Tolono Yendi . E Zabzugu NORTHERN Bole ODamongo9. Bimbilla c 6T E TOGO D 'IV OIRE Nkwanta Kinomoo BRONG-AHAF Kete Kwame Danso Karachs Drob WnhOAtebubu OWAE 0 Tec r Nkoranza VLAdlebi Bereku E ur J sikan Dormoo- SUNYA ASHANTI Ahenkro ochem Mampong Kwome Hohoe 7 0AO Dansoo 7 KenyOsi TepO ffin AoEfidua prn ank so OM Ronte 7n9.. Goaso E ANsun aso . Korago Nkawi S, Ouase praeso H Kuntemise O H JAE-8ABibioni O.no Juns BraV OLTA skon BekwoaBeor Oo buas I m Ns*Odumasi Atimpeku kat Wiaws Kadro Adidoma 6' Dunkwa- Edu 0se 0 uhmAkkopogo myo e on O n Ak,m Oda 0 adowa Keto o oNTRAL Asam nkese O m Encht Asankrangwa OFos IAr a n'Adao WESTER wif Praso Asikrm Ama TemaAC R Abura Alumoa A?1 kw 00 10 20 30 40 50 60 Tor~~ aO AoWnneba MILES a * Saltpond This map has been peadbyThe World Bonk's staff excluisnvefy for a Assini WESTne HO , CP OAST the convemenceof edeso ad is for the iaternal use of The World 5 , EmoneBarnk Group The denommnations used and the b-ounres showni on this SEKONDImop, do not imply, on the port of The World Bonk Group, any judgment SEKONDIan the legal stts of any territory or any endorsement or oceeptance of Axm , GULF OF GUINEA suchboundone onto JANUARY 1993