CHAPTER ONE

1.1 INTRODUCTION
1.2 BACKGROUND OF THE STUDY
In the pure spirit of democracy, the writers of Ghana's constitution in 1992 dealt with

Decentralization and Local Government in Chapter 20, Articles 240-256. This is an institution

that is making government and governance more accessible to the people. The Metropolitan,

Municipal, and District Assemblies were envisioned in the constitution as a democracy

laboratory as well as the primary agent for furthering the cause of equal opportunity, income

redistribution, and poverty reduction, among other things. As a result, it served as a vehicle for

decentralization. Local government is often responsible for providing people with administrative,

budgetary, and other public services and facilities.

Because of insufficient budgets and a lack of autonomy, local governments in highly unitary

centralized regimes such as France and the United Kingdom have very limited capabilities in

terms of proposing and enacting programs. Although many see decentralization as a fundamental

foundation mechanism for national democracy and prosperity, district assemblies are ill-

equipped to oppose any infringement on its authority by the central government (NALAG,

2005). Metropolitan, Municipal, and District Assemblies (MMDAs) in Ghana are partners with

the central government in national development, and as partners, they must create adequate

Internal Generated Funds (IGFs) to carry out development initiatives.

Internal revenue is utilized to finance the statutory District Assemblies Common Fund (DACF),

which is used to provide infrastructure development and services to the people. MMDAs are

responsible for providing municipal and other services, as well as preserving law and order, all

of which need sufficient financial capital, and internal revenue mobilization is therefore critical.

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The District Assemblies were completely funded by the Central Government. Due to budgetary

restrictions, the government endeavored to identify other sources of money for the assembly in

order for them to execute their tasks successfully and efficiently. This resulted in the adoption of

Article 240 (2) of the Republic of Ghana Constitution of 1992, which established district

assemblies as rating authorities. Article 252 established the District Assemblies Common Fund

as well (DACF). This fund represents 7% of the central government’s domestically produced

money, which is disbursed to all 216 Metropolitan, Municipal, and District Assemblies for

development initiatives.

The decentralization program provided the district assemblies with five sources of money: the

District Assemblies Common Fund (DACF), ceded revenue, domestically produced funds via

local taxation, loans, and licenses, among other things, and revenue from external sources like

property sales. The DACF is the principal source of government revenue, delivering a legally

mandated minimum contribution. The ceded revenue is concerned with a variety of minor tax

categories that the federal government has delegated to district assemblies.

The Ghana Internal Money Service has transferred revenue to the district assemblies in the form

of entertainment duty, casino revenue, betting tax, advertisement tax, and others (Ayee, 2003).

However, community revenue production dates back to 1986, when the central government

required that local governments pay the wages and salaries of their employees. This was done to

push them to increase their income mobilization efforts while also reducing central government

spending in that area. Parts VII and VIII of the Local Government Act (Act 462 of 1993)

permitted district assemblies to mobilize money in the form of fees, penalties, and licenses,

which were further harnessed in 1988 when the District Assemblies were founded and

empowered.

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The query, therefore becomes, to what extent can Assemblies mobilize revenue?

(United Nations Communications Group SDGs, 2017) argued that the elimination of poverty is

only possible if more people, especially young people, have stable and productive employment.

Decent jobs mean safe working conditions, with fair wages, that provide opportunity for people

to lift themselves out of poverty. Society, as a whole, benefits when more people contribute to

Ghana’s growth. A growing youth population can boost economic growth if employment

opportunities are available, but unmet expectations of an increasingly educated youth population

can lead to social conflict and political instability.

By 2035, the proportion of youth population in Africa will go up drastically. Over here in Ghana,

the youth make up 36% of the population, and 56% of these youth dwell in urban centers. To

adequately respond, the government of Ghana will need to provide an enabling environment that

facilitates the creation of decent job opportunities for new entrants to the labor market. Studies

indicate that most jobs in Ghana are low-skill, requiring limited cognitive skills and

technological content. This in turn translates into low earnings and less decent labor practices.

The challenge for the government is therefore twofold: provide access to jobs and ensure that

jobs meet decent work standards.(Dadzie et al., 2020)

This dissertation aims at establishing resource mobilization opportunities and challenges that the

Nsawam Municipal Assembly is confronted with in promoting access to decent work and

financial resources to the youth.

1.3 PROBLEM STATEMENT

The primary goal of Ghana's decentralization scheme is to include citizens. This will assist the

government in better identifying their wants, difficulties, and obstacles, allowing the former to

fulfill such needs properly. As a result, the MMDAs rely on the central government's statutory

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money to enhance the livelihood and well-being of the local people. Unfortunately, the central

government does not appear to provide the required budget; and if it does, it looks insufficient to

implement the assembly's programs and activities. Furthermore, according to the Local

Government Act (Act 462 of 1993), the MMDAs represent the executive arm of government at

the decentralized level, and as such, they are required by law to identify, generate, and collect

revenue in the form of rates, tolls, property taxes, and fines, among other things, and to make

expenditures in accordance with Ghanaian laws and acts to strengthen their financial base for

locality development. In addition to the Internally Generated Funds (IGFs), the MMDAs are

expected to design initiatives and programs that entice revenue to meet the execution of projects

and organize activities that, in the long term, aid in poverty reduction in their respective

communities.

Most Assemblies confront problems such as insufficient infrastructure and a lack of logistics,

employees, and resources to discover revenue sources and collect and use funds to conduct

development initiatives (Owusu, 2012). As a result, most MMDAs struggle to obtain the

necessary money to fund their budgets. Similarly, the Local Government Act 462 of 1993 did not

anticipate the difficulties that MMDAs would encounter in attempting to produce more money in

their local assemblies. For example, there is a paucity of knowledge on the resources and

activities inside each assembly's limits, which may hamper income mobilization in their

individual districts. Furthermore, land litigation and legal concerns make it difficult for some

assemblies to identify, appraise, and mobilize money from firms and economic activity located

within their limits. These and other factors, as well as the use of assemblies, raise concerns that

must be investigated; thus, the purpose of this study is to discover how a local Assembly

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identifies and mobilizes revenue for the implementation of projects in MMDAs in Ghana,

specifically the Nsawam Aduagyiri Municipal Assembly.

The 2019 Ghana Voluntary National Review Report on the Implementation of the 2030 Agenda

on Sustainable Development observed that, the national unemployment rate has increased from

11,6% in 2015 to 14.1% in 2017. Comparatively, the unemployment rate has more than doubled

in only 4 years; from 6.5% in 2013 to 14.1% in 2017. The report further indicated that

unemployment continues to be shooting high in urban centers (16.7) than in rural centers (11.4).

Again, the report revealed that the majority of the youthful populations who are employed are

working in the informal sector, which is characterized by low wages and low job security. The

2019 Ghana Voluntary National Review Report on the Implementation of the Sustainable

Development concluded that the informal sector presents a major challenge in achieving the

SDGs Goal 8 in Ghana, due to the fact that a lot of people work in the informal sector. (Delatie-

Budair, 2011)

(Dadzie et al., 2020) argues that, ‘In the last 20 years, the government of Ghana has rolled out

several interventions to address youth unemployment and underemployment. The current

guiding policy, the Coordinated Programme of Economic and Social Development Policies

(2017–24): An Agenda for Jobs—Creating Prosperity and Equal Opportunity for All, places the

issues of youth unemployment and underemployment at the center of national development.

Specific to programming, the revamping of the Youth Employment Agency (YEA), the work of

the Microfinance and Small Loans Centre (MASLOC), and the operationalization of the Nation

Builders Corps (NABCO) are avenues for promoting youth employment. In addition,

implementation of the One-District-One-Factory, One Village-One-Dam program and other

initiatives are intended to revive formerly well-to-do but now-distressed businesses, as well as

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promote the establishment of strategic new businesses. This implies that the central government

has recognized these challenges that stand a risk of limiting Ghana’s efforts to achieving SGDs

goal Goal 8, and put in some measures to help address them. Yet, the decision lies in whether a

centralized approach is preferred to decentralized approach to making these Government

initiatives work appropriately and in line with the attainment of the Sustainable Development

Goals in Ghana.

(UCLG, 2019) assesses that promoting inclusive local economic development and enabling

decent work is at the center of city and territorial development. Cities and metropolitan centers

are recognized as the engine of growth, but this claim could be evasive if the needed rights-based

and inclusive local policies are not in place to promote decent work and opportunities for all. The

report further stated that, local governments have a key role to play by ‘strengthening their local

economy, invest in local economic development and to foster technological innovation, support

the green and circular economy and to promote local culture and products. The best way forward

in promoting decent work and economic growth at the local level, according to the (UCLG,

2019), is to ensure an adequate and predictable stream of financing and resources to support

policies in favour of inclusive local economic growth. The document also called for the

engagement of relevant local actors in the implementation and follow upfollow-up process to

foster sustainability, transparency and accountability.

As the world thrives to finding solutions to developmental issues facing its citizenry through the

Sustainable Development Goals, many countries, especially in Sub-Saharan Africa, still linger on

to achieving these developmental goals by 2030. One of the key setbacks is the effectiveness of

its local governance structures in raising the needed revenue to embark on the developmental

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agenda. According to the District League Table II 2018/2019 (DLT II) organized by UNICEF,

the Center for Democratic Development, (CDD Ghana) and the Center for Social Policy Studies,

University of Ghana; for Ghana to develop, there is the need to understand a variety of factors

that is contributing to the poor performance of some district assemblies in embarking on

developmental projects in their own domains. The DLT II analysis established various degrees of

development among districts and regions as well as existing differences in various sectors. The

report encourages national and local governments to enhance citizens’ participation in the

development process, and in harnessing citizens’ voices to improve social accountability, and

social development which is a reflection ofreflects their needs and aspirations. The DLT II

outlined 5 key areas that need a critical look at by both national and local governments for

effective planning, and to better understand the range of factors causing the poor performance in

some districts:

a. Is central government budgeting for priority services, and are the funds being transferred

to the districts timeously, and effectively utilized?

b. Are the districts and local governments collecting the revenues that are available to them?

c. Are district and local government budgets prioritizing the services that are going to

deliver the greatest social impact and thereby improve people’s quality of life?

d. Are districts and local governments releasing the funds to priority services? and

e. Are the funds being used to deliver services effectively in an equitable manner?

(Unicef/CDD, 2019)

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 1.4 RESEARCH OBJECTIVES
The main objective of the study is to ascertain how Local Government Revenue Mobilization

capacities affect the attainment of SDGs Goal 8 in Ghana.

Specific Objectives

 Determine the revenue streams in the Nsawam Aduagyiri Municipal Assembly.

 To identify some of the problems encountered during revenue mobilization and ways of

maximizing revenue collection

 To identify the revenue and expenditure projections of the district

 Determine the expenditure patterns of the revenue generated

 To identify how the revenue mobilized can help in the attainment of SDG goal 8

1.5 RESEARCH QUESTIONS

To achieve the above objectives, the researcher will seek to find answers to the following

questions:

 What are the sources of revenue in the Nsawam Aduagyiri Municipal Assembly?

 What are the factors undermining effective revenue mobilization?

 What are the revenue and expenditure projections of the Nsawam Aduagyiri Municipal

Assembly?

 How does the District Assembly expend its revenues?

 How does the revenue mobilization help in the attainment of SDG goal 8?

1.6 SCOPE OF THE STUDY

The research does not cover the entire scope of MMDA and the Nsawam Aduagyiri Municipal

Assembly’s financial activities, nor their structures, systems, internal controls, and internal audit

processes. However, the researchers acknowledged that there are other financial actions that are

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significant but not relevant to the study. The research also does not cover all MMDAs, despite

the fact that the suggestions given might be implemented by all MMDAs in Ghana and abroad.

The analysis solely looks at the Nsawam Aduagyiri Municipal Assembly's capacity to generate

income in order to measure its effectiveness and how this income generated contributes to the

attainment of the Sustainable Development Goals (Goal 8) to be specific. It also examines the

expense items spent from income mobilized to find the apparent reasons for expenditure-revenue

gaps in the Assembly from the year 2018-2020.The study also seeks to find out the disparities

with regards to opportunities and challenges in revenue mobilization among local governance

systems in Ghana. Another objective, is to find out the differences in local strategies employed

by local government agencies in achieving the SDGs Goal 8 by 2030 in Ghana, with particular

emphasis on youth employment and access to financial resources.

The choice of the Nsawam-Aduagyeri Municipal Assembly as the study area was informed by

the overall rankings in the District League Table II 2018/2019. The report places the Nsamwam

Aduagyiri Municipal Assembly at the 3rd, out of 216 districts survey. The interest here is to find

out what accounts for the differences in opportunities as well as challenges for the District

Assembly to perform its developmental roles effectively.

1.7 SIGNIFICANCE OF THE STUDY

The study's findings, if implemented, would aid in the democratization and machinery of the

Ghanaian government, as well as the Ministry of Local Government and Rural Development,

which has the mandate to promote a vibrant and well-resourced establishment and development

of a decentralized system of local government for the people of Ghana. This study could help the

Nsawam Aduagyiri Municipal Assembly in particular, as well as other Ghanaian Assemblies,

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reconsider appropriate policies, set goals, and implement strategies to implement, monitor,

evaluate, and coordinate programs, projects, and generate adequate revenue for the development

of their communities in Ghana. This is due to the fact that data such as precise demographic and

socioeconomic information is frequently used in the creation and execution of development and

policies (GSS, 2014).

Furthermore, research of this sort will reveal Ghana's attitude and understanding of taxes and

local government systems, which will guide policymakers on the relevant areas to focus on and

steps to be implemented to educate their people and extend their revenue mobilization sources.

As a result, the research will eventually produce helpful information that might lead to a better

local governance system not just in the study district but also in other places. It will be especially

useful for Local Government practitioners in Ghana and the management of Nsawam Aduagyiri

Municipal Assembly because it will provide useful information on how to improve revenue

mobilization and how revenue could be used to realize vision decentralization in the governance

system of the Ghanaian republic.

Furthermore, the findings will reveal the many sources of revenue concerns of the people in the

district, as well as the obstacles, if any, experienced by the revenue mobilization team and how

the money may be better to be used to develop projects and programs in the communities. The

research will also aid other interested institutions or investors, both domestic and foreign, in the

development of infrastructure and the welfare of Ghanaians in determining how they may

successfully partner with the government to create a more responsive influence on the country's

requirements.

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Finally, the study will contribute to the current body of information on local government and

project implementation, as well as act as a research foundation and a valuable document for other

scholars.

1.8 BRIEF METHODOLOGY

In terms of methodology, the study adopts a mixed-method approach. Both qualitative and

quantitative research methods were used for the study. A case study approach is adopted since it

has the advantage of allowing for an intensive collection of information needed to achieve the

objectives of the study. Plans for the survey started with a number of meetings with relevant

stakeholders at the Ministry of Local government and Rural Development, the Ministry of

Finance, the Office of the Head of Local Government Service, the National Development

Planning Commission, and the Nsawam Aduagyiri Municipal Assembly. Following the

stakeholder meetings, initial drafts of the questionnaires were tested at Nsawam Aduagyiri

Municipal Assembly and also shared with some of the key stakeholders for their feedback.

Specific questionnaires were prepared for each of the respondent categories which focused on

their education and experience, as well as comprehensive questions on revenue mobilization

capacity (including resources), strategies, practices, and constraints… Questions were asked

about billing, collection, enforcement, technology, and database use, as well as revenue

collectors’ performance, salaries, commissions etc. Data was then collected using network-

enabled devices and hardcopies which ensured real-time upload and synchronization of the data

to a single location for daily examination. The study targeted 300 officials and personnel

associated with Ghana's Nsawam Aduagyiri Municipal Assembly. Chief Executives,

Coordinating Directors, Finance Officers, Budget Officers, the Chair of the Finance and

Administration Sub-Committee (and, in some situations, the Presiding Member), revenue

accountants, audit and revenue officers were among the respondents also revenue supervisors

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and superintendents as well as salaried and commissioned revenue collectors. In addition,

randomly sampled whose work related to the subject matter was duly sampled. Utilizing a

purposive and convenient sampling technique, the sample size selection of 150 was informed by

the key players involved based on their knowledge of budgeting, finance, and revenue generation

in the District Assembly. The choice of the officers at the District Administration was informed

by the fact that they were directly involved in the processes that led to the setting of the budget

processes as well as the management of the revenue generation processes.

1.9 LIMITATIONS OF THE STUDY

The research study was confined by time since it was carried out alongside academic activity that

was time-bound. Nonetheless, the research would have provided thorough information on

income collection, project use, and financial issues confronting all district assemblies in Ghana.

Furthermore, it could not serve all homes in the Nsawam Aduagyriri community since the

district is fairly wide with dispersed revenue centers, necessitating significant financial

investment in transportation and time to all rural regions. Furthermore, the inadequate record-

keeping culture and hectic schedules of MMDA workers, such as those in the revenue unit,

constituted a barrier to providing enough secondary information and questionnaires to

individuals chosen for the research study. As a result, the researcher relied on the sample to

complete the study.

1.10 ORGANIZATION OF THE STUDY

The study upon completion will be structured into five chapters. Chapter one will contain the

background of the study, the problem statement, the research objectives and questions, the

significance of the study, the scope of the study, and the organization of the study. Chapter two

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will focus on the review of literature relevant to the study. Chapter three will deal with the

methodology of the study which comprises the research design, instruments of data collection,

sample and sampling techniques, data collection tools and procedures as well as data analysis

and a brief profile of the study area. Chapter four will compose the presentation and

interpretation of data obtained from the study field. Chapter five which is the final chapter will

consist of the summary of key findings, recommendations, and conclusions are drawn.

CHAPTER TWO
2.1 INTRODUCTION
This study must be situated within a well-defined intellectual context in order to bring the

pertinent issues into sharp focus in a scholarly inquiry of this nature. Essentially, this requires the

development of a conceptual review, a review of related literature, and a theoretical framework

to guide the research. As a result, this chapter focuses on all of the above as well as a conceptual

framework that underpins the research.

2.2 DEFINITION OF CONCEPTS

2.3 PUBLIC REVENUE
According to the Oxford Advanced Learner's Dictionary, public revenue is the money received

by a state from taxation and other sources. To put it simply, Revenue is the money generated by

a company's routine business operations, which often include the sale of products and services to

clients. Many nations, like the United Kingdom, refer to revenue as turnover.

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Some businesses get money via interest, dividends, or royalties paid to them by other businesses

(Carcello, 2008). Revenue can relate to overall commercial income or to the amount received in

a monetary unit during a certain time period. Profits, also known as net income, are typically

defined as total revenue and fewer total costs in a particular time. According to the US

Department of the Treasury (2006), annual revenue for non-profit organizations can be referred

to as gross revenues. Donations from people and corporations, government funding, money from

activities linked to the organization's objective, income from fundraising activities, membership

dues, and financial assets such as stock shares in firms all contribute to this revenue.

2.4 STATE REVENUE

The Australian Government's Central Government revenue consists of gross earnings from

corporate and individual taxes, excise duties, customs charges, other taxes, sales of goods and

services, dividends, and interest received. In general, revenue is defined as money received by a

business in the form of cash or currency equivalents. Sales revenue is income earned from the

sale of products or services over time. Tax revenue is income received by the government from

taxpayers. In a more formal sense, revenue is a computation or estimation of periodic income

based on a certain standard accounting practice or the standards set by a government or

government agency. Corporations that sell stock to the general public are often obliged by law to

record revenue in accordance with generally accepted accounting principles or International

Financial Reporting Standards (Source: http://www.budget.gov.au/, accessed on April 16, 2011).

Local government revenue, on the other hand, is mostly comprised of user fees and charges,

property tax, money from certain trades, and so on. Revenue mobilization is the act of gathering,

collecting, and coordinating financial contributions from all known sources of revenue in an

economic environment.

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 2.5 DECENTRALIZATION
Decentralization refers to any activity in which a central government explicitly delegated

authority to individuals and institutions at lower levels (Smith, 1995). It entails delegating

political authority and responsibilities to other levels of government, as well as providing

financial, legal, institutional, and managerial resources to local governments to carry out their

obligations. It also suggests that local governments must answer to both the federal government

and their constituents (World Bank, 1989). The distribution of power across all levels of

government is the foundation of democracy. The term "decentralization" refers to the actual

transfer of authority to local government entities or specific legal bodies. Decentralization may

be defined as the de-concentration (delegation) of authority to field units within the same

department or level of government, or the devolution of authority to local government (Badu,

2007). According to Fass and Desloovere (2003), decentralization is "any act in which a central

authority legally cedes powers to actors and organizations at lower levels in a political-

administrative and geographical hierarchy." This implies that decentralization is a mechanism for

bringing government closer to the governed and aiding in the improvement of public

administration by empowering local governments to be the planning and decision-making

bodies, thereby increasing government capacity to achieve local participation." Rondinelli (1981)

defines decentralization as the transfer of authority from a higher level of government to any

individual, organization, or agency at a lower level to plan, make decisions, and manage public

activities. Based on the definitions and explanations provided above, decentralization may be

described as the process of transferring the governance process to the local people in order for

them to manage, direct, and control their development with the assistance of the central

government and decentralized entities.

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 2.6 THE LOCAL GOVERNMENT STRUCTURE IN GHANA
Ghana's decentralization movement began in 1988 when the PNDC Law 207 gave legal and

institutional guidelines for the formation of the first District Assemblies. The Local Government

Act of 1993, Act 462, accelerated the process. More than a decade later, the Metropolitan,

Municipal, and District Assemblies' (MMDAs') ability to respond to development concerns,

particularly poverty, remains crucial in institutionalizing the decentralization process. Ghana's

districts were reorganized in 1988/1989 in an attempt to decentralize governance and address

widespread corruption among officials. The late 1980s reform separated Ghana's regions into

110 districts, with local district assemblies dealing with local government. By 2006, an

additional 28 districts had been formed by dividing parts of the original 110, increasing the total

number of districts to 138. More districts were established in February 2008, and some were

elevated to city status. This raised the total number of districts in Ghana to 170. Since then, 46

more districts have been created, bringing the total to 216 as of June 28, 2012.

2.7 GHANA'S DISTRICT ASSEMBLIES' HISTORICAL DEVELOPMENT

The 355 native authorities, which focused on a chief or another unit of local monarchy that was

not well-defined, were the first attempts at local governance during the colonial era. The

indigenous rulers were not democratic, but only representations. The Municipal Ordinance of

1859 created municipalities throughout the Gold Coast's coastal communities. A new Ordinance

passed in 1943 established elected town councils in Accra, Kumasi, Sekondi-Takoradi, and Cape

Coast. The Municipal Council Ordinance was passed in 1953. Following independence, the

Local Government Act 54 of 1961 was enacted. The separation between central and local

government entities was preserved in all of these pieces of law. In terms of this distinction,

Ghana has always had two types of administrative machinery: one centered on the capital with

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branches at the local (district) level, and another separate and district level, based in well-defined

areas and known as local government. National issues were handled by central government

entities at the local level. They also attracted more competent employees in terms of

management and professional experience. These central government organizations had less

clearly defined authority in terms of local responsibility, but they had a far stronger presence due

to their de facto status as central government authorities (Ahwoi, 1999). Decision-making took

an inordinate amount of time because these bodies had to refer most matters of any significance

to a ministry in Accra, which was so bogged down with matters of "national significance" that it

was unable to respond quickly enough to problems referred from the local level, causing the

tempo of activity to be slow. Local government entities were given responsibility over local

issues and had grown up alongside central government organizations that functioned at the local

level. They were expected to offer municipal services and facilities in their communities

regardless of whether they had the resources to do so. These organizations lacked individuals

with the necessary skills and professional knowledge.

In their inability to acquire finances to satisfy their duties and recruit capable and qualified

officials, local government entities have only succeeded in projecting an unflattering image of

inefficiency and incompetence.

2.8 REVENUE MOBILIZATION

In the case of district assemblies, income mobilization entails increasing the assets of public

finances without increasing obligation or recovering spending. This money is generated via

taxes, licenses, fees, permits, and so on. To put it simply, Revenue is the money generated by a

company's routine business operations, which often include the sale of products and services to

clients. Revenue mobilization is the act of gathering, collecting, and coordinating financial

17
contributions from all known sources of revenue in an economic environment. According to

Olowu and Wunsch (2003), a stable income system for local governments is a necessary

precondition for fiscal decentralization to succeed. Local income mobilization, according to

Oates (1998), has the potential to enhance political and administrative responsibility through

empowering communities. Revenue generation has been defined as the process of acquiring

revenue through returns on investments, whereas revenue mobilization is the use of available

resources to harness revenues that are required by law to be paid by citizens, corporate

institutions, and quasi-governmental organizations on their operations (Encarta Encyclopedia,

2004). The large number of revenue instruments used by local governments in Africa is a well-

observed feature of local government revenue systems (Bahiigwa et al, 2004). In numerous

nations, local governments seek to raise taxes, fees, and charges that they are capable of

mobilizing on a regular basis without being very concerned about the economic distortions and

distributional impacts that these instruments may have (Brosio, 2000). According to Kessey and

Gunter (1992), domestic revenue mobilization consists primarily of two components: policy

formulation and administration. In terms of policy formation, it is concerned with the physical

goal determination and the design of laws and procedures to achieve such objectives. The

administration, on the other hand, is in charge of carrying out the physical policies that have been

developed. Policy design and administration, although equally vital in revenue mobilization, do

not receive equal emphasis in theory and practice. One of the challenges that nations confront in

their development efforts is the issue of money creation to support the various development

projects that are necessary to improve their populations' living conditions (Stren, 1998).

Internally produced funds are as ancient as the institution of local government itself. When sub-

national and local governments become the bodies in charge of providing services to identified

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users up to the point that the value set on the final quantity of services that the recipients are able

to receive is reached

Because local governments are responsible for providing services to their particular geographical

areas, vigorous internal income mobilization by sub-national organizations has become critical.

In this scenario, good financial planning necessitates a continuous examination of how local

government resources are created, how they are distributed to services, and projecting the

benefits received from those services, in addition to efficient revenue mobilization tactics (Ebel

& Vaillancourt,1998).

2.9 LOCAL ASSEMBLY’S REVENUE INSTRUMENT

According to Olowu and Wunsch (2003), a stable income system for local governments is a

necessary precondition for fiscal decentralization to succeed. Shahs (1998) and Oates (1998)

agree that through empowering communities, local revenue mobilization has the potential to

develop political and administrative responsibility. However, prescriptions derived from theory

and good international practice place significant limits on local governments' choice of revenue

mechanisms. According to Bahl et al. (2003), local government revenue in Africa is divided into

two categories: These are revenues generated domestically, such as taxes, user fees, and different

licenses, as well as transfers from the federal or regional levels, typically in the form of grants

and revenue sharing. Municipalities, districts, and other local governments in some nations are

permitted to borrow money for capital investments in infrastructure. Local government bodies in

Ghana are prohibited by law from purchasing equity shares.

2.10 ASPECTS OF DISTRICT ASSEMBLIES’ REVENUE

2.11 DISTRICT ASSEMBLIES COMMON FUND
The District Assemblies Common Fund (DACF) was included in Ghana's 1992 constitution and

implemented for the first time in 1994. It is the Assembly's single greatest source of revenue,

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accounting for around 75% of its yearly revenue

(www.ghanalocalassemblies.com/districts/accessed on 22/3/2011). Wages and pay of local

government personnel at the Assembly are also money granted to MMDAs by the Central

Government. The study above reveals that the majority of the cash obtained through central

government transfers, including DACF, is allocated in some fashion, leaving MMDAs with

limited control over how the funding is used. The majority of the cash collected by MDAs is for

salary payments to personnel in decentralized departments that report directly to sector ministries

(MLGRDE, 2008). The 1992 constitution emphasized the need of the Central Government

financially support local governments. The constitution acknowledged the need to enhance the

District Assemblies' financial foundation. As a result, section 252 of the constitution established

the District Assemblies Common Fund (popularly known as the Common Fund). Under an Act

of 455, Parliament was required by Section 252 of the constitution to set aside not less than 5%

of national revenue to be dispersed among MMDAs purely for development and ensuring

effective performance of statutory tasks. The central government has set aside approximately

50% of the entire Common Fund for MMDA activities. As a result, the MMDAs have control

over 50% of the funds distributed to meet their local investment requirements. MMDAs should

be able to plan and budget for their own local requirements under the delegated type of fiscal

decentralization (MLGRDE, 2008).

2.12 RENTS, FEES, PENALTIES, AND GRANTS

Fees are levies or tolls imposed on consumers of the Assembly's services. These services include

the District Assembly's provision of markets, lorry parks, and so on, which are largely funded by

the DACF. As a result, users of these amenities must pay for their use. Rents are also collected

when market stalls/stores, Assembly quarters, and other facilities are rented. Court penalties are

imposed on those who break the Assembly's bylaws.

20
According to Bahl et al. (2003), taxes are not the ideal method for matching the demand and

supply of public services. Better connections may be obtained through cost-recovery billing

systems, which directly relate the amount paid to the quantity utilized. Furthermore, many

African countries have a long history of providing basic public services through self-help

activities and religious and other locally based organizations, as well as through institutionalized,

long-term co-production relationships between state agencies and organized groups of citizens.

By establishing a more direct relationship between citizens' contributions and service delivery,

such systems may become efficient ways of recovering service costs and promoting efficiency in

service usage. Most researchers, including Bahl et al (2003), believe that user fees should play an

important part in local government financing.

According to Fjeldstad et al. (2005), the primary economic motivation for user fees is to

encourage the efficient use of public sector resources rather than to generate money. When

correctly established, user charges, according to these authorities, give information to public

sector suppliers on how much consumers are ready to pay for certain services, as well as

guaranteeing that what the public sector supplies is appreciated by residents. Free or subsidized

services may result in excessive consumption. Furthermore, it may be difficult to identify the

recipients of free services.

McDonald and Pape (2002) give case studies from numerous countries, including Namibia and

South Africa, to demonstrate how user fees may put a significant cost on low-income service

consumers while also excluding the poorest sectors of the urban population from services.

Adjustments, according to Rondinelli et al (2017), can be made to compensate for such impacts.

User charges, for example, can reflect inequalities in the ability to pay by integrating sliding

21
scales for the kind of user or the volume of consumption, but this will necessitate suitable

administrative capacity.

According to Bahl and Smoke (2003), user fees for trade services such as water, electricity,

sewage, and solid waste management are key sources of revenue in Southern African

metropolitan municipalities, particularly in Namibia and South Africa. Water and power supply

service expenses, in particular, are significant. This money is earned through a surcharge applied

to the cost of utilities purchased by local governments from utility companies or if the authority

produces the utility, added to the cost of production.

According to Bahl et al (2003), over a fifth of South Africa's electricity-distributing agencies

generate significant cash from sales surpluses. A significant portion of these proceeds is utilized

to offset the cost of delivering the service. However, a significant surplus is left in certain towns

for general local government objectives. As a result, the tax component of the user charge is

concealed from ratepayers. As a result, the exact level of local government taxes is not clear to

residents. As a result, the accountability of the municipal revenue system is weakened.

Furthermore, because the consumer price of a service, such as electricity, is exaggerated by the

amount of the implicit tax, this may have a detrimental influence on economic efficiency.

According to Fjeldstad et al. (2005), in Namibia, the majority of town councils do not set their

prices in line with an established tariff policy of cost recovery. As a result, a lot of local

governments run numerous trade services, including water distribution, at a large loss.

(Bahl and Smoke, (2003) support this by stating that it happens in South African municipalities.

The problem is exacerbated by an increase in the number of outstanding creditors in many local

22
governments, who are consumers who do not pay for essential services for a variety of reasons,

including cost.

(Bahl and Smoke, 2003) utilize examples from South Africa and Namibia to demonstrate that

there are a variety of limits on user fees and other methods of cost recovery. These are the results

of equity factors, such as the capacity to pay, collection and invoicing procedures, the quality of

services delivered, and persistent unwillingness to pay. These lessons demonstrate that dealing

with the policy challenge of revenue improvement in local governments necessitates some

awareness of the elements that influence an individual's decision to pay or avoid paying service

charges and taxes.

Slemrod (2003) cites a growing body of research suggesting that the rate of contribution to

payment of rates, taxes, and so on for the public good is influenced by variables such as

residents' trust in others and the local government's ability to offer quality and timely services.

There is little basis for social collaboration and voluntary compliance with rules and regulations

governing the payment of rates, taxes, and so on without trust. Three characteristics of trust, in

particular, appear to influence people’s compliance with payment requirements and bye-laws:

1. Trust in local governments to use funds to deliver expected services;

2. Trust in local governments to develop fair revenue collection systems; and

3. Trust in other residents to pay their taxes, rates, and so on.

The greater the proportion of the local populace detected not paying the correct taxes, the smaller

the perceived danger of prosecution. This affects individual ratepayers' perceptions of the

revenue administration's legitimacy and trustworthiness. Furthermore, the attitude of local

political leaders toward revenue collecting appears to be significant. They must, for example,

23
legitimate nonpayment via their own actions. Nonpayment issues should thus be addressed on

several fronts, including service delivery, improved administration and payment mechanisms,

and community engagement.

2.13 PROPERTY RATES

Property tax is an important source of revenue for many municipal governments (Mikesell,

2002). Property taxes accounted for 40% of all sub-national taxes in developing countries in the

1990s (Bird and Slack, 2002), but less in many African nations; for example, 10-30% in

Tanzanian urban councils (Fjeldstad et al., 2004), and roughly 20% in South Africa (Bahl and

Smoke 2003). It also has the potential to become a significant revenue generator in district

councils in semi-urbanized areas. Few fiscally significant taxes, according to textbooks on

revenue allocation between levels of government, are more fit for municipal administration than

property tax. This is because real estate is visible, immovable, and a clear symbol of one type of

wealth. As a result, in theory, property tax is impossible to escape, and if properly handled, it

may be a non-distortive and highly efficient fiscal instrument. Local and central governments can

both administer property taxes. Local governments are responsible for keeping property and

ownership data, assessing taxable property values, computing and issuing property tax bills,

handling receipt payments, and enforcing tax on non-payers (Mikesell, 2002, p. 22). In other

circumstances, local governments have a voice in the tax rate, but the national revenue authority

handles all aspects of tax administration. Property valuation is done by the national government

in several countries, like Malawi, while local governments determine rates and collect payments

(Mikesell, 2002, p. 28).

According to Brosio (2000), West African French-speaking countries in general rely on the

traditional French model, in which the property tax is administered and collected by the central

24
government, whereas East and Southern African countries rely on local administration. This is

usually recommended in the literature that stresses that taxes should be administered by the

government that is entitled to their revenue. However, mixed results prevail in both cases in

Africa. Expert opinion on how to enhance property taxation in emerging nations differs. Some

analysts blame the overwhelming centralization of property tax policy, which prevents greater

tax rates from being imposed. Others blame local government independence in this sector for

what they see as near-total chaos. There is also a disagreement on tax management. Property

taxes certainly provide numerous advantages on a local level, but they also have some obvious

flaws that must be considered before relying heavily on them. Often, the municipality's

competency and capacity are insufficient to administer the property tax at a cheap cost

(McCluskey et al., 2003). These administrative flaws appear as valuation issues and arbitrariness

in tax assessment and enforcement. In principle, assessing property value and collecting revenue

is simple: undertake a cadastral survey to determine the market or site value of each piece of land

or property, and issue a tax bill to each owner. Cadastral surveys, on the other hand, are both

costly and time-consuming in practice (Bahl et al., 2003, p. 79). Many municipal governments

lack the financial and technical resources to complete the task. Tax offices in many Sub-Saharan

African nations are severely understaffed if they exist at all (Farvacque-Vitkovi and Godin,

1998). In Uganda, for example, eleven accredited land and property valuators are in charge of

valuing three million pieces (McCluskey et al., 2003).

Tanzania's equivalent estimates are around 100 certified valuators and five million parcels. As a

result, it is difficult to perform and maintain evaluations, which are frequently undermined by

inflation. It is difficult to administrate, especially when property prices fluctuate frequently. As a

result, despite growth in the physical size or value of the property, the property tax base is

25
inelastic since old valuations are not updated and new properties are not recognized. In most

cases, the system was passed down from the colonial era and is no longer fit for purpose.

Property rates account for a significant portion of the overall income collected by local

governments, although the collection is not always efficient. This is a widespread issue in many

underdeveloped nations, not just Ghana (Yeboah & Johanson, 2010). The rate is determined by

the resident adult population and the value of the immovable property. Immovable property is

subject to the property rate.

2.14 DONOR SUPPORT

Most district assemblies get donor money from development partners like DANIDA, GTZ, and

others to carry out specific initiatives in the assembly. DANIDA, for example, supplied water

and sanitation infrastructure to various villages in the Greater Accra regions. The European

Union, World Vision International, and other donor groups present in the municipality have

provided support to the Nsawam Aduagyiri Municipal Assembly.

2.15 LICENSES
Licenses are granted based on the district's economic activity. The license is required to conduct

any such activity in the district. Business operating permits, development permits, and other

types of licenses are issued to persons to allow them to do certain activities in the district. It

generates cash to assist local governments in carrying out their duties (Yeboah & Johansson,

2010). While some of these licenses are paid annually or periodically, a higher number is paid

monthly, increasing the expense of collection (www.ghanalocalassemblies.com.accessed on

22/02/2011).

Local business taxes are often imposed in one of two ways (Devas and Kelly, 2001, p. 384): as a

fixed sum that changes depending on the nature, size, or location of the firm, or as a percentage

26
of turnover or profits. Assessing turnover or profitability, on the other hand, is challenging for

both small firms, which frequently do not keep sufficient records and large enterprises with

several locations in various jurisdictions. As a result, municipal business taxes frequently utilize

proxies for turnover or profitability, such as the size of the premises, the kind of business, the

number of workers, the installed electrical power, and so on.

According to Devas and Kelly (2001), local governments in Francophone Africa collect a tax

known as the Patente, which was inspired by the French Taxe Professionelle. In the 1990s, the

Patente was the greatest single local revenue stream in Cote D'Ivoire, supporting around 17% of

the local government budget, and even more in the capital Abidjan. However, the computation of

this tax is fairly complicated, considering the value of the premises, the number of employees,

turnover, machinery used, installed energy capacity, and other size proxies. Furthermore,

because the rental value of the premises is by far the most important consideration in this

calculation, the tax begins to resemble a property tax.

According to Devas and Kelly, the traditional strategy for generating money from firms in

Anglophone Africa has been licensing. Despite the intended regulatory goal, local business

licensing has gradually become an income generator in most jurisdictions. Business licenses

often contribute between 5% and 30% of local government income in metropolitan districts.

However, in many Anglophone nations, the system has been fairly unsatisfactory, and frequently

quite inequitable. It has placed massive expenditures on businesses while producing very little

revenue. Small and Medium-sized Enterprises (SMEs) in most African nations frequently

complain about not knowing what to pay, where to pay, and to whom. The licensing system's

regulatory features have been mostly abandoned.

27
Furthermore, due to inadequate policy design and administration, license coverage, assessment,

collection, and enforcement rates are low, resulting in low revenue generation. Obtaining a

license usually entails many trips to various offices, often spread out over several days, with

related travel expenditures. Failure to furnish the right licensing receipts may result in the

business being closed. As a result, the system is frequently rife with rent-seeking and corruption.

According to Aranjou-Bonjean and Chambas (2003), inadequate administration frequently

results in many enterprises not being included in the license system due to a lack of proper

business registries. In addition, poor financial management sometimes implies that collection and

enforcement procedures are rarely executed. This reduces the revenue base and creates

imbalances in the system.

As a result, many existing companies’ license systems in Africa have major flaws.

According to Devas and Kelly, 2001, these include:

1. high compliance costs for businesses due to multiple licensing and complex procedures;

2. complicated tariff structures that do not reflect the ability to pay;

3. a process riddled with ineffective regulatory requirements, which provide opportunities for

rent-seeking;

4. poor administration and evasion, which reduce the tax base and generate inequities; and 5. a

revenue source that generates relatively little revenue.

2.16 GHANA'S PROPERTY RATING AND BUSINESS LICENSING ISSUES

Despite legislative backing, most MMDAs are unable to assess and impose business fees or

decide property rates properly. This has an impact on transparency in decision-making

procedures within the context of the two assemblies' deliberative and taxing powers. Within the

28
framework of taxation principles, there is a need to maintain equality in the way taxes are levied

on both persons and companies. Horizontal and vertical equity in public finance refers to the

notion that those with a similar ability to pay taxes should pay the same or similar amounts,

while people with higher ability should pay more.

The Assemblies classify firms ranging from 'table-top' to multinationals, yet fees are given to

different groupings with little impartiality. Litigation by companies opposing the charges occurs

on a yearly basis. Similarly, MMDAs collect property rates from owners of immovable

properties on business operation permit costs. Act 462 also establishes the criteria for

determining the valuations of such assets for the purposes of calculating property taxes. The

structure's disadvantage is the calculation of rate impost as a factor of the values for charging

property rates, which are arbitrary despite being passed and gazette.

2.17 DISTRICT DEVELOPMENT FACILITY

The District Development Facility is a new source of funding for MMDAs (DDF). The new DDF

is funded by a combination of funds from development partners and the Ghanaian government.

The DDF incorporates performance-based criteria as an incentive to improve financial

management processes at the districts, but it is built in such a way that no MMDA is penalized

for activities beyond their control. District Assemblies that satisfy the criteria are given more

resources. The Functional and Organizational Assessment Tool is used to conduct the

assessment. The DDF also offers a more systematic approach to capacity building, as capacity

building is aimed at Districts that are not functioning satisfactorily according to the Functional

and Organizational Evaluation Tool (FOAT) assessment. However, the DDF is aimed at

development and capacity building and has little effect on recurring costs (MLGRDE, 2008).

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 2.18 IMPORTANCE OF REVENUE TO LOCAL GOVERNMENT
Local revenue is important to local governments for the following reasons, according to Ziria

(2008):

 Financing administration costs (e.g., councilors' emoluments and employee costs in

Uganda);

 Financing maintenance costs and thus promoting project ownership;

 Allowing collection of localized and low-yielding revenues;

 Ensuring sustainability of service delivery and autonomy of local governments;

 Regulating businesses and providing important infrastructure and services

2.19 LOCAL GOVERNMENT INTERNAL GENERATED FUNDS REFORMS

(IGFS)
According to Fjeldstad et al. (2000), a large range of revenue instruments utilized for revenue

mobilization is a common feature of local authority IGF systems in Africa. Local governments

appear to increase whatever taxes, fees, and levies they are capable of generating in many

nations, frequently without regard for the economic distortions and distribution impact that these

tools may cause. According to Bardhan and Mookherjee (2002), a convoluted and opaque local

government income system is costly to run and encourages corruption and mismanagement.

Furthermore, many municipal taxes have a distorting influence on resource allocation choices,

which inhibits the establishment of new businesses and the accomplishment of economic growth.

According to Sander (2003), these impacts emerge when effective rates vary substantially

between traded items and when licensing costs are set too high for start-up small-scale firms to

sustain. According to Fjeldstad and Semboja (2000), the amounts and types of municipal revenue

instruments might result in the tax burden falling more on the poor than on the affluent. This is

30
mostly due to the fundamental nature of the municipal tax system and the manner in which

revenues are collected.

Despite several thorough central government tax revisions over the previous decade, Sub-

Saharan Africa's local government revenue structures remained essentially untouched until

recently. In general, while restructuring municipal revenue systems, a greater emphasis on the

cost-effectiveness of revenue collection is required, taking into consideration not only the direct

expenses of revenue administration but also the entire costs to the economy, including taxpayer

compliance costs. Furthermore, losses due to corruption and evasion must be reduced. Clearly,

better revenue administration cannot make up for poor revenue planning.

Thus, improving the revenue structure should come before overhauling revenue administration,

because there is little use in making a defective revenue system operate somewhat better,

Fjeldstad, (2001). Tanzania has completed a significant overhaul of its local government income

system. The key components of this reform were the elimination of ineffective local revenue

instruments that were costly to collect from an administrative and political standpoint, as well as

improvements to existing revenue bases through simplified rate structures and collection

methods. The Tanzanian reform shows that substantial changes in the local government revenue

system are conceivable, however, it is too early to estimate the long-term effects of this reform

on local government income.

2.20 MAJOR LOCAL GOVERNMENT IGF WEAKNESSES AND

STRENGTHS
As previously said, local own revenue' systems in Africa are frequently characterized by a large

variety of revenue instruments. However, property rates, business licenses, and different usage

taxes, frequently in the form of surcharges for services performed by or on behalf of the

municipality, are normally the major sources of own revenues in urban councils. Nonetheless,
31
evidence from a number of African nations indicates that these income tools have significant

shortcomings. For example, property taxes may be exceedingly expensive to administrate

(Brosio, 2000, p. 20), and in certain countries, the enforcement of user fees has resulted in

widespread opposition to pay among the poorest portions of the urban population (Fjeldstad,

2004; Fjeldstad et al., 2005). Furthermore, cumbersome company licensing procedures have

been shown to be significant barriers to the establishment and development of businesses,

particularly micro and small businesses (… Sander, 2003).

However, worldwide data suggests that when properly managed, these revenue devices may

deliver significant and consistent revenue for metropolitan communities.

2.21 REASONS FOR THE LOW REVENUE MOBILIZATION EXPERIENCE

IN MALAWI
According to Schroeder et al. (1998), the following factors contribute to inadequate revenue

mobilization in Malawian local governments.

2.22 A FEEBLE ADMINISTRATION:

In general, revenue base data is poor, collections are low, and enforcement is almost non-

existent. Although policies may be tweaked, the biggest impediment to efficient municipal

income collection is ineffective administration. Weak administration, along with a lack of

political will to enforce, results in poor performance in municipal revenue mobilization. There is

widespread consensus that local assemblies have significant potential for increasing local

income, particularly through business licenses and property taxes (Schroeder, et al., 1998).

2.23 COLLECTION AND ENFORCEMENT:

Malawi's local revenue collection rates are presently estimated to be between 20 and 50 percent.

This is simply an estimate because figures on actual collection rates are difficult to come by and

32
are generally compared based on tax collection objectives rather than billed obligations or

prospective income. To present, local governments have relied mostly on interpersonal

persuasion to raise funds, rather than employing the many enforcement procedures provided by

the Local Government Act. According to Kelly et al (2001), a lack of collection and enforcement

capability can be linked to a number of causes, including:

 A paucity of visible political will. Education and incentives for people participating in the

revenue mobilization endeavor are required to mobilize political will.

 Inadequate local amenities: The taxpayer must be persuaded to pay the tax by obtaining

enhanced local services and believing that taxes and levies are managed properly. The

first objective must thus be to enhance service delivery because people are always more

prepared to pay taxes and levies if they receive concrete advantages or services in

exchange.

 Tax responsibility education is inadequate: As with other taxes, taxpayers should be

educated about the reasoning, methods, obligations, and responsibilities associated with

business licenses and property tax. The ability to relate revenue collections to better

service delivery and a more informed taxpayer population will boost compliance.

Mobilizing the community via improved participatory budgeting and civic involvement

will engage residents while also facilitating increased revenue collection.

 Coverage of the Tax Base: Kelly et al. (2001) reach the conclusion that the coverage ratio

of local government revenue registers appears to be rather low as a result of non-existent,

inadequate, or obsolete information on taxable items, properties, and enterprises. Local

business license registries only contain information on the few smaller firms that are

licensed and granted by Assemblies. The Ministry of Industry and Commerce's business

33
 registration contains information about any major enterprises (Malawi). The property tax

registries are also incomplete in numerous ways. Property tax registers do not exist inside

the district assembly and must be formed for the first time. Property tax registries in

formerly ratable regions may be incomplete and out of date.

2.24 PROPERTY VALUATION AND CATEGORIZATION:

Kelly et al. state that the tax administration must categorize the tax object accurately for a unit

tax assessment, such as a licensing fee system, or it must be valued correctly for an ad valorem

tax assessment, such as a conventional property tax system, using information from the registers.

Accurate business classification for tax assessment, according to them, is dependent on:

1. Having adequate and clear information on the business characteristics required by the

employees to appropriately categorize the enterprises,

2. Trained personnel who can categorize accurately and consistently,

3. Proper supervision and monitoring for quality control, and

4. An appeals mechanism for misclassification situations.

Kelly et al., (2001) contend that inaccuracies in categorization and value have an impact on

income potential, equality, efficiency, administrative feasibility, and political acceptability. In

general, business categorization is pretty basic. It is based on objective descriptive information

such as the nature and size of the firm.

2.25 EFFECTS ON POLICY

According to Bahl and Smoke (2003), one major administrative challenge for some African city

councils today is their inability to collect all of the income owed to them. There are large

disparities between actual and predicted revenues in several towns. This is due to

1. Inadequate administrative capacity to assess the revenue base;

34
2. Inadequate administrative capacity to enforce tax payment;

3. Explicit and intentional tax evasion and resistance from taxpayers;

4. Corruption, including revenue collector embezzlement; and

5. External pressure on the local finance department to provide optimistically.

According to Bahl and Smoke (2003), one major administrative challenge for some African city

councils today is their inability to collect all of the income owed to them. There are large

disparities between actual and predicted revenues in several towns. This is due to:

1. Inadequate administrative capacity to assess the revenue base;

2. Inadequate administrative capacity to enforce tax payment;

3. Explicit and intentional tax evasion and resistance from taxpayers;

4. Corruption, including revenue collector embezzlement;

5. External pressure on the local finance department to provide optimistic projections in their

budgets; and

6. Political pressure on the local tax administration to relax revenue collection.

The primary concerns to be addressed in the context of local government fiscal reforms,

according to Bahl and Smoke (2003), are redesigning the present revenue system and

strengthening financial management. Furthermore, steps must be taken to strengthen taxpayer

compliance with bylaws and the responsibility of revenue collectors and elected councilors. This,

however, will require strong and persistent political backing from the central government.

According to Bahl and Smoke (2003), more public education and greater public information on

35
budgets, revenue mobilization, and accounting may improve people’s opportunity to express

their voice and demand accountability from local governments.

2.26 TAX MOBILIZATION CHALLENGES IN NIGERIA

Adedokun (2007) listed the following issues as impediments to local government revenue

mobilization in Nigeria.

2.27 A LACK OF TRAINED EMPLOYEES.

There is a scarcity of well-trained and competent individuals who are intended to act as tools for

tax and rate collection at the municipal level, and even those who are available are not

adequately taught in effective budgeting and financial management systems. Furthermore, most

municipal administrations are understaffed to carry out their responsibilities.

2.28 INABILITY TO RECRUIT AND RETAIN WORKERS.

Local governments lack the capacity to attract and retain the necessary kind of personnel to

create strategies and carry out programs and initiatives that will enhance the lives of grassroots

people.

2.29 THE SYNDROME OF RELIANCE.

Despite constitutional provisions for statutory allocations and domestically produced funds, state

governors firmly manage and subordinate local governments through a variety of tactics,

including manipulation of financial transfers to them. Local governments in Nigeria obtain all of

their funding from outside sources. Financial transfers from the federal and state governments,

such as grants, statutory allocations, the share of Value Added Tax (VAT), revenues, and loans,

are examples of external sources. These external sources create a reliance syndrome in the

attempts of local governments to raise money. External setbacks have a negative impact on the

administrative machinery and the execution of certain potential local government programs. This

has also harmed their ability to generate internal revenue.

36
 2.30 CONTROL OF THE LOCAL GOVERNMENT BUDGET BY THE STATE.
Another limitation on local government income mobilization capabilities is state control over the

local government budget, which is required to go through many layers of approval in the hands

of the state or central government. Even after approval, post-budget limitations place further

constraints on what local governments may do. The delay in passing the yearly budget for local

governments is a major issue since the budget might take up to three months to be approved.

This would invariably entail delays in the execution of local government activities, including the

payment of personnel wages, and will impede the establishment of infrastructure facilities. In

1996, some newly elected Chairmen of Local Governments in Nigeria condemned the horizontal

sharing formula of the local government's allocation from the federation account, which was

equality (40%) of the population (30%), landmass/terrain (10%), social development factor

(10%), and internally generated revenue (10 percent). This formula will continue to produce less

money for many local governments, particularly if more local governments are established.

2.31 CORRUPTION
Furthermore, the insincerity of council workers on field assignments is a bigger issue because

most of them siphon collected council monies for their own use, denying the council of essential

finances for its operations. Some chairmen of local governments placed local government

subventions in savings and loans businesses in which the local governments had no account.

Some local governments perceive this as an opportunity to siphon municipal cash for personal

gain.

2.32 STRATEGIES FOR AN EFFECTIVE IGF

Korkor (2003) offers the following MMDA techniques for producing adequate IGFs:

1. Public education on the payment of rates, fees, licenses, and so on by corporate entities,

dealers, and property owners, among others.

37
2. Revaluation of immovable properties to reflect their genuine earnings worth.

3. The issuance of new business operating licenses.

4. Use of private revenue collectors.

5. Using a task force and the police to enforce the payment of fees, licenses, and so on.

2.33 PERFORMANCE MANAGEMENT AT THE DISTRICT LEVEL WITH

RESPECT TO THE SUSTAINABLE DEVELOPMENT GOALS
(Zakaria, 2013) assesses the amount of work made by district assemblies to institutionalize

performance management at the organizational level. The author assesses that District Assembly

performance as motivated by the introduction of the Functional and Organizational Assessment

Tool (FOAT) and the disbursement of the accompanying cash reward including the Urban

Development Grant (UDG). Zakaria (2013) as cited by (Chachu, 2021) argues that the

performance assessment of local governments will be more effective when local governments

focus on achieving goals which are consistent with the needs of local communities and citizens

rather than entrenching upward accountability to the central government. According to him,

relying on annual performance assessments designed to ignore the opinions of the citizens will

only result in ineffective performance assessments in local governments.

SDGs In Ghana

(Anaafo, 2021) investigated that the Government of Ghana has put in several measures to

prioritize the SDGs and AU Agenda 2063 in the national development goals. To ensure the

successful implementation of the SDGs, the government has created new structures and

mechanism at both national and district assembly levels such as the inter ministerial committees

and CSO committees to ensure that all hands are on deck to ensure the successful

implementation of the SDGs. He however noted that, the only thing that would hamper the

38
success of such Government initiatives are budget constraints. The study also noted efforts by

the Government and their partners to promote community ownership and commitment, as well as

improved monitoring and evaluation at the local levels as one of the good initiatives to promote

the SDGs successfully. The report noted that government interventions such as the Youth

Employment Agency, Agenda for Jobs, One district one factory, planting for food and jobs, as

well as tax reforms are all geared towards promoting and localizing the SDGs in Ghana,

especially goal 8.dditionally, in 2020, initiatives such as the National Entrepreneurship

Innovation Programme (NEIP) were set up by the President to fast track the development of

Ghana’s entrepreneurial culture especially among the youth. This, the President believes, would

create avenues for self-employment. The Presidential Business Support Programme also seeks to

create decent jobs for Ghanaians. The study further recommended that that a deepned

decentralization system in Ghana and good governance are the essential ingredients to achieve

the SDGs in Ghana by 2030. Additionally, the study also stressed on the fact that the transfer of

responsibility from the national to the local levels for the SDGs implementation should be

measured by the needed resources. The study further mentioned the neede to ensure regular

tracking and reporting of progress and a robust administrative data system to provide timely,

accurate and reliable data.

2.34 GOVERNMENTAL INTERVENTIONS ON EMPLOYMENT IN GHANA

The International Lobour Organisation (ILO) 2020 global report on employment observed that

people are finding it difficult to build a better life for themselves because of the absence of a

decent job, coupled with unemployment and inequalities levels. The report indicated that in

2019, the global economy slowed by almost 1%, that is from 2.2% to 1.5%, while COVID 19

further aggravated economic conditions globally in 2022. In Ghana, the SDG goal 8 took a

center stage of all government initiatives so as to combat the global economic downturn.

39
Government ensured a direct linkage between their polies and contributions towards decent work

and economic growth. In 2020, an estimated 42, 000 employees lost their jobs due to covid. An

additional 770, 000 workers had their wages reduced. In response however, the Government of

Ghana initiates the 1 billion cedis Coronavirus Alleviation Programme to support SMEs which

make up of about 92% of all businesses in the country. Additionally, another 100 billion cedis

was invested in the Coronavirus alleviation and revitalization of Enterprise Support (CARES) to

cushion workers. In all, the total budget allocated to government institutions both nationally and

at the local levels amounted to about 4,216 million Ghana cedis. (Report, 2020)

2.35 YOUTH EMPLOYMENT

Speaking at a stakeholder engagement on the topic: ‘The way forward for sustainable youth

employment in Ghana’ Professor Baah-Boateng, Head of Economics Department University o

Ghana indicated that the youth constitute about a third of Ghana’s population (35%) and that an

inefficient utilization of the potential of the youth could have dire consequences for the country.

He further stressed that te youth are not homogeneous in terms of gender, age, education and

location, and therefore government aimed at addressing youth employment challenges need to be

factored into the various categories of youth in Ghana. He further stated that due to these

heterogeneity nature of the youth, certain government employment initiatives such as the Nation

Builders Corps (NABCO) may not be beneficial to all. Recent findings in a study reveals that

“The percentage of the youth with no level of education was 27.2 % for those within the 25-35

age group and 41.3% for those within the 15- 24 age group”. The findings further pointed out

that unemployment is higher among the educated youth than the uneducated because of the fact

that the the educated youth do not find the informal sector attractive. Again, the study found out

that youth in backgrounds in science, technology, engineering and maths (STEM) recorded

lowest levels of unemployment compared to those with social sciences, business and law

40
backgrounds. Interestingly, it was established from the findings that the length of time a job

seeker a job seeker remains unemployed varied for the older and younger youth respectively. It

takes the older youth an average of about 19 months to find a job as compared to 15 months for

the younger youth in Ghana. (Session & Dialogue, 2020)

In 2021 (Ahmad & Bigirimana, 2021) defined decent work as the following: “ decent work is

done under conditions where people are gainfully employed (and there exixt adequate income

and employment opportunities); social protection systems (labour protection and social security)

is fully developed and accessible to all; social dialogue and tripartism are promoted and

encouraged; and rights at work, as specified in ILO Declaration on Fundamental Principles and

Rights at Work and Core ILO conventions are practiced, promoted and respected”. Decent Work

Check Ghana 2021 employs a double comparison system by first of all comparing national laws

with the international labour standards and gives a score to the national regulations. If the

national regulations in a country are not consistent with ILO conventions, it receives a low score.

The study in Ghana compared 15 major legislation on employment and labour , including the

1992 Constitution of Ghana, the Criminal Code, 1960 (Act 29), the National labour Commission

Regulations, 2006 (LI 1822, the Workmen’s Compensation Act 1987 (PNDCL 187), the Labour

Act, 2003 (Act 504), among others. The report observed that Ghana has not fully ratified all the

ILO conventions to its national labour laws. For instance, on the issue of minimum wage, ILO

conventions 131 (1970), and Regular pay and wage protection: 95 (1949) and 117 (1962); Ghana

has only ratified ILO Convention 117 (1962) only into its labour laws.

41
 2.36 THEORETICAL FRAMEWORK
I conducted a systematic literature review using organizational learning theory to explain income

mobilization and usage at the Nsawam Aduagyiri Municipal Assembly in order to be proactive in

recognizing historical trends of its shortcomings and enhancing its capacity to achieve its

purpose. Through learning, the theory maintains a process improvement that may enhance

efficiency, accuracy, and profit. According to Braun and Benninghoff (2003), the idea asserts

that companies must adapt their aims in order to remain competitive in a changing environment.

This seeks to improve the functions of policies and organizations by altering skills, performance,

and problem-solving ability in order to better prepare an organization for the future (Osen &

Peter 1996, cited in Common 2012). Organizations alter their behaviors in reaction to changes in

conditions, and they intentionally relate action to consequence. Data gathering, according to

proponents of the notion, is the initial step in the learning process. According to proponents, an

institution gains knowledge of legitimate action-outcome relationships, the environmental

conditions under which they are valid, the likelihood of the outcomes, and the uncertainty around

that probability. Tax administrators must constantly update their collecting actions, whether

through tax information additions or denials based on fresh evidence. Experimentation,

benchmarking, observation, and other methods were used to do this. An important issue is that

the firm's actions will and must alter in reaction to environmental changes.

Successful forms, according to the idea, will have to scan their environs for indicators of change,

whether real or expected, in order to discern when change is required. The process's second stage

is interpretation. Organizations constantly compare actual to projected results in order to upgrade

or add to their knowledge and create a new performance culture. All tax players are involved in

developing revenue collection and use policies, including tax administrators, taxpayers and

recipients, chiefs, and opinion leaders. Participatory policymaking may promote commitment,

42
ownership, and willingness to carry out the plan (Pedler et al., 1997). In this regard, revenue

players are working together to evaluate tax performance so that unexpected results may be

analyzed for causality. This brings us to the third level, which discusses adaptation/action. This

is when the company uses the interpreted knowledge/results to choose new activities that are

appropriate for the changing environmental conditions. This might be influenced to a significant

extent by the institution's complexity and dynamism. The implication is that MMDAs,

particularly Nsawam Aduagyiri Municipal Assembly, should implement optimal internal revenue

mobilization performance methods. These MMDAs can do so by comparing their revenue

mobilization performance to the IGF mission. Anomalies that impede effectiveness and

efficiency can be recognized and a new performance culture formed through adequate data

collecting.

2.37 EMPIRICAL FRAMEWORK

In research, Schroeder (2000) discovered that inadequate revenue mobilization in Ghanaian local

contexts is due to weak administration collection and enforcement systems. They discovered that

poor revenue is due to typically insufficient revenue base information, low collections, and

essentially non-existent enforcement. Although policies may be tweaked, the biggest impediment

to efficient municipal income collection is ineffective administration. Weak administration

paired with a lack of political will for enforcement results in poor performance in municipal

revenue mobilization. There is widespread consensus that local assemblies have significant

potential for increasing local income, particularly through business licenses and property taxes

(Schroeder, 2000).

Local revenue collection rates in Ghana are reported to vary between 20% and 50%. This is

simply an estimate because real revenue collection figures are difficult to obtain and are

43
generally compared based on tax collection objectives rather than billed obligations or

prospective revenues. To present, local governments have relied mostly on interpersonal

persuasion to raise funds, rather than employing the many enforcement procedures provided by

the Local Government Act.

According to Kelly et al. (2000), a lack of collection ability and enforcement can be attributed to

a number of factors, including a lack of apparent political will, inadequate local facilities, a lack

of education on tax responsibility, a lack of tax base coverage, and property valuation

classification.As a result, they proposed that people participating in the revenue mobilization

effort get instruction and incentives. Furthermore, the taxpayer must be persuaded to pay the tax

by obtaining enhanced local services and believing that the taxes and levies are fairly managed.

The first objective must thus be to enhance service delivery because people are always more

ready to pay taxes and levies if they receive actual advantages or services in exchange (Kelly et

al., 2001).

As with other taxes, taxpayers should be educated about the reasoning, methods, obligations, and

responsibilities associated with business licenses and property tax. The ability to relate revenue

collections to better service delivery and a more informed taxpayer population will boost

compliance. Mobilizing the community via improved participatory budgeting and civic

involvement will engage residents while also allowing for increased revenue collection.

According to Kelly et al. (2001), the coverage ratio of local government revenue registers

appears to be fairly poor as a result of non-existent, inadequate, or obsolete information on

taxable items, properties, and enterprises. Local business license registrations only list the few

smaller enterprises licensed and granted by the Assemblies. The Ministry's business registration

contains information about any bigger firms. Property tax registers do not exist inside the district

44
assembly and must be formed for the first time. Property registrations in formerly rateable

regions may be incomplete and out of date. According to Adedokun (2007), challenges

preventing local government revenue collection in Ghana include a paucity of skilled employees,

a lack of capability and retained personnel, the reliance syndrome, and state control over the

local government budget. There is a scarcity of well-trained and competent employees who are

meant to act as a tool for tax and rate collection at the municipal level, and even those who are

available are not adequately taught in effective budgeting and financial management systems.

Furthermore, most municipal administrations are understaffed to carry out their responsibilities.

Local governments lack the capacity to attract and keep the proper personnel to create goals and

carry out initiatives that will alter the lives of grassroots people.

Despite constitutional provisions for statutory allocations and domestically produced funds, state

governors firmly manage and subjugate local governments through a variety of tactics, including

manipulations of financial transfers to them. Local governments in Ghana receive all of their

funding from outside sources. External sources include financial transfers from the state

government such as grants, statutory allocations, the share of Value Added Tax (VAT),

revenues, and loans. These external sources create a reliance syndrome in the viable programs of

the local government. This has also harmed their ability to generate internal revenue.Another

limitation on local government income mobilization capabilities is state control over the local

government budget, which is required to go through many layers of approval in the hands of the

state or central government. Even after approval, post-budget limitations place further constraints

on what local governments may do. The delay in passing the yearly budget for local governments

is a major issue since the budget might take up to three months to be approved. This would

invariably entail delays in the execution of local government activities, including the payment of

45
personnel wages, and will impede the establishment of infrastructure facilities. Furthermore, the

honesty of council workers on field assignments is a significant issue because the majority of

them siphon collected council monies for their own use, denying the council of the necessary

finances for its operations. Some local government chairmen deposited subventions into savings

and lending businesses when the local governments had no accounts. Some municipalities

perceive this as a way to shift cash for personal purposes.

2.38 Conceptual framework

Figure 1: based on (Andersson and Ostrom 2008), a conceptual framework for decentralized

resource control in a polycentric governance system (Ostrom 2009). Interactions occur between

central and local governments, as well as local government agencies and local users. The current

study solely looks at the SESSocial System (right side of this diagram)

46
 CHAPTER THREE
3.1 PROFILE OF THE STUDY AREA
3.2 Location and Size
Nsawam Adoagyiri Municipality has located approximately 23km from Accra, the national

capital.

It is situated in the South Eastern part of the Eastern Region between latitudes 5.45’N and 5.58’N

and longitude 0.07’W and 0.27’W and covers a land area of about 175 square kilometers.

In terms of spatial interaction, it is bordered to the South by the Ga West and Ga East

Municipalities in the Greater Accra Region and to the North by Akuapem South District. It also

shares boundaries in the North-West with Ayensuano District and in the South West with the

Upper West Akim District. The proximity of the Municipality to Accra and Tema is a potential

for development. For instance, the Accra–Tema conurbation provides the single largest market

in the country and provides a ready market for farm produce and industrial products from the

47
Municipality. Thus, the Municipality, for instance, can focus on market gardening in agricultural

development. The Municipal capital, Nsawam is a gap town along the main highway linking the

coastal lands to the Northern part of the country which is the Accra–Kumasi Road. This provides

opportunities for commercial activities in the town, particularly the marketing of bread and

pastries.

3.3 Demographic Characteristics

The Nsawam Adoagyiri Municipality is estimated to have a population of about 86,000 (2010

Population and Housing Census Report). The population density of the Municipality is 465

persons per sq km. Population growth is estimated at 1.6% per annum which is lower than that

of the country at 2.7% but slightly higher than the regional population growth rate of 1.4% per

annum.

3.4 Population Size and Distribution

The population composition by age and sex influences fertility, mortality, migration, and other

demographic processes that underline population growth and ultimately socio-economic

development. This section discusses the population in the Municipality by age, sex, and locality.

It also provides data on sex ratios, fertility, and mortality levels. Nsawam Adoagyiri

Municipality has a population of 86,000, comprising 42,733 (49.7%) males and 43,267 (50.3%)

females. The urban population constitutes 50,864 (59.1%) whilst the rural population is 35,136

(40.9%). The Municipality is densely populated with a density of 465 persons per square

kilometer.

3.5 Ethnicity and Religion

The Municipality is predominated by Akuapems who constitute about 63% of the population.

Ewes constitute about 9%, Ga-Adamgbes make up 7%, and other Akans other than Akuapems

constitute 17%. The remaining 4% are from other tribes, including Northern and other tribes.

48
The dominance of the Akans has created social cohesiveness, which is ideal for community

development.

3.6 Water and Sanitation

3.7 Sanitation
Sanitation facilities in the municipality inadequate are crude dumping of liquid waste, refuse

dumping, septic tank latrines, KVIPS, W/Cs, and a few pan latrines. There is no final waste

disposal site for liquid waste in the municipality. Liquid waste is, therefore, transported in a

cesspool emptier to a lagoon in Accra. The Assembly has one cesspool emptier which conveys

the wastes from the 12 withholding tanks. The Assembly currently has been using a site at

Adipa in the municipality as a final waste disposal site for solid waste. There are two refuse

trucks, one cesspool emptier, and a refuse tractor. There are 47 community public toilets in the

municipality. This is made up of one (1) water closet, Twenty-one (21)-aqua privy, Four (4)

VBTs, Eleven (11) KVIPs, and Two (2) Pit latrines.

Sanitation issues, which are of critical concern in the municipality, include:

 Lack of solid and liquid waste disposal Sites

 Inadequate public places of convenience

 Domestic refuse disposal site.

 Lack of modern slaughterhouses – Aduagyiri, Nsawam

 Non-pounding of animals

 Inadequate manpower at the Environmental Health Section

In the area of household toilets and public latrines, the proportion is 41 percent and 59 percent

respectively, therefore there is an urgent need to encourage house owners to construct household

49
latrines, as public ones are difficult to maintain. On refuse disposal, 95 percent of the population

relies on crude dumping to dispose of their household refuse. The practice has resulted in huge

mountains of refuse dumps in the communities, some as close as 10 meters to the nearest

dwelling houses. There is only one slaughterhouse in the Municipality located at Djankrom –

Nsawam which is in a deplorable state. This is however located in the middle of the community

which proves to be a nuisance to the inhabitants. The need to relocate the slaughterhouse to a

more convenient place has necessitated the allocation of a piece of land at Wangara in Nsawam;

where a new modernized slaughterhouse is under construction. In addition to the public toilets,

the municipality has through DANIDA constructed 31 institutional latrines and 362 household

latrines under the Community Water and Sanitation Agency (CWSA). This is the starting picture

confronting the municipality as far as sanitation is concerned. As part of efforts by the

Assembly’s aim at finding a lasting solution to the disposal of liquid waste in the Municipality,

the Assembly in collaboration with MDF, Training and Consulting BV in The Netherlands with

an office in Accra has secured a Four Million Seven Hundred Thousand Euros

(GH₵4,700,000.00) grant from The Netherlands Government for the construction of a Liquid

Waste Treatment Plant at the Nsawam Prisons under The Special Treat Project.

3.8 Water
The major sources of potable water in the Municipality include pipe-borne water, borehole, and

hand-dug wells. The supply of pipe-borne water in the municipality is woefully inadequate- only

about 40 percent of the required volume is supplied.

The result is that only areas like Nsawam, Adoagyiri, Sakyikrom, Djankrom, Ntoaso,

Amoakrom, Owuraku, Prisons, Dobro, and Atsikope benefit from the supply of pipe-borne

water.

50
The reason for the shortfall in pipe-borne supply is due to old weak and broken transportation

lines, which were installed in the 1950s. Only a few lines have been replaced recently during the

rehabilitation exercise. About 30 percent of the municipality’s population enjoys pipe-borne

water. 47.9 percent of the municipality’s population, covering mainly small towns and rural

areas, has been provided with boreholes and hand-dug wells. 45 percent of communities have

been covered with boreholes while 62 percent are covered with hand-dug wells. 45 communities

have been provided with hand-dug wells. Lastly, two (2) communities, Fotobi and Akwakupom,

are currently enjoying the paddle flow of the water system. Water supply in the municipality is

handled by agencies such as Community Water and Sanitation Agency (CWSA) which is being

funded by DANIDA and the Ghana Water Company.

3.9 Human Settlement Pattern

Nsawam being the Municipal Capital has the largest population of 32,531. It is the only first

order of settlement with facilities like a hospital, banks, pipe-borne water, electricity, and post

and telecommunication services. Nsawam with a population of about 32,531 could be classified

as a first-order settlement and Adoagyiri with a population of about 14,660 as a second-order

settlement. The settlements that have enough services to cater to the many third-order settlements

include Sakyikrom, Fotobi, Ankwa Dobro, etc., and over a hundred and thirty settlements

scattered all over the Municipality. It must however be noted that the sphere of influence of these

first and second-order settlements excludes settlements such as Ahodwo, Ahwerease, Nsumia,

Oparekrom, Dago, and Obregyima, which have to rely on other service centers outside the

Municipality. This situation calls for the provision of some best services for education, health,

and telecommunication to make the place attractive especially to the youth. Characteristically,

the human settlement pattern to a great extent is influenced by the road network, with settlements

51
dotted along the main arterials to Nsawam and also along the rail lines connecting Accra to

Cocoa and Gold producing hinterlands.

3.10 Security
In the area of security, the Municipality has two main police stations located at Nsawam and

Obodan. These stations operate through the following units:

 District Administration (the focal point of command)

 Motor Traffic and Transport Department (MTTD)

 District CID

 Station CID

 DOV

 Arms & Ammunition Unit

 Courts Unit

 Community Policing Unit

 Visibility Unit

3.11 Prison Service

The prison service is mandated to ensure the staff custody and welfare of prisoners, and provide

adequate feeding and medical care. It also undertakes reformation and rehabilitation of prisoners

for their successful reintegration into society.

3.12 Ghana National Fire Service

To ensure that fire disaster is minimized in the Municipality, National Fire Service operates a

station at Nsawam manned by 69 personnel. The service currently operates from an old wooden

52
structure, which serves as its office accommodation. There is no residential accommodation for

the personnel and there are only five (5) fire hydrants which are not adequate to ensure efficiency

and effectiveness in service delivery.

3.13 Agriculture
Agriculture is the major economic activity in terms of employment and income generation in the

Municipality. Data gathered from the field indicate that majority of the working population

(about 37%) is engaged in agriculture. About 40% of this population is female with men forming

about 60%. The major crops produced in the Municipality include maize, cassava, plantain,

cocoa, coffee, oil palm, citrus, cola pineapple pawpaw, cashew, etc.

3.14 Education
Knowledge acquired, through education provides the individual the power to take control of

one’s environment, optimizing the use of its resources for one’s benefit. Thus education can be

said to be the key to unlocking the potential of an area’s human resources to enable them to make

optimum use of all other resources for its development. Knowledge through education creates

opportunities that enhance understanding of events and situations and facilitates the infusion of

innovations in technology into the production system. The overall effect of all these is to

improve productivity and aggregate production in all sectors of the local economy in particular

and the entire macro-economy in general. It is in recognition of this fact that the Nsawam

Adoagyiri Municipal Assembly places so much emphasis on education as one of the key issues

in its human resource development. The provision of adequate educational facilities throughout

the Municipality has been a nagging problem for the Assembly. Thus, the Assembly has directly

established, and indirectly, facilitated the establishment of several educational institutions in the

Municipality so as to provide quality education to the people therein.

53
 3.15 Health
The Municipality has one very good hospital i.e. Nsawam Government Hospital, which has been

designated as the Municipal hospital. To support the hospital, there have been established five

Health Centres/Clinics and two Community Based Health Planning and Services (CHPS)

Compounds at Obotweri and Kofisah. There are also at least two Private Maternity Homes and a

number of Private Clinics throughout the Municipality. As a result of the extreme pressure on the

Nsawam Government hospital whose catchment area goes beyond the Nsawam Adoagyiri, the

Assembly in collaboration with the Ghana Health Service has established a Health Centre in

Nsawam as the first point of call for patients. The structures are ready and the facility is

operational.

Source: The Ghana Statistical Service (PHC, 2010)

54
 3.16 RESEARCH DESIGN
The mixed method was used for the study's research design. The study included both qualitative

and quantitative research approaches. A case study technique was chosen because it allows for

the rigorous gathering of information required to meet the research's objectives. It also provides a

detailed insight into the problems under consideration.

3.17 DATA SOURCES

The study made use of both primary and secondary data. Relevant secondary literature was

researched to support and contradict arguments and conclusions advanced by various persons on

the issue under examination.

The survey was carried out by distributing questionnaires to gather information on revenue

mobilization in the assembly in the attainment of SDG goal 8 of the Nsawam Aduagyiri

Municipal Assembly. Structured interviews were also performed with various assembly

stakeholders involved in revenue collection methods.

3.18 POPULATION
The study targeted 300 officials and personnel associated with Ghana's Nsawam Aduagyiri

Municipal Assembly. Chief Executives, Coordinating Directors, Finance Officers, Budget

Officers, the Chair of the Finance and Administration Sub-Committee (and, in some situations,

the Presiding Member), revenue accountants, audit and revenue officers were among the

respondents also revenue supervisors and superintendents as well as salaried and commissioned

revenue collectors. Assembly members, heads of decentralized departments, opinion leaders, and

other local officials who have working expertise in Assembly matters, as well as community

members at the grassroots level were also not left out.

55
 3.19 SAMPLE SIZE
Due to time and resource constraints, a proportionate sample size will be used for the

administration of questionnaires and interviews. A sample size of one hundred and fifty (150)

respondents, comprised40 revenue collectors, 95 respondents (assembly members, unit

committee members, chiefs, opinion leaders in community suburbs, drivers and hawkers, market

merchants, and community members), and fifteen municipal assembly staff. These individuals

included the municipal planning officer, municipal coordinating director, municipal finance

officer, municipal engineer, and the presiding member of the municipal assembly, among others.

3.20 SAMPLING TECHNIQUES

For the decentralized department, assemblymen, opinion leaders, and community people, both

convenient and purposeful samplings were employed. Purposive sampling is a non-random

sampling approach used when the people to be chosen possess the necessary details. A purposive

sample is made up of participants who were chosen for the research because they happened to be

at the right place at the right time. Furthermore, these sample procedures were utilized since the

information sought by the researcher can only be obtained from the mentioned categories.

3.21 DATA GATHERING INSTRUMENTS

Both interviews and questionnaires were adopted for this method. Questionnaires were prepared

to collect data from the respondents and recommendations for improvement. Quantitative data

including the financial data of revenue and expenditure were collected to analyze the efficiency

of revenue collection and expenditure on projects. The interview schedules were also adopted to

elicit information from respondents, especially those who were not able to read or write. The

researcher took this as an opportunity to interpret the questions to the respondents. Also, the

interview was adopted to gather information from the top management of the Nsawam Aduagyiri

56
Municipal Assembly. respondents were given enough information on what to expect in

responding to items. Their consent and approval were also sought first.

3.22 DATA ANALYSIS AND PROCESSING

Data gathered would be edited daily and immediately after they are gathered to ensure accuracy

and consistency in response. Data is coded, entered, and analyzed using the Statistical Product

and Service Solutions (SPSS-version 26) software. This will enable the researcher to compute

data using percentages, cross-tabulations, graphs frequency distributions, and many others when

necessary to help simplify the information collected.

3.23 VALIDITY AND RELIABILITY

Reliability is ensured by minimizing sources of measurement error like data bias. To control this

dilemma the researcher is the only one who will issue and interpret the questionnaire to

respondents. On the issue of validity, the data collection instruments issued included a variety of

questions on sources of revenue to the assembly and the challenges facing them. Data is critically

surveyed to ensure that it is free from errors and consistent with the questions asked and answers

are given to make it true and valid for its intended purpose.

3.24 ETHICAL CONSIDERATIONS

Before beginning primary data collection, an introductory letter is obtained from the appropriate

ISSER office of the director and distributed to the management, elected members, opinion

leaders, elders, and other stakeholders of the communities that will be included in the study,

clearly stating the objectives of the research, what is involved, and its significance. In order to

achieve cooperation and proper replies, the researcher will also request the verbal agreement of

the respondents, assuring them of the confidentiality of the information provided. Respondents'

anonymity and rights were protected by not asking for their identities.

57
 CHAPTER FOUR
4.1 RESULTS, FINDINGS, ANALYSIS, AND DISCUSSIONS
The results of the data analysis are presented and interpreted in line with the research objectives

and questions, in this chapter. Data are presented in tables and charts with frequency and

percentages beginning with the sample characteristics and the research questions that were

formulated to guide the research. The demographic background of respondents is considered in

the first part. The subsequent parts will discuss the findings of the study in relation to the

research objectives.

4.2 SECTION A: DEMOGRAPHIC BACKGROUND OF RESPONDENTS

The results illustrate that there were more male participants than their female counterparts. Out

of the 150 respondents, 60% (90 respondents) are males and the rest are females. Making male

respondents the majority of the respondents for this survey. It further shows that Nsawam

58
Aduagyiri Municipal Assembly has more male-employed workers in charge of mobilizing

revenue than females. Also, the majority of the participants were within the age bracket of 25-35

years followed by the 36-45 age bracket. Most of the respondents are young adults who are

mostly involved in revenue mobilization. Furthermore, just a handful of the employees are

nearing retirement age. Another result obtained from the survey demonstrated that half of the

respondents were married representing 50%, 10% didn’t respond, 30% were single 6.7% were

divorced and the rest were widowed. With respect to education, the majority of the respondents

were HND/Diplomat holders (40%), followed by Undergraduates (36%), (16%) were master’s

degree holders, and 8% had their WASSCE Certificate.

Variable Number Percentage (%)

Sex Male 90 60
Female 60 40

Age Below 25 25 16.7

25-35 55 36.7
36-45 40 26.7
46-55 20 13
56-60 10 6.7
Marital Status Married 75 50
Single 45 30
Divorced 10 6.7
Widow(ers) 5 3.3
Other…….. 15 10
Education WASSCE certificate 12 40
HND/Diplomat 60 36
Undergraduate 54 16
Master’s degree 24 8
Total 150 100

Source: Field Survey, 2022

59
 4.3 SECTION B: TO IDENTIFY THE SOURCES OF REVENUE FOR THE DISTRICT
Respondents identified the Rates, Land and Royalties, Rents of Land, buildings, and Houses,

Fines, penalties and forfeits, Licenses, Fees, Miscellaneous & Unspecified Revenue, and Grants

as the main sources of income of the district. These sources serve as the major sources of

revenue to undertake projects and activities for the district of which the grants are the main

source. Followed by the others.

Sources of Revenue Amount Percentage

Rates 242,125.00 2.4

Land and Royalties 195,783.00 2.0

Rents of Land, buildings, 34,337.00 0.4

and Houses
Licenses 457,106.00 4.6

Fines, penalties, and forfeits 29,712.00 0.3

Fees 760,036.00 7.6

Miscellaneous and 10,000.00 0.1

Unspecified Revenue
Grants 8,225,682.38 83

TOTAL REVENUE 9,954,781.38 100

SOURCE: NSAWAM ADUAGYIRI ANNUAL ACCOUNT FOR 2018 & 2019

The Local Government Law, which defines and regulates the operations of the Metropolitan,

Municipal, and District Assemblies (MMDAs), requires the different Assemblies to generate

income from local sources to support development initiatives in their jurisdictions. There is

widespread agreement that local assemblies have significant potential for increasing local

income, particularly through business licenses and property taxes (Schroeder, 2000). This study
60
supports Schroeder's thesis by making internally produced money the primary source of revenue

for constituents. Every Assembly must preserve a complete inventory of its internal income

sources as well as pertinent information on total possible recoverable revenues.

NSAWAM
ADOAGYIRI MUNICIPAL ASSEMBLY
PRINCIPAL NOTES TO THE FINANCIAL
STATEMENT FOR
THE YEAR ENDED 31ST
DECEMBER, 2019
APPROVE
D BUDGET ACTUAL APPROVED
REVENUE 2019 2019 BUDGET 2018
GH₵
2 Rates
141300 7,00
2 Basic Rate 0.00 -
141300 163,87 152,8 128,0
1 Property Rate 5.00 90.00 00.00
113100 20,00 10,0 35,0
3 Special Levy (Sanitation) 0.00 65.36 00.00
141203 51,25
1 Property Rates Arrears 0.00
242,12 162,9 163,0
Total 5.00 55.36 00.00

3 Land and Royalties

141200 17,4
3 Stool Land Revenue 31.82
142215 175,28 352,8 120,0
7 Sale of Building Permit/ Plans 3.00 55.97 00.00
141200
6 Communication Mast permit
141200 20,50 14,4 20,0
4 Buildings Jacket 0.00 00.00 00.00
195,78 384,6 140,0
Total 3.00 87.79 00.00
4. Rents of Land, Buildings and Houses
141500
2 Ground Rent
111131 Assembly hall 1,025 2 3

61
1 .00 00.00 00.00
141500
8 Investment Income
141501 12,300 24,1 12,0
1 Rent of Assembly Bangalow .00 10.00 00.00
111131
0 Other Receipts from Petroluem Op
142347 51 7 5
3 Park -Sale of Plant 2.00 06.00 00.00
141505 20,50 28,4 20,0
2 Market Stores/Stalls/open spaces 0.00 16.00 00.00
34,33 53,4 32,8
Total 7.00 32.00 00.00

142200
0 5. Licenses GH₵
142200
2 Pito/Palm Wine Sellers/Tappers
142200 50 1,0
2 Herbalist 0.00 00.00
142200 1,00 3,0
3 Hawkers License 0.00 00.00
142200 44 2,0
5 Chop Bar and Restaurants 7.00 40.00 00.00
142200 10 7
6 Grinding Mail 8.00 50.00 00.00
142200 7,38 1 6
9 Bakers/Bakries 1.00 60.00 00.00
142201 7,71 8,2 6,0
1 Artisans/Self Employed 6.00 95.00 00.00
142202 34,21 11,6 23,0
1 Manufacturing Firms 1.00 00.00 00.00
142201 1,57 1 1,5
3 Sand and Stone Conts.License 3.00 00.00 00.00
142204 37,96 18,5 30,0
4 Financial Institutions 9.00 55.00 00.00
142202 3,85 2,6 10,0
4 Private Education Int. 1.00 97.00 00.00
111200 27,23 13,5 14,6
2 Petroleum Dealers 7.00 40.00 96.00
111231 3 7
4 Communication /Business Centers 05.00 00.00
142201 6,05 1 5,8
8 Pharmacies/Chemical Sellers 6.00 00.00 00.00
114110 57 3,6 2,6
9 Hotels 4.00 00.00 00.00
62
142202 2
0 Swam Timber/Chain Saw Operators 40.00
142202 138,25 132,4 150,0
0 Commercial Vehicles 8.00 78.65 00.00
142203 4
2 Akpeteshie/ Spirit Sellers 50.00
141505 49,80 33,1 30,0
2 Private Store Permit 4.00 98.00 00.00
142212 15,0
8 Telecom System/Security Services 00.00
141505 30,0
2 Market Stores/ Stalls /Open Space 00.00
142205 32,46 10,1
4 Signage and Temporary Structure 1.00 05.00
142310 40,00 28,9 40,0
8 Medical Screening for Food Vendors 0.00 14.00 00.00
142200 7,38 3,2 3,0
7 Bar/Wine/Liquor/Beer 1.00 10.00 00.00
142341 54,45 8,5 70,0
0 Quarry and Hand brokers 0.00 00.00 00.00
142205 6
4 Laundries/Car Wash 00.00
142203 27
2 Liquor License 8.00
142213 5,85 15,3
0 Transport Union 1.00 00.00
142215 1
8 Sand winning 00.00
457,10 290,8 440,8
Total 6.00 47.65 86.00

6. Fees
142300 75,85 62,1 61,6
1 Markets 0.00 40.00 00.00
142300 1,02 1,0
2 Livestock/Poultry 5.00 00.00
142300 2,35 1,5
5 Registration of Contractors 6.00 00.00
142300 41,00 23,6 40,0
6 Burial Fees 0.00 00.00 00.00
142300 76,87 38,2 75,0
9 Adverts/Bill Boards 5.00 15.00 00.00
20 6 2
Pond 5.00 00.00 00.00
142203 Entertainment 9,22 4,9 8,0
63
0 5.00 61.00 00.00
142301 2,05 1,8 2,0
1 Marriage/Divorce Registration 0.00 00.00 00.00
142301 194,75 226,0 190,0
8 Loading/Lorry Park 0.00 00.80 00.00
142301 246,00 106,5 220,0
0 Convenience/Exportation 0.00 30.50 00.00
142301 41,00 26,6 33,0
2 Public Toilet 0.00 80.00 00.00
142352 6,15 9 1,5
7 Tender Documents 0.00 00.00 00.00
142301 2,05 2,0
4 General Merchants 0.00 00.00
142207 61,50 208,1 55,0
2 Business Operating Permit 0.00 68.22 00.00
760,03 699,5 690,8
Total 6.00 95.52 00.00

7. Fines, penalties, and forfeits

143000 51 5
1 Court /Spot Fines 2.00 00.00
143000 25,62 25,0
7 Lorry Park Fines 5.00 00.00
141500 50 1,7
8 Sales of Bins 0.00 51.91
143000 3,07 4,1 5,0
6 Slaughter Fines 5.00 17.00 00.00
29,71 5,8 30,5
Total 2.00 68.91 00.00

8. Miscellaneous & Unspecified Revenue

145000
8
145000 10,00 18,0 10,0
7 Miscellaneous Revenue 0.00 87.40 00.00
145001
0
10,00 18,0 10,0
Total 0.00 87.40 00.00

1,729,09 1,615,4 1,507,9

TOTAL IGF 9.00 74.63 86.00

9. Grants
133100 Salaries and Wages (Gov't) 3,934,96 3,937,5 3,420,6

64
 1 0.00 58.03 89.52
133100 3,113,10 1,489,8 3,005,5
2 DACF -– Main 8.60 32.42 91.00
6,4
NALAG DUES 76.56
230,0
Fumigation 00.00
287,5
Sanitation Improvement Plan (SIP) 00.00
133100 312,93 245,0
3 DDF Capital Development 1.75 26.00
133100 27,06 54,5 51,4
3 DDF Capacity Building 8.25 60.00 13.00
133100 424,1
4 UDG Capital Development 11.00
133200 432,00 343, 224,6
5 MPs' Fund 0.00 707.68 84.00
133100 150,00 142,0 60,0
6 Disability Fund 0.00 76.70 00.00
133100
7 LSGDP
133100 82,21 12,6 59,0
8 G & S Decentralised departments 1.32 63.33 14.89
133100 14,3 25,0
9 DACF reversed Cheque 85.00 00.00
133101 420,1
0 UDG-Capacity Support Fund 67.23
133101 15,00 11,9
1 HIV/AIDS FUND 0.00 12.83
158,40 158,4 75,0
Other Donors (MAG) 2.46 03.47 00.00
8,225,68 6,934,1 7,765,6
Total Grants 2.38 02.02 70.64

9,954,78 8,549,5 9,273,6

GRAND TOTAL REVENUE 1.38 76.65 56.64

According to the table above, the money earned by the assembly from government grants for the

three years in question amounted to $8,225,682.38, or almost 82% of the total receivers for the

years. On the other hand, the IGF generated significantly less than they had been anticipated or

budgeted for. Much of the income production expectation for the district's potential revenue

streams were not realized. This demonstrates the difference between income sources and revenue

65
mobilization. The district's inability to meet even half of its planned income suggests a negative

impact on its capacity to complete all of its initiatives. According to the research, the gap was

caused by a lack of accurate and current data, an insufficient supply of logistics, low motivation

for revenue personnel, poor monitoring, and insufficient public education for taxpayers.

4.4 SECTION C: TO IDENTIFY SOME OF THE PROBLEMS ENCOUNTERED DURING

REVENUE MOBILISATION AND WAYS OF MAXIMIZING REVENUE COLLECTION.
Revenue collectors reported difficulties with revenue mobilization. The biggest issue they have

during tax collection is that consumers do not understand the value of paying these fees. This is

because individuals were unwilling to give any money to the district assembly owing to a lack of

knowledge about the assembly's use of the money. Furthermore, others contribute but do not see

any action or project was undertaken by the assembly with these monies, resulting in their

reluctance to pay any longer. According to all responders, the Nsawam Aduagyiri Municipal

Assembly lacks credible revenue source databases. Effective, effective, and trustworthy revenue

systems rely on current information on the properties and businesses that pay taxes. Without this

information, the Nsawam Aduagyiri Municipal Assembly will be unable to estimate, charge,

collect, and optimize its earnings. Furthermore, respondents stated that they lack proper logistics

to collect income and have low morale due to the minimal incentives provided.

With respect to the ways of mobilizing revenue collection, tax collectors proposed various

approaches for the assembly to solve the issues they encountered when collecting revenue. All

66
revenue collectors agreed that tax education was the way to go. They proposed that tax education

be conducted for the general people using radio stations, print media, information vans, and other

electronic forms to emphasize the need for revenue mobilization by the assembly. They also

stated that the general people should be informed about the initiatives that the Assembly wants to

fund with cash. According to revenue collectors, tax education is critical for maximizing

revenue. Tax education should describe the district's projects and time schedules, as well as how

they will be accomplished given the predicted money.

APPROVE APPRO
EXPEN D BUDGET ACTUAL BUDGET
DITURE 2019 2019 2018
GH
₵
10 Compensation of Employees

2111501 Established Post

Sub Total - - -

Non Established Post

3
2111101
Daily rated 00.00 300.00
167,6 128,6
2111102
Monthly paid & casual labour 85.00 54.53 688.24
167,9 128,6
Sub Total 85.00 54.53 988.24

Other Allowances
6,1 4,9
2111221 Training Allowance 50.00 00.00 000.00
2111233
Entertainment Allowance 655.00
5,0
2111224
Traditional Authority Allowance 00.00 000.00
2111225 Commissions- Revenue Collectors
67
 510.00
1,0 8
2111234
Fuel Allowance 00.00 00.00
2112242
Travelling/Fuel Allowance 000.00
23,0 22,7
2111243
Transfer Grants 00.00 59.37 000.00
7,0 7,3
2111238
Overtime Allowances 00.00 50.00 000.00
2
2111203
Car Maintenac allowance 00.00
10,2 10,1
2111237
Risk Allowance 75.00 75.00

Board Committee Allowance 000.00

64,8 66,0
2111248
Special Allowance/honorarium 12.00 00.00 000.00
3,0 3,1
2111229
Acting Allowance 00.00 54.63 000.00
120,4 115,1
Sub Total 37.00 39.00 165.00

National Pension Contribution

12,4 13,1
2121001
13% SSF Contribution 09.00 87.24 000.00
2121002 End of Service Benefit (ESB)
12,4 13,1
Sub Total 09.00 87.24 000.00
300,8 256,9
Total Compansation 31.00 80.77 153.24

11 Goods and Services

90,0 87,7
2210101
Printed Materials & Stationery 00.00 02.54 000.00
4,0 3,4
2210102
Office facilities, Supplies & Accessories 00.00 60.00 098.80
3,0 2,8
2210103
Refreshment Item 00.00 25.00 000.00
26,0 22,1
2210113
Feeding cost 76.00 57.12 440.00
2210104 Medical Supplies
2210112 Uniform and Protective Clothing
72,2 13,0
2210122
Value Books 06.00 00.00 445.60

68
2210116 Chemicals & Consumables
2210117 Teaching & Learning Materials
11,2 10,3
2210120
Purchase of Petty Tools/Implements 01.00 80.92 000.00
19,0 3,9
2210111
Other Office Materials & Consumables 00.00 78.89 000.00
225,4 143,5
Sub Total 83.00 04.47 984.40

Utilities
41,1 44,0
2210201
Electricity Charges 13.00 63.00 111.02
2
2210202
Water 00.00 472.56
5
2210203
Telecommunications 00.00 655.00
1 2
2210204
Postal Charges 00.00 50.00 000.00
20,6 19,3
2210205
Sanitation charges 50.00 84.40 800.50

2210206 Armed Guard and Security 000.00

62,5 63,6
Sub Total 63.00 97.40 039.08

General Cleaning
2,0
2210301
Cleaning Materials 50.00 - 000.00
2210302 Contract Cleaning Service Charges
2,0
Sub Total 50.00 - 000.00

Rentals/Lease
2210401 Office Accommodation
20,5 1,1
2210404
Hotel Accommodation 00.00 00.00 000.00
2210402 Residential Accommodation
2210403 Rent of Office Equipment
20,5 1,1
Sub Total 00.00 00.00 000.00

Travel and Transport GH

69
 ₵
30,7 49,3
2210502
Maintenance / Repairs of Offical Vehicals 50.00 60.04 000.00
90,0 102,5
2210503
Fuel & Lubricants- officals Vehicles 00.00 05.82 000.00
4,0 3,4
2210505
Running Cost - Official Vehicles 00.00 11.00 000.00
6,0
2210510
Night Allowance-Assembly 00.00
2210517
Fuel Allocation to Waste Mgt Dept. 000.00
103,1 102,9
2210511
Local Travel Cost 06.00 95.00 000.00
10,2 6,9
2210509
Other Travel & Transport 50.00 65.00 152.72
244,1 265,2
Sub Total 06.00 36.86 152.72

Repairs and Maintenance

5,0
2210601
Roads, Driveway & Grounds 00.00 000.00
5,0
2210602
Repairs of Assembly Bangalow 00.00 000.00
49,9 46,5
2210603
Repairs of Office Buildings 75.00 68.90 584.50
1,1
2210604
Maintenance of Furniture & Fixtures 26.00 515.00
5,0
2210605
Maintenance of Machines and Plants 00.00 000.00
5,0 4,8
2210606
Maintenance of General Equipment 00.00 55.20 000.00
2210607 Minor Repairs of Public Toilet
2210608 Computer Software
5,0
2210611
Market 00.00 000.00

Support for Traditional Authority 000.00

2210617 Street Light and Trafic Light
2210621 Security Gadgets
76,1 51,4
Sub Total 01.00 24.10 099.50

Training, Seminar and Conference

2821012 Training /Scholarship/Bursary
2210702 Out of Station Allowance

70
 076.90
67,5 87,6
2210710
Staff Development 85.00 49.11 000.00
16,0 15,6
2210103
Refreshments 00.00 85.89 000.00
Seminars/Conferences/Workshops/ 163,0 262,5
2210702
Meetings Expenses 50.00 69.79 000.00
3,0 1,3
2210705
Hotel Accommodation 00.00 50.00 900.00
4,0 3,5
2210711
Public Education & Sensitization 00.00 00.00 000.00
2210701
Training Materials 400.00
253,6 370,7
Sub Total 35.00 54.79 376.90
Consultancy Expenses
Other Consultancy Expenses
23,5 57,2
2210801 Local Consultants Fees 75.00 99.74 000.00
23,5 57,2
Sub Total 75.00 99.74 000.00

GH
Special Services ₵
4,0 3,4
2210902
Official Celebrations 00.00 00.00 000.00
2210905
Assembly Members Special Allow 000.00
40,0
2210905
Assembly Members Sittings All 00.00 000.00
6,8
2210906
Unit Committee/Zonal Councils 21.00 655.00
61,5 197,2
2210909
Operational Enhancement Expenses 00.00 54.56 000.00
Dep. /MPCU/Sub Commmiitee meetings 5,1
2210906
25.00
8,1
2210907
Support to Departements 50.00
5,1
Support to Traditional Authorities 25.00 000.00
2210908 Property Valuation Expenses
122,5 208,8
Sub Total 71.00 04.56 655.00

71
 Other Charges and Fees
2,0 4,0
2211101
Bank Charges 50.00 80.51 500.00
8 2,7
2731103
Refund of Medical Expenses 71.00 00.00 000.00
Workman Compensation
63,3
Imprest 00.00
2731102 Staff Welfare Expenses
2,9 70,0
Sub Total 21.00 80.51 500.00

General Expenses
2,4 3,5
2821001
Insurance and compensation 60.00 00.00
2,0 7
2821007
Court Expenses 00.00 45.00
2821003 Awards & Rewards
51,2 77,9
2821009
Donations 50.00 68.20 025.16
2821018 Civil Number and Street Naming
2821011 Tuition Fees
2821017 Refuse Lifting Expenses
2821019 Scholarship & Bursaries
Reversed Cheque
55,7 82,2
Sub Total 10.00 13.20 025.16
1,089,2 1,314,1 1
Total 15.00 15.63 832.76
12. ASSEMBLY FUNDED PROJECTS
3111306
Bridges/Culverts/Drains 000.00
32,2 14,9
3112208
Computer and Assessories 75.16 86.50 000.00
3111204 Office Building
306,7 92,5
3111308
Rehabilitation of Roads Municipal-wide 77.84 23.59 000.00
Electric Poles
339,0 107,5
Sub Total 53.00 10.09 000.00

GRAND TOTAL EXPENDITURE- 1,729,0 1,678,6 1

IGF 99.00 06.49 986.00

13 GRANTS

72
 OTHER GRANTS-Recurrent
3,934,9 3,937,5 3
2631101 Comption of Gov't Employees-Est post
60.00 58.03 689.52
2631102 UDG- Environmental Saveguard
2631103 Social Intervention Programme
000.00
27,0 54,7
2631104 DDF Capacity Building Grant
68.25 38.99 413.00
6
2631105 HIPC
10.00
150,0 274,3
2631106 Disability Fund
00.00 99.91 000.00
2631107 CWSA/LSGDP
76.00
15,0 11,9
2631108 HIV/AIDS
00.00 72.31
82,2 12,5
2631109 Goods & Services Decent. Dept.
11.32 77.02 014.89
2631110 DDF M & E Dev't Fund
000.00
2631111 UDG Capacity support
158,4 158,4
2631112 Donor Support (MAG)
02.46 02.41
2631113
4,367,6 4,450,3 3
Sub-Total
42.03 34.67 117.41

2631100 DDF- CAPITAL EXPENDITURE

2210108 Civic Numbering/Street Naming

2210602 School Projects/Buildings 000.00

2210603 Buildings and Other Structures

2210605 Renovation of Assembly Buildings
2210603 Roads/Signals
196,6 179,2
2210606 Sewage and Irrigation(Boreholes) 71.40 43.75 710.82

2210611 Bungallows for Assembly Staff 705.06

2210613 Provision for O&M-Office Equipments
2211203 Const. of Markets
36,2 30,4
3111204 Operational Enhancement 60.35 90.00

3111205 Refuse Lifting. Sewers and Irrigation 000.00

73
3111207 Support for Community Initiated Projects

3111303 Const. of Toilets 695.12

80,0 27,6
3111306 Const. of Bridges/Culverts/Drains 00.00 44.00 000.00
3112201 Purchase of Plant and Equipment
3112208 Purchase of Computer and Accessories
3113104 Utilities Network
3113108 Purchase of Furniture & Fittings
2631100 Health Centres/CHPS
312,9 237,3
Sub-Total
31.75 77.75 111.00

2631100 UDG- CAPITAL EXPENDITURE

2210108 Civic Numbering/Street Naming
2210602 School Projects

2210603 Buildings and Other Structures(court) 013.13

2210605 Renovation of Assembly Buildings
2210603 Const. of Roads/signals
2210606 Sewage and Irrigation(Boreholes)
2210611 Bungallows for Assembly Staff
2210613 Const. /Renovation of Markets
Other consultancy Expenses
3111204 Property Valuation
3111205 Electrification Project
3111207 Const. of Car/Lorry Parks
3111303 Const. of Toilets

3111306 Const. of Bridges/culverts/drains 154.10

3112201 Purchase of Plant and Equipment 000.00

3112208 Purchase of Computer and Accessories
3113104 Utilities Network
3113108 Purchase of Furniture & Fittings
2631100 Other consultancy Expenses
Sub-Total
- - 167.23

CAPITAL TRANSFERS OTHERS

2631113
HIPC

Donor Support for capital Projects 000.00

LSDGP

74
2631114 MP'S Capital Development Projects
811.00

Sub Total - - 811.00

DACF - RECURRENT
2210000 EXPENDITURE
Repair of Equipments
30,0 11,6
2631101 Maint. & Repairs-Official Vehicle 00.00 82.49
39,8 14,4
2631102 Scholarship and Bursaries 79.72 60.53 915.82
4,0 6,7
2631103 Support for Sports and Culture 00.00 31.05 000.00
36,1
2631104 Public Education and Sensitisation 41.06 000.00
3,0
2631105 Text Books and Liberary Materials 00.00
40,0
2631106 Property Valuation Expenses 00.00 000.00
215,1 240,0
2631107 Management of Refuse Dumps 19.49 00.00
105,0 80,0
2631108 Official Celebrations 00.00 86.91 375.20

2631109 Staff Development 000.00

110,0 33,0
2631110 Computer and Assocessories 00.00 93.90
617,1 42,4
2631111 Operational Enhancement Expenses 49.78 15.40 921.74
1,1
2631112 Bank Charges 21.00 000.00
6,4
NALAG DUES 76.56
230,0
Fumugation 00.00
287,5
Sanitation Improvement Plan 00.00
30,0
Local Consultancy Fees 00.00
Purchase of Jersey
Support to ARIC
18,1
Support to GHS on Malaria 28.24 744.74

Support to Municipal Immun. Prog 333.00

75
Support DRI - HIV/AIDS/TB 744.74

Sport STME 000.00

4,5
Sport My First Day at School 39.00 000.00
20,00
Awards and Rewards 0.00 000.00

Support to Sister City Programme 000.00

Support Security Surveillance 000.00

Other Consultancy Expenses - RIAP 000.00

50,00 25,9
Sanitation Charges 0.00 56.00 202.00
185,000 149,7
Refuse Lifting Expense .00 34.07 000.00
35,00 4,4
Purchase Petty Tools/Implements 0.00 99.70 000.00
50,00 32,0
Fumigation 0.00 84.99 130.21
52,00
Seminar/Conference/Meeting 0.00 000.00
52,5
Maintenance of Sanitary Facilities 30.00 000.00
3,8
Local Travel Cost 03.68 437.00

Registration of Assembly Lands 437.00

Property Rate and BOP Bill Software 000.00

Support for Decentralised Dept 000.00

20,00 19,4
Street Naming and Property Add. 0.00 67.00 000.00

Support to Traditional Authority 000.00

5,00 10,4
Training Materials 0.00 35.00 000.00

Gazette Fee Fixing Resolution 000.00

Support to Sub-District Structures 916.00

Monitoring of Evaluation of Dev Proj. 000.00

76
 Citizen Satisfaction Survey 000.00

Support to ERCC 000.00

Preparationn of Annual Action Plan 000.00

Water & Sanitation committee 000.00

21,32
Repair of Residential Builidings 1.51
10,00
Armed Guide and Security 0.00
20,00
Support Roads,Drive ways Grounds 0.00
10,00
Maintenance of Markets 0.00
Petty Tools and Implements
23,7
Revenue Data Collection 00.00
20,00 27,9
Maintenance of Office Building 0.00 23.30
1,728,6 1,326,3 1
Sub-Total 11.56 68.82 157.45

2631100 DACF - CAPITAL EXPENDITURE

2210108 Purchase of Funiture & Fitting
228,1 85,7
2210602 School Projects 37.08 60.67 695.00
130,0 13,7
2210603 Buildings and Other Structures 00.00 89.90 328.00

2210605 Renovation of Assembly Buildings 000.00

40,0 30,0
2210603 Computer software 00.00 00.00
30,0
2210606 Sewage and Irrigation(Boreholes) 00.00

2210611 Bungallows for Assembly Staff 000.00

10,0 26,0
2210613 Networking/ITC Facilities 00.00 59.00 000.00

2211203 Compensation of Land Owners 000.00

98,9
3111204 Roads and Signals 00.00 900.00

77
 100,0
3111205 Electrical Networks 00.00
3111207 Street Light Installation/Poles 20,0 30,0
00.00 00.00 000.00
3111303 Const. of Toilets/Repairs Sanitory Sites
3111306 Support to Self Hekp Project
789.55
3112201 Purchase of Plant and Equipment
3112208 Purchase of 2 Pick Ups
3113104 Bridges 100,0
00.00
3113108 Sewers and Irrigation (Boreholes)
000.00
Slaughter House
000.00
Roads and Signal
Purchase of Vehicles
000.00
Water System 99,6 40,0
84.55 00.00
Other Charges 103,7
65.90 000.00
2631100 Health Centres/CHPS 557,7 137,7
75.41 68.36 721.00
Sub-Total 1,384,4 497,1 1
97.04 43.83 433.55
TOTAL COMMON FUND 3,113,1 1,823,5 2
08.60 12.65 591.00

MP'S COMMON FUND

Scholarships and Bursaries 35,0 31,1
00.00 73.00 873.00
Trade Promotion/Exhibition Exp 318,3 308,7
60.29 33.10
MP Infrastructure Development 78,6 128,0
39.71 54.81
Sub-Total 432,0 467,9
00.00 60.91 873.00

TOTAL GRANTS 8,225,6 6,979,1 7

82.38 85.98 670.64

GRAND TOTAL EXPENDITURE 9,954,7 8,657,7 9

81.38 92.47 656.64

78
 4.5 SECTION D: TO IDENTIFY THE REVENUE AND EXPENDITURE PROJECTIONS OF THE
DISTRICT
Revenue projections are an essential component of all levels of budgeting. Projections in a

strategic context, according to Cole (1994), refers to any attempt, whether qualitative or

quantitative and usually based on past performance, to predict future outcomes and trends in an

organization's internal and external environments in order to limit the risks involved in

developing and implementing a strategy. Every institution or organization should be able to

make a reasonable forecast of what it expects to receive (revenue) and how that revenue will be

spent (expenditure). To put it another way, all organizations should be able to create sound

budgets to guide future development. Budgets, as Mayo (1995) points out, are important

planning tools, and their creation necessitates financial managers anticipating when outlays will

be made and receipts will be collected. Projections, according to Cole (1994), are the

processes of making the seemingly unpredictable predictable. Projection revenue and expenses

are thus an essential component of organizational planning and management. However, revenue

forecasting and budgeting issues plague District Assemblies across the country, particularly the

Nsawam Aduagyiri District Assembly. As Graves and Dollery (2009) point out, the quality of

local government budgets varies. The District Assembly's ability to forecast or estimate its

anticipated revenue and expenditure is in doubt. We discovered a growing disparity between

estimated revenue and actual revenue collected, as well as between budgeted expenditure and

actual expenditure. As Soest (2007: 356) notes "the 'tax gap', i.e., the difference between tax

79
potentials and tax actually collected forms a major challenge for tax administration in developing

countries". As shown in the table above, there is a significant difference between the Nsawam

Aduagyiri District Assembly's estimated and actual revenue and expenditure. For example, in its

2016 and 2017 budgets, the Assembly recorded a 35% increase in revenue and expenditure over

the estimated amount shown. This occurrence does not meet proper projections or budgeting

standards. Budgets, as advocated by the World Bank (2005), should be based on more accurate

estimates of domestic and external resources, as well as absorptive capacity constraints.

During a discussion with the Assembly's core staff following the presentation of our findings,

three main reasons were specifically identified as causes of this phenomenon:

First, one of the factors identified as impeding proper budgeting or projections was insufficient

data. The District Assembly lacks the necessary data to serve as a foundation for accurate

estimation or revenue projections. The Assembly has failed to profile and maintain adequate data

on its existing revenue sources and yields over time. The Assembly lacks a comprehensive and

up-to-date list of its resource sources. Similarly, because of the poor revenue reporting system, it

is difficult to budget using previous years' revenue yields. Thus, estimation is reliant on intuition

rather than a rigorous evaluation of the surroundings and historical performance.

Second, inadequate revenue collection techniques and poor spending planning account for the

large gap between projected and actual revenue and expenditure. As previously stated, revenue

collection and reporting systems are disorganized or poorly structured. Revenue objectives

cannot be met in the absence of adequate revenue mobilization tools.

Alternatively, the adoption of ad hoc measurements might result in either low or high income at

a given moment in time, resulting in the oscillations seen in the table. In other words, when ad

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hoc measures are used in revenue mobilization, consistency in revenue levels cannot be

sustained. Similarly, in the absence of well-planned and disciplined expenditure behavior, swings

in expenditure levels will be the norm.

Third, it was discovered that the large gap between planned and actual income is occasionally an

intentional activity. It was found that District Assemblies were occasionally paid by the

government for surpassing their income objectives. This was accomplished by an increase in the

central government's portion of District Assemblies Common Fund allocations. This may still be

observed in the mechanism for allocating the District Assemblies Common Fund (responsiveness

factor), which is specified in section 3.2 of this document. The issue with this incentive

package is that it encourages District Assemblies around the country, including the Nsawam

Aduagyiri District Assembly, to establish low-income objectives that are easily surpassed. As a

consequence, the Assemblies claim to have exceeded their revenue objectives and are thus

rewarded for underperformance.

Poor forecasting or projections can have a negative impact on planning and revenue

mobilization. As Graves and Dollery (2009) point out, cash flow forecasting has an impact on

cash and investment balances. According to Kokor (1991), revenue collection discrepancies are

caused by forecasting mistakes, administrative problems, random causes, or a combination of

these. In the perspective of Ma (2009: 12) "when state finance is inadequate and income flow is

troubled by unpredictability, it is hard for the state to even perform significant budgeting

operations, let alone develop the competence to budget". Clearly, poor estimating due to a lack

of data, bad revenue and spending procedures, and a reward-seeking strategy from the central

government might stymie future efforts to improve internal revenue mobilization.

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 4.6 SECTION E: DETERMINE THE EXPENDITURE PATTERNS OF THE REVENUES
GENERATED
The pattern of expenditure is an essential aspect of budgeting. Budgets, as stated by Cole (1994),

serve the dual purpose of setting goals (targets) and allocating resources, as well as allowing

those resources to be distributed fairly. The District Assembly's domestically produced fund is

expected to be spent on both recurring and capital expenditures. However, unlike central

government spending, which is dominated by transfer payments, local government spending is

nearly entirely expended on intensive expenditures (goods and services), as observed by Bailey

(1999). Similar patterns may be found in the Nsawam Aduagyiri District Assembly. As

demonstrated in the budget statement above, more than half of the spending from the

domestically produced fund is recurring. For example, practically the whole domestically

produced cash was utilized on recurring spending alone in 2016, 2017, 2018, and 2019.

Personnel emoluments, traveling and transportation, and miscellaneous are the four primary

recurring spending sectors of the domestically produced money. The large recurring spending

was ascribed in part to circumstances where the Assembly had to utilize its own funds to oversee

and sustain programs established through the District Assemblies Common Fund or donor

monies. The Assembly's core staff indicated that no provision was made to use a portion of the

District Assemblies Common Fund (limited central government payments) to oversee initiatives

funded by the fund. As a result, the Assembly is obligated to utilize a portion of its domestically

produced budget to pay for such initiatives' monitoring efforts. Another source of concern was

the misclassification of the third main recurring expense category as miscellaneous.

Miscellaneous expenditure was defined as spending on products or activities that were not

budgeted for. As a result, such spending items do not come under any one expense category, thus

the name miscellaneous expenditure.

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This broad categorization of spending is concerning since it is not suitable to spend such

substantial quantities of internally produced cash on unbudgeted or ambiguously categorized

expenditure items.

In the budget, for example, we discovered that as much as $18,087.40.00 was spent on

miscellaneous. This word is improper since it allows for the easy theft of finances. Funds may be

misapplied or misused if specified goods or activities are not recognized for spending. Kroes

(2007) claimed that the specification of quantities of inputs and money necessary for each project

must be done in advance in order to avoid this behavior and allow for accurate revenue forecasts

and planning. Only in this manner can the usage of money be recorded or monitored.

In relation to personnel emoluments, we discovered that central government funds have

continuously failed to sufficiently cater to this spending component. This did not imply a

reduction in central government funds for employee emoluments, but rather an increase in staff

numbers at the Assembly's request, rather than the central governments. During the discussion, it

was revealed that the Assembly employs more people than the central government need. This

implies that the Assembly must find alternate sources of funding other than central government

grants to pay the Assembly's expanded workers.

The general observation has been made that rises in revenue are frequently accompanied by an

increase in spending. This type of 'indisciplined' expenditure might have a negative impact on

revenue management. The continual fall in the share of domestically produced funds and the

Assembly's escalating expenditure pattern result in a poor financial base for the Assembly. This

means that actual project investment through the domestically produced capital would be

modest, if not impossible.

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 4.7 SECTION F: TO IDENTIFY HOW THE REVENUE MOBILIZED CAN HELP IN THE
ATTAINMENT OF SDG 8
SDGs are defined as policy priorities, established targets, or aspirational goals that nations

should strive for, regardless of their specific national circumstances, resource capacities,

realities, and degrees of development. In general, countries must strive to integrate their policy

objectives and planning procedures with attempts to achieve sustainable development goals. The

evaluation attempted to analyze how the income generated can contribute to the achievement of

SDG 8, which says Decent work and economic growth, ensure long-term economic growth that

is both inclusive and sustainable. Citizens must also have access to good and productive

employment options. This was chosen because they are integrally intertwined with revenue

mobilization. Governments require funds to carry out their responsibilities, and revenue

mobilization promotes access to affordable and readily available financial services. According to

the reviewed literature, revenue mobilization has an impact on economic growth, poverty

eradication, and inequalities, as well as providing access to education and health care and, to a

lesser extent, reducing unemployment through the expansion of the tax base. A robust economy

with good jobs for residents might lead to the achievement of multiple SDG 8. The attainment of

the SDGs might fuel the ongoing cycle of income mobilization and the achievement of the

SDGs.

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 CHAPTER FIVE
5.1 SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS
5.2 INTRODUCTION
The preceding chapter examined the findings and discussed them in detail. This section contains

the study's summary, results, and recommendations. The study sought to identify revenue

sources in the Nsawam Aduagyiri Municipal Assembly, to identify some of the problems

encountered during revenue mobilization and methods of maximizing revenue collection, and,

finally, to identify how the revenue mobilized can contribute to the achievement of SDG 8.

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 5.3 SUMMARY
This study used both quantitative and qualitative methods. A total of 150 people were chosen at

random. Both questionnaires and interviews were used to obtain information from respondents

about their understanding of the variables in this study. Since all of the study instruments were

filled and returned, the response rate was 100%. According to Mugenda & Mugenda (2003), a

response rate of 100% is ideal for analysis.

5.4 KEY FINDINGS

The primary sources of income for the district, according to respondents, are rates, land and

royalties, rents of land, buildings, and houses, fines, penalties, and forfeits, licenses, fees,

miscellaneous & unspecified revenue, and grants. These sources are the primary sources of

money for the district's programs and activities, with grants being the primary source. According

to the report, the Nsawam Aduagyiri Municipal Assembly faces a number of challenges in

identifying and mobilizing these sources of revenue. They include, among other things, unclear

boundary identification and landmarks litigations, political pressure on local tax administration

to relax revenue collection, poor education on the payment of rates, fees, licenses, and so on, a

shortage of well-trained and qualified personnel, poor administrative capacities, and corruption.

Controlling tax leakages can be accomplished by closely monitoring tax collectors. Citing the

reasons for tax evasion, they suggested a lack of support from the district assembly and the

desire to punish individuals who violate taxes. One of the key restrictions in the collection of tax-

by-tax collectors was recognized as a lack of logistics to work with. Tax collectors cited a lack of

knowledge and a lack of collaborative and or organized tax collecting units including all

stakeholders, including law enforcement authorities. The district's inability to reach half of its

expected income showed a negative impact on its capacity to meet all of its initiatives. The

Assembly may not have enough funding to meet its aims, programs, and activities, particularly

86
those connected to SDG goal 8, which is of primary concern to the researcher. To overcome

these challenges, logistics, social amenities, central or major tax collecting places, and adherence

to tight norms, regulations, and laws were established.

5.5 CONCLUSION
According to the study's findings, the Nsawam Aduagyiri Municipal Assembly does not generate

enough domestic money to meet its developmental goals, and hence relies too heavily on the

District Assemblies Common Fund from the central government and foreign assistance. Internal

revenue mobilization is impeded by factors such as erroneous data, a lack of tax education,

irregular property values, and poor enforcement of the assembly's bylaws, as well as insufficient

logistics for revenue collectors and low morale among revenue collectors due to low incentives.

This also prevents the Assembly from fulfilling the majority of its SDG targets, particularly goal

8. Because there is insufficient funding to begin on initiatives, the Assembly is unable to hire

more youngsters from this politically decentralized area. Also, Nsawam Aduagyiri District

Assembly is having difficulties with income mobilization and administration. The Assembly has

a few internal resources that can barely support any major development initiative in the district.

With recurring expenditure increasing at the cost of capital expenditure due to the usage of the

Assembly's internally produced fund, investment in revenue-generating activities would be low,

if not entirely absent. The district's inadequate revenue collection techniques, along with the

highly unskilled character of the tax collectors and the consequent poor reporting procedures,

will continue to impede the Assembly's revenue objectives from being fulfilled. For the time

being, the Assembly lacks a framework to assure effective income mobilization and

administration. The revenue collectors are inexperienced and unable to do fundamental

accounting chores. This leads to inadequate reporting and accounting, which has the potential to

cause significant income leakage. Data is critical in all aspects of planning, including financial

87
planning. The lack of data in the Assembly, particularly data on income sources and yields, is

thus a concerning occurrence. This paints a grim picture of the current position in terms of the

capability of various revenue sources and how such sources should be enhanced or targeted. As a

result, the Assembly must create strategies to solve these difficulties in order to achieve effective

income mobilization and administration. This is critical since the Assembly's very survival is

dependent on the number of financial resources available to it. In this scheme of things, human

resource development is critical, particularly for those involved in income mobilization and

management. There is also a need to invest in revenue-generating activities in order to broaden

the tax base.

5.6 RECOMMENDATIONS
Following the study's findings, it is suggested that the district collaborates with other local

government actors such as Registrar General Departments and tax collection authorities to ensure

the proper and efficient registration and compilation of all business entities, as well as the

renewal of business certificates as required by law, to ensure effective data collection and record

keeping. To act as a guideline for tax policy and goal setting. The district should work with other

authorities to ensure that assembly bylaws, particularly those pertaining to taxes and tax

payments, are published in order to ensure compliance and protection for tax actors. In addition,

the assembly should train and hire more energetic and younger men and women with experience

in human relations and financial management. Without these procedures and understanding,

good accounting and receipts systems would fail. They should also supply tax mobilization

logistics. Because alienation can breed irresponsiveness, it is recommended that local

government officials maintain constant consultations with stakeholders such as traditional rulers,

civil society organizations, and policymakers to discuss issues affecting internally generated

revenue and prescribe appropriate strategies for making it more appealing and sustainable.

88
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