The Impact of Fiscal Decentralization on Service Delivery in

Manafwa

District

A Case Study of Lwakhakha Town Council

WAMBWA DAVIES

SO7BO8/903

Dissertation Submitted to the Faculty of Social Sciences in Partial Fulfillment for the

Award of a Bachelors Degree in Development Studies of

Uganda Christian University, Mukono

SUPERVISOR

Ms. MARACTHO COMFORT. EMILLY

2

DECLARATION

I WAMBWA DAVIES, a student of development studies declare that all the detailed

Information in this report is of my own findings from Lwakhakha Town Council Local

Government in Manafwa district where the researcher conducted research on Assessing the

Impacts of Fiscal Decentralization on Service Delivery in partial fulfillment for the

requirement for the award of bachelors degree in Development studies of Uganda Christian

University.

Sign……………………………………. Date……………………………

Wambwa Davies (researcher)

Approved by Ms. Maractho Comfort Emilly (Supervisor)

Sign…………………………………..... Date…………………………………

DEDICATION

I wish to extend my warmest heartfelt attitude to my beloved Paapa NAMONYO ANDREW

and mum KITUYI AGNES, sisters and brothers plus friends and relatives for the financial,

spiritual and physical support rendered towards the completion and success of my fieldwork,

may God Almighty bless them/you abundantly.

ACKNOWLEDGEMENT

I deeply acknowledge my supervisor Ms. Maractho Emilly Confort and the entire Lwakhakha

Town Council Local Government for the support and intellectual guidance that made my

research study a success.

Special thanks go to the entire Development Studies Students especially those who helped me

in Discussions and for their support, care and courage during my struggle, may God bless

you.

TABLE OF CONTENT

DECLARATION.....................................................................................................................3

DEDICATION.......................................................................................................................4

ACKNOWLEDGEMENT.........................................................................................................5

TABLE OF CONTENT............................................................................................................6

DEFINITION OF KEY TERMS...............................................................................................10

CHAPTER ONE...................................................................................................................13

INTRODUCTION................................................................................................................13

1.0 INTRODUCTION..............................................................................................................................................131.1 BACKGROUND...............................................................................................................................................131.2 PROBLEM STATEMENT....................................................................................................................................151.3 OBJECTIVES OF THE STUDY..............................................................................................................................161.3.1 GENERAL OBJECTIVE....................................................................................................................................16

1.3.2 Specific Objectives...............................................................................................................................161.4 RESEARCH QUESTION......................................................................................................................................16HOW DO THE FUNDS RECEIVED SPEND BY THE TOWN COUNCIL?...................................................................................171.5 SIGNIFICANCE OF THE STUDY............................................................................................................................171.6 SCOPE OF THE STUDY.....................................................................................................................................17

LITERATURE REVIEW.........................................................................................................19

2.0 INTRODUCTION .............................................................................................................................................192.1 FISCAL DECENTRALIZATION AT INTERNATIONAL LEVEL ...........................................................................................202.2 ACHIEVEMENTS OF FISCAL DECENTRALIZATION ....................................................................................................222.3 CHALLENGES OF FISCAL DECENTRALIZATION .......................................................................................................24

CHAPTER: THREE..............................................................................................................27

METHODOLOGY................................................................................................................27

3.0 INTRODUCTION..............................................................................................................................................273.1 RESEARCH DESIGN.........................................................................................................................................273.2 AREA OF STUDY.............................................................................................................................................273.3 DESCRIPTION OF THE POPULATION ...................................................................................................................273.4 THE SAMPLE SIZES AND SAMPLING METHOD.......................................................................................................283.5 DATA COLLECTION INSTRUMENTS......................................................................................................................283.6 DATA MANAGEMENT.....................................................................................................................................283.7 DATA ANALYSIS..............................................................................................................................................28

CHAPTER FOUR.................................................................................................................31

DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS..............................31

4.1 INTRODUCTION .............................................................................................................................................314.2 SOCIAL-DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS.............................................................................31

4.3.0 Impact of Fiscal Decentralization on service delivery in Lwakhakha Town Council..........................334.3.1 Services brought near to the community............................................................................................344.3.2 The priority of the Community............................................................................................................354.3.3 Balance Resource Allocation...............................................................................................................354.4.0 The challenges being faced in the implementation of Fiscal decentralization in Lwakhakha Town Council..........................................................................................................................................................374.4.1 Corruption............................................................................................................................................37

4.4.2 Raising revenue...................................................................................................................................374.4.3 Conflict of interests..............................................................................................................................384.5.0 General finance received and expenditure levels on services delivery in Lwakhakha Town Council. 394.5.1 Construction of roads..........................................................................................................................394.5.2 Scholastic materials.............................................................................................................................404.5.3 Sanitation in the markets....................................................................................................................404.5.4 Agriculture ..........................................................................................................................................40

CHAPTER FIVE...................................................................................................................41

CONCLUSIONS AND RECOMMENDATIONS........................................................................41

5.1 INTRODUCTION .............................................................................................................................................415.2 CONCLUSION................................................................................................................................................425.4 AREAS FOR FURTHER RESEARCH........................................................................................................................44

QUESTIONNAIRE...............................................................................................................47

INTERVIEW GUIDE............................................................................................................49

LIST OF APPENDICES

Appendix (i) SKECTH MAP OF MANAFWA DISTRICT

Appendix (ii) SKECTH MAP OF LWAKHAKHA TOWN COUNCIL

Appendix (iii) QUESTIONNAIRE

Appendix (vi) INTERVIEW GUIDE

LIST OF TABLES

Table1. Showing the distribution of respondents by sex.

Table2. Showing the distribution of respondents by age.

Table3. Showing the distribution of respondents by occupational.

Table4. Showing the frequency and percentage of respondents on

impacts Fiscal decentralization on service delivery in Lwakhakha

Town Council

Table5. Showing the frequency and percentage of respondents on

challenges of implementing Fiscal decentralization on service

delivery in Lwakhakha Town Council.

Table6. Showing the frequency and percentage of respondents on the

spending of funds as the Town Council.

ABBREVIATIONS

CBOs Community Based organizations.

IGAs Income generating activities. FAL functional Adult literacy.

PDWs peoples with disabilities.

S/C Sub-county.

LG Local Government.

AAMP Area Agricultural Modernization programmes.

ACDO Assistant community development office.

ACORD Agency CO-operation and research in Development.

CAO Chief Administrative officer.

LC Local council.

NGOs Non governmental organizations.

NAADs National Agricultural advisory services. JARD Joint Annual Review on decentralization

LGA Local Government Act

MOLG Ministry of Local Government

PEAP Poverty Eradication Action Plan

PMA Plan for Modernization of Agriculture

ULGA Uganda Local Government Association

NCC National consultative council

NRC National Resistance Council

NRM National Resistance Movement

Definition of Key Terms

Acts. An Act is a law passed by parliament elected through universal adult suffrage. Acts

usually operational what is provided in the Constitution and so are inferior to the Constitution

in order of priority. For example the Local Government Act that gives effect to the

Constitutional provision for the local government system in Uganda (decentralization)

Constitution. This is the supreme law of a country. All other laws must conform to the

Constitution and any law that contradicts with the Constitution is invalid or has no legal

effect.

Deconcentration .This is a form of decentralization which redistributes decision making

authority financial and management responsibilities from the central government officials in

the national capital to those working in the regions, provinces or districts or it can create

strong field administration or local administrative capacity under the supervision of the

central government.

Delegation. This is the transfer of responsibility for decision-making and administrations of

public functions to semi-autonomous organizations not wholly controlled by the central

government but ultimately accountable to it. In this form, governments delegate

responsibilities when they create public enterprises of corporations or special project

implementation units. These organizations have a great deal of discretion from the constraints

on regular civil service personnel and may be able to charge users directly for the service.

Devolution. This is the transfer of discretionary decision-making, planning, administrative

and financial management to independent local governments units with powers to sue or be

sued. Devolution transfers responsibilities for services to administrative units that elect their

own mayors and councilors, raise their own revenue and have independent authority to make

investment decision. In devolution, local governments have a clear, legally recognized

geographical boundaries over which hey perform public exercise authority, and with in which

they perform public functions. This type underlies political decentralization.

Statutes. These are laws made by a legislative body other than an elected parliament. For

example, laws that were made by the National Consultative Council (NCC) in 1980 and the

National Resistance Council (NRC) between 1986 and 1996 are called Statutes. However, the

term statutes may also be used to mean a collection of laws.

Rule of Law. This implies that the powers and functions of government must be exercised in

accordance with the law. This was derived from the concept postulated by Professor Dicey;

he argued that to remove government from dictatorial tendencies, it is necessary to place

government not in the control of men and women but rather to subject it to the principles and

rule of law.

Local Revenue. This can be defined as the income of a local government that is realized from

the local sources within the local government. These local sources of revenue may include;

graduated tax, property tax, market dues, rents, license fees, interests, charges and others.

Local Government. The Local Government Act 1997 defines a local government to include;

districts, urban councils, sub counties and division councils. The parishes, wards, cells or

village councils are referred to as administrative units.

ABSTRACT

This study was carried out in Lwakhakha Town Council. The main objective of the study was

to examine the impacts 0f fiscal decentralization on service delivery in Lwakhakha Town

Council.

The researcher made sure that descriptive research design was used to organize and

summarize responses using numerical data in form of tables to be easily understood.

The research design based on unstructured interviews, and self-administered questionnaires

that comprised a number of questions that were answered by respondents. Respondents that

were selected included civil servants, political leaders, opinion leaders, peasants and head

teachers. 80 participants were sampled to cover the entire study area.

Findings revealed that fiscal decentralization has greatly improved service delivery in

Lwakhakha Town Council. Services such as health, education, transport and agriculture

services have been delivered at cost effective way. However, it was also revealed that some of

the services are not completely accessed especially medical and electricity services.

Most service delivery indicators show positive improvements, therefore, it is concluded

decentralization has not only opened up opportunities for empowerment of the people, but

has also led to improvements in service delivery.

The researcher recommends that the ministry of local government should increase the funds

to execute decentralized services, ensure accountability, strengthening of anti corruption

institutions, massive sensitization, and participatory planning in local governments. The

researcher hopes that these will help the stakeholders in the fiscal decentralization

implementation in addressing the gaps that were established in the study.

CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter gives the introduction and background of Decentralization in Uganda, problem

statement, scope of study, purpose of study, objectives of the study, significance of the study

and the research question that was used in the study.

1.1 Background

According to Nsibambi (1997) for the past three decades, governance in Uganda was

characterized by corruption, centralization of power and personalization in reference to local

authorities, the local government Act (1967) and the 1994 Urban Authorities Act over

centralized power had left local government almost powerless and prone to whims of the

central government for local administration. The central government had the high yielding

taxes while the local government were left with minor taxes, poor yield and difficult to

assess, collect and administer.

According to Etsham etal www.GDDRC.org, the effects of centralization were a weak civil

society that could not check the excess power of the state nor enforce accountability of public

officials, the limited economic development and service delivery due to state domination over

the civil society.

Therefore, decentralization policy in Uganda gained ground far back in 1986 when the NRM

captured power. It was introduced as a reform process geared towards redesigning the profile

of the state to enable it exercise its essential functions while letting the local governments

complete the delivery of services to the community effectively through the establishment of

Resistance Councils.

It was launched in October 1992 and stated out in the local government statute No.8 of 1993.

During the constitutional making process, decentralization emerged as one of the most

contentious issues in the Constituent Assembly debates but it was eventually enshrined in the

1995 constitution. The pursuit of decentralization policy in Uganda is part of quest for good

governance, economic prosperity and the service delivery.

Decentralization is intended to empower people in making financial and other decisions

beneficial to the local communities. Also it is intended through the process of privatization

and other mechanisms, to enrich civil society and also ensure that the local administrators and

politicians are first and fore most, accountable to the local communities. And main objectives

of decentralization are as follows according to Nsibambi (1998).

1. Transfer real power to local government and reduce the workload of remote, under

resourced central government.

2. To bring political and administrative control over services at the point of delivery in order

to improve accountability and efficiency.

3. To free local managers from central constraints and allow them develop organizational

structures tailored to local circumstances.

4. To improve financial accountability by establishing a clear link between payments of

taxes and provision of services.

5. To improve local council capabilities to plan, finance and manage service delivery to their

constituents. This constitutes a total reversal of the centralizing tendencies of early

government.

Rondinelli (1984) defines decentralization as a generic word which refers to the transfer of

financial responsibilities for planning, management, resource mobilization and allocation of

decision making and financial authority from the centre to regional branch offices, local

governments/Non Governmental Organizations (NGO). Rondinelli identified the three forms

of decentralization such as Deconcentration, Delegation, and Devolution

Chapter 11 article 176(2) of the constitution states that:-

‘’There shall be established for each local government unit a sound financial base with

reliable sources of revenue. Persons in the service of local governments shall be employed by

the local government and the local government shall over see the performance of such

persons to provide services in their areas and monitor the provision of government services or

the implementation of projects in their areas.’’

The implementation of the constitutional provisions was facilitated and legalized by the

enactment of the local government Act 1997 whose objectives was to give a full effect of

decentralization of powers, functions, powers and responsibilities at all levels of local

governments, to ensure democratic participation in and control of decision making by the

people concerned, to establish a democratic political and gender sensitive administrative set

up in local governments and to establish the sources of revenue and financial accountability

and to provide for elections of local councils.

Article 193 of the 1995 constitution of Uganda provide that the president shall each financial

year, in accordance with the constitution, cause to be present parliamentary proposal as to the

monies to be paid out of the consolidated funds as follows;

Unconditional grant is the minimum grant that shall be paid to the local government to run

decentralized services and shall be calculated in the manner specified in the seventh schedule

of this constitution.

Equalization grants, is the money to be paid to local government for giving subsidies or

making special provision for the least developed districts and shall base on the degree to

which a local government unit is logging behind the national standards for a particular

service.

Condition grant, shall consist of monies to local government to finance programmes agreed

upon between the local government and the government and shall be expended only for the

purpose of which it was made and in accordance with the condition agreed upon.

Therefore, the implementation of fiscal decentralization in Uganda was seen as the strong

indicator of empowering local government and the provision that encourages delivery of

services to the lowest possible level where people can participate.

1.2 Problem Statement

Decentralization is intended to improve the efficiency in provision of services, the quality of

governance, economic development and effort to alleviate poverty. Local Government has

been granted holistic power whereby it is the highest political authority in their area of

operation.

According to Kisembo (2006), the constitution empowers Local Governments to levy charge

and collect appropriate fees as well as taxes to help in provision of services to the masses.

Lwakhakha Town Council has also been decentralized and it has powers to levy charge and

collect taxes or fees for the above purpose. However there is little if any, publication as

regards the impact of fiscal decentralization on the delivery of services in the Town Council.

Therefore, the study, concisely sought to establish the impact of fiscal decentralization on

service delivery in Lwakhakha Town Council.

1.3 Objectives of the Study

1.3.1 General Objective

To examine the impacts of fiscal decentralization on service delivery in Lwakhakha Town

Council, Manafwa district.

1.3.2 Specific Objectives

To examine the extent to which fiscal decentralization has impacted on service delivery in

Lwakhakha Town Council

To investigate the challenges faced in the implementation of fiscal decentralization in

Lwakhakha Town Council.

To establish the relationship between general finance received and expenditure levels in

promoting service delivery in Lwakhakha Town Council.

1.4 Research question

To what extent has Fiscal decentralization impacted effective service delivery?

What are the challenges being faced in the implementation of the policy?

How do the funds received spend by the Town Council?

1.5 Significance of the Study

Town council will get to know and assess themselves on performance as regards the

implementation of fiscal decentralization.

The study will be very significant to the government of Uganda as a whole to see how best it

has performed in the implementation of fiscal decentralization.

The study will also help town Council authorities and other authorities on how best to address

the challenges being faced in the implementation of fiscal decentralization.

It will enlighten the local people to demand for services since they will have been made

aware of the idea behind the policy.

It will be important to academicians or scholars who would wish to carry out further research

on fiscal decentralization to identify areas that needs further study and exploration.

1.6 Scope of the Study

Conceptual scope; the research was to study the extent to which fiscal decentralization has

brought about effective and efficient service delivery in Lwakhakha Town Council to which

decentralization is intended. The study focused on different sectors such as Education,

Health, Water and Sanitation, and works and transport and Agriculture.

Geographical scope included of three wards in the Town Council, that is Butemulani,

Bukibaye, and Lwakhakha wards.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter focuses on the review of the existing literature on fiscal decentralization by

different authors. It focuses on specific areas of concern like definition, Fiscal

decentralization at international level, the achievements of fiscal decentralization, and

challenges of fiscal decentralization.

Uganda like Ethiopia, Guinea, and Mozambique among other countries embarked on

decentralization policy as early as 1986 when NRM under the leadership of Yoweri Kaguta

Museveni

According to the Joint Annual Review of Decentralization (JARD) report by Ministry of

Local Government (April 2008), Decentralization in Uganda followed a phased approach

beginning with Political and Administrative aspects and later Fiscal Decentralization

Mukandala (2000) defines fiscal decentralization as the type of decentralization, which seeks

to redistribute financial resources for providing public services among different levels of

government. It is the transfer of responsibilities for planning and financing of certain public

functions from the central government and its agencies to the field units of levels of

government.

According to ministry of local Government (2006), Fiscal decentralization involves shifting

some responsibilities for expenditures and/or revenues to lower levels of government. One

important factor in determining the type of fiscal decentralization is the extent to which sub-

national entities are given autonomy to determine the allocation of their expenditures. The

other important factor is their ability to raise revenue. This note outlines principles and best

practice and highlights how country specifics will ultimately be the best determinant of

expenditure assignments.

According to http://www.Iucea.org/downloads/Golola paper document, in recent years,

there has been a worldwide revival of interest in fiscal decentralization. The so-called

"countries in transition" of Eastern Europe, for example, are busily setting up new systems of

local and intergovernmental finance (Bird and Wallich, 1993). In line with the above Many

developing countries are turning to various forms of fiscal decentralization as one way of

escaping from the traps of ineffective and inefficient governance, macroeconomic instability,

and inadequate economic growth in which so many of them have become mired in recent

years. Similarly Bennett (1990), argues that if less dramatic, pressures are at work in

developed economies attempting to reshape their intergovernmental fiscal structure to be

more in tune with the realities of the "postwelfare state" era, At one extreme, the threat of

national disintegration has led Canadians to focus as never before on such traditional issues

as tax assignment as well as on the broader political and economic aspects of federalism.

2.1 Fiscal Decentralization at International Level

According to World Bank report August 2003 Unitary and federal governments provide

different opportunities for fiscal decentralization. Unitary countries do not have sub-national

governments that are constitutionally empowered to make decisions over a specified range of

government functions and services; rather, they have multiple subordinate levels of the same

government for example central, provincial, district. Federal governments, on the other hand,

have constitutionally protected sub-national governments and thus, the possibilities for

independent decision making are clearly stronger under these systems. It is important to note

that local governments as opposed to state or province may not necessarily enjoy

constitutional protection under federal systems. In practice, however, the extent and nature of

decision-making power exercised by lower tiers varies widely from country to country in

both federal and unitary countries and may change in either direction from time to time. At

the extremes, some nominally federal countries for example Venezuela may be considerably

less decentralized in reality than in nominally unitary countries for example Colombia.

According to Revenue sharing study report (2002), Denmark has decentralized both in terms

of expenditure and revenues. most services are decentralized together with commensurable

revenues sources, a clear system of compensation when tasks are transferred is designed and

implemented with well developed system of clearance of interest and dialogue on the size of

central government transfers, although characterized by tough discussions between central

governments every year. While the Transfer systems of Denmark each level like the

municipality and county has its tax revenues and they set their own tax rate but they share the

same base. The most important revenue source is the income tax (approximately 90% of all

tax revenue). The corporate income tax is shared between the central and municipal level.

According to Revenue sharing study report (2002), in Nepal, the centre still implements

district- level programmes through their district offices. Most of those programmes relate

to day-to-day activities of the local people. Those programmes implemented by the centre

have problems like lack of adjustment and harmony with the local conditions, excessive

investment and lack of people's participation and sustainability. Services devolved to local

governments are clearly defined in the local government Act. However, at the on set of

decentralization, there are no linkages between the cost of these services and the funds

decentralized. They are in the process of assessing the cost of these services, reducing

overlaps and reviewing funding through transfers and setting up of a local Authority finance

commission to address these issues.

According to Kabwegere (2000), South Africa is at a crossroads in its decentralization policy. On

the one hand, it has declared its intention to strengthen the fiscal powers of local

governments. On the other hand, the institutional arrangement necessary to guarantee fiscal

decentralization, the power to raise local revenues, has not yet been fully defined. Nor has a

target been set for the vertical division of resources between the central and lower levels of

government. The revenue dimension of fiscal decentralization in South Africa is described as

the system of local government and local government finance in the normative criteria for

proper revenue assignment in an intergovernmental system, and to an evaluation of each of

the major revenue sources.

Kabwegere (2000), says that it was until the late 1980’s that fiscal decentralization emerged

as the quest for development and valued as economic goal in most Sub-Saharan countries.

Africa tended in the majority to enforce on some form of transfer of both political and

financial powers to local units of government. In most African countries since independence,

the situation has become different whether arising from dramatic political reforms, donor

pressure and programs or as part of administrative change. Recent local governance revival

has been one of the most significant facts of state restructuring in Africa since independence.

Rondinelli (1984) in his classic study of decentralization and developing countries argued

that economic growth and social modernization depend on the ability of third world

governments to diffuse responsibility for planning to expand on participation in economic

activities and to promote new centers of creativity within the society. He also stresses that

fiscal decentralization is a precondition for a commitment of economic growth and social

modernization. Though Rondinelli appreciates the reasons for fiscal decentralization, this

view was not put into consideration due to the fact that local people do not have strong

influence in the planning process. This therefore means that there is still little participation of

local citizens in the planning process.

www.GDDRC.org argues that the Malawians made substantial progress in planning of how

fiscal decentralization will be implemented. All the 27 District Assemblies wrote their three-

year development plans in which they lay out their operational and development program and

indicative budget. Also seven of the ten ministries slated for devolution in the first phase

submitted their devolution plans, which was reviewed and approved by an inter ministerial

task force on decentralization and cabinet. For example, the ministry of education devolved

management and administration of schools and deployment of teachers, and the ministry of

agriculture devolved district level planning, budgeting and inspection of extension services.

(World Bank report August 2003:22)

According to http://www.ciersin.org, In Europe, new federal states are emerging such as

Spain and Belgium, and decentralization is being studied extensively even in such centralized

countries as the United Kingdom and France (Bennett, 1990). The latest "new federalism" in

the United States has resulted in increased attention to such concepts as fiscal competition

(Kenyon and Kincaid, 1991) and fiscal equalization. The issues of fiscal decentralization,

broadly conceived, are thus in the air everywhere and, indeed, are already on the ground in

many different guises in different parts of the world. Economic theorists are theorizing about

fiscal decentralization, applied economists are attempting to pin it down in numbers, and

policy economists are busily flying around the world dispensing advice about it

2.2 Achievements of Fiscal Decentralization

According to Kisembo (2006), fiscal decentralization can be widely defined to include some

elements of political power sharing; it has considerable political implications, particularly as

a means of resource allocation, through budgetary, limited taxation powers, for instance have

encouraged some politicians to demand a federal system.

Chandan (1987) agrees that through fiscal decentralization, there is increased accountability.

In this regard, there is value for money and the resources on the ground that the local

population is encouraged to demand for accountability and transparency from their leaders.

This is because these leaders are ere more relatively closer to them unlike the central

government officers who may seem to be distant from them.

According to the Joint Annual Review of Decentralization (JARD) report by the ministry of

local government (April 2008), noted that through fiscal decentralization, local government

performance has been enhanced through provision of conditional, unconditional, and

equalization grants, other development resources and own resources like revenues for local

governments. The policy has provided Uganda a successful story where other countries

adopting fiscal decentralization visit for learning purposes.

The minister pointed out that there are a number of achievements, notably, improvements in

the government aspects such as significant increase in fiscal investment in health, education,

roads and water sectors which has led to improved quality and quantity of service delivery.

In August 2007, the President of Uganda Local Government Association (ULGA) in his

address to the Parliamentary Committee on Public Service and Local Government pointed out

that although fiscal decentralization Uganda is still in its infancy stage, it has registered a

number of achievements, among which includes Improved service delivery; roads, health

units, schools and water have been provided successful under fiscal decentralization, with

improved supervision and monitoring by the local leaders.

In line with the above he argues that it has increased accountability, the value for money is

seen on ground and people have been encouraged to demand for accountability and

transparency by their leaders. Bottom-up planning and budgeting; this gives a frame work for

the people to be involved in the planning, budgeting and resource allocation process.

Improved employment, local government today is the biggest employer in the country with

more than 300,000 personal at technical levels of service. Increased household incomes

through implementation of poverty eradication Action Plan (PEAP) and Guidance is given to

the people by the leaders to improve methods of farming.

According to www.GDDRC.org Bahl and Linn (1992), the most appropriate form of a transfer

depends in large part upon its objective. Regardless of the particular design, however,

experience demonstrates that good intergovernmental transfer programs have certain

characteristics in common to the extent that the central government is interested in

redistribution as a goal; there is a national interest in redistribution that occurs via the

provision of public services by the sub-national governments. Expenditure harmonization

which can be accomplished by the use of non-matching conditional grants provided the

conditions reflect national efficiency and equity concerns, and where there is a financial

penalty associated with failure to comply with any of the conditions. In choosing such

policies there will always be a trade-off between uniformity, which may encourage the free

flow of goods and factors, and decentralization which may encourage innovation, efficiency

and accountability. Transfers are determined as objectively and openly as possible, ideally by

some well-established formula. They are not subject to hidden political negotiation. The

transfer system may be decided by the central government alone, by a quasi-independent

expert body for example a grants commission, or by some formal system of central-local

committees.

Narayan (2002, argues that Uganda is considered a forerunner in Africa with respect to

decentralization. On the whole, the system of decentralization has been fairly well established

and has delivered improvements in service delivery and accountability. Numerous jobs have

been created in the process. However, it is highly conceivable that the achievements could

have been much more pronounced, both in terms of quantity and quality, and the process has

been sequenced, with capacity building leading.

2.3 Challenges of Fiscal Decentralization

According to Bahl and Linn (1992), often decentralisation is looked at as a series of

unplanned measures rather than as a careful sequence of reforms intended to introduce

incentives, accountability and improve service delivery. Badly planned decentralisation can

easily worsen regional inequities, economies of scale losses and be dominated by local elites.

Lack of information on the impact of different devolution mechanisms makes it hard for

donors to base programme support decisions on sound evidence.

According to Kisembo (2006), in Uganda there is no local government that can depend on its

own revenues. Political influence and other constraint, for example ownership of property in

case of property taxes, have made it difficult for local authorities to collect reasonable

revenues and taxes to meet even fraction of service delivery costs. Capacities and legal

constraints have also affected collection of property taxes. Local revenues, which is supposed

to be supplemented by the unconditional grants, is much less in most local government that

unconditional grants with exception of a few council.

In the Joint Annual Review of Decentralization (JARD) report by the ministry of local

government (April 2008) the minister noted that due to limited house hold incomes leading to

low and declining own generate d revenues, local government continue to encounter

difficulties in CO-funding construction of physical investments, meet the costs of post

construction operation and maintenance and council operation and other statutory obligations

According to the Ministry of Local Government Decentralization Policy Framework (2006),

fiscal decentralization challenges rotate around coordination and alignment of legal

framework. While most local governments comply with central line ministry guidelines in

their operations, there is yet no mechanism for handling those that do not. It is also evident

that central government is not providing adequate guidance, monitoring and enough support

to local governments. As a result, most local governments find it difficult to respond to

development challenges with the dynamic and competence that is expected of them to deliver

services effectively.

According to Delius (2007), civil servants and politicians take over the whole responsibility

of local finances. The public sacrifice their time and energy to screen and vote for them

become disillusioned immediately after elections because of the behaviors of their elected

leaders. This occurs when the interests of civil servants and politicians converge to misuse

public goods, assets and services.

In addition, the allocation and distribution of public projects is also a highly politicized issue.

This is prevailed upon the technical staffs who allocate projects as rewards to their support to

materialize their political advantage. Counselors are believed to be using the sector

committees of the councils to influence the allocation of projects to their political favor.

Among the projects includes bridges, feeder roads, garbage skips, water schemes PMA funds,

PAF funds, and Local Government Development Programs projects among others and this

has distorted the delivery of services to the targeted areas.

According to Nsibambi (1998) central government, tend to monopolize the services of

revenue like sales tax while leaving the non-elastic sources like market dues to the local

administrative units. These local authorities are not likely to finance their projected services

by the locally raised revenue taxation alone.

He also argues that managing expectations is also a big problem. The planning process is

supposed to be highly participatory, bottom up approach however, this raise many

expectations from the population. This becomes a difficult due to limited resource envelope

in that not all the demands from the population can be met. The challenge therefore is how to

manage such expectations during the bottom up planning process. If not effectively managed,

this results in people not turning up for planning in the next planning cycle.

In August 2007, the President of Uganda Local Government Association (ULGA) in his

address to the Parliamentary Committee on Public Service and Local Government pointed out

that Local Governments are facing challenges in the implementation of the fiscal

decentralization policy in Uganda due to Corruption which was pointed as a national issue

that equally affects the local governments. The accountability institutions in the country are

weak and the code of ethics of public officers are lacking. The creation of new local

government units (new districts and sub counties) is also challenge.

The creation of new local government units (new districts and sub counties) is also challenge.

While the idea of creation of new districts is intended to bring services nearer to the people

(decentralization), ULGA believes that there are no clear established objective criteria for

creation of these new districts, this of course has an impact on the meager resource basket of

the country. Recentralization of local government staff (the Chief Administrative Officers).

Decentralization as a principle entails the devolution of political, administrative and financial

powers and responsibilities. Recentralization of local government staff is a negation of this

principle and thus this undermines decentralization.

CHAPTER: THREE

METHODOLOGY

3.0 Introduction

This chapter describes the selected methods that were used in collecting and analyzing data.

It shows the various methods that were used in research design, area of study, description of

the population, sample size and sampling method, data collection instrument, data

management, data analysis, study limitation and delimitation.

3.1 Research Design

The researcher used both qualitative and quantitative research methods of data collection and

analysis. These included descriptive, analytic and cross-section. Questionnaires and interview

guide were designed and administered to collect data.

3.2 Area of Study

The area of study was on impacts of fiscal decentralization on service delivery in Lwakhakha

Town Council. The Town Council is located about 20km from Manafwa district headquarters.

It is bordered by Bumwoni sub-county in the West, the Republic of Kenya in the East and

Bubutu in the South and the North, Bubulo East constituency, Manafwa district, Eastern

Uganda.

3.3 Description of the Population

Data was collected from the technical leaders, politicians, opinion leaders, head teachers and

parents within Lwakhakha. Technical staff included the town clerk, assistant town clerk,

engineer, town treasurer, education officer, health officer, community officer, auditor,

agriculture officer and other technical staff.

Among the political leaders, data was collected from the local council chairperson of Town

Council and councilor representing three wards; Lwakhakha ward, Bukibaye ward, and

Butemulani ward. Local residents, parents, head teachers and opinion leaders within the study

scope were among the respondents

3.4 The Sample Sizes and sampling method

A total number of 80 participants were sampled to cover the entire study area. Purposive

sampling method was used to the key informant from whom qualitative data was obtained.

This is because it revealed new ideas to the study, which may not have been anticipated.

Systematic random sampling was also used where specific respondents were sampled. This is

because the method helped to avoid tendencies of bias or discrimination in sampling

individual respondents.

3.5 Data Collection Instruments

Questionnaires and interview guide were the main instruments used in collecting data from

the respondents.

Both open ended and closed ended questionnaires were distributed to the selected

respondents basing on the questions that were developed by the researcher in advance.

Interviews guide. Personal or face-to-face interviews were also carried out for getting the

high degree of accuracy because this helped the researcher to establish what others think

about the study.

3.6 Data Management

Data was managed on spreadsheet such as excel from the period of collection to analysis.

3.7 Data analysis

Data from each questionnaire and interview guide were edited, classified and entered into

various categories according to different respondents in tables. Interviews were recorded in

note books by the researcher and at the end of each day were checked to ensure relevancy,

and consistency. Quantitatively the researcher-analyzed data through tabulation of the

findings using graphs, percentages and frequencies using Statistical Packages of Social

Scientists (SPSS).This method was used because it ensured uniformity and accuracy. The

responses were interpreted and analyzed according to objectives and questions. The

researcher then gave the findings, conclusions and recommendations of the study after the

data analysis.

3.8 Study Limitation and DelimitationThe researcher met some limitations that hindered him during the study and they included the

following and their delimitations;

Time was limited for the researcher since the data was collected during holiday period that

was Christmas.

Delay of respondents to fill the questionnaires and return them as expected. The researcher

had to follow up to collect the questionnaires from them.

Resources were limited to meet transport and stationary during the study. The researcher

collected data at near by distances.

Local language of the study area also hindered the success of the research, as some

respondents were illiterate. It was necessary for the researcher to engage an interpreter.

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS

4.1 Introduction

Under this chapter, the researcher presented and analyzed the data that was collected from the

respondents and interpreted the findings so as to answer the objectives of the study which

were; to examine the extent to which fiscal decentralization has impacted on service delivery

in Lwakhakha Town Council. To investigate challenges faced in the implementation of fiscal

decentralization on service delivery in Lwakhakha Town Council. To establish the

relationship between general finance received and expenditure levels on service delivery in

Lwakhakha Town Council.

A cross section of people of different occupation, sex, age and sectors were interviewed and

served with questionnaires to determine their level of knowledge about fiscal

decentralization, its importance/objectives and its achievements, challenges and financial

spending on service delivery.

4.2 Social-demographic Characteristics of the respondents.

Table 1.Distribution of respondents by sex

Table below represents the characteristics of the respondents by sex. In the table both sexes

were represented as shown in the table below.

Sex Frequency Percentage (%) Males 48 60 Females 32 40 Total 80 100Source: Primary Data, 2010, Lwakhakha Town Council

The above table shows the male and female characteristics of respondents, with the biggest

number of 48 being males, comprising of 60 % and 32 respondents being females comprising

of 40 % of the total population that were sampled for the study.

Table 2.Distribution of respondents by Age

The table below presents the respondents that were selected in accordance with their age

groups.

Age Group Frequency Percentage (%)18-25 8 1026-36 12 1537-47 28 3547-50 18 2350+ 14 18Total 80 100

Source: Primary Data, 2010, Lwakhakha Town council

From the above table the age characteristics of the respondents indicates that few

respondents in the youth age bracket of 18-25 years were captured from the sampled

population representing 10% with a frequency of 8 respondents, followed by 12 respondents

with age of 26-36 years and above representing 15 %, followed by 14 respondents of age

bracket between 50+ representing 18%,18 respondents were in the age bracket of 47-50

representing 23% and the highest number of respondents of 28 was of the age group of 37-47

representing 35 %. Many individuals with in these age brackets were more informed of the

current activities.

Table 3.Occupation of the respondents

Respondents of different categories were selected. Below is the table indicating the

respondents in correspondence with their occupation. In the table civil servants, political

leaders, head teachers, peasants, and opinion leaders were all selected.

Occupation Frequency Percentage (%)Technical leaders 09 12Political leaders 10 13Head teachers 03 04Peasants(local residents) 46 58Opinion leaders 02 03Parents 10 13Total 80 100

Source: Primary Data.2010, Lwakhakha Town Council

Table 3 above, showed that the highest number of respondents was the local residents

(peasants) with a frequency of 46 comprising 58% of the total population under study. This

was followed by parents and political leaders with a frequency of 10 and with a percentage

of 13%, 09 were technical leaders comprising of 12% , A frequency 03 were Head teachers

comprising of 04% and the lowest being the opinion leaders with a frequency of 02

comprising of 03% respectively of the population that was selected for study.

4.3.0 Impact of Fiscal Decentralization on service delivery in Lwakhakha Town Council

Under this section, the researcher was interested in establishing the impacts of fiscal

decentralization on service delivery in Lwakhakha Town Council. Questionnaires were

distributed in order to get responses to the above research question. The responses were as

per the table below

Table 4, showing the Frequency and percentages of respondents regarding the impact of

Fiscal decentralization on services delivery in Lwakhakha Town Council

Impact of administrative decentralization on

service delivery

Frequency Percentage (%)

1 Authority/powers to make their own decisions. 8 102 Prioritized community needs 13 173 Participatory budgeting and planning 7 94 Recruitment 9 125 Balanced resource allocation 10 137 Services brought nearer to the community such

as health, education, roads and water

27 34

8 Services received at minimum costs due to

Results Oriented Management (ROM).

6 7

TOTAL 80 100 Source: Primary Data.2010, Lwakhakha Town Council

4.3.1 Services brought near to the community

As from the table above, a frequency of 27 representing 34% of the respondents argued that

services are bout nearer to the community. Among the services according to them are water

and transport, and education services and Agriculture.

The education services have improved through increase in the number of teachers recruited in

the service, and construction of class room blocks through LGDP Buwuma and Lwakhakha

primary schools. The status of roads as regards to transport has improved through

rehabilitation of community roads which eases means of transport like Lwakhakha-Buwuma

raod, Sihkana-Buwuma-Malaba road, and Lwakhakha-Buserere road.

While those not provided include Housing, Electricity, and Medical services. It was found out

that the services provided were the immediate need to the people for the betterment of their

livelihood. The provision of medical services were said to be delayed due to the fact that they

were being provided in the neighboring sub-county which they were previously part of.

But it was suggested by the respondents to be provided to them since they are now

independent from the mother sub-county. The population of the Town has increased and there

is need to provide medical services to the people together with the housing with in the Town

Council, people suggested the government to provide housing facilities to the people

especially the refugees who came in as a result of post-election fighting in Kenya.

Feeder roads were getting more attention than the rest of the services provided in the Town

Council, Many people are said to be accessing the market across the border due the good

roads constructed with in the Town Council. Many roads are being maintained through the

filling of potholes caused by heavy rain pours. Many people are said to have been employed

by the Town Council to keep the roads cleans through slashing along the roads and making of

the water channels wide.

4.3.2 The priority of the Community

The priorities of the community were considered under fiscal decentralization, 17% of the

respondents were of the view that community priorities are put into consideration however, it

was said that the political leaders tend to put up projects claiming that it is through their

efforts and they tend to put up projects to the areas they got many votes as a way of thanking

them. And some prevalent issues are not considered due to the fact that the ordinary citizen

does not have a say in the decision making most especially at the lowest grass root level.

4.3.3 Balance Resource Allocation

A frequency of 13% observed that there is balanced resource allocation at the Town Council,

though there is balanced resource allocation, some sectors gets much more resource than

others for example in the education sector are given less resources in terms of budget.

Furthermore, a frequency of 9 representing 12% of the respondents was of the view that ever

since this system was introduced, recruitment, appointment and promotion has been done

within the Town Council. They pointed out that in different sectors such as roads

maintenance, agriculture and sanitation it does not need to go out to get man power but they

use their local residents for example respondents argued that in feeder roads maintenance has

gotten more attention through employing many people in maintenance. Extension staff has

been recruited under fiscal decentralization by districts and deployed at low level. These staff

includes Agriculture Officers, veterinary Officers, Community Development Officers who are

charged with promoting and implementing government programmes like NAADS, AAMP,

PMA and others. All these are aimed at alleviating poverty among communities to improve

people lives quantitatively and qualitatively.

According to table 4 above, Town Council has all the powers to make their own decisions.

They have the capacity to implement the proposed projects in the community, and this makes

the local citizens have a sense of ownership of the projects implemented, this was observed

by 10% of the respondents that were selected.

Participatory budgeting and planning was also pointed out by 9% of the respondents.

According to them, they were of the view that through their representation by the councilors

in the planning process planning has been effectively conducted. Planning at the local

councils ranges from the lowest level up to the highest level. Local councils are required to

prepare plans showing their proposed projects and forwarded to the district level to make an

integrated plans. It was found that a big number of them are not involved, this limited them to

air out their priorities of which some times led to the misallocation of resources. Budgeting

was said to be done by the politicians and the technical personals of the Town Council

leaving out the residents with whom the funds were intended to serve the needs through

participation.

Planning is the key ingredient to pro-poor service delivery. Participatory and inclusive

planning ensures that the views of the poor are included at the planning stage and that

implementation accommodates their needs especially for social and economic infrastructure.

This should ensure limited capture by the elite and better off members of society.

From the analysis carried out, 7% were of the view that fiscal decentralization has ensured

service delivery at minimum costs due to the introduction of Results Oriented Management

(ROM) since it focuses on results.

As seen in the table above impacts of fiscal decentralization on service delivery, it has

impacted in many areas. It has improved health services, education, planning processes,

planning, recruitment and decision making among others. It was concluded that the general

status of the Town Council and welfare of people have improved due to the bringing of the

services near to the people. This has given a positive impact on the lives of the people in

general.

4.4.0 The challenges being faced in the implementation of Fiscal decentralization in Lwakhakha Town Council

Table 5, Challenges faced in Lwakhakha Town Council

Challenges Frequency Percentage (%)

1 Corruption 27 342 Conflict of interest among the civil

servants and politicians

14 18

3 Challenge in raising revenue due to

abolition of graduated tax.

19 24

4 Unskilled personnel 09 125 Lack of capacity to implement some

technical decisions

11 14

TOTAL 80 100 Source: Primary Data.2010, Lwakhakha Town Council

The table above shows what respondents presented as the challenges facing fiscal

decentralization in Lwakhakha Town Council.

4.4.1 Corruption

Corruption was mentioned as one of the major challenges facing the fiscal decentralization in

the delivery of services with a frequency of 27 making 34% of the respondents; dishonest

officials were said to be a threat to the Town Council development. Most of the officials in

charge especially the ward chiefs take the revenues collected for their personal use limiting

the Town Council to raise revenue. It results into unequal distribution of service among the

people some time tended to influence services to their places of operation due to over

promising during campaigns.

4.4.2 Raising revenue

Challenge in raising revenue, 24% of the respondents revealed that Town Council has limited

resource revenue. This was made worse when the graduated tax was scrapped, and it has

made difficult for the Town Council to operate effectively in the provision of services to the

people. This has been so due to increase in inflation with high prices of goods such as

building materials, improved seeds, among others. Seasonal changes in the market operation

affect the Town Council to raise revenue from the available sources. This is especially during

the rain season where people are much involved in cultivation of their gardens limiting the

sellers to bring their produce to the market thus low tax base.

The taxi operators were reluctant to pay the taxes because the bodaboda operators were not

paying any charges for their operations thus being challenges for the Town Council to raise

revenue. Congestion at the market places making the operation difficult. Most of the

markets are in small piece of land where traders bring their produce making it difficult to

observe those who have paid and not paid.

4.4.3 Conflict of interests

It was mentioned by six respondents said that to conflict of interest between the politicians

and civil servants forming 18%, from the findings, Interference by councilors inciting traders

against paying charges. Politicians tend to discourage the business community from paying

especially business license. In some cases there is still an impression that payment of market

dues is no more, and in some cases ward chiefs have been beaten for endeavoring to ensure

compliance. The members end up quarrelling and even hating one another basing on funds,

making them isolated as different groups limiting the officials to bring their ideas as a team to

deliver services to the people

From the research, 7 of the respondents revealed that the Town council lacks the capacity to

implement some of the technical decisions. This comprise of 9% of the total number of the

respondents. It was said that because the town council has gained the Town Council status

and the influence of politicians on setting up services under their favors.

Unskilled personnel were also revealed to be a challenge facing fiscal decentralization. It was

revealed that some of the departments are filled with unskilled officials most especially at the

lower local governments where some posts are filled with those who attained education up to

the certificate level such as the parish chiefs. Respondents who identified this as a challenge

were six in number representing 8%.

Therefore, corruption was ranked the highest among the challenges mentioned above which

lowers effective planning for the Town Council to deliver service effectively due to various

factors making the planners to be behind the planned time for every activity and successful

operation of the projects.

4.5.0 General finance received and expenditure levels on services delivery in Lwakhakha Town Council.

Table 6 showing the frequency and percentages of respondents on the spending of funds as a

Town Council

Spending of the funds as a Town Council Frequency Percentage (%)

1 Buying of more scholastic material and

building schools

14 17

2 Construction of shallow well 8 103 Construction of roads 19 244 Sanitation in the market 13 175 Gender and community services 7 96 Capacity building of political and technical

leaders

4 5

7 Agriculture production 10 138 Management 5 7

TOTAL 80 100 Source: Primary Data.2010, Lwakhakha Town Council

The funds of the Town Council are used in providing services to the people as shown below;

4.5.1 Construction of roads

It was said to be spend on improving the pass ability of the community roads with a

frequency of 19 respondents representing 34%. They gave examples such as Lwakhakha-

Buwuma raod, Sikhana-Buwuma-Malaba road, and Lwakhakha-Buserere road. This is to

improve the accessibility to rural and urban areas within the Town Council on a sustainable

basis. The road sector receives both current and development grants. The current ones are for

maintenance. Funds are first given for maintenance, and then the balance is for rehabilitation.

Construction is one of the most commonly decentralized functions, for it is relatively simple

and place-specific. The private sector is often involved in this area as well. Local

governments have acted as developers consolidating large parcels of land, building

infrastructure, then returning part of the land to the original owners and selling the rest to

recoup development costs.

Central governments usually provide the bulk of finance for infrastructure investment, while

lower-level governments and the private sector participate more often in financing small

improvements, modifications, and local additions to the national networks. Central

government also provide transfers to local governments for local infrastructure investment or

maintenance in order to ensure a minimum level of infrastructure for both reasons of

efficiency (externalities) and equity. These transfers can be quite a large percentage of

infrastructure funding.

4.5.2 Scholastic materials

It was mentioned by 18% of the respondents said that the funds are used in the buying of

more scholastic and building of more class room. Additional desks were said to be distributed

to various schools owned by the government such as Lwakhakha primary and secondary

schools, Buwuma primary school. The classroom construction allocations are based on

prevailing classroom to pupil ratio in the Town Council with the intention of worse schools to

catch up. Education is one of the pillars of the PEAP and it strives to improve the quality of

life of the people.

4.5.3 Sanitation in the markets

The funds are also spent on improvement of sanitation in the market places with in the Town

Council with a frequency of 13 respondents representing 17%. This was mainly on the

collection of rubbish, paying of the people who clean up the market places among others.

4.5.4 Agriculture

Agriculture production was revealed by a frequency of 10 respondents representing 13%.

Many of the people were said of being involved in agriculture as their major activity for both

commercial and home consumption. With the aid of NAADS together and PMA, they have

involved themselves in agricultural for survival of which they access advisory services. At

least every person is carrying out farming such as vegetable growing and rearing of live

stock. One of the farmers called Wafula Ben said that through NAADS he has been able to

apply improved husbandry and management practices by use of modern knowledge and

technologies.

Frequency of 8 respondents with 10% said that the funds are being used on construction of

shallow well in the Town Council especially in slum areas where tap water can not reach.

Water and sanitation grant is provided with the objectives to improve operation and

management of water sources within the Town Council for the people to access safe drinking

water.

A frequency of 7 respondents with 9% said that they also spend the funds on Gender and

community development most especially on women and youth groups within the Town

Council. This is to promote the empowerment of communities through sponsoring activities

like games, music, drama and dance. The sector has services decentralized with matching

funds; hence little is budgeted for it. It was also revealed that the funds are used on functional

adult literacy (FAL) provided to people who want to know how to read and write especially

the adults.

Other members said it is used on administration of the Town Council Such as in the Town

Council management like management committees and departmental heads. It was said that it

is used on the provision of allowances to the Town Council Committee members after

holding meetings. It was revealed by a frequency of 5 respondents representing 7%.

A frequency of 4 respondents with 5% revealed that it is used for capacity building of local

government staff both the politicians and the technical staff. They were of the view that Local

Government leaders were given legislative, financial and planning powers in the LGA (1997)

as amended, however it was established that there has been enough training for them to carry

on service delivery effectively

As seen in the above, fiscal decentralization on service delivery has impacted in many areas.

It has improved, education, planning processes, planning, recruitment and decision making

among others. Although that the Town Council faces a number of challenges in implementing

the policy, welfare of people have improved and it is able spend the funds as stipulated in the

Local Government Act and according to the objectives of the PEAP.

CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

Under this chapter, the researcher was interested in making conclusions and the

recommendations basing on the objectives, which included; examining the extent to which

fiscal decentralization has affected service delivery in Lwakhakha Town Council. Investigate

challenges faced in the implementation of fiscal decentralization in Lwakhakha Town

Council. To establish the relationship between general finance received and expenditure

levels on service delivery in Lwakhakha Town Council.

5.2 Conclusion

From the presentation, analysis, and interpretation of the findings in chapter four, the study

established that there has been a great impact of fiscal decentralization in Lwakhakha Town

Council in terms of service delivery in areas of education, water, agriculture, roads,

administration, and social development as indicated below;

In spite of the emerging difficulties in sharing and financing services, there are noticeable

improvements in service delivery. This has really been facilitated by fiscal decentralization

policy, as elaborated in the Poverty Eradication Action Plan, to mainstream poverty concerns

into all programmes plus the direct transfer of Poverty Action Fund resources to Town

Council. In the road sector, for example, the Town council now has the capacity to handle and

is carrying out feeder roads rehabilitation and maintenance. The high percentage of the rural

population with access to safe water increased, on the whole, the quality of life has improved

due to access to services provided in the Town Council. There has been increased

accessibility of schools through building of schools and renovation of those which were worn

out, many children go to school unlike the past years where children were mostly involved

smuggling at the border, in addition, many primary and secondary schools are being

constructed by the use of the Town Council funds thus services delivered.

People are able to access markets for their goods and easy accessibility for service providers

to reach beneficiaries due to development and maintenance of roads. This has in the long run

improved incomes of the people thus impacting on service delivery.

Local people have empowerment through the promotion of universal primary and secondary

education, Functional Adult Literacy. This has reduced illiteracy levels in communities,

increased awareness of people to demand for quality services and advocating for their rights.

Access of local people over roads has allowed a comprehensive approach encompassing both

the network of social facilities such as rural schools, clinics and transport access to these

facilities and materializing any trade-offs between the two. In addition to improving access to

basic services, construction of rural roads has also helped in alleviating income poverty by

increasing agricultural productivity and enabling the poor to find better paying work. At the

same time, rapid urbanization in the Town Council has created tremendous demand for urban

infrastructure and basic services.

Food production and security has increased due to the fact that people have accessed

extension services and improved varieties of crops and animal such as cross breed goats.

Indeed, fiscal decentralization has facilitates the use of local knowledge, local participation

and ownership by utilizing local resources. Furthermore, fiscal decentralization has the

potential to enhance transparency and accountability in the delivery of agricultural services,

allowing local governments and community groups to more closely monitor service providers

in order to reduce shirking by extension workers and to ensure that extension services are

actually delivered.

Most service delivery indicators show positive improvements, therefore, it is concluded

decentralization has not only opened up opportunities for empowerment of the people, but

has also led to improvements in service delivery.

5.3 Recommendations

In line with the research findings and conclusions made, some of the recommendations are as

follows to the users of fiscal decentralization;

Local revenue is very important for local governments to be able to plan and implement their

activities. Without financial capacity, their independency and autonomy may not be realized.

The abolition of graduated tax was not appropriate, as it was the major revenue source for

local governments. The graduated tax itself was not a problem; the problem was with the

means of collection and its utilization. Therefore, the local government should be given

another chance to collect and utilize the graduated tax effectively and efficiently which would

contribute to the success and sustainability of fiscal decentralization in Uganda.

Sensitization of communities on fiscal decentralization and its objectives, goals, and mission.

This would go along with increased capacity of local people to demand for serviced and

accountability from their leaders. The local people have the right and power under

decentralization to elect their leaders and to participate in decision making on issues that

affect them under participatory planning. This recommendation was made on the basis that

many local people were found to be having little knowledge about fiscal decentralization

objectives.

Guidelines on reporting and accounting information should be developed, if funds should

continue to the lower local government. In addition, the transfer of funds should be linked to

report and publish.

Despite the positive impact of decentralization that has been registered from the research

findings, the researcher recommended that all other functions that are not yet decentralized to

be decentralized to give it full meaning. This is because it would not carry meaning to say

there is decentralization in Uganda when some important functions like appropriate Chief

Administrative Officers is under the central government and other functions like secondary

Education and others are not decentralized.

It should be appreciated that fiscal decentralization has positively influenced the service

delivery, though there is persistent public out cry that the grass roots beneficiaries have not

benefited much due to corruption in form of poor quality and substandard work and services.

the researcher therefore recommend that anti corruption laws and institutions to be

strengthened so as to curb down this and it should be the responsibility of all the stake holder

in fiscal decentralization to ensure adequate super vision, monitoring and evaluation of

activities and programs under fiscal decentralization for effectiveness and efficiency.

5.4 Areas for further research.

Under this section, the researcher identified the following areas that require further study.

To analyze and compare the costs of services at various levels of government.

To study the revenue raising capacity for the Local government.

Clarify the distribution of revenue between the urban councils and the lower level.

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Etsham etal www.GDDRC.org

http://www.Iucea.org/downroads/Golola paper document

http://www.ciersin.org

QUESTIONNAIRE

Questionnaire on assessing the impacts of fiscal decentralization on service delivery in

Lwakhakha Town Council.

Dear respondent I am by name WAMBWA DAVIES a student of Uganda Christian

University, Mukono pursing bachelors in Development Studies. I am in third year and as a

requirement am carrying out a research on the above mention topic. This is therefore to

request to spare some little time and answer this questionnaire on the above topic. The

information obtained from this study is restrict for academic purpose only and will be treated

with at most anonymity and confidentiality

1. Your sex?

(i)Male (ii) Female

2. Age

18-25

26-36

37-47

47-50

50+

3. What is your occupation?

(i)Peasant

(ii)Technical leader

(iii)Head teacher

(iv)Business

(v)Political leader

(vi)Opinion leader

4. Which service do you access provided in the town council?(mention one)

5. (a) Do you think the implementation of Fiscal decentralization has impacted on services

delivery?

(i) Yes (ii) No

(b) If yes why?(give one reason)

(c) If no why?(give one reason)

6. What do you think are the causes of the above hindrances?

7. What is the status of services provided in the Town Council?

(i) Good

(ii)Poor

(iii) Very poor

(vi)Very good

(v) None of the above

8. What are the available sources of funds for the Town council?

9. How do you spend these funds as the Town council?(mention one)

10. Is there anything you would like me to know about fiscal decentralization?

Thank you