The lies, truth of creating new districts

By Mubatsi Asinja Habati

New districts were intended to improve services. But they with shrunken revenues, they have achieved the exact opposite

James Kule, a Grade III primary school teacher in Kasese district, excitedly lists the benefits a new district will bring to his people. Jobs will be created; health centres will be built; clean water, education and better local roads.

Many local politicians agitating for new districts are repeating the same chorus around the country. What they are not talking about is the cost of a new district to the delivery of the expected services.

What they do not know is that many communities that have had their prayers answered and got new districts or had their trading centres elevated to town councils and municipalities have regretted it. Without sufficient revenue to create and sustain the new district, the first casualty has often been social services.

It is expensive to support a district. It requires a district council (LC5) with chairperson and deputy, a resident district commissioner, chief administrative officer, district planner, district education officer, district environment officer, district agricultural officer and NAADS coordinator, district councilors, district health officer, etc, all drawing hefty salaries and allowances.

Many of the new districts have so few sources of income that some cannot pay their public servants, and must rely on their mother districts for support. This leaves the claim of “new districts” to improve service delivery in a quandary.

Timothy Kyamanywa, a former councillor for Rwebisengo sub-county in Bundibugyo District, campaigned for breakaway of his constituency to form Ntoroko district. When Ntoroko district became operational in July 2010 with Kyamanywa as its first chairman, he was entitled to a salary of Shs 2.5m, housing allowance, a vehicle and driver, among other benefits.

Three years now, Ntoroko is yet to find the 48 health workers to staff Karugutu Health Centre IV, the biggest health facility in the district, with a maternity ward, general wards for children and adults and in-patient care. But Karugutu has only 18 medical staff, with one doctor who spends more time in administration than patient care.

Incumbent district officials across the country have started realizing the folly of thinking that new administrative units will improve services.

Peter Odok W’Oceng, president of the Uganda Local Government Association (ULGA) which brings together district chairpersons, chief administrative officers and mayors, admits that new districts cannot afford to deliver services and urges government to stop creating them.

“We are not against the creation of districts per se, but there should be matching finance resources when districts are created,” he says.

Odok, who is also chairman of Agago district, one of the 25 new districts formed in 2010, says that without money, districts cannot even attract the basic professional staff needed to sustain services.

“There should be money to pay workers to provide services. There are new districts that should not have been created,” he charges. “Some do not even have the required population. They were created just because people made noise.”

“As leaders of local government we are not happy with the central government in the way it is financing the districts. The percentage of grants to districts has stagnated,” Odok said.

However, despite this glaring gap in service delivery due to shrunken revenues as districts are broken up, the clamour for more districts is only gaining momentum. People in Kibaale and Kasese have petitioned Parliament and President Museveni for new districts.

On June 21, a peaceful demonstration was held demanding the split of Kasese into three districts to “bring services nearer to the people”.

Kasese district leaders recently passed a resolution demanding creation of Rwenzori and Bwera out of the mother district.

Recently Bweramule sub-country in Ntoroko was carved out of Rwebisengo sub-county. But the new unit had no funds to construct offices. Its leadership threw medical staff out of Bweramule Health Centre II, the only one in the area, from their staff quarters which were built last year by World Vision, an international NGO. Now medical workers trek 15km every day to the health centre, arriving late, leaving early, patients going without adequate care. Although Ntoroko district chairman says the occupation is temporary as they look for money to construct sub-county offices, this underlines the crisis of creating new administrative units without adequate resources for sustenance.

Uganda had 16 districts by 1959, which increased to 17 in 1962 and were 33 in 1986 when Museveni came to power. Currently we have 111 districts after Kampala dropped off upon being turned into a Capital City Authority.

Going by the notion of “more districts, more services” Uganda would be a star performer given that it ranks number one in Africa and the fourth in the world among countries with the largest number of highest-level sub-national administrative units and the smallest population per unit.  Yet Uganda has one of the world’s poorest indicators of social services delivery.

It is not surprising. The creation of more smaller units means that the resources of larger ones must be split and shared out. This means a shrinking tax base, especially with the abolition of graduated tax, which further aggravates already poor services.

For instance, of the Shs112.2 billion given to districts as unconditional grants in the last financial year, Shs86.5 billion was spent on salaries for local government staff, leaving a paltry Shs25.6 billion for services. Yet local governments are responsible for providing public services such as primary education, primary health care, water and sanitation, feeder roads maintenance, and agricultural extension services.

Initially, in a bid to support districts with poor revenues, the central government provided alternative grants. The Local Government Finance Commission (LGFC) introduced the Equalization Grant for districts which could not finance delivery of core services. This was to address the disparities in revenue potential and expenditure needs in different districts. By 2000 only 27 districts qualified for the grant. However, by 2005 the number of “disabled” districts in need of the grant had increased to 34. Today all the 111 districts cannot operate without the grant.

The funding to the local governments has continuously declined over the years. Compensation for the loss of Graduated Tax for example reduced from Shs44.4 billion last year to Shs41.1 billion this year. The Equalization Grant has remained at Shs3.4 billion since inception yet the number of receiving districts has increased by about 400 percent.

This situation undermines the decentralisation policy, introduced to devolve service delivery to local governments. Yet today no local government, whether district, municipal or town council, can finance beyond 5% of its own budget.

During compilation of data for The Local Government Handbook by The Independent Publications in 2011, out of more than 60 districts visited (over 50% of all districts) – including most of the traditional former self-financing districts like Mukono, Mpigi, Bushenyi, Mbarara and Masaka – none could finance its own budget, depending on external support by up to 95%.  The breakaway of constituencies to form new districts deprived mother districts of vital revenue sources. The old districts have remained skeletal administrative units with a narrow tax base that cannot raise sufficient revenue. Yet these skeletal districts inherited huge debts and liabilities (pensions, gratuity, court costs, etc) incurred on behalf of the former districts which included the breakaway units.

For example, in 2010/11, the Masaka district budget was Shs12.4 billion, yet it raised only Shs 141.1 million from local revenue. Of the shortfall, Shs11 billion was provided by the central government and Shs963.4 million by donors. From the central government release, Shs 2.9 billion went to NAADS and Shs 194 million was for Graduated Tax compensation.

Just like Masaka district, Mpigi budgeted for Shs12 billion in 2010/2011 financial year but only collected Shs217 million locally and got Shs11 billion from the central government. Yet in 2009/10 financial year before Gomba, Butambala and Wakiso districts were carved out, Mpigi collected Shs390.9 million in local revenue. Gomba and Butambala used to produce revenue in livestock while Entebbe Airport, now in Wakiso, was a major earner. Now Mpigi is left with only 6 sub-counties and a town council with no major revenue activity.

Government is now abolishing the County Councils, saying this will close the service duplication gap.

“Many of the new districts of Kalungu, Mitooma, Butambala, Kiboga, Rubiriizi, Lwengo and others are one-county districts. This creates conflict of roles with the county councils,” said Adolf Mwesige, the Minister of Local Government.

While the move will help save some Shs 17.5 billion now spent on County Councils every year, analysts say it is a little late, but most importantly too little.

Mwesige says local governments are better placed to respond to the needs of their people. But how are they to do that if they have no revenue to satisfy those needs? The “new districts” craze needs a serious rethink.