Sustaining local government projects

Why increasing centralisation of local government project implementation negatively impacts effectiveness

COMMENT | WALTER AKENA | Uganda’s decentralisation framework aims to empower local governments to plan and budget for their local needs, have financial autonomy and robust citizen engagement mechanisms, enhance accountability, and foster ownership and effectiveness of local government interventions. This framework was premised on local governments being better positioned to identify and address local needs because of their proximity to the local people. Key service delivery functions were devolved to local governments as outlined in Part II of the Second Schedule to the Local Governments Act to achieve this.

Consequently, the implementation of the decentralisation policy began robustly, achieving several gains in political, administrative, judicial, planning, financial, and legislative functions. For instance, funding from the central government to local governments increased from Shs 0.79 trillion in FY 1997/98 to Shs5.1 trillion in FY 2023/24. However, the share of the national budget allocated to local governments decreased from 22% in FY 2010/11 to 9.8% in FY 2023/24.

Despite this percentage decline, the nominal increase reflects the government’s commitment to financing decentralised local government services. But a concerning trend has recently emerged that threatens these gains.

Central Government Ministries, Departments, and Agencies (MDAs) have increasingly retained funds intended for local government functions. A study by ACODE has established that MDAs retained Shs1.06 trillion, Shs1.3 trillion, and Shs3.1 trillion in FY 2019/20, FY 2020/21, and FY 2023/24 respectively.

This trend is primarily attributed to the “projectisation” of the budget, wherein services for local government mandates are delivered through centrally managed projects. Under this arrangement, MDAs implement development projects in local governments without significant engagement with local government stakeholders in the identification of needs, design of the projects, implementation, and subsequent sustainability.

The ACODE study (2023) established that in FY 2023/24, 52 projects under local government mandates amounting to Shs1.6 trillion were implemented by central government MDAs in different local governments nationwide.

The reasons cited for MDAs controlling budgets meant for local governments include weak capacity in most local governments, corruption, and donor conditionality. However, sections 96, 97, and 98 of the Local Governments Act (1997 as amended) require line ministries to provide technical support to local governments and build their capacity. The Act further tasks MDAs to eliminate corruption and abuse of office in local governments.

The current trend of direct implementation of projects by central government MDAs, with minimal involvement of local governments in their design and implementation is having detrimental effects.

Local governments often do not take ownership, leading to neglect and abandonment of projects. In many cases in several districts, infrastructure from different projects installed with processing equipment, machines, and markets has remained unutilised or dysfunctional after experiencing breakdowns. Indeed, there are many similar white elephant government-funded projects where money has been sunk littering the country.

This results in wasted taxpayer money on projects that become white elephants due to a lack of local ownership and maintenance. Furthermore, centralisation makes it difficult for local governments to monitor and ensure accountability since they are not in charge of implementation.

To address these issues and strengthen local governments, funds appropriated for local governments should be communicated and directly devolved to the beneficiary local governments, as directed by the Ministry of Finance, Planning, and Economic Development (MoFPED) in the second Budget Call Circular for FY 2021/22. Additionally, the design of programs implemented directly by MDAs should involve local governments, and roles for all actors should be adequately financed to ensure ownership and sustainability. The Local governments should also be represented in project negotiations with development partners to address issues of centralisation arising from donor conditionality.

Furthermore, when projects are secured, funds for monitoring and supervision should be allocated to local governments and incorporated into their budgets and work plans. Local government projects should be included in the Public Investment Plan and presented to the Development Committee (DC) to enhance local governments’ participation in project identification and design. This inclusion will enable local governments to understand projects from their inception and guarantee participation, oversight, and sustainability.

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The writer is a Research Officer under the Local Government Council Scorecard Initiative (LGCSCI) at ACODE