Question

EVALUATING THE EFFECTIVENESS OF REVENUE MOBILIZATION STRATEGIES OF MMDAs IN GHANA. A CASE STUDY OF THE TALENSI DISTRICT ASSEMBLY.

Answer 1

EVALUATING THE EFFECTIVENESS OF REVENUE MOBILIZATION STRATEGIES OF MMDAs IN Ghana, A CASE STUDY OF THE TALENSI DISTRICT ASSEMBLY:

The purpose of this study was to evaluate the effectiveness of revenue mobilization strategies of

Metropolitan, Municipal and District Assemblies (MMDAs) in Ghana, Talensi

Metropolitan Assembly (KMA) as a case study. The main objective of the study was to come out with strategies that

Can help KMA to generate enough Internal Generated Funds (IGFs) to meet its developmental

Needs. Areas considered under the challenges that KMA face included; insufficient IGFs, over

Reliance on District Assemblies Common Fund (DACF), corruption, inability to provide public

Needs, etc. A survey conducted using the staff and management of KMA, tax payers and other

Stakeholders in Kumasi revealed that the infrastructural projects provided by KMA are not

Adequate and do neither march revenues collected nor their demands for development. KMA is

Legally and politically doing nothing to motivate the residents to fulfil their financial obligations.

There are so many revenue leakages involving KMA revenue collectors, senior officers of the

Assembly and Assemblymen and women of the various Sub- metros. The conclusion drawn from

The survey indicated that KMA is not sufficiently using fiscal decentralization to empower itself

Under Local Government Act, Act 462 (1993) for that matter it has not developed new and

Sustainable strategies to improve its performance in revenue mobilization. The Assembly like

Many local authorities in Ghana had tendered to over-rely on the District Assembly Common

Fund to meet its capital expenditure. Another fact is that greater part of KMA‘s IGFs goes into

Administration expenditure. KMA definitely is unable to meet its socio – economic and political

Obligations to consumers of public goods and services in the metropolis. It will continue to fail to

Satisfy its consumers so far as it does not develop new strategies and policies to improve its

Revenue mobilization. KMA also lacks reliable data base on traders that affect its budget

Formulation and implementation. A number of recommendations were made to KMA and these

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Recommendations suggested strategies be taken to improve the revenue base of KMA. It is

Recommended that KMA should try to eliminate corruption, put in place reliable data base on

Properties and businesses, use of relationship marketing to reach out to stakeholder through

Meetings, seminars, conferences, forums, tax education and sensitization to know the problems

Of payment of taxes, rates, etc. and the challenges in revenue collection. KMA should also invest

In hostel accommodation, shuttle transport, mortuary services, funeral services and other Profitable ventures.

Background to the case Study:

In Ghana Metropolitan, Municipal and District Assemblies (MMDAs) are partners to the central government in the national development and as partners they are required to create enough Internal Generated Funds (IGFs) to enable them carry out development projects. The revenue generated internally is used to support the statutory District Assemblies Common Fund (DACF) to provide infrastructural development and services to the people. It is the responsibility of MMDAs to provide municipal and other services as well as maintaining law and order, all which require enough financial capital and internal revenue mobilization is therefore paramount. Over the years, both the central and local governments have been experiencing budget deficiency year on year. The governments of Ghana and its MMDAs have consistently spent more than they are able to produce as revenue. In the case of central government the gap is often financed with foreign aid which has perpetuated the country‘s aid dependency (Osei and Quarter, 2005). In the case of local authorities they cannot take loans to fill their revenue-expenditure gaps. The current financial crisis has created financial difficulties for many developing countries that depend mainly on external source for public finance, given the lack of liquidity on the international market and according to Drine (2009) this puts into question the robustness of their development. This system of financing budgetary gap of government transcends to the local governments or the MMDAs

Research Objectives of the study are:

* Find out why KMA cannot devise new strategies to generate IGFs.

* Study the performance of existing revenue mobilization strategies of KMA.

* Find out the difficulties faced by KMA in its revenue mobilization.

* To make recommendations to KMA for the improvement of revenue mobilization.

Importance and Justification of the Study:

After more than a decade of introduction and continuous implementation of fiscal decentralization in Ghana, there is an urgent need to have some mechanisms to measure the 19 performance of MMDAs especially KMA. An independent study to assess or evaluate the Assembly‘s performance on the internal generated funds is therefore essential to help KMA design efficient and effective mechanisms not only to mobilize revenue but also manage it prudently for development.

other importance of the study:

* Find out why KMA couldn't advise new strategies to generate IGFs.

* To study the performance of existing revenue mobilization strategies of KMA.

* Finding out difficulties faced by KMA in its revenue mobilization.

* To make recommendations or proposals to KMA for the improvement of revenue mobilization.

* All the findings from the study will help the MCE and the entire Management to have insight into the need to adopt more strategies for revenue mobilization.

Summary:

The study is on the topic Evaluation of Revenue mobilization strategies of talency district assembly. The study set out to discover other revenue sources that are not being explored by the Assembly, what strategies are adopted for revenue collection and accounting standards. Finally, the study considered the contribution of internally generated fund.