The Dynamics of Local Government Financing in Uganda

Mrs. Cadreen Barungi Kabahizi

Local governments in Uganda have been autonomous from the central government since the implementation of decentralized participatory, administrative, fiscal and management reforms in Uganda. They are closely supervised by the ministry of local government and the ministry of finance also plays a fairly close supervisory role in their planning and budgetary process. The implementation of local governments came at the time of democratization and a high demand for efficient service delivery by the local citizens. There was also a great need for the involvement of electorates in the making of decisions in the local political, social and economic spheres. As a result, local governments in Uganda have the responsibilities for the planning, identification and mobilization of the required resources necessary to run their operations. In addition to central government funding, they mobilize extra funding from a number of local sources such as local service taxes and off budget support. However, the local government management of service delivery has in the recent past come under heavy scrutiny and doubts as service delivery has recently more frequently stagnated and come to a standstill.
Owing to the above background, this study seeks to investigate the following research questions; Do the local governments receive sufficient funding from the government? Is the funding related to service delivery management and performance? Why do local governments in Uganda consistently fail to deliver quality services? What difficulties come with local government budgeting in Uganda?
This paper will use mixed scientific methods, i.e Qualitative and Quantitative methods to analyze the gathered data and answer the research questions. The data required to answer these research questions will come from the ministry of finance, local government financial reports, local government budgets, audit reports and performance reports. Having gathered and analyzed the data, this study will also suggest policy recommendations containing strategies for strengthening the performance of local governments for the growth and development of communities in Uganda.