The Government has been urged to increase the statutory allocation to the District Assemblies Common Fund (DACF) from the proposed 7.5 per cent to at least 10 per cent of total national revenue to strengthen fiscal decentralisation and accelerate local development.
The Ghana Developing Communities Association (GDCA), a non-governmental organisation, also called for constitutional safeguards to prevent deductions and central government spending from district allocations before the funds are transferred to Metropolitan, Municipal and District Assemblies (MMDAs).
The call follows Cabinet's approval of the National Decentralisation Policy and Strategic Framework (2026–2030), which proposes increasing the constitutional minimum allocation to the DACF from five per cent to 7.5 per cent, alongside reforms to deepen citizen participation and strengthen local governance.
The GDCA also commended the government for approving the proposed increase, describing it as a positive step towards strengthening fiscal decentralisation, a statement signed by the Executive Director of the GDCA, Philip Gmabi, said.
However, it maintained that the 10 per cent threshold recommended by the Constitutional Review Committee (CRC) remained more appropriate, considering the expanding responsibilities of local governments and the country's development needs.
DACF reforms
It said the DACF, established under Article 252 of the 1992 Constitution, remained the principal mechanism for financing local development. However, the constitutional minimum allocation had remained at five per cent for more than three decades despite the growing responsibilities of district assemblies.
The association also welcomed the proposal to elect Metropolitan, Municipal and District Chief Executives (MMDCEs) through non-partisan elections, describing it as a major step towards strengthening local democracy and accountability.
It, however, stressed that political decentralisation must be matched by meaningful fiscal decentralisation to enable elected local leaders to respond effectively to community development needs.
The GDCA further welcomed plans to review the Local Governance Act, 2016 (Act 936), harmonise planning functions across MMDAs and strengthen accountability systems to improve coordination, land-use management and service delivery.
Fiscal autonomy
The GDCA said international best practice suggested that local governments should manage between 20 and 25 per cent of public expenditure, while Ghana's current level of fiscal decentralisation remained significantly below that benchmark.
It argued that increasing the DACF allocation to at least 10 per cent would enhance the capacity of assemblies to implement development plans, improve service delivery and support rural and peri-urban communities with limited internally generated funds.
The association also expressed concern over continued deductions from DACF allocations, noting that in 2020 district assemblies reportedly received only 50.4 per cent of the fund for discretionary spending.
It therefore called for constitutional amendments to guarantee a minimum 10 per cent DACF allocation, prohibit pre-transfer deductions, strengthen transparency and auditing of the fund, and align the proposed election of MMDCEs with greater fiscal autonomy for local governments.
It said the measures would strengthen participatory governance, improve service delivery and enhance accountability.
