Ghana decentralises to reduce regional disparities

Decentralisation is an increasingly common trend throughout African countries, and Ghana is no exception. Over the past two decades, the country has taken significant steps to improve and empower local and regional governance, although the issue has been brought into sharper focus in the last five years with the discovery and production of the country’s first hydrocarbons resources.

The equitable distribution of this new found wealth is a source of great debate, and has highlighted existing disparities within the country, where the fruits of economic progress have been largely concentrated in the southern half of the country. As a result, the government is looking to not only stimulate development in the north, but reduce broader disparities, while also ensuring local community support in regions that house extractive industries.

Current Structure

In many ways, Ghana has been ahead of the game when it comes to acknowledging the need for local governance structures. The concept is enshrined in the 1992 constitution. Article 34 of the document calls upon the state to “make democracy a reality by decentralising the administrative and financial machinery of government to the regions and districts and by affording all possible opportunities to the people to participate in decision-making at every level in national life and in government”. This followed the country’s first serious foray into structured decentralisation including local, not just regional, governance. In 1988, a law was passed establishing metropolitan, municipal and district assemblies. These local authorities, which were partially elected, were given significant power, including the ability to legislate and budget.

The main planning and administrative body at the local level is the district assembly. This is either metropolitan (consisting of a population over 250,000), municipal (single town assemblies with a population over 95,000) or district (with a population over 75,000). The country initially had three metropolitan assemblies, four municipal assemblies and 103 district assemblies. The total number of assemblies has subsequently increased to 216. Two-thirds of the members of these bodies are directly elected, while a minimum of 30% are appointed by the president in consultation with district chiefs and interest groups. Members of parliament that represent constituencies within the district also serve on the body.

As part of the Civil Service Law of 1993, the Ministry of Local Government and Rural Development was established to oversee the decentralisation process and advise on local government issues. The district assemblies are also monitored by 10 regional coordinating councils. These bodies have no policy-making capabilities, but rather evaluate and monitor the performance of district assemblies and the use of funds allocated to local government.

Funding

District governments are funded by locally generated revenue and central government transfers. The constitution allows them to levy local taxes and collect fees for land, licensing and trading services. However, districts also receive transfers for salaries and pensions from the central government. The constitution also stipulates the establishment of a District Assembly Common Fund. Disbursed among the districts annually, the fund should not represent less than 5% of Ghana’s total revenues.

In 2009, the funding system was supplemented by the District Development Facility (DDF), a performance-based grant system aimed at improving the accountability, efficiency and transparency of metropolitan, municipal and district assemblies. Allocations to these bodies are made on the basis of annual performance against predetermined indicators. The DDF is funded by the government of Ghana and four international donor agencies – the French Development Agency; Foreign Affairs, Trade and Development Canada; the Danish International Development Agency and Germany’s KfW Group. The DDF has made significant strides. In 2008, only 38% of assemblies would have qualified for funds. By 2013, over 90% of assemblies qualified each year.

Since the introduction of the new local governance structure in the late 1980s and early 1990s, there have been other measures to improve the system. The government took a further step in the decentralisation process in 2003, for example, with the passage of the Local Government Service Act. Under the terms of the legislation, a separation between the civil service attached to central government agencies and the local government service (LGS) was established. In 2009, 16 departments, including those responsible for sanitation, environmental protection, road maintenance and public transport, were decentralised. The LGS became fully operational in 2010. Under its GHS348.6m ($96.7m) Medium Term Development Plan 2014-17, the service highlights key challenges including human resources development and the actual establishment of government service departments for each local assembly.

Challenges

Although the basic structures of local governance were introduced over 20 years ago, there are still issues constraining the ability of assemblies to meet the vision set out under the constitution. One of the primary challenges is a perceived disconnect between local bodies, who are tasked with “affording all possible opportunities to the people to participate in decision-making at every level in national life and in government”, and the communities that elect them.

According to a survey conducted in 2014 by Afrobarometer, an Africa research network, 71% of Ghanaians say that district assemblies and elected local councillors never or only sometimes listen to ordinary people, while more than 7 in 10 say that they do not inform constituents about annual budgets or their work programmes. These figures have deteriorated significantly since a similar survey was conducted in2005. According to the survey, part of this negative attitude is explained by the fact that respondents do not see any material improvement in services and the quality of living in their local area: for example, 70% said the assemblies have failed in maintaining local roads and marketplaces.

Given this, it is hardly surprising that participation in local elections is limited – although this dynamic is not confined to Ghana, with local elections in many OECD countries also significantly lagging those of national elections. The Coalition of Domestic Election Observers stated that although the district assembly elections in September 2015 passed off without incident, there was a low voter turnout. In the 2002 election, for example, turnout was 16.2%. This compares to an average turnout of over 70% for national presidential and parliamentary elections. It is perhaps unsurprising that turnout was low in the most recent district elections – local press reported that some areas had 5% turnout – given that the Electoral Commission postponed the vote by 6 months following a court case brought by a disqualified candidate.

Regional Development

Despite the challenges local elected bodies face in Ghana, however, the broader effect on enabling local input on economic development and infrastructure issues has been beneficial. Unlike many regional counterparts or developed countries, for example, economic opportunity has a fairly broad geographic spread in the country.

This can be seen in terms of the weight of Accra in the national economy. The Ghanaian capital has a $3bn economy, which only represents about 10% of the country’s overall GDP. By international standards, this is relatively small. Nairobi, the capital of Kenya, accounts for 60% of that country’s GDP. In 2012, Istanbul accounted for 42% of Turkey’s GDP. In the UK, London accounts for 22% of the country’s GDP.

Indeed, although Ghana has experienced rapid urbanisation and a structural transformation of the economy, economic opportunities have been relatively well dispersed. According to the World Bank, Ghana’s urban population has more than tripled over the last three decades from 4m to 14m. This has led to a decline in subsistence agriculture and a growth in the industrial and service sectors. However, this growth has been well spread, with higher population increases in smaller Ghanaian cities rather than the larger ones. Perhaps surprisingly, employment is also higher in rural areas than urban areas, with the employment-to-population ratio standing at 73.3% in the former and 62.3% in the latter, according to the African Economic Outlook.

However, the statistic does obscure some key aspects of economic development in the country. The employment statistic above could just as easily point to the mechanics of economic necessity as to economic opportunity. Child labour, for example, is more prevalent in rural areas. Indeed, poverty indicators perhaps give a better indication of the regional disparities that prevail in the country. The Multidimensional Poverty Index, developed by the Oxford Poverty and Human Development Initiative and the UN Development Programme to measure both incidence and intensity of poverty, displays significant regional variation in Ghana. It is lowest in the Greater Accra area, standing at 0.072 on a scale of 0 (less poverty) to 1 (more poverty). However, in the north of the country, it increases substantially. In the Upper West Region it is 0.341, in the Upper East Region it is 0.335 and in the Northern Region it is 0.371.

Furthermore, while broad geographic growth is generally a positive, it also underlines the importance of strong and effective regional and local governance and services. Here, Ghana does not fare quite as well. The International Fund for Agriculture Development estimates that 51% of poor Ghanaians live in rural areas where they have limited access to basic necessities such as safe drinking water, electricity, telephone services and passable roads all year round.

This translates into large-scale discrepancies in the quality and length of life for citizens in different regions. In 2010, for example, the maternal mortality ratio at a national level was 164 per 100,000 live births. However, in the Upper East Region, it stood at 802 per 100,000 live births.

Local Resources

It is then perhaps unsurprising that regional development, funding and services remain key political issues. Indeed, as mining and quarrying accounted for 8% of GDP in 2014, behind only agriculture, construction and transportation, the sector has become a key issue in the debate over promoting regional development. The nascent oil and gas industry is a particular source of attention, with many Ghanaians wary of what has happened to the east in Nigeria, where oil and gas has failed to transform that country’s poorer regions and has led to instability.

As a result, Ghana’s government has sought to institute a framework that ensures that hydrocarbons revenues are directed equitably across the country for development and growth. The country’s Petroleum Revenue Management Act mandates that hydrocarbons revenues flowing into the annual budget, which should not exceed 70% of benchmark revenue, are put to use for the whole country. The targets are admirable, although meeting them has proven tricky, particularly given the need for improved infrastructure to support new projects in the southern regions. According to local press, between 2011 and 2013, more than $700m flowed to the budget from hydrocarbons production. Media reports indicated that while the Greater Accra region received 17% of these revenues, the Ashanti region 18% and the Western region 12%, the Northern, Upper East and Central regions received just 5% of the revenue, while the Upper West region received only 1% of total.

Ensuring equitable development over the entirety of a country’s territory is never easy, and few if any countries in the world can claim to have achieved it successfully – particularly ones with climate, demographics and geographies as diverse as that of Ghana. However, the establishment of local governments and the ongoing efforts to improve sub-national governance initiatives in Ghana has helped dramatically.

There is still scope for improvement, of course, but there is no doubt that the issue is a focal point for the national government. The Institute of Democratic Governance and the Civic Forum Initiative, locally based think tanks, told the local press in October 2015, that they are planning to make the devolution of executive power and decentralisation priority campaign issues for the 2016 general election.