Fiscal Decentralization and Organizational Performance in Uganda: A case of Namutumba District Local Government

Abstract

The study mainly focused on establishing the relationship between fiscal decentralization and organizational performance of Namutumba District Local Government. The study covered a period of four years that is from 2014 to 2018. A cross-sectional design was adopted in which both qualitative and quantitative approaches were applied to collect data. A total sample population of 144 was determined wherewith 133 were reached. The study was guided by the following objectives: To establish how revenue mobilization affects the performance of Namutumba District local government; to establish the effect of Expenditure assignment on the performance of Namutumba District local government and to establish the effect of Intergovernmental Fiscal Transfers (IGFTs) on the performance of Namutumba District local government. The study applied Purposive sampling and Simple random sampling where both Self-Administered Questionnaires and Key Informant Interview Guide were used to collect detailed data. The study findings established that Namutumba District Local Government does not have adequate revenue sources from which to generate revenue to support district program activities. It was also revealed that the local revenue collected by local government had not increased in its autonomy with regard to revenue utilization and allocation. The late receipt of revenue had an immense effect on local government’s execution of planned activities which negatively affected its performance especially the health infrastructure. Findings further revealed that conditional grants received were not adequate to execute local government activities. Also, they were untimely. This kind of inadequacy and untimely disbursement of conditional grants greatly affected the entire district infrastructure suggesting inefficiencies and ineffectiveness in services delivery. Nevertheless, it was established that conditional grants were directed towards prioritized areas. The study recommended that there was need to institute appropriate and reliable measures that prevent tax leakages so as to increase local revenue collections. It was expedient to mobilize communities across District and engaging them in participatory budgeting. Also, it was found worthwhile to ensure appropriate evaluation of assignment of revenue as well as expenditure responsibilities geared to local governments so as to determine the most suitable options to enhance local government performance. It was also realized that it was ideal to strengthen accountability by instituting regulations and controls as part of the audit function to oversee revenue allocation and utilization and promote fiscal balance thereof. Further, ensuring international donor engagement in supporting government and local government programs was found prudent. Conclusively, the main aim of fiscal decentralization is to streamline local government service delivery and create autonomous structures within districts by strengthening the infrastructure in place and leveraging on the support from different domains i.e. local revenue, intergovernmental transfers and donations from anonymous bodies. Failure to generate adequate revenues affects its allocation and utilization. Similarly, the insufficiency and untimely disbursement of intergovernmental transfers greatly impacts the performance of local government entities.