Budgetary Financing and Service Delivery: A case study of Mpigi District Local Government in Central Uganda

Abstract

The study focused on budgetary financing and delivery of services under decentralized governments in Uganda, with Mpigi as a case study and it was based on the following research objectives; to find out the relationship between local revenue and delivery of services in Mpigi District; to find out the relationship between borrowing and delivery of services in Mpigi District; and to analyse the effect of central government transfers and delivery of services in Mpigi District. The study employed a cross sectional research design, adopting both quantitative and qualitative approaches. In total, a sample of 140 respondents who included district council staff, Local Council members, residents, was chosen to take part in the study. The researcher used both primary and secondary data sources and data was collected by use of questionnaires and interviews. Data analysis was done using descriptive statistics, Pearson correlation coefficient and regression analysis. The study findings revealed that: there was a significant relationship between local revenue sources; borrowing; central government transfers on the one hand, and delivery of services on the other.. The study therefore concluded that: the major revenue sources are conditional grants, borrowing, transfers, unconditional grants and loans and that Mpigi District is mainly relying on local revenue sources and government grants to finance its budgets. It was thus recommended that; Mpigi should have strong tax sources that are stable, predictable, high yielding and easy to administer; that Mpigi district administration shouldunpack and demystify the technical contents of budgets and economic performance data, create a general awareness on the poor issues, inform and train stakeholders; the government should consider giving Mpigi and other districts and towns in Uganda considerable autonomy in local priority setting combined with over all targets and minimum standards for infrastructure and social service delivery; the system of central government transfers should be transparent and predictable; and finally, a clear strategy and improvement plan should be developed for the future improvement and maintenance of the services, taking into account the scarce resources available.