The District Assemblies Common Fund: how Ghana shares national revenue with local government

When residents complain that their district assembly has no money for roads, drains or school buildings, the conversation often turns to the Common Fund. The District Assemblies Common Fund is the main channel through which Ghana’s central government shares national revenue with local authorities. It is written into the Constitution, and its size, timing and use are watched closely by assemblies, MPs and citizens.

The constitution, the law and the formula

The 1992 Constitution provides that not less than five percent of national revenue must be allocated to district assemblies for development. Parliament can set a higher share. The District Assemblies Common Fund Act of 1993 set up the fund and an administrator to manage it. The money is shared among assemblies using a formula approved by Parliament each year, which considers factors such as population, need and service delivery.

Assemblies use the fund for projects such as classrooms, clinics, markets, roads, sanitation and water.

Delays, deductions and reform

A portion is set aside for MPs to support projects in their constituencies, a practice that has been debated. Assemblies often complain that releases are delayed, making it hard to plan and pay contractors. Central government sometimes deducts money at source for national programmes, reducing what reaches assemblies. Audit reports have raised concerns about the use of the fund in some districts.

Part of the fund is reserved for programmes supporting persons with disabilities. Because many assemblies raise little revenue locally, they depend heavily on the fund. Proposals include increasing the share, releasing funds on time and reducing central deductions.

Citizens, amounts and the administrator

Residents can attend assembly meetings and request information on how the fund is spent. Parliament has at times raised the share above the constitutional minimum, and debates about the right percentage come up in most budget seasons. Assemblies and civil society groups usually argue for more, while the finance ministry points to competing demands on national revenue.

The Administrator of the fund is appointed by the president with the approval of Parliament and reports on how the money is shared. The Common Fund is meant to bring national wealth to local streets. Whether it does depends on how much arrives, how quickly and who decides where it goes.