Panel Data on Local Revenues of District Assemblies in Ghana

This is a panel data on expenditures and local revenue mobilization of district assemblies in Ghana. Variables include, own revenues, central government transfers (f), population (p), population density (d), capital expenditures, and 12 variables representing sectoral employment for people 15 years and older at the district level in 2010. Sectors covered include manufacturing; financial and insurance; construction; wholesale and retail; transport; accommodation; professional, technical and scientific; administration and support services; public administration and defence; education; human health and social work services; arts and entertainment services, and other services. Other services, refers to all other service employments not included amongst the main sectors listed above. Data on own revenues, central government transfers (f), and capital expenditures for all 216 districts was obtained from the Ministry of Local Government and Rural Development (MLGRD), while data on population size, population density, and economic activities in the assemblies came from the Ghana Statistical Service Department. Assembly performance rankings were compiled jointly by UNICEF, CDD, and the Social Policy Studies of the University of Ghana.

Central government transfers to district assemblies is financed through a constitutional provision which sets aside a minimum of 5 percent of the total central government revenues to be distributed to district assemblies (Ghana, 1992). Four key factors are considered in the distribution of the central government funds to district assemblies; equality, responsiveness, service pressure, and needs. Each year, an approved percentage of the amount to be distributed to the assemblies is distributed equally across all district assemblies following the equality criterion. The percentage of funds shared equally across assemblies normally runs from 30 percent to 60 percent. The rest of the fund is allocated proportionally based on, responsiveness, service pressure, and needs. Responsiveness rewards assemblies that experienced some growth in own revenues in the previous year(s) - assemblies that record decreases or no change in their own revenues positions receive no reward in this area. Population density is used by the district assembly common fund management as proxy for service pressure, while district needs level is determined by adequacy in Water delivery, Health, Education, and Roads infrastructure in a district. District water coverage (in percentages) is used to proxy district neediness. Assemblies generally have a free hand in determining use of own revenues. However, use of central government transfers is normally restricted to capital projects.*****

The key sources of own revenues for the districts are daily tolls imposed on commercial vehicles, poll taxes imposed on traders, rent from district assembly properties (mainly market stalls), business licenses and permits, royalties on natural resources, and property taxes.