Increased participation of Businesses in Fee Fixing and Mobilization in the Techiman North District Decentralisation of revenue mobilization in Ghana

With the advent of democratic and decentralization reforms, many countries have devolved the responsibility of generation and management of revenue and expenditure to Local Government bodies. These bodies are therefore faced with the challenge of planning through their budgets by mobilizing appropriate level of revenue to enable effective service and infrastructure provision to their constituents. Availability of adequate funds, through efficient budgetary processes constitutes the required catalyst necessary for timely execution and completion of infrastructural development projects by local governments. There is the need to examine the processes and strategies used to generate these revenues and the various challenges that are encountered with these processes and strategies adopted, especially with regards to the involvement of taxpayers and various stakeholders in fee fixing and revenue mobilization.

The District Assemblies in Ghana are required to provide administrative, fiscal, social services and amenities to their residents. These responsibilities have been increasing in nature as a result of the gradual decentralization of some of these responsibilities which hitherto were being performed by the central government. In view of the increasing functions, several reforms and programmes were aimed at managing the budgetary processes such as the introduction of the composite budgeting system as well as adequate mobilization of local revenue for the development of the local areas.

However, majority of the revenues of the District Assemblies, generated from the identified sources are woefully inadequate to support recurrent expenditure much more to finance the delivery and running of basic infrastructure and services needed by the local communities. These District Assemblies have become solely dependent on the District Assemblies Common Fund (DACF) for their infrastructural development. In recent times however, the absence or the delay in the release of this fund, as a result of shortfalls in revenue inflow to the central government has almost brought most of these Assemblies to a standstill. This situation has negatively affected the administrative, social, economic and the infrastructural development of the Assemblies. This has led to the need for the Assemblies to examine their budgetary and revenue mobilization processes and strategies with the view to identifying effective and sustainable ways of generating revenue for infrastructural and other development projects in the Assemblies.

The government of Ghana in its desire to strengthen these Assemblies in their revenue generation and further deepen fiscal decentralization, had put in place some reforms in the 2014 and 2015 budget statements respectively in order to address some of these challenges. These reforms include the need to pay serious attention to local revenue generation and management by the Metropolitan, Municipal and District Assemblies (MMDAs) and to explore other financing mechanisms, which would give local Government authorities greater autonomy from the central Government. It also included the development of a well-defined policy framework that enables the expansion of the base of existing MMDA revenue sources, the identification of new sources of revenue, and the effective administration of collection systems.

The Techiman North District Assembly (TeNDA)

The Techiman North District is one of the 254 Metropolitan, Municipal and District Assemblies (MMDAs) in Ghana, and forms part of the 29 of Municipalities and Districts in the Brong Ahafo Region. It was established by the Legislative Instrument (LI 2095) and was duly inaugurated on Thursday, 28th June, 2012 with Tuobodom as the District Capital.

It was carved out of Techiman Municipal Assembly to ensure and strengthen decentralization and effective grass root participation in governance at the local level and bring development to the doorsteps of the people. The District is made up of sixty-four (64) towns and villages. This number includes the five (5) major towns, namely; Tuobodom, Offuman, Aworowa, Krobo and Buoyem. Most of the settlements in the District are located along the two (2) main arterial roads in the District, that is, the Techiman-Wenchi and Techiman-Kintampo routes.

The population of the TeNDAis estimated at 59,068 (2010 census) comprising 28,766(48.7%) males and 30,302(51.3%) females. The population density is estimated at about 152 persons/Km2. The population of the District has witnessed rapid increase over the years.This increase in the population can be attributed significantly to the fertile land in the area which attracts a lot of migrant farmers mostly from the northern part of the country. Also, the strategic location of the District, that is, its nearness to the major market center – Techiman, makes it lucrative for marketing of farm produce and small-scale businesses.

Revenue Mobilization Challenges in The District

The TeNDA as one of the newly created Districts in Ghana has faced similar challenges of revenue generation in their short existence including the inability to explore revenue sources, inadequate database on revenue, poor revenue monitoring and the inappropriate strategies and processes to realize the actual revenue potentials of the Assembly and most especially lack of engagement of tax payers in decision making that affect them with regards to how much taxes and levies they should pay or the most appropriate means to be used to mobilize these revenues that will be suitable to both parties. For instance, in the years 2017 and 2018, the TeNDAbudgeted for internally generated fund of GH₵ 167,000.00 and GH₵ 173,000.00 respectively. However, it realized an amount of GH₵ 102,304.00 and GH₵ 101,903.00 (Composite Budget, Techiman North District, 2018). The effect of this worrying phenomenon is the inability of the District Assembly to provide the needed infrastructural development to its citizens.

Reason for Revenue Mobilization challenges

It must be noted that, one of the major resultant effects of excluding businesses in the fee-fixing and revenue mobilization process is tax evasion and default in payment. Tax evasion has numerous ill effects on the payer, society and the district assembly in particular. Notably in Ghana, it is realized that there have been several times the MMDAs, GRA and even central government, having supposedly conceded that the revenue from taxes is very low with regards to the expectation of growth and development, and decided to introduce another form of tax, or shift focus to one already existing by way of increasing such taxes, in effect, tax evasion misshapes economic efficiency.

Having being established as one of the major causes of tax evasion, when the bottlenecks in the in fee fixing and revenue mobilization, with regards to the participation of businesses is properly addressed, it will go a long way to raise the revenue levels in the district and enhance the functional importance of the district assembly.

The goal of stakeholder participation within the budgetary process is to allow local governments to actively engage its citizens and business community in taking shared responsibility for the development of the region and improving socio-economic wellbeing and the quality of life. These stakeholders include, Assembly and Unit Committee Members, Trade and Residential Associations, Rate Payers, Area and Town Councils, Traditional and Opinion Leaders, the various departments of the Assembly, revenue collectors among others. The budget process of needs assessment, identification of the resource base of the assembly and the setting of rates and fees to be included in the Assembly’s medium-term development plan and for that matter the Assembly’s annual budget should involve all these stakeholders.

Recommendations to Address the decline

It is to help address this challenge that the Eureka Garages Association with support from the BUSAC-Fund is embarking on this Advocacy for Increased participation of Businesses in Fee Fixing and Mobilization in the Techiman North District Assembly.

As part of the advocacy process, A study conducted by the Association to interrogate the issues related to fee fixing and revenue mobilization and to help bring solutions to address the challenge All respondents indicated that they were battling with the phenomenon perennially.

It is imperative that district assembly mobilize the needed resources to be self-reliant and also to finance pertinent developmental projects within their catchment areas. The Techiman North District assembly will be able to do this if they used the right strategies by exploiting all financial resources within their jurisdiction.

The Ministry Of Local Government And Rural Development fee fixing resolution is promulgated to serve as a guideline for fee fixing resolution in the local level, however there is the need to address certain challenges it come with especially the revenue brackets since it limits the local assembly’s ability to effective encourage grassroot participation in fee fixing and revenue mobilization.


The findings of the study revealed that stakeholder inclusion in the budgetary process and the availability of a reliable database for identifying and forecasting revenue generation was very poor. It was also revealed that the success of the revenue collection depended on skills of the revenue collection agents who are not adequately trained coupled with poor enforcement of regulations involving revenue collection. The study also found that the unavailability of logistics, poor training of revenue collectors in addition to poor monitoring resulted in leakages of revenue for the Assembly. The study concluded that in order to improve the system of revenue generation, there is the need to involve various stakeholders especially the tax payers in fee fixing and the budgetary process of identifying the revenue sources, and appropriate ways of mobilizing revenue.


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