Govt approves pre-funding arrangement for MMDAs

President John Evans Atta-Mills has approved a pre-funding arrangement with some syndicated local banks for Metropolitan, Municipal and District Assemblies (MMDA) to ensure smooth operations and implementation of policies and programmes.

The pre-funding being spearheaded by National Investment Bank (NIB) would be in the form of a soft loan at low interest rates.


This arrangement would serve as a stop-gap within the three month statutory delay period for the disbursement of the District Assemblies Common Fund (DACF), to enable the MMDAs operate effectively and efficiently, and re-imbursed the banks when the DACF funds were released.


Mr Samuel Ofosu-Ampofo, Minister of Local Government and Rural Development announced the arrangement when addressing the opening session of a Joint Decentralisation Sector Review Mission Validation workshop in Accra on Thursday.


The workshop was attended by representatives of MMDAs to validate a sector report on the performance of the effectiveness of local government process in Ghana presented by a local consultant and sponsored by the European Commission (EC).


He underscored the critical role of MMDAs in the decentralisation process to ensure that government policies and programmes were fully implemented at the local levels to effect the necessary change and ensure national development.

The Sector Minister indicated that to ensure their efficient operation, there was another arrangement for the MMDAs to have their own composite budget.


“Under this arrangement, MMDAs would now prepare their budgets stating their areas of focus for support and channelling them through the Chief Executives to Central Government.


Mr Ofosu-Ampofo explained that the MMDAs would now have the benefit of determining their priorities and focused areas for support than the past when Central Government determined development projects or programmes to be undertaken by the MMDAs.


He announced that the budget would now be decentralised, disbursed, monitored and evaluated at the MMDAs other than by the Central Government.


Mr Ofosu-Ampofo said composite budgeting would not only ensure ownership by local assemblies, but strengthen monitoring and evaluation as accountability would be done at the MMDAs level.

He said it would also promote accountability and local involvement, as the budget of MMDAs would be announced in the mass media at the local community for public scrutiny.


“This would give true meaning to decentralisation, therefore government is working hard towards ensuring a definite conclusion to the arrangement for the process to begin from December 2012,” he added.


Mr Ofosu-Ampofo urged all MMDAs to hasten the drawing of their programmes and budgets for the ensuing year to be able to effectively access the loan facility.


He gave the assurance that government would put in place efforts to ensure sustainable support for implementation of decentralised policies and programmes.


Dr Esther Ofei-Aboagye, Director of Institute of Local Government Studies (ILGS), commended the EC for the initiative which would serve as a check to the various MMDAs and enhance local governance at the Regional, District and local levels.

She explained that the consultant held several focus group discussions on the various thematic areas of local governance which included budgeting as a major area of concern.


“The validation of the report by participants is therefore to ensure local ownership,” she added.


Mr Ole Kragh, Consultant for the study recommended more capacity building for staff of MMDAs and strengthening of monitoring and evaluation of MMDAs programmes.