Parliament has approved the 2021 formula for the sharing of the District Assemblies Common Fund (DACF) with GH¢1.210 billion (50%) of the total fund of over GH¢2.402 billion for MMDAs direct support programmes.
It also decided that GH¢629.9 million, representing 26.2 % of the GH¢2.402 billion will be allocated for national projects.
The amounts represent an improvement in the 2020 formula which allocated GH¢446.7 million for national projects and GH¢1.165 billion for MMDAs direct support programmes.
A total of GH¢200 million was allocated for institutional support under the new formula announced for the disbursement of the DACF with GH¢299.186 million to be reserved for Members of Parliament (MPs) for constituency labour projects as well as constituency labour monitoring and evaluation exercise.
The new formula allocates a little over GH¢62.402 million, representing 2.6% of the fund, to the MMDAs for distress district support, training, and cured and uncured lepers.
The allocated fund for national projects will cover national education policies, rural development special projects, Ghana School Feeding Programme, national sanitation support, construction/renovation of MMDAs and other buildings, and construction of courts/residential buildings.
Funds for institutional support will be allocated to the National Youth Programme, youth employment support and national disaster support.
The proposed formula was tabled before Parliament on June 10, 2021, by the Majority Leader and Minister for Parliamentary Affairs, Osei Kyei-Mensah-Bonsu, in accordance with Article 252(2) of the 1992 Constitution and Sections 125(3) and 129(a) of the Local Governance Act, 2016 (Act 936).
The Speaker referred the proposed formula to the Committee of the Whole House for consideration and report, and the Committee met on June 30, 2021, and considered the referral, with the Administrator of the District Assemblies Common Fund, Irene Naa Torshie Addo and officials from the District Assemblies Common Fund, and considered the Proposed Formula.
Background
Parliament is mandated by Article 252(2) of the 1992 Constitution of Ghana and Section 126(1) of the Local Governance Act, 2016 (Act 936) to make provision for the allocation of not less than five per cent of the total revenue of the country to the District Assemblies Common Fund for the implementation of development programmes in the Metropolitan, Municipal and District Assemblies (MMDAs).
The allocation to the fund for the 2021 fiscal year is 5% of total tax revenue as approved in the 2021 Budget Statement and Economic Policy of the Government.
Consequently, the Appropriation Act, 2021 (Act 1069) has been allocated an amount of GH¢2,402,331,910.00 to the fund for the 2021 fiscal year.
By the provision of Section 129 (a) of the Local Governance Act, 2016 (Act 936), the Administrator of the fund is to propose annually for the consideration and approval of Parliament, a formula for distribution of the fund to MMDAs.
Principles Underlying 2021 Formula
It was reported that the Administrator informed the Committee that there were no significant changes in the guiding principles of choosing the factors and corresponding indicators in developing the DACF Formula for 2021.
The formula, according to the chairman of the Committee of the Whole, Joseph Osei-Wusu, is developed to allocate the funds evenly to address the developmental gaps between the rural and urban districts in the country.
By Ernest Kofi Adu, Parliament House