The Political Context of Financing Infrastructure Development in ...

The Political Context of Financing Infrastructure Development in Local Government
Abstract
In Uganda, local governance has vacillated between tight central control and decentralisation
depending on the vicissitude of the political tempo. It is in the era of decentralisation which
started in 1993 that local governments attained responsibility over infrastructure development
while elected councils exercise oversight functions over the infrastructure which includes
health and education facilities, roads, water sources, channels, street lights and bridges.
The financing of infrastructure is largely by the central government because the locally raised
revenue is meagre. Currently, the average contribution of local revenue to local governments’
annual budgets is between 2 to 3 percent. The effect of this is a “patron-client” relationship
between the central government and local governments. This is aggravated by creation of
new districts. Besides, the legal transfers from the central government are largely conditional.
About 95 percent of transfers from the central government to local governments are in
the form of sector conditional grants. The local governments are unable to re-allocate the
resources to meet priority needs of their communities.
The structural arrangement and legal framework appear sufficient to enable local councils to
exercise oversight functions in infrastructure development. However, the challenge is that
most of the councillors who monitor infrastructure projects lack the necessary educational
qualifications, technical skills and competence to adequately exercise their oversight functions.
Even the project management committees do not have sufficient competence.
Economic Policy Research Centre - EPRC
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