Local Government Financing: An Analysis of the Draft National Budget Estimates for FY2020/21 and Proposals for Re-allocation

In April 2019, ACODE commissioned a study that analyzed the proposed national budget allocations for FY 2019/20. The study was carried out with support from USAID and UKAID, under the Governance, Accountability, Participation and Performance (GAPP) Program identified budgetary allocations that by law should be implemented by the LGs but were retained by central government MDAs. The study findings showed that up to UGX 1.07 trillion for funding decentralized services had been allocated to Central Government MDAs. The study also identified UGX 530.2 billion allocated to MDAs that could be rationalized to free additional resources for Local Governments. This study was a follow-up of the 2019 study intended to examine the Budget Framework Paper (BFP) and the National Budget Estimates for FY 2020/21 to identify the budget lines for devolved services that had been allocated to Central Government MDAs. It was intended as strategy for advocacy for increasing the financing of LGs in the FY 2020/21 national budget. An extensive document review of all relevant budget documents was done, focusing mainly on the Budget Framework Paper (BFP) and the Draft Estimates of Expenditure (Recurrent and Development) FY 2020/21. The approach was to identify Sectors with decentralized functions as prescribed in the Local Government Act, CAP 243 (second schedule). Identified Sectors were: Agriculture, Education, Health, Social Development; Water and Environment, and Works and Transport. The analysis was made in comparison with the FY 2019/20 budget, intended to establish whether the policymakers and budget technocrats had heeded the recommendations made by a similar study conducted by ACODE in 2019.