By Sarah Baafi
A fresh wave of debate has emerged over Ghana’s decentralisation agenda, following Parliament’s approval of GH₵8.77 billion for the District Assemblies Common Fund (DACF). Concerns have being mounting over deepening inequality in the distribution of local governance resources.
A member of the National Communication Team of the New Patriotic Party (NPP), Ernest Adade, speaking on the GTV Breakfast Show, argued that while the allocation seeks to address arrears owed to Members of Parliament, it also exposes long-standing structural flaws in how the Common Fund is shared.
According to him, the original purpose of the DACF established to strengthen decentralisation and accelerate development at the grassroots risks being undermined if critical issues within the distribution formula are not addressed.
“Over time, we have forgotten why the Common Fund was established,” he said, stressing that it was meant to empower less-resourced districts to develop faster and more equitably.
He pointed out that although significant national revenues are generated from natural resources such as oil, gold, and cocoa often in rural areas the current sharing formula tends to favour metropolitan assemblies, which already have stronger internally generated funds.
Mr Adade highlighted the disparity by noting that some assemblies in urban centres like Accra can generate up to $15 million in revenue, while rural districts struggle with as little as $100,000 to $200,000. Despite this gap, metropolitan areas continue to receive a substantial portion of the Common Fund.
“This raises serious concerns about fairness,” he said, adding that rural communities, which contribute significantly to the country’s natural wealth, are left with limited development returns.
He further argued that the metrics used in determining the allocation must be reviewed to reflect present economic realities, including inflation and the growing disparity in revenue generation between urban and rural assemblies.
The discussion comes at a time when arrears owed to MPs have become a contentious issue, with the newly approved fund expected to address some of these obligations. However, Adade insists that beyond settling arrears, policymakers must take a broader look at reforming the DACF formula to ensure equitable national development.
Analysts say the debate signals a critical moment for Ghana’s decentralisation policy, as stakeholders increasingly call for reforms that align resource distribution with the original intent of bridging development gaps across districts.
As pressure builds, the government may be compelled to revisit the DACF formula an issue that could shape future fiscal policy and local governance reforms.
