The Constitution of Ghana acknowledges the importance of decentralisation and requires that Government is intentional in providing the necessary resources to subnational authorities for their management and execution of policies. Hence, the constitution specifies that the Central Government must allocate at least five per cent of national revenue into a fund known as the District Assemblies Common Fund (DACF). Monies accrued to the Fund are distributed among all Metropolitan, Municipal and District Assemblies (MMDA). Over the years, DACF has become an essential revenue source for MMDAs since other primary income-generating sources such as Internally Generated Funds are small, emanating from low economic activities and weak revenue collection efforts.

Mining communities receive additional revenue from the Minerals Development Fund (MDF) to address the harmful effects of mining and promote local economic development and alternative livelihood projects in their communities. MDF was established in 1993 as an administrative provision and codified into law through the Minerals Development Fund Act (Act 912) in 2016. The MDF and DACF have been essential sources of revenue for MMDAs in mining communities, especially in funding health, education and infrastructure.

However, challenges including late and partial disbursement to the Funds impede the MMDAs’ ability to deliver essential development plans. The Funds also act as funding sources for other institutions and national level interventions. Additionally, disbursements also suffer from top tier deductions due to the application of some legislative frameworks such as the Earmarked Funds Capping and Realignment Act, 2017 (Act 947). These deductions have grave impacts on funds disbursed to MMDAs to further development plans, especially in the education and health sectors.