Financing Local Authorities in Ghana: Can decentralizing control of natural resources enhance service delivery and local economic development?

In Ghana, the fundamental problem confronting local assemblies is the widening gap between the availability of financial resources and their spending needs. The local assemblies are mostly blessed with an abundance of natural resources of various kinds, from which adequate revenue can be generated to support local economic growth and development. The management and control of natural resources, however, seemed centralised, posing challenges to efficient management and utilisation of accrued revenues to the benefit of the people. Decentralising the management and control of natural resources could be more beneficial since it will enable the widening of the fiscal space of local assemblies. This research therefore explored how Decentralising the control and management of natural resources can enhance service delivery and local economic development. The research deployed the qualitative research method and used the case study research design by relying on selected local assemblies endowed with mineral natural resources in Ghana. Data was collected from key stakeholders including both the central, and local government officials and traditional leaders through interviews. The participants were selected through on purpose using the purposive and snowball sampling methods. The thematic method was used to carry out an analysis of the study. The study revealed that fiscal decentralisation of natural resource control is not extensively practised in Ghana. The local assemblies are less included in the management and control of the resources and thus have no direct benefit from the revenues generated from the exploitation of the resources. It is deduced further that there are legal frameworks that guide the control and management of natural resources in Ghana, however, these frameworks are not comprehensive enough. The country partly relies on some of its laws spelt out in the constitution in the control and management of natural resource exploitation, which includes fewer local assemblies. The central government is unwilling to include local assemblies to participate actively in the management and control of natural resources. In conclusion, local assemblies derive no direct benefit from the resources mostly found at their doorstep. This affects their fiscal space, leading to inadequate finances towards local economic growth and development. The assemblies have the required capacity and only need the support of the central government to manage, control and generate revenue from their natural resources. To help local assemblies less endowed with the resources to benefit as well, co-management of the natural resources could be a good strategy.