Local Government Organization and Finance: Uganda
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the decentralized system. They include the MoLG, the Ministry of Public Service (MoPS), the Ministry of Finance Planning and Economic Development (MoFPED), and line ministries. The line ministries are responsible for ensuring implementation of national policies and adherence to performance standards on behalf of local governments, inspection, monitoring, technical advice, support, supervision, and training (LGA, section 97).
Links between the Layers of Government Overall, the local government system is based on the principles of subsidiarity and integration without subordination. Every local government may, subject to the provisions of the constitution, enjoy or suffer anything that may be done, enjoyed, or suffered by a corporate body (LGA, section 7). Each local government therefore has the right and obligation to formulate, approve, and execute its budgets and plans, provided that the budgets are balanced (LGA, section 78). However, the comprehensive and integrated development plan prepared by the district is supposed to incorporate plans of lower local governments, and those governments are expected to prepare plans incorporating the plans of lower councils in their jurisdiction (LGA, section 36). The district is also supposed to mentor and support the lower local governments.
Reforms of the Local Government Structure In 2001, the number of districts increased from 45 to 56. In financial year (FY) 2003/04, six new town councils were formed, increasing the number of urban authorities to 69. Some local governments are not viable—they are too small in terms of population and local revenue potential. Hence, they have become overly reliant on central government transfers, which are greatly earmarked, thereby affecting their autonomy. The establishment of new local governments has sometimes not been based on a thorough analysis of their economic sustainability—their ability to generate sufficient revenues and ensure administrative and political capacity to run council affairs efficiently. However, a more fundamental reform of the entire system of administration and structures is under consideration—namely, the introduction of a regional tier of government between the central government and the district level.
Brief Overview of Revenue and Expenditures Fiscal decentralization is enshrined in the constitution of 1995 and in the LGA, which describes in detail the system for funding local governments’
