AN ASSESSMENT OF THE EFFECTS OF THE URBAN DEVELOPMENT GRANT (UDG) ON THE CAPACITY OF LOCAL ASSEMBLIES TO MANAGE DEVELOPMENT PROJECTS: THE CASE OF THE KWAHU WEST MUNICIPALITY IN GHANA

Abstract

The Urban Development Grant (UDG) is an annual performance-based grant extended to select Metropolitan/Municipal Assemblies (MMAs) in Ghana over a five (5) year period: 2011-2017/18. Annual allocations of grant funds were made to MMAs on the basis of an annual assessment exercise. World Bank document which outlines the grant scope indicates that one of the main aim of the Grant was to build on the capacity of staff at MMAs towards ensuring proper management and use of project funds, adherence to strict compliance guidelines and consistency of projects. In line with the grant’s aim, the study assessed the effects of UDG on the Assembly’s capacity to manage projects; the ability of the Assembly to manage public finances; the Assembly’s responsiveness to environmental and social safeguards as well as the Assembly’s compliance with public procurement laws. To achieve these objectives, both primary and secondary data were applied. The study is mainly qualitative, applying the case study approach with the Kwahu West Municipality used as the case of study. The findings of the study indicated that the financial management practices of the Kwahu West Municipality had improved with the coming into effect the UDG. Also, the Assembly was complying with the environmental and social safeguards which it was not doing prior to the Grant. With regards to procurement, the assembly was adhering to the public procurement law which the World Bank made it so strict to comply with in order to continue enjoying the UDG. Staff capacity had also been built through training on financial management, revenue management, asset management and public financial management. Based on the findings, the researcher mainly recommends that The Ministry of Local Government and Rural Development in Ghana must adopt the World Bank approach v which bases on performance in allocating to funds. This will help put local Assemblies on their toes and improve on their performance.