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Table 1:Trend of Grants to Local Government FY 1997/08 – 2013/14

FY 1997/08 1998/09 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 budget
UCG - 64.4 66.8 79.1 73.3 77.4 83.0 87.5 103.4 94.4 128.6 133.6 144.6 156.7 77.0 0 79.6 0
UCG as % of Total 54.3 22.6 17.2 15.4 11.9 11.5 11.2 10.9 12.1 9.6 12.1 11.6 10.8 10.6 4.7 79.0 0 0
GTC 24.1 0 0 0 0 0 0 0 34.8 45 12 32 45 45 0 4.3 4.02 0
GTC % of Total 0 - - - - - - - 4.1 4.6 1.1 2.8 3.4 3.1 0 0 0 0
EQG 0 0 2 4 4.4 4.3 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 0
EQG % of Total - -  0.5  0.8 0.7 0.6 0.5 0.4 0.4 0.4 0.3 0.3 0.3 0.2 0.21 0.19 0.18 0
CG 170.6 220.9 320.2 429.1 535.8 588.2 654.9 714.5 717.5 839.3 872.0 1,004.5 1,145.9 1,269.6 1,575.2 1,773.0 1,896.3 0
CG % of Total 75.9 77.4 82.3 83.8 87.3 87.2 88.3 88.7 83.8 85.5 82.2 87.2 85.6 86.1 95.1 95.6 95.8 0
Total Transfers to LGs 224.9 285.3 389.0 512.2 613.9 674.3  741.5 805.5 856.3 982.2 1,060.9 1,172.3 1,338.9 1,474.8 1,655.7 1,855.5 1,979.3 2,360.2
National Budget - - - - - - 2,911.8 3,150.8 3,425.5 3,852.0 4,465.0 5,464.0 7,044.5 7,376.5 9,630.0 10,902.8 12,904.0 15,054
% of Direct Transfers to National Budget - - - - - - 25.47 25.56 25.00 25.50 23.76 21.45 19.01 19.99 17.19 17.02 15.34 15.68

 

 

The share of local government transfers in the national budget has been falling from 25% in FY 2003/4 to 15% in FY 2013/14. Stakeholders in the sector are concerned about the declining share of the national budget because it is affecting service delivery in the key sectors of education, health, water, roads and agricultural production.From the table above, it is noted that total direct transfers have been increasing from Ugx. 224.9bn in 1997/08 to Ugx.1,979.3bn in FY 2013/14. However, the following issues have emerged and require attention:

 

 

  1. The number of conditional grants has risen from 26 in FY 2003/04 to over 50 in FY 2013/14.
  2. Currently about 95.5% of all financing of LGs are conditional grants contrary to the Fiscal Decentralisation Strategy (FDS) provision (2000/01) that the number and level of conditional grants should reduce. This has reduced the opportunity for local fiscal autonomy and discretion for LGs.
  3. The failure of the flexibility principle which had been inbuilt in the grant system to allow limited discretion of 10% for LGs during budget formulation for sector non-wage recurrent conditional grants as had been recommended by FDS.
  4. Stagnation of basic service delivery grants of PHC, UPE, Roads maintenance.

 

Annual Report 2014-2015