Finance Minister, Dr. Casiel Ato Forson announced nearly GH¢988 million for Ghana’s District Assemblie s Common Fund (DACF) in the first quarter of 2025. Double the highest annual allocation of recent years, it is hailed as a bold recommitment to fiscal decentralization. Yet behind the fanfare lies a stark paradox: pouring unprecedented sums into local government coffers without first overhauling the accountability structures that have long undermined those very resources. The Auditor-General’s reports for 2021 through 2023 expose a pattern of under-delivery and misuse: net transfers to assemblies hovered between 65.9% and 76.2% of their allocated shares, while irregularities siphoned off 14.8% to 20.5% of those transfers. With close to two-thirds of available funds routinely lost to deductions, leakages or delays, the question is inescapable: can assemblies spend more money more wisely if the underlying culture and controls remain unchanged?
In 2021, the Auditor-General recorded GH¢511 million as the assemblies’ share of the DACF, but after deductions and leakages only GH¢390 million ever reached local budgets—and a further GH¢66 million vanished into irregular expenditures. The following year, the problem worsened: GH¢370 million allocated, GH¢262 million delivered, and a startling GH¢54 million misapplied. By 2023 the gap narrowed slightly, but the core issue endured—assemblies received just 65.9% of what belonged to them, and nearly 15% of that net sum still slipped through the cracks. This chronic under-performance reveals more than technical glitches; it points to deeply embedded habits of opaque procurement, uneven oversight, and incentives misaligned with public service
Confronting these failures demands more than stricter audit checklists or harsher penalties for errant officials. At the 2025 National Economic Dialogue, Franklin Cudjoe of IMANI Africa rejected the prevailing “Principal-Agent” model of public financial management—one built on suspicion, compliance reminders, and infrequent performance reviews. He painted Ghana’s governance machinery as “a broken machine” fuelled by archaic rules and low morale, proposing instead a Stewardship Model centred on intrinsic motivation, ethical commitment, and radical transparency.
Dr. Sangu Delle extended this vision in his essay “Beyond Rhetoric: A Radical Rethink of Ghana’s Public Financial Management,” advocating a values-driven system where public servants see themselves not as mere agents of a distant centre, but as stewards entrusted with national resources on behalf of their communities. Drawing on lessons from New Zealand and Singapore, he argued that trust begets discipline: when officials feel both empowered and morally accountable, they innovate to stretch every cedi, rather than gaming rules for narrow gain. Crucially, he insisted stewardship must complement, not supplant, existing controls—transforming audits and expenditure returns from box-ticking rituals into public conversations about shared priorities and tangible outcomes.
Yet despite these compelling blueprints, the 2025 DACF rollout remains anchored in a cash-first, reform-later posture. Assemblies must now meet an 80% transfer threshold—up from roughly 70% in earlier years—and submit detailed expenditure returns from the prior quarter before unlocking the next instalment. While this gatekeeping role for the Ministry of Finance represents progress, it still treats accountability as a narrow financial exercise rather than a broader governance partnership. Paper returns, no matter how meticulously compiled, cannot reveal whether boreholes deliver safe water to communities, markets boost local incomes, or new classrooms ease overcrowding. Nor do they capture the ever-present risk that procurement lines be padded, contracts awarded to cronies, or projects abandoned once initial payments clear.
If history is any guide, Ghana will witness a rebound in nominal transfers—potentially nearly GH¢3.2 billion in DACF across 2025—only to see a similar scramble for resources undermine real impact. Worse, higher totals could embolden rent-seeking if the stewardship mindset fails to take root: larger leakages, grander ghost projects, and deeper public cynicism. The remedy lies in marrying Cudjoe’s and Delle’s stewardship proposals with the financing mechanism itself. Assemblies should co-create quarterly work plans with citizens, publishing live progress reports on district-level portals, and inviting independent civil-society observers to budget hearings. Performance corridors—key indicators like functional boreholes per capita or percentage completion of health posts—must trigger bonus disbursements or, conversely, corrective action plans when missed.
Moreover, Ghana’s Parliament and Auditor-General could pilot a Participatory Budget Audit in select districts, blending official audits with community-led field verifications. Early results would shape a national playbook for roll-out, ensuring that the exponential growth in DACF allocations becomes an engine of equitable development rather than an accelerator of waste. Political will is paramount: ministers and chief directors must model stewardship by publicly releasing their own performance evaluations, demonstrating that accountability applies at every level of government.
“Budgeting Without Brakes” can herald a new era of local transformation—if the government treats reform and funding as two sides of the same coin, rather than sequential tasks. In a democracy still striving to deepen its roots, the real test will be whether Ghana can institutionalize trust as rigorously as it enforces budgets. Only then will the DACF become not just a windfall of cash, but the foundation for communities to thrive.
Credit: IMANI’s Criticality Analysis of Governance Issues-June 1-7, 2025.
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