An analysis of the effects of equalisation funds on service delivery in selected local authorities in Zambia

• Published in: Journal of Local Government Research and Innovation Vol. 1; pp. e1 - e9
• Main Authors: Chishimba, Hanson, Kazonga, Eustarckio, Nsenduluka, Evaristo
• Format: Journal Article
• Language: English
• Published: AOSIS 01.01.2020
• Subjects: equalisation funds; financing; fiscal capacity; local government; local revenue; revenue base; service delivery
• DOI: 10.4102/jolgri.v1i0.14
• ISSN: 2709-7412

Background: The government of the Republic of Zambia established the Local Government Equalisation Fund, to which each year parliament appropriates not less than 5% of the total amount of projected income taxes collected for the republic for that financial year. The purpose of the fund is to provide a source of financing for service delivery.Aim: The goal of this study was to analyse the effects of equalisation funds on service delivery in selected local authorities in Zambia.Setting: The study focused on Lusaka City Council, Luanshya Municipal Council and Chisamba and Luangwa town councils in Zambia.Methods: A concurrent mixed-methods approach was used. The population comprised registered property owners and council officials in the selected districts. The sample was drawn using stratified sampling. Data were collected using questionnaires and analysed by using descriptive statistics and regression analysis using the Statistical Package for Social Sciences (SPSS) version 25. Qualitative data were analysed using a narrative approach.Results: The expenditure composition of the equalisation funds shows that expenditure on personal emoluments accounts for a greater proportion than capital and service expenditure. There were similarities and differences in the methods of service delivery among local authorities: the use of local government enterprise, contracting out, franchises, volunteers, self-help groups and in-house provision.Conclusion: There is lack of satisfactory adherence to the guidelines on utilisation of equalisation funds for service delivery as espoused by the central government. The local authorities studied do not adhere to the prescribed guidelines on the utilisation of equalisation funds.