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Fiscal Transfers

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A CASE STUDY OF SIERRA LEONE

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INTRODUCTION TYPES OF TRANSFERS BASIS OF DISTRIBUTION PREDIACTABILITY AND IMPLICATIONS MONITORING AND EVALUATION CHALLENGES THE WAY FORWARD

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The 19 Local Councils in Sierra Leone were set up on the basis of the Local Government Act 2004. The Councils for their existence largely depend on transfers from the Central Government. The Local Government Act 2004 in S.47 states that : ‘Until and including the Financial Year ending 2008, Parliament shall appropriate to Local Councils as a tied grant for each devolved service, at least that amount necessary to continue the operation and maintenance of that service at the standard to which it was provided in the year prior to its devolution’

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Population = 4.9 Million (2004 Census) Area=71,740 sq km (27,925 sq miles)



Devolved functions include:
◦ ◦ ◦ ◦ ◦ ◦ ◦ Health and Sanitation Education Agriculture, Forestry & Food Security Internal Affairs Social Welfare, Gender & Children’s Affairs Fisheries and Marine Resources Youths and Sports

Grants tied to Devolved functions
◦ Recurrent and Development


share of revenues from sources such as the mining sector



Grants to the Local Governments are on the basis of a grants distribution formula.
◦ The formula considers
     Population size Composition of population Size of farming population Revenue base amongst others In addition to these factors, allocations are set aside for some councils owing to their limitations on some key fronts.



Share of revenue are on the basis of agreed proportions between the central government and the Local Authorities



The councils prepare budget which are funded on the through quarterly allocations in the case of grants.









The Local Council budget is a component of the National Budget. The National Budget is significantly donor supported Donor contributions have been largely untimely Predictability of the Local Council Budgets has been an issue

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All 19 Councils have do have M & E Units. The Central Government in collaboration with the Local Council undertakes annual Public Expenditure Tracking Surveys (PETS) at the end user level.









Increasing Revenue generation capacity of Local Councils (currently 30% of resource envelope) Decreasing dependence on budgetary support More Human Resource Capacity to handle unconditional grants Review of related Acts and Regulations





An increase in the revenue base of Local Councils will reduce reliance on Grants from Central Government and foster completion of the Fiscal Decentralization Drive. Increasing Capacity and Autonomy at the Local level.

Thank You…...

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