Analysis of Local Government’s revenue collection and expenditure performance in Uganda. A case study of Kisoro Municipal Council

Abstract

Background: The efficient management of revenue collection and expenditure is fundamental to the financial health and sustainability of local governments worldwide. In the context of Kisoro Municipal Council, the analysis of revenue collection and expenditure performance is crucial for assessing the municipality's financial viability, resource allocation practices, and overall governance effectiveness. This study analyzed local government’s revenue collection and expenditure performance of local governments in Uganda. Methods: Quantitative secondary data was used which was collected from official government records, budgetary documents, and expenditure reports of Kisoro Municipal Council. Data was analyzed using descriptive statistics, regression analysis, and correlation techniques to examine the relationship between government expenditure and service delivery indicators. Statistical software STATA V15 was employed to analyze expenditure-service delivery dynamics and identify significant trends or associations. Results: Locally raised revenues encompass market/gate charges, land fees, park fees, and business licenses, among others. The analysis indicates that market/gate charges are the highest contributors within this category (2.7% of the total revenue), underscoring the significance of local markets in the municipality's economic landscape. Government transfers, particularly conditional government transfers, form the backbone of the revenue structure (23.1%), emphasizing the dependency on central government support. These transfers are crucial for ensuring that essential public services are adequately funded. External sources, although contributing a smaller percentage (0.6%), provide a critical supplement, especially in bridging financial gaps for specific projects. Conclusion: The findings from the revenue sources, expenditure per sector, and allocation per program collectively highlight the strategic financial management of the Kisoro Municipal Council. The focus on education, infrastructure, and public sector transformation indicates a balanced and forward-looking approach to local governance. By leveraging both internal and external revenue sources, the council can fund essential services and development projects effectively.