Local Government Revenue and Economic Welfare of Kagulu Sub-County, Buyende District, Uganda

Abstract

Community members in Kagulu sub-county continue to face poor welfare conditions reflected by increasing poverty levels and limited access to basic needs like food, water, shelter, electricity, medical care and education despite the increase in district local government revenues that are widely believed to have a significant contribution towards welfare of community members. The study was undertaken to investigate the relationship between Local Government Revenue and Economic welfare of Kagulu Sub-County, Buyende District, Uganda. The specific objectives of the study were; to examine the relationship between locally raised revenue and economic welfare of Kagulu Sub-County, Buyende District Uganda, to assess the relationship between central government transfers and economic welfare of Kagulu Sub-County, Buyende District and to analyze the relationship between donor funding and economic welfare of Kagulu Sub-County, Buyende District. Based on guidance of Krejcie and Morgan (1970)’s table for determining sample size, a sample of 152 respondents was selected from a study population of 250 persons. These were selected using a simple random sampling technique. Data was collected by use of self-administered questionnaires. After collecting data, it was edited and coded and entered in SPSS computer program which was used to generate descriptive and inferential statistics. Pearson’s correlations as used in the SPSS were used to test the study hypotheses and also establish the nature and strength of the relationship between the study variables. The results indicated that; (i) there is a statistically significant and strong positive relationship between locally raised revenue and economic welfare Kagulu Sub-County - BDLG (r = 0.716, the Sig. Value = 0.000 < 0.01 and N =139), (ii) there is a statistically significant and strong positive relationship between central government transfers and economic welfare of Kagulu Sub-County - BDLG (r = 0.659, the Sig. Value = 0.000 < 0.01 and N =139) and (iii) there is a statistically significant and strong positive relationship between donor funding and economic welfare of Kagulu Sub-County - BDLG (r = 0.701, the Sig. Value = 0.000 < 0.01 and N =139). The regression model that guided the study was; W = β0+ β1LR + β2GT + β3DF + ẹ. The results from this model indicated that the three independent variables of the study (locally raised revenue, central government transfers and donor funding) can explain up to 62.4% variations in dependent variable, the remaining 37.6% is explained by other factors or variables not included in the current study. Consequently, the study recommended that efforts should be made to improve Local Government revenues by for instance gearing more efforts towards enhancing accountability such as taking punitive measures to those that cannot account for the locally raised revenues. The government should consider increasing its grants towards BDLG since majority of the respondents indicated that they are inadequate. BDLG management should also appeal to the donors to increase on the amount’s funds allocated to the district as this is likely to improve economic welfare of local community in Kagulu Sub-County.