Civil Service Institute
Department of Urban Management
ASSESING THE CHALLENGES AND OPRTUNITIES OF FISCAL
DECENTRALIZATION IN HARGEISA LOCAL GOVERNMEN.
By
Sakariye Iid Ahmed
Student ID
CSI-504-2017
Advisor
Abdi nor Mohamed Ali
A Research thesis Submitted to the Department of Urban management at
Civil Service Institute, in Partial Fulfillment of the Requirements for the
Award of Bachelor Degree in urban management 2020
June 2020
Hargeisa, Somaliland
1
Title:
ASSESING THE CHALLENGES AND OPRTUNITIES OF FISCAL
DECENTRALIZATION IN HARGEISA LOCAL GOVERNMEN.
II2
DECLARATION
I am sakariye Iid Ahmed Ali, hereby declare that this submission is my own work and that, to the
best of my knowledge and belief, it contains no material previous published or written by another
person nor material which has been accepted for the award of any other degree or diploma of the
University or other institute of higher learning, except where due acknowledged has been made in
the text and reference list.
Sakariye Iid Ahmed Ali: signature: …...Date:
This is to certify that thesis is the Actual work of (Sakariye Iid Ahmed Ali), carried out under my
supervision.
Name of the Advisor _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _signature ……………….
Date……………………..
iii
APPROVAL
This is to certify that thesis entitled “ASSESING THE CHALLENGES AND OPRTUNITIES
OF FISCAL DECENTRALIZATION IN HARGEISA LOCAL GOVERNMEN.
, Hargeisa Somaliland”.
Submitted by Mr. SAKARIYE IID AHMED ALI to Civil Service Institute towards partial
fulfillment of the requirements for the award of the bachelor degree of arts in Urban management
Department
Name of the Advisor:________________________ Signature_________________
Name of the External Examiner: _______________ Signature_________________
iv
DEDICATION
I dedicate this book to my lovely uncle Ali Aw Hassan Jama, who has worked tirelessly in this
academic achievement and my best friends/class mates who have helped me approvingly and
cooperatively in my academic struggle.
v
ACKNOWLEDGEMENTS
My gratitude firs go to almighty Allah who gave me the strength and courage to undertake this
thesis. Without Allah, I could not be able to successfully complete this work.
Immeasurable gratitude and thankfulness goes to my respectful Advisor (Abdi nour) for his
intellectual support, consistent reminders to develop this thesis. Thank you very much for the time
you have scarifies your precious time to help me, and I won’t forget how well you guided me during
my studies in Civil Service Institute. Also thanks goes to the other individuals who shared me with
their experience, information and advises which were all important to the accomplishment of this
thesis.
Special thanks to my beloved uncle “Ali Aw Hassan Jama”,for their generous support, I can’t
forget my uncle for his unstinted sustenance support and encouragement to study. Similarly, I am
greatly thankful to my respect full class mated for their tireless support and constant motivation that
allow me to study harder.
Final word my indebtedness goes to everyone who contributed to this research and made this
research possible by providing information, facilities and encouragement throughout the process.
vi
Table of content
APPROVAL .................................................................................................................................. iv
DEDICATION ................................................................................................................................ v
Abstract ......................................................................................................................................... IV
ACKNOWLEDGEMENTS ........................................................................................................... vi
TABLES ....................................................................................................................................... III
Figures........................................................................................................................................... III
CHAPTER ONE ............................................................................................................................. 1
INRODUCTION ......................................................................................................................... 1
1.1.
BACKGROUND OF THE STUDY ................................................................................ 1
1.2. PROBLEM STATEMENT................................................................................................... 3
1.3.
RESEARCH OBJECTIVES ............................................................................................ 4
1.3.1. GENERAL OBJECTIVES ............................................................................................. 4
1.3.2. SPECIFIC OBJECTIVES.................................................................................................. 4
1.6.
DESCRIPTION OF THE STUDY AREA/ORGANIZATION ....................................... 5
1.7.
LIMITATIONS OF THE STUDY ................................................................................... 5
CHAPTER TWO ............................................................................................................................ 6
2.1. LITERATURE REVIEW ..................................................................................................... 6
2.2. THEORETICAL FRAME WORK ....................................................................................... 6
2.3. BENEFITS OF FISCAL DECENTRALIZATION .............................................................. 7
2.4. CHALLENGES OF FISCAL DECENTRALIZATION ...................................................... 8
2.5. OPPORTUNITIES ............................................................................................................... 8
2.3 Empirical literature ................................................................................................................ 9
CHAPTER THREE ...................................................................................................................... 10
3.1. RESEACH DESING: ......................................................................................................... 10
3.2. Variable Definitions ........................................................................................................... 10
3.2.1. FISCAL DECENTRALIZATION .................................................................................. 10
3.3. RESEARCH TYPE ............................................................................................................ 11
3.4. RESEARCH APPROACH ................................................................................................. 12
3.5. SAMPLE DESIGN ............................................................................................................. 12
3.6. POPULATION ................................................................................................................... 12
3.7. SAMPLE SIZE ................................................................................................................... 13
3.8. SAMPLING TECHNIQUES .............................................................................................. 13
I
3.8. SOURCES OF DATA ........................................................................................................ 13
3.8.1.
Primary data source .................................................................................................... 13
3.8.2. SECONDARY DATA SOURCE .................................................................................... 14
3.9. DATA COLLECTION INSTRUMENTS .......................................................................... 14
3.9.1. CLOSE ENDED QUESTIONER .................................................................................... 14
3.9.2. KEY INFORMANT INTERVIEW ................................................................................. 14
3.10. DATA PRESENTATION TOOLS .................................................................................. 14
3.11 ETHICAL CONSIDERATION ......................................................................................... 15
QUESTIONIARE ......................................................................................................................... 30
CHAPTER FOUR ......................................................................................................................... 16
4.1. Data presentation, Analysis and Interpretation: ................................................................. 16
4.2 Demographic Characteristics of the Respondents ............................................................... 16
CHAPTER FIVE .......................................................................................................................... 27
5.1 CONCLUSIONS AND RECOMMENDATIONS .............................................................. 27
5.1.2 CONCLUSIONS .............................................................................................................. 27
5.2 RECOMMENDATIONS ....................................................................................................... 27
II
TABLES
Table1.1………………………………………………………………………………………………………...page29
Table1.2………………………………………………………………………………………………………...page38
Figures
Figure1.2…………………………………………………………………………………………………………page30
Figure1.3…………………………………………………………………………………………………………page31
Figure1.4…………………………………………………………………………………………………………page32
Figure1.5…………………………………………………………………………………………………………page33
Figure2.1…………………………………………………………………………………………………………page34
Figure2.2…………………………………………………………………………………………………………page35
Figure2.3…………………………………………………………………………………………………………page36
Figure2.4…………………………………………………………………………………………………………page37
Figure2.5…………………………………………………………………………………………………………page39
III
Abstract
After regaining its independence, Somaliland made a unitary system of governance in which the
constitution establishes central government with regional and local governments. Where Local
governments provide basic services as per their capacity. The number of districts, their hierarchy,
and boundaries were to be [and are still to be] defined by law. Donors and UN Agencies introduced
Joint Program for Local Governance and Decentralization (JPLG) which has been operational in
Somaliland since 2008, supporting decentralization. Nonetheless, decentralization efforts in
Somaliland, particularly those pertaining to fiscal affairs face many challenges. The main aim of this
study is to explore key fiscal decentralization challenges and available options for a better fiscal
decentralization system. There is unnecessary increase of districts based on tribal political
motivations many of them with limited taxable economic base and their dependency on electoral
districts in elections. Subsidy allocations to local governments are not based on assessed physical
and socioeconomic factors and have not been predictable nor fairly distributed. Districts with
custom posts receive municipal tax revenue which raises local government budget over comparable
districts. Unless addressed with equalization funds such budget inequality among local governments
in the process of decentralization will have a negative disparity in the services provided and
livelihoods among districts. Other challenges include poor legal framework and limited institutional
capacity. However, Somaliland should rethink the type of decentralization to adopt, review policies
and regulatory frameworks applied to subnational governments to reflect best practices.
IV
CHAPTER ONE
INRODUCTION
1.1.
BACKGROUND OF THE STUDY
Decentralization is referred to as a transfer of authority and responsibility of public functions from
the Central Government to intermediate and Local Governments (LGs) or quasi-independent
government organizations. It is a complex multifaceted concept, which does require substantial
reorganization of public sector service delivery and finance in order to become effective. It is
generally accepted to make a distinction between at least three main types of decentralization:
According JICA in 2008
Colombia had been a very centralized state. With political liberalization and the free election of
mayors in the second half of the 1980s, the country has been moving headlong toward
decentralization. Prior to the reform, the president named mayors, and local governments
implemented central-government programs with central government funding8. Local government
was part of the central-government budget system. The Colombians are moving toward the “local
choice” model for municipal governments, while the regions and territories have also been
decentralized, but toward the “principal-agent” model. Central government’s budget is shared with
local and regional governments, which receive transfers and shared revenues amounting to almost
50 percent of the total budget. These revenues are transferred to local and regional governments for
specific as well as no specified uses according to a transparent formula. In part, these revenues are
based upon the size of the population, the degree of poverty, and demand (e.g. with regard to
schooling needs) but performance aspects have also been included (so called “Sistema general de
participations”). According to US-AID -Central American governments.
1
Rwanda is a one of the poorest countries in the world, since 2000 and 2014 Rwanda has developed
one of the more coherent policy and institutional frameworks in decentralization in Sub-Saharan
Africa. (Crook and Manor 2000)
In 2000, the Government launched a National Decentralization Policy. Districts have been accorded
a greater role for service delivery across all sectors. The four provinces remain arms of the central
Government, whilst districts and cities exercise budgetary autonomy. Boundaries of local
governments have been redrawn to consolidate and reduce the former number of districts, thereby
strengthening their financial viability. The current system of intergovernmental fiscal transfers is
based largely on three flows of resources from the central Government to sub-national governments:
(i) an un-earmarked block grant to finance administrative costs (including salaries); (ii) grants
earmarked for the delivery of specific public services at sub-national level;
(iii) a development grant through the Common Development Fund (CDF) to fund capital projects.
(See Chambas et al. 2009).
Somaliland Like any other unitary government, the constitution of Somaliland does not empower
subnational governments but lays subordinate level of governance. While federal governments have
subnational governments empowered by a constitution. After regaining its independence,
Somaliland restored the state institutions including subnational authorities. The Government is in
three-tier- formation design, the central government, regions, and local governments. The structure
of the Government as set by the Somaliland constitution is ‘regions and districts in which the
number, their hierarchy and boundaries are described by law. Public Policy and Administration
Research The success of development agendas and democratic governance depends on participation
of local communities in decision making in regards to the issues directly affecting their lives (Kim,
2019). The idea of decentralizing basic social services to local governments has been constitutional
in Somaliland, depending upon their ability to do so. However, these basic services are usually
provided by central government ministries and agencies for reasons including limited capacity and
fiscal constraints in local governments. Decentralization of many developing countries is
characterized by administrative and fiscal challenges in relation to revenue raising and expenditure
authority (Haas, 2017), similarly Somaliland central government transfers different types of funds to
local governments, namely; local governments subsidy, funds for decentralized services of
education and health which are pilot in number of districts, and Local Development Fund as part of
Joint Program for Local governance. Ahmed, J., S. Devarajan, S. Khemani and S. Shah (2005),
‘Decentralization and Service Delivery’, World Bank Policy Research Working Paper.
2
1.2. PROBLEM STATEMENT.
This is the problems that faces to implement full fully fiscal decentralization in Hargeisa local
Municipalities it will not be execute success full till resolved this problems. And to strengthen their
revenue mobilization mechanisms.
Deficient Mechanism for Intergovernmental Fiscal Transfers
Inter-governmental funds transfers are largely characterized by many challenges that are widely felt
by both local governments and central government institutions. Central government transfers
different types of funds to local governments including local government’s subsidy, funds for
decentralized services of education and health (Service Decentralization Model) which are
introduced in number of districts, and Local Development Fund (LDF), of which the latter two are
part of Joint Program for Local governance (JPLG).
Limited Capacity
Financial management practices are below average standard and they use very old fashioned and
errorous manuals ( (Mahmoud, 2012). Mayors also showed the challenge of limited skilled staff in
local governments. Moreover, sector ministries of health and education have limited capacity in
systems and regional offices in particular. The research team found it difficult in finding the
financial plans of local governments, the budgets of local governments Public Policy and 65 are not
publicly disclosed. It’s also currently difficult getting information about work plan and budget for
decentralized services of education and health from local governments that shows and clearly
indicate how the three different sources of funds are to disbursed (Ministry of education/health,
UNICEF, local
government). Elected district
authorities to
be accountable to
local
communities/constituents face so many challenges primarily budget constraints and inadequate
funding (Ahmed, 2016). However, key respondents in this study thematically reasoned that
concerned authorities showed poor leadership quality to use allocated resources to address existing
challenges.
Districts councils. The major limitations relate to poor legislations that supports implementation of
decentralized governance. For example Local government act (Law 23/2002) failed to take into
account the administrative and fiscal transferring responsibilities, (Abdi Zamad Omar maal
paper” Local Governance through Decentralization Policy and Institutional Arrangement for
Peace, Governance and Service Delivery in Somaliland”.
3
1.3.
RESEARCH OBJECTIVES
1.3.1. GENERAL OBJECTIVES
The General Objectives of this study will be a assessing the challenges and Opportunities of fiscal
decentralization of Hargeisa local Government
1.3.2. SPECIFIC OBJECTIVES
I.
II.
III.
1.4.
to investigate challenges of fiscal decentralization
to analysis the effect of fiscal decentralization on service delivery
to identify major challenges encountered in practicing of the fiscal decentralization
SIGNIFICANT OF THE STUDY
The study will determine the roles fiscal decentralization as a tool for efficient and effective of
financial resources. The study research will help the government on Moving from a centralized
financial system of government to a decentralized system of government requires a shift in the way
that central government relates to local government institutions that become responsible for
providing and directly overseeing services. The benefits accruing from more innovative public issue
that income growth may lead to a “cost-push” effect derived from the kind of services being
provided by local governments (LGs) Since LGs are usually related to labor intensive functions
(Education, health, police and the like), growth in productivity will tend to be rather low for those
that provide these services. The local people will understand the importance of local Government
budget transparency.
4
1.5.
SCOPE OF THE STUDY
The Geographical scope of this study is local government of Hargeisa while the content scope of
this study was challenges, and Opportunities of fiscal decentralization in Hargeisa municipality, and
the time study was three months start from June to August).
1.6.
DESCRIPTION OF THE STUDY AREA/ORGANIZATION
Hargeisa is the capital of the Hargeisa district as well as the capital of Somaliland. The city occupies
an estimated area of 120 sq. kms. It is situated in a high land with altitude of about 1km -1.2km
above the sea level. The city has an estimated current population of 1200,000.
The mayor of Hargeisa local government Abdurrahman Mohammad caydiid (sol Telco) and
deputy mayor Abdi-Aziz Mohamed Hashi. And secretary of the local government Mr. juxa the
finance department of municipal, “Progress in decentralizing fiscal, administrative and sector
functions to councils has been slow. Sources of local revenue include registration and annual
property fees, business licensing fees, sales tax, public employee tax, and livestock taxes collection
in local markets. According to the UNDP over half of district budget are spent on staff salaries and
allowance” (JPLG, 2011b)
1.7.
LIMITATIONS OF THE STUDY
Limitations of the study are characteristics of design of methodology impact or influenced the
application or interpretation of the result of this research. The limitations which the researcher was
face during the research are Fear of confidence, some respondents they are not willing to offer
information due to lack of trust or fear of lack of confidence, luckily the researcher tell them that he
is not going to present their privacy. The most fascinating point that the researcher handles this
limitation by distributing the questioner with responsible people that have an ability
and commitment to answer his questioner Poor previous research studies on this topic, the
researcher
tries
to
collect
primary
data
as
much
as
he
can
5
CHAPTER TWO
2.1. LITERATURE REVIEW
2.2. THEORETICAL FRAME WORK
What is Decentralization?
Several authors defined the concept of decentralization as the transfer of power from the national to
sub-national government; the official powers transfer includes: political, administrative, fiscal
responsibilities and territorial hierarchy.
As the UNDP states: "Decentralizing governance is the restructuring of authority so that there is a
system of co-responsibility between institutions of governance at the central, regional and local
levels according to the principle of subsidiarity, thus increasing the overall quality and Effectiveness
of the system of governance, while increasing the authority and capabilities of sub-national levels".
The term "decentralization" embraces a complex multifaceted concept and its different types
include: political, administrative, and fiscal decentralization.
Political decentralization normally refers to situations where political power and authority has
been transferred to subnational levels of government. It is often implies that the selection of
Representatives from local electoral jurisdictions allows citizens to know better their political
representatives and allows elected officials to know better the needs and desires of their
constituents. Political decentralization often requires constitutional or statutory reforms, the
development of pluralistic political parties, the strengthening of legislatures, creation of local
political units, and the encouragement of effective public interest groups.
Administrative decentralization seeks to redistribute authority, responsibility and financial
resources for providing public services among different levels of government. The three major
forms of administrative decentralization – de concentration, delegation, and devolution.
Fiscal decentralization refers to the resource reallocation to sub-national levels of government.
Experience in fiscal decentralization has led to capacity building in expenditure and revenue
assignment as well as the design of fiscal transfer formulas and sub-national borrowing.
6
Definition of fiscal decentralization: 1st generation. The 1st generation of fiscal decentralization,
or "fiscal federalism", sets forth an active and positive role for the government in terms of correcting
various forms of market failure, establishing equitable distribution of income and stabilizing the
macro-economy at high levels of employment with stable prices. According to Oates (2005), the
implicit assumption is that government agencies, as “custodians of the public interest”, will seek to
maximize social welfare, either because of some kind of benevolence or because of electoral
pressures in a democratic system. In short, where market failure prevails, there is a presumed need
for public intervention. Another implicit assumption is the political stability of a sustainable nationstate, which provides the context for the theory.
2.3. BENEFITS OF FISCAL DECENTRALIZATION
Centralization is a more structured approach to capturing the benefits of fiscal decentralization the
first positive effect of income on FD has to do with the demand for variety and quality in the
spectrum of services being provided by the State. Whear (1964) first made this point, suggesting
that decentralization is a desirable but “expensive good” and thus could only be afforded by rather
affluent societies. The potential link between quality of life and decentralization rests on Theoretical
and empirical arguments. The theory stresses the advantages in terms of better information being
available to local bureaucrats and politicians (Von Hayek 1945)1, the likely similarity between a
competitive market and the competition between jurisdictions (Tiebout 1956, Tirole 1974), the
benefits accruing from more innovative public service(Rose-Ackerman 1980) and the increasing
degree of government accountability (Seabright 1995). On the one hand, a lower population density
will lower g, reducing the government’s marginal benefit of centralization, which is directly
proportional to the rents obtained from On the other hand, given that the median voter’s marginal
utility is decreasing in a lower government budget implies a higher marginal utility of public goods
versus private consumption.
7
2.4. CHALLENGES OF FISCAL DECENTRALIZATION
In Somaliland the decentralization couldn’t bee success fully implemented till solved some
problems, according The UNDP, UNJPLG, in Somaliland challenges will be such like.
Changes to Law 23 to provide more defined functional assignments based on district capacities is
not achieved reform of the intergovernmental transfer grant with more objective and transparent
criteria is not achieved. Resistance of central ministries to decentralize services to the districts in key
delivery functions such as Education, Health, and transportation Tax etc. The Regions and Districts
Law does not include any over-all purposes for having a local government system the Constitution
and the local government legal framework do in principle and to some extent point towards a
holistic local governance system, but in practice local governance is limited to political
decentralization.
The 12.5% fiscal grant is actually not a real district tax any longer as it was previously. The total
yield of this previous tax is applied by the central government to support districts to finance their
services through the fiscal transfer mechanism. The base of the yield is the Fiscal Duty plus the
Sales
2.5. OPPORTUNITIES
There are a number of opportunities that can be utilized to support the development of
decentralization. One of these is the potential for a law that will clarify the civil service status of the
local government employees. This is an important development and will greatly affect the possible
transfer of functions to the local governments with sufficient capacity to apply a merit based civil
service system. The potential to improve the financial management system through some
developments in the revenue collection capacities and the processes of applying more modern
budgeting methods also is another opportunity that needs to be exploited. This is an area where
further technical assistance of the donor community would prove beneficial and the experience of
the JPLG to provide some methods of budgeting, accounting and auditing controls will be a basis for
continuing this development.
Most existing research focuses on evaluating decentralization experiences from around the world
and looks for the links between theory and practice. Much less attention has been given to
implementation strategies (Bahl 1999b). This chapter offers some guidelines for both design and
8
implementation— beginning with a discussion of the rationale for fiscal decentralization—by
analyzing objectives, opportunities, and risks that should lead the design of a decentralization
program.
2.3 Empirical literature
Evidence regarding the existence of informational asymmetries is relatively scarce.a notable study
by Faguet (2004) shows that decentralization improved the responsiveness of governments to local
needs in Bolivia. Alderman (2002) suggests that welfare transfers in Albania are better targeted
because they are decided by local officials. Ligthart and Van Oudheusden (2011) show that fiscal
decentralization increases citizens’ trust in government. Kyriacou and Roca-Sagalés (2011) Suggest
that the quality of government increases after fiscal decentralization. Finally, Borge e.t al. (2014)
show, based on a decentralization reform in Norway, that when spending discretion is decentralized
it better suits local demand. In addition, Bjornskov et al. (2008) offer indirect evidence that
informational advantages improve local outcomes, showing that residents’ subjective well-being
rises after decentralization.
Since the seminal theoretical contribution of Brennan and Buchanan (1980), a rich empirical
literature has emerged dealing with the effects of FD on the size of government. Oates (1985) was
probably the first to provide a systematic empirical analysis of this relationship. As a measure of
the size of government, Oates used tax revenues as a share of personal income. To measure FD, he
used the local Government share of revenues and expenditures, and the number of local
government units in the state. Based on two cross-sectional samples – one consisting of
43 countries and the other the 48 contiguous US states – Oates showed that decentralization does
not reduce government size.
9
CHAPTER THREE
3.1. RESEACH DESING:
This section was present the overall research design of the study, research methods, sources of data,
sampling techniques, data gathering instruments and their validity and reliability, variables of the
study, procedures of data collection, methods of data analysis and ethical considerations.
3.2. Variable Definitions
3.2.1. FISCAL DECENTRALIZATION
Fiscal decentralization relates to the transfer of functions or authority from central levels of
government to local institutions regarding local decision-making on the allocation of financial
resources (i.e. financial discretionary powers) and the powers to levy local taxes. Full fiscal
decentralization requires political decentralization and, at least to some extend administrative
decentralization.
Results generally support former evidence on the effect of a set of related variables on FD. As
opposed to existing evidence, urbanization appears to have a negative effect on FD. Moreover,
although federations and democratic regimes seem to be more fiscally decentralized, this research
does not find a significant effect of population diversity and income distribution. After controlling
for all the measurable factors considered in the model, the plot of residuals from the regressions still
suggests common patterns across clusters of countries.
10
3.3. RESEARCH TYPE
The researcher used the descriptive type of research in this study, because the information is
gathering in order to organize, tabulate, depict and analyze. Though the researcher is
Describing some relations, the best way that fits this research was descriptive type of research
because this study describes. Challenges and opportunities of fiscal decentralization on local
government.
11
3.4. RESEARCH APPROACH
The researcher was used qualitative and quantitative approach or mixed method the qualitative
approach deals with the subjective assessment of attitudes, opinion and behavior of the respondents.
In addition, the quantitative approach was used to measure percentage and ratios of the situation and
to quantify the responses of the questionnaires. A quantitative approach also maximizes objectivity
by using numbers, statistics, structure and researcher control (McMillan & Schumacher, 1993).
Because of data analysis and interpretation was descriptive and percentage which means that reader
and beneficiaries was understand well the main importance of this research.
3.5. SAMPLE DESIGN
With respect of that it is impossible to study the entire population, sample size, sample unit and
sample technique that the researcher was focus on, it is necessary to take a sample from the
population.
3.6. POPULATION
Name of the Department
Number of the Population
Sample population
Dep: revenue
200
60
Dep: planning
50
15
TOTAL
250
75
According to Rule of Thumb, the researcher is going to use the Role of thumb this is used for small
data analysis population refers to any standard deviation, people or objects that have common
characteristic. The target Population of this study is employees of (250) in revenue and planning
Department this is actual figure from Mohamed Abdurrahman, local government expert at vicepresident
office
01/03/2017
12
decentralization
3.7. SAMPLE SIZE
From the target population of the total of 250 which consist of the total of Employee 90 of them will
be the respondent will be selected for the study will be selected for the study will be used solves
formula used to calculate the sample size.
Thus, the sample size will be calculated as follows;
250*30%=75
3.8. SAMPLING TECHNIQUES
Sampling is central to ensure that the stratified sampling the generalizations are valid. A sample is a
set of target respondents selected from a larger population for the purposes of surveys (Singh, 2007).
It is a smaller group or subset of the total population (Cohen, Manion, and Morrison, 2007). The
type of sampling techniques that the researcher was used is non-probability sampling especially
purposive sampling because the study was focus on Accountability and transparency in ministry of
finance that the researcher was get the information. Purposive sampling as one which involves
selecting a sample based on experiences or knowledge of the group to be sampled.
3.8. SOURCES OF DATA
The researcher was used both primary and secondary data sources.
3.8.1. Primary data source
The primary data collection method explores the originality of data through gathering information
relevant to the study; primary data was obtained from respondents of UNDP, Somaliland UN-joint
Program, Hargeisa Municipality minister if Interior department JPLG. In Hargeisa Somaliland by
use
of
questionnaires
13
and
interview
3.8.2. SECONDARY DATA SOURCE
Secondary data collection explored methods supplementary to the above method where data
obtained from records (Obtained from different areas such as dissertations, text books, the internet
and other material such as journals, newspapers, websites and so on) as found useful to the study.
This kind of data collection method was important to the study especially in the literature-review.
3.9. DATA COLLECTION INSTRUMENTS
3.9.1. CLOSE ENDED QUESTIONER
The researcher was used to collect the primary data in a form of closed ended questionnaires
because it is easy to apply and less time consuming as most respondents were well educated and can
fill in the questions easily or with little guidance. According to Best and Kahn (2006), questionnaire
is used when information is desired.
3.9.2. KEY INFORMANT INTERVIEW
The researcher was used interview two (2) respondents specially the head of revenue and planning
key informant interview in order to get relevant reliable and adequate information based on the
study. Interview helps to obtain relevant information that cannot be collected by questionnaire.
3.10. DATA PRESENTATION TOOLS
The researcher will presented from his study by using Tables and Figures from the study is used for
spss to Use data Interpretation and analysis
14
3.11 ETHICAL CONSIDERATION
A participant was insured that the source of data collection would remain confidential and that
secrecy maintained, written permission to conduct the research study was obtained from the
Hargeisa Civil Service Institute. The study was carried out the permission of the respondents, it kept
as confidential and used by not mentioning the names of the respondents. The researcher told the
purpose of the study to the respondents and ensured voluntary participation, as it is only for
academic purpose with full confidentiality.
The researcher was used professional and ethical standard to plan, collect and process data. The
author was ensured that he as much as possible employ objective methods in data collection. Finally,
the researcher was make sure that he will be collecting data according to the acceptable research
standards.
15
CHAPTER FOUR
4.1. Data presentation, Analysis and Interpretation:
This chapter presents data analysis and interpretation, the data analysis and interpretation where
based on the research questions as well as research objectives; the presentation were divided in to
two parts. The first part presents the respondents’ demographic information, age, gender, marital
status, and education while the second part deals with presentation, interpretation, and analysis of
the research questions and objectives. Below are the data presentation and analysis of research
findings.
4.2 Demographic Characteristics of the Respondents
This part presents the background information of the respondents, who participated in this study the
purpose of this background information was to find out the characteristics of the respondents and
show the distribution of the population in this study. This distribution is founded as it follows:
Table 1
Gender of the respondent:
gender
Frequenc
y
Percent
male
74
98.7
female
1
1.3
75
100.0
Table 4.1 indicates that this questionnaire filled by the both male and female, the majority are male
being represented by 74.1 percent while female are represented by 25.9 percent. And this indicates
that most of the respondents were male.
16
Figure 1.1
The age of the respondent
90
80
70
60
50
18-25
26-33
40
60-above
30
20
10
0
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Source: Field primary data 2020
The above chart point out that 37percent of the respondents was age group of 18-25 years while 41
percent where age group of 26-33followed by those in the age group of 60-above years at 22 percent
of the respondents; this means that the respondents between ages of 28-33 are the most and they are
mature who can pass rational decisions and appropriate for the case.
17
Figure 1.2
Marital status of the respondents:
Source: Field Primary data 2020.
The above chart illustrate that 37 percent of the respondents were single, 48 percent were married
and 15 percent were divorced. Therefore the majority of the respondents was married and suggests
that they are mature enough.
Figure 1.3
18
Educational level of the respondents:
Source: Field primary data 2020
Findings from the above chart expound that there is a different category of educational level so that
7 percent of the respondents were secondary educational level, 19 percent of the respondents were
diploma educational level and 48 percent of the respondents were Bachelor while 26 percent of the
respondents were other educational levels. Therefore, most of the respondents who take part this
study were bachelor educational level who can positively contribute for the intended purpose.
Figure 1. 4
19
Work period of the respondent:
So
urce: Field primary data 2020.
The above figure elaborates that 15 percent of the respondents worked less than a year, 29 percent of
the respondents worked 1-4 years, 52 percent of the respondents worked 5-7 years while only 4
percent of the respondents worked 8 years and above.
20
Figure 2.1
Is there opportunities faced on fiscal Decentralization Hargeisa LG, Somaliland? :
Source: field primary data 2020.
The above figure illustrate that 88.89 percent of the respondents believe that there is Opportunities
in fiscal decentralization in local government , while 11.11 percent of the respondents don’t believe
there is no opportunities in fiscal decentralization Hargeisa LG Somaliland.
Figure 2.1
21
How does the local government's service delivery changed since the adoption of
decentralization:
Source: Field primary data 2020.
The above figure, shows that 63 percent of the respondents say there is low no more change since
made adoption on fiscal decentralization in Hargeisa LG 37 percent of the respondents say there is
High adoption towards the LG so, there is low service Delivery since the adoption of
decentralization in LG.
Figure 2.2
22
Which do you think it is better when it comes to service delivery centralization or
decentralization?
Source: Field primary data 2020.
The above figure expound that 48.1 percent of the respondents say centralization is better than
decentralization when is comes service delivery 51.9 percent of the respondents say the
decentralization is better than centralization According social service delivery.
Figure 2.3
23
Decentralization Does it gives power to the people in ensuring good service delivery?
Source: Field primary data 2020
The above figure indicate that 33.33 percent of the respondents say no it doesn’t gives power to the
people 66.67 Yes it gives power to insuring good service delivery.
24
Table 2:
What do you think community satisfaction on district development in the city?
Category
Frequency
Percent
Valid Percent
Cumulative
Percent
10
33.3%
33.3%
33.3%
Sou
rce:
Fiel
d
pri
ma
ry
dat
a
202
0
Very satisfied
The
abo
satisfied
Dissatisfied
ve
30
44.4%
44.4%
77.8%
15
14.8%
14.8%
92.6%
figu
re
sugg
Moderately
satisfied
Total
20
7.4%
7.4%
75
100.0%
100.0%
100.0%
ests
that
33.3
0 percent of the respondents are very satisfied 44.40 percent of the respondents are satisfied in
district development, 14.80 percent of the respondents Dissatisfied 7.40 percent of the respondents
moderately satisfied. Therefore the majority of the respondents are satisfied district development.
Figure .3.1
Does the local government has a role to apply state decentralization
25
Source: Field primary data: 2020
This figure explains that 89 percent of the respondents say yes it has a role to apply decentralization,
11 of the respondent says NO it doesn’t has any Role to Apply the decentralization
26
CHAPTER FIVE
5.1 CONCLUSIONS AND RECOMMENDATIONS
5.1.2 CONCLUSIONS
This study investigated the relationship between decentralization and service delivery in Somaliland.
The results obtained in this study showed that the services delivered by local government are
decreased due to absence of enough financing, basic skills and competences at local level, and due
to lower technical and administrative capacities and inadequate funds.
1. This means the service delivery can be improved if local governments are given the power to
raise and retain financial resources from central government such as road tax and inland tax
to fulfill their responsibilities and also local governments should have the ability to borrow
money when they have the capacity to repay. The results obtained additionally demonstrated
that decentralization means to allow for the participation of ordinary people in the
accountability of local governments. Finally,
2. the study has shown that there is no significant relationship between decentralization and
service delivery in Hargeisa, thereby supporting the claims of Ford (1999). Decentralization
policy has had a significant effect on service delivery but the exact nature of that effect
depends the form of decentralization that has been adopted Somaliland’s decentralization has
been in the form of delegation, not devolution
5.2 RECOMMENDATIONS
Based on the study’s findings, the following recommendations are suggested:
 In order to improve the performance of service delivery at the local level, the local
governments must positively address their financial and technical limitations.
 The local governments should strengthen their powers to collect taxes and generate revenues
through either local activities and/or subsidies from the central government.
 Local governments should motivate the community to participate in local fundraising
activities and contribute financially.
 The central government must work together with local governments in setting priorities,
suggesting budget allocation and service delivery models and assessing progress.
27
 The central government has a key role to play in building local capacity and there are two
approaches available to it in this respect. The central government can provide training in
traditional, top-down ways, and it can also create an enabling environment, utilizing its
financial High Quality Research Support (HQRS) Programed 7 resources and regulatory
powers to help local governments define their needs (thereby making the process demanddriven), in order to deploy training to local governments from multiple sources. This would
enable local governments to learn by doing as decentralization proceeds, and to establish
learning networks within and between jurisdictions.
 Even if decentralization is aimed at improving service delivery, it has been resisted by
central government due to benefit it draws from the traditional centralized system. For
instance, politicians and bureaucrats within the upper echelons of government may have
been earning rents from the very same system that gave them control over the allocation of
resources.
28
References:
Ahmed, Y. J., 2016. Decentralization and Service Delivery in Hargeisa: A case study of
Mahmoud Haybe District in Hargeisa City High-quality Research Support program me
( HQRS ) September 2016. Issue September, pp. 1-8. Alam, M., 2019. Assessment of
Fiscal Decentralization in Ethiopia: The Case Study of Selected Basic Sectors of Public
Policy and Administration Research
Ahmed, J., S. Devarajan, S. Khemani and S. Shah (2005), ‘Decentralization and Service
Delivery’, World Bank Policy Research Working Paper 3603, May [accessed 9 July
2016], available from:
http://www1.worldbank.org/publicsector/decentralization/decentralizationcorecour
se2006/CoreReading s/Ahmad.pdf Barden, P. (1997), The Role of Governance in
Economic Development: A Political Economy Approach, Paris: OECD. Bradbury, M.
(1997), Somaliland: Country Report, London: CIIR. Drysdale, J. (2001), Problems of
Decentralization and Suggested Approaches, London: Blunders. Jim'ale, A. (2002).
Consolidation and Decentralization of Government Institutions. Hargeisa: APD.
Khemani, S. (2004), ‘Local Government Accountability for Service Delivery In Nigeria’,
World Bank Development Research Group, no date [accessed 9 July 2016], available
from: High Quality Research Support (HQRS) Programme 8
http://siteresources.worldbank.org/INTKNOWLEDGEFORCHANGE/Resources/491519
- 1199818447826/Khemani.Local.Gov.Acc.Nigeria_JAE_accepted.June.2005.pdf.
29
APPENDIX I: QUESTIONNAIRE:
QUESTIONIARE
Dear respondents my name is SAKARIYE EID AHMED, and I am an undergraduate student at the
Somaliland Civil Servant Institute (CSI) the faculty of Urban Management, by answering the
questionnaire you will help me realizing my final thesis. This questionnaire aims at assessing
challenges and opportunities of fiscal decentralization in Hargeisa, local Government. Please read
each question or statement carefully and try to answer all questions honestly and to your best
knowledge. It takes on average ten minutes of your time. Your answer will be treated confidentially
and only for the research. I greatly appreciate your help.
Please Mark (√) with provided space below on required data.
NB: No need to write your name.
Contact address Researcher’s
Name: sakariye Iid Ahmed Ali. Tell: 00 25263 4635483
Email: sakariye9911@gmail.com
17
30
Section A: Socio-Economic Characteristics of the Respondents
1. Age of the respondent?
a) 18-25 ☐ b) 26-33 ☐ c) 34-39 ☐ d) 40 and above ☐
2. Gender
a) Male ☐
☐
b) Female
3. Marital status
a) Single ☐
b) married
c) Divorced ☐
d) Widower
☐
☐
4. Education Background?
A) Primary ☐
c) Diploma ☐
b) Secondary ☐
d) Bachelor degree ☐
e)
Master degree ☐
f) PHD and above ☐
Section B: Questionnaires Report Related Questions
I- How the local government system and practice effectively in Somaliland?
1. Is there are opportunities faced on fiscal Decentralization Hargeisa, Somaliland?
a) Yes ☐
b) No ☐
c) I don’t know☐
18
31
If yes enlist?
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
How does the local government’s service delivery changed since the adoption of
decentralization?
A) Low ☐
B) High ☐
C) very high ☐
APPENDIX B: Interview Question
2. What are the main challenges decentralization has been facing in the last ten years?
……………………………………………………………………………………………………
……………………………………………………………………………………………………
…………………………………………………………………………………………………….
Which system do you think is better when it comes to service delivery: centralization or
decentralization?
A) Decentralization ☐
b) centralization ☐
What is the main purpose of decentralization? Does it give power to the people in ensuring
good service delivery?
A) Yes ☐
B) NO ☐
c) I don’t know ☐
32
3. Does the local government has fiscal decentralization system?
A) Yes ☐
b) No
☐
c) I don’t know☐
4. What do you think about the quality of the roads?
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
…………………………………………………………
5. How the fiscal decentralization exists in Somaliland Decentralization policy? So
what do you think about the fiscal decentralization?
a) Excellent ☐
b) Very good ☐
C) Good ☐
d) Bad ☐
e) I don’t know☐
6. Who is responsible for improving decentralization? A)
Central Government ☐
B) Local Government☐
c) I don’t know ☐
33
7. What do you think the community satisfaction on district development in the City?
a) Very Satisfied ☐
d) Dissatisfied ☐
b) Satisfied ☐
c) Moderately Satisfied☐
e) extremely dissatisfied☐
8. Does the local government has a roles to apply state decentralization? A)
Yes☐
B) No ☐
C) I don’t know ☐
8. Do you think the kind of challenges faced the fiscal decentralization? a)
Lack of Policies ☐
b) Lack of commitment ☐
c) Inadequate budget☐
e) Inadequate resource ☐
34