Government has taken a decision to transfer 93% of the District Assembly Common Fund directly to the local level. The move marks a 10% increment on the 2025 formula approved by Parliament.
According to the proposed 2026 formula in possession of Accra News Online, 80% will be transferred to the various assemblies to fund their activities, 5% to cater for Persons with Disabilities (PWDs), 5% for MPs share of the Common Fund for Labor and an additional 3% for Project Monitoring making a total of 93%.
Accra News Online has gathered the proposed formula has already received cabinet approval. However the formula which is already in parliament is expected to be considered tomorrow March 12, 2026 by the committee of the whole. Minister for Local Government, Chieftainly and Religious Affairs Ahmed Ibrahim is expected to shepherd the approval of the formula on the floor of parliament.
The formula especially the increment in the allocation for PWDs and that of the Assemblies have been hailed by local government analysts.
Find Below the full proposed formula:
PROPOSED 2026 FORMULA FOR THE DISTRIBUTION OF THE DISTRICT ASSEMBLIES COMMON FUND
EXECUTIVE SUMMARY
1.0 INTRODUCTION
The 1992 Constitution provides under Article 252 that not less than 5% of total revenue shall be allocated into the District Assemblies Common Fund (DACF).
Based on this, Parliament enacted the 2026 Appropriation Act and allocated an amount of Eight billion, seven hundred and sixty-nine million, seven hundred and seven thousand, nine hundred Ghana Cedis (GHS 8’769’707’900) to the DACF for application in the 2026 fiscal year. The 2026 Formula for distribution is therefore based on this allocation. Parliament is hereby requested to consider and approve the 2026 Formula for implementation in this fiscal year.
2.0 SUMMARY OF ALLOCATION
The total allocation for the year is based on 5% of projected total revenue for 2026. The Fund allocation for the year 2026 is GHS 8’769’707’900 as compared to GHS7,510,000,000 allocated for 2025 representing an increase of 16.78%.
We commend the Minister of Finance for making full and prompt releases totalling GHS 6’296’229’250 for all four quarters of 2025 to the DACF.
3.0 ARREARS
The DACF wishes to raise the attention of the Parliament to the 2024 arrears of GHS 7’332’530’591.40 billion based on the total actual government revenue reported in the National Accounts. We ask for Parliament’s support to verify and recover the arrears.
4.0 REVENUE CAPPING
The Petroleum Revenue Management Act, 2025 (Act 1138) caps the share of the DACF to a maximum of five percent (5%) contrary to the stipulations of Article 252 of the 1992 Constitution, the Local Governance Act, 2016 (Act 936) and the decision of the Supreme Court of Ghana in the case brought by Benjamin Kpodo and Richard Quarshiagh in 2019. We ask Parliament to take steps to review and remedy the capping of DACF allocations.
5.0 REFORMING THE FISCAL TRANSFER SYSTEM
Ghana requires a radical restructuring of its fiscal and governance architecture anchored on a predictable and automatic transfer mechanism for funding the DACF if decentralisation is to remain effective and relevant. We call on Parliament to implement this legislative reform in 2026.
6.0 ALLOCATION STATEMENT 2026
| GHS 2026 | PROP % | GHS 2025 | PROP % | |
| INSTITUTIONAL SUPPORT | 0.00 | 135’180’000 | 1.80 | |
| NATIONAL YOUTH PROGRAMME | 0.00 | 45’060’000 | 0.60 | |
| NATIONAL EMPLOYMENT SUPPORT | 0.00 | 45’060’000 | 0.60 | |
| NATIONAL DISASTER SUPPORT | 0.00 | 45’060’000 | 0.60 | |
| NATIONAL PROJECTS | 166’952’441 | 1.90 | 191’550’000 | 2.55 |
| NATIONAL EDUCATION PROGRAMME | 68’731’713 | 0.78 | 37’550’000 | 0.50 |
| SPECIAL PROJECTS | 98’220’728 | 1.12 | 70’000’000 | 0.93 |
| CONSTRUCTION /RENOVATION OF MMDAS AND OTHER BUILDINGS | 0.00 | 60’000’000 | 0.80 | |
| COMPLETION OF COURTS/RES. BUILDINGS | 0.00 | 24’000’000 | 0.32 | |
| RESERVE FUND | 603’027’914 | 7.88 | 546’845’000 | 7.28 |
| DISTRESSED DISTRICTS SUPPORT | 87’697’079 | 1.00 | ||
| CONSTITUENCY MONITORING AND EVALUATION (MPs) | 263’091’237 | 3.00 | 225’300’000 | 3.00 |
| LOCALISED EMERGENCIES | 81’558’283 | 0.93 | 160’080’000 | 2.13 |
| GRANTS MOBILIZATION PROGRAMME | 90’000’000 | 1.03 | ||
| REGIONAL CO-ORDINATING COUNCILS | 36’832’775 | 0.42 | 30’040’000 | 0.40 |
| DACF OPERATIONS | 131’545’619 | 1.50 | 78’855’000 | 1.05 |
| LOCAL GOVERNMENT SERVICE/ILGS INFRASTRUCTURAL BUILDING AND EQUIPMENT | 0.00 | 52’570’000 | 0.70 | |
| MMDAS – INDIRECT | 19’293’356 | 0.22 | 27’625’000 | 0.37 |
| DRIP ADMINISTRATION | 9’646’678 | 0.11 | 8’850’000 | 0.12 |
| TRAINING | 9’646’678 | 0.11 | 18’775’000 | 0.25 |
| MMDAS – DIRECT | 7’980’434’189 | 90.00 | 6’608’800’000 | 88.00 |
| PERSONS WITH DISABILITIES (PWD) | 438’485’395 | 5.00 | 225’300’000 | 3.00 |
| CONSTITUENCY LABOUR PROJECTS (MPs) | 438’485’395 | 5.00 | 375’500’000 | 5.00 |
| NET MMDAS | 7’015’766’320 | 80.00 | 6’008’000’000 | 80.00 |
| TOTAL FUND | 8’769’707’900 | 100.00 | 7’510’000’000 | 100.00 |
7.0 NATIONAL PROJECTS
An amount of GHS 166’952’441 has been allocated towards prioritised infrastructure and development projects in line with government policy objectives.as follows:
National Educational Programmes
An amount of GHS 68’731’713 has been allocated for educational policies and programmes within selected districts.
Special Projects
An amount of GHS 98’220’728 has also been allocated for strategic or intervention projects to address urgent development gaps or policy priorities within selected districts.
8.0 RESERVE FUND
An amount of about GHS 603’027’914 has been set aside to cater for the following:
Distressed Districts Support
An amount of GHS 87’697’079 has been allocated for Distressed Districts Support. These are districts facing serious socio-economic and development challenges, including prevalent poverty levels, limited access to basic services, and weak local revenue capacity, making them heavily dependent on central government transfers to deliver essential services.
These districts comparably have weak local economic bases and experience major infrastructural deficits, including inadequate roads, schools, health facilities, and water systems. In addition, they are often exposed to climate risks, conflict, and disasters and may be hard-to-reach districts.
Constituency Monitoring & Evaluation (MPs)
An amount of GHS 263’091’237 has been allocated to provide support for Constituency Monitoring and Evaluation of projects by Members of Parliament (MPs). This amount would be shared equally among all MPs and shall be accounted for by MPs signing for the quarterly releases with documentary evidence of the usage of the funds.
Localised Emergencies
An amount of GHS 81’558’283 has been allocated to provide for localised unforeseen emergencies (fire outbreak, explosions etcetera), and internal displacement resulting from disease outbreak (cholera, meningitis, water contamination), poor waste management and natural/weather events (rainstorms, flooding, windstorms, heatwaves etcetera).
Grants Mobilisation Programme
An amount of GHS 90’000’000 has been allocated to Grant Mobilisation Programme.
ESG:
Focus on attracting and coordinating concessional and grant resources to support high-impact interventions aligned with national development priorities and ESG principles.
Sustainability:
Emphasis will be placed on mobilising climate, social, and development finance to advance environmental sustainability, inclusive social outcomes, and strong governance at the local level. DACF would also leverage targeted grant resources to de-risk priority projects, strengthen institutional capacity, promote climate resilience, and support sustainable infrastructure.
Regional Co-ordinating Councils
A provision of GHS 36’832’775 has been earmarked to cater for all the sixteen (16) Regional Co-ordinating Councils to enable them to perform their monitoring and supervisory functions over the MMDAs.
The Regional Planning and Co-ordinating Units are being resourced to enable them to conduct their roles to monitor and evaluate development projects in the regions. The amount due to each region is therefore to be used as follows: –
- Sixty percent for General Administration and
- Forty percent for Regional Planning and Co-ordinating Units (RPCUs).
District Assemblies Common Fund Operations
An amount of GHS 131’545’619 has been allocated to the Office of the DACF pursuant to section 132 of the Local Governance Act, 2016 (Act 936). This would cater for the compensation cost of employees, goods and services, research, monitoring, and evaluation of the MMDAs, CAPEX, etcetera.
9.0 MMDAs INDIRECT ALLOCATION
MMDAs Indirect allocation amounting to GHS 19’293’356 have been earmarked for the following:
DRIP Administration
An amount of GHS 9’646’678 has been allocated to the DRIP Administration for the Secretariat at the head office for Operations and Maintenance.
Training
An amount of GHS 9’646’678 has been allocated for Human Resource Development and Training programmes. This is meant to train the MMDCEs and other staff/members of the District Assemblies.
10.0 MMDAs DIRECT ALLOCATION
This is the share of the Allocation distributed directly to Metropolitan, Municipal and District Assemblies based on the approved formula anchored on equality, need, and service pressure Factors. The total direct transfer to the MMDAs is estimated at GHS 7’980’434’189 representing 90% of the total allocations as follows: –
Persons With Disabilities
The allocations for Persons with Disabilities (PWDs) for 2026 is set at GHS 438’485’395 to enhance their socio-economic wellbeing. The percentage allocation has been increased from 3% to 5%. The amount due to the PWDs is therefore to be used as follows:
- Seventy-five percent would be transferred to PWD accounts in the MMDAs.
- Twenty-five percent is proposed to be used to settle outstanding debts for infrastructure carried forward from 2024.
Constituency Labour Projects (MPs)
This is to provide funding for Constituency development projects undertaken by MPs. The projected amount of about GHS 438’485’395 would be shared equally amongst the MPs and would be accounted for by the MMDAs through their monthly returns.
Net MMDAs Transfer
A net total of GHS 7’015’766’320 is allocated to the MMDAs for the provision of development infrastructure. The estimated ratios and allocations for 2026 are based on the recommended factor weights of the scenarios.
11.0 PRINCIPLES UNDERLYING THE FORMULA
There is no significant change in the guiding principles of choosing the Factors and the corresponding indicators in developing the DACF Formula. The Factors and Indicators chosen are deem Relevant, Comprehensive, Reliable, Measurable, and simple to interpret.
In developing the DACF Formula, each MMDA receives a certain minimum allocation to serve as a start-up Fund before allocations from other Factors are applied. This in the Formula is the Equality Factor. A percentage of the Fund is shared equally among the MMDAs before other factors are applied.
The next factor covers “Basic Needs” with the following as its indicators:
- Health Services
- Education Services
- Water Coverage
- Tarred Road Coverage
Under these factors those MMDAs who have more facilities/services receive less to bridge the development gap.
The other Factor considered apart from Equality and the Basic Needs is the Service Pressure Factor. This Factor is to cater for population pressure because of migration and population growth. The result from this factor is to assist the Assemblies to maintain the deteriorating of facilities due to population pressure.
11.1 CHOICE OF INDICATORS AND MEASURES FOR THE FACTORS
In choosing the various indicators, emphasis is placed on those indicators for which data is readily available and disaggregated to the MMDA. The following indicators and measures are chosen for each of the Factors:
Equality Factor
This involves an equal allocation of a portion of the fund among 261 MMDAs. No indicators are therefore required.
Need Factor
Health Services
This indicator measures the level of health services available to citizens in each MMDA. The selected measures for health services are the number of health facilities such as hospitals, clinics, health centres, CHPS Compound and Health professionals\ population ratio.
Education Services
Under this indicator, consideration is given to the number of basic education facilities in each MMDA as well as their Human Resource. The selected measures for this are the number of schools in each MMDA and the trained teacher/pupil ratio.
Water coverage
The percentage of population having access to clean and potable water.
Road Coverage
This indicator takes care of the total urban and feeder road network to tarred roads.
Service Pressure Factor
This indicator tries to compensate Urban Assemblies for the over-utilization of their facilities by visitors.
11.2 SOURCES OF DATA USED
Data used in the Formula is obtained as spot data from central sources. This is to avoid MMDAs influence over the data used and to prevent any falsification.
Population
Population data is obtained from the Statistical Service. The 2025 projected population had been inputted into 2026 Formula.
Education
Data on Education is obtained from the Ministry of Education. Data required includes Education Facilities, Pupil and Trained Teacher Population.
Health
The data supplied includes Health facilities such as Public Hospitals, Clinics, Health Posts and CHPS compound as well as Doctors and Nurses population.
Water Coverage
Data on water coverage was sourced from both the Community Water and Sanitation Agency and the Ghana Water Company. While the Community Water and Sanitation Agency gave out rural coverage, the Ghana Water Company also provided urban coverage.
Road Coverage
Tarred Roads data was obtained from Departments of Urban and Feeder Roads. Data on Feeder and Urban roads were used. Highway data was excluded as MMDAs are not responsible for the construction of highways.
11.3 LOCATION QUOTIENT
Location quotient is the method used to mathematically derive proportions from the data on Needs Factor, defined as: (Si/S) /(Ni/N). Si is the number of “S” facility in district “I” and ‘S’ is the total number of facility S in the country. Ni is the population of district ‘I’ and N is the population of the country. The location quotient ranks all the districts in terms of the endowment of the facility in question. It is intended that the less endowed Metropolitan, Municipal and District Assemblies (MMDAs) gain more than the better endowed; the reciprocal of the location quotient is what is used.
11.4 DACF RESPONSIVENESS FACTOR GRANT (DACF-RFG)
In 2018, the management of the Donor Partner Support to MMDAs, formerly overseen by the Ministry of Finance and the Ministry of Local Government, Chieftaincy and Religious Affairs came under the DACF. The Responsiveness Factor component, a factor previously considered in the DACF formula, was added to the Donor Partners Support and termed the District Assemblies Common Fund Responsiveness Factor Grant.
The DACF component was introduced to serve as a counterpart/partnership funding arrangement to receive donor funding. The condition of DACF was that the donor funding should always be equal to at least 100% of the DACF contribution. Ten percent (10%) of the MMDAs net direct allocation is used as counterpart funding to receive the donor grant from the Government of Switzerland and KFW (Germany).
The proposal is to strengthen the performance-based grant component (i.e., Responsiveness factor) of the DACF for improved service delivery to incorporate the achievements of the DDF/FOAT into the DACF responsiveness factor component. This is intended to mobilize additional resources as a top up to the DACF.
12.0 PROPOSALS FOR 2026 – DIRECT TRANSFER
We propose again and have used the underlisted factors and indicators.
Equality Factor
No indicators are required. A percentage of the allocation is shared equally among all the MMDAs.
Need Factor
(a) Health
- Facilities/Population Ratio
- Health Professionals/Population Ratio
(b) Education
- School Facilities/Population Ratio
- Classroom facilities/population
- Teacher/Pupil Ratio
(c) Water
- Water Coverage Ratio
(d) Tarred Roads
- Roads Coverage Ratio
Service Pressure
The calculation of the population Density has been factored in the scenarios.
12.1 PROPOSED WEIGHTING SCENARIOS – 2026
Three scenarios were developed and predetermined weights were applied to each indicator per the table below:
12.2 2026 PROPOSED WEIGHTING SCENARIOS
| 2026 PROPOSED WEIGHTING SCENARIO | ||||||
| FACTOR | SCENARIO A | SCENARIO B | SCENARIO C | |||
| % | % | % | % | % | % | |
| EQUALITY | 20 | 20 | 20 | |||
| NEEDS | 60 | 70 | 65 | |||
| Health facility/ Population | 6 | 10 | 8 | |||
| Health Professionals | 6 | 10 | 8 | |||
| Education facility/Population | 18 | 20 | 19 | |||
| Teacher/Pupil | 10 | 10 | 10 | |||
| Roads Coverage | 10 | 10 | 10 | |||
| Water Coverage | 10 | 10 | 10 | |||
| SERVICE PRESSURE | 20 | 10 | 15 | |||
| Population Density | 20 | 10 | 15 | |||
| Total | 100 | 100 | 100 | |||
Observation On the Scenarios
The comparison shows that under all scenarios most MMDAs had an increased allocation because of the increase in the nominal budget.
However, a critical examination of the three scenarios indicates that Scenario B is distributed more evenly followed by Scenario A and then C.
13.0 RECOMMENDATION
We wish to recommend Scenario B as it allows a greater number of MMDAs to receive their highest allocation compared to the other two scenarios. This reduces the scale of inequities in development in the MMDAs.
Details of Scenario B are as follows:
| 2026 RECOMMENDED WEIGHTING SCENARIO | ||
| FACTOR | SCENARIO B | |
| % | % | |
| EQUALITY | 20 | |
| NEEDS | 70 | |
| Health facility/ Population | 10 | |
| Health Professionals | 10 | |
| Education facility/Population | 20 | |
| Teacher/Pupil | 10 | |
| Roads Coverage | 10 | |
| Water Coverage | 10 | |
| SERVICE PRESSURE | 10 | |
| Population | 10 | |
| Total | 100 | |
MICHAEL HARRY YAMSON
ADMINISTRATOR
MARCH 2026
