Examining the Impact of Equalization Funds on Service Delivery by Local Authorities: A Case Study of Chongwe District Council in Zambia

Abstract

This study was set out to investigate ramifications of equalization funds on service delivery within selected Local Authorities in Zambia. The primary objective was to operationalize this inquiry by evaluating the financial, technical, and administrative repercussions of equalization funds, alongside assessing the degree of utilization of these funds by Local Authorities. Employing a concurrent mixed methods approach, the research adopted an explanatory sequential design. This entailed two distinct phases: an initial phase of quantitative data collection followed by a subsequent phase of qualitative data collection, with the qualitative inquiry being informed by the outcomes of the quantitative phase. Quantitative data were acquired through questionnaires and subjected to analysis employing SPSS, while the qualitative data were scrutinized through a narrative analytical framework. The results of this study have illuminated significant facets concerning the utilization of equalization funds by the Chongwe Municipal Council. It became evident that the council did not conform to the stipulated guidelines for the allocation of equalization funds. A notable portion of these funds was directed towards personnel compensation and councilors’ allowances, leaving inadequate resources for essential capital enhancements. Furthermore, the study underscored the inadequacy of Chongwe Municipal Council’s technical, administrative, and financial capabilities in rendering public services congruent with the burgeoning population within their jurisdiction. In the realm of service delivery strategies, the council embraced multifarious methodologies including local government enterprises, contracting out, franchising, self-help groups, and in-house provision. The efficacy of these strategies was particularly pronounced in the context of Chongwe Municipal Council, attributed to its relatively small population. Conclusively, this study underscores that Local Authorities, particularly those located in rural settings such as Chongwe, grapple with insufficiencies in technical, administrative, and financial capacities when endeavoring to cater to the needs of expanding populations. Moreover, these Authorities exhibit a tendency to deviate from prescribed equalization fund utilization guidelines. Furthermore, the introduction of equalization funds has led to an upward trajectory in revenue and expenditure estimations for Local Authorities, like Chongwe Municipal Council. This fiscal trend, however, has been coupled with a diminishing fiscal effort. Consequently, the essential correlation between local revenue and expenditure has been disrupted. To address these challenges, this study advocates for a reconfiguration of the fiscal framework, coupled with stringent adherence to financial management regulations by Local Authorities.