The government has proposed allocating 93% of the District Assemblies Common Fund (DACF) directly to the local level for the 2026 fiscal year, in a move aimed at strengthening decentralisation and grassroots development.
According to the proposed 2026 DACF distribution formula expected to be tabled in Parliament by the Minister for Local Government, Chieftaincy and Religious Affairs, Ahmed Ibrahim, the total fund stands at GHS 8,769,707,900—representing exactly 5% of projected national revenue as mandated by Article 252 of the 1992 Constitution.
This marks a 16.78% increase from the 2025 allocation of GHS 7,510,000,000.
Under the proposal, 90% (GHS 7,980,434,189) of the fund is earmarked as direct transfers to the 261 Metropolitan, Municipal and District Assemblies (MMDAs).
This includes:
– 5% (GHS 438,485,395) for Persons with Disabilities (PWDs) — up from 3% in 2025, with 75% transferred to PWD accounts in MMDAs and 25% for settling outstanding infrastructure debts.
– 5% (GHS 438,485,395) for Constituency Labour Projects undertaken by Members of Parliament (MPs), shared equally and accounted for through MMDAs.
– The remaining 80% (net GHS 7,015,766,320) going directly to MMDAs for core development infrastructure such as roads, schools, health facilities and water systems.
The remaining 7% covers national-level provisions, including a reserve fund (7.88%, GHS 603,027,914) for distressed districts, localised emergencies, constituency monitoring by MPs, and grants mobilisation focused on ESG (Environmental, Social and Governance) principles and sustainability.
DACF Administrator Michael Harry Yamson recommended Scenario B weighting — 20% Equality, 70% Needs (health, education, water and roads coverage), and 10% Service Pressure (population density) — as it delivers the most even distribution across MMDAs and minimises inequities.
The proposal also highlights ongoing concerns, including GHS 7.33 billion in 2024 arrears, calls to remove the unconstitutional 5% cap imposed by the Petroleum Revenue Management Act, and the need for radical fiscal transfer reforms to make DACF releases more predictable and automatic.
Parliament is expected to consider and approve the formula for implementation in the 2026 fiscal year, with the increased direct transfers seen as a boost to local governance and service delivery at the district level.