Enablers and barriers of financing local government investment : a case study of Mbale City

Abstract

The study examined the enablers and barriers to local government investment in Uganda. The findings were gathered from respondents who were sampled for the interviews; including staff in Mbale City Council, members of Mbale Municipal Development Forum, investment fund, and political Leaders. The key enablers of local government investment include knowledge and skills of municipal staff, the political will of city leaders, participation of citizens in planning, availability of accurate data to inform planning among others. The findings point to the greatest barriers expressed within the domains of enabling environment, including; the legal and regulatory framework, resource constraints, governance challenge and high cost of doing business. The contextual differences between local governments could be an important factor that influences the investment process. Hence, cities may be reluctant to invest financial and human resources in collaborative projects without clear indications of the returns they will receive for their investment in the form of outputs and outcomes. Municipalities that lack robust institutional channels for collaborative engagement with the private sector and civil society throughout planning will inevitably fail to establish meaningful constituent engagement with potential investors. Moreover, even if there are institutional avenues and channels for investment, without good laws to protect investors and adequate communication to citizens, the new cities risk engaging with only a limited number of their constituents. In conclusion, this study provides useful information on barriers and enablers to local government investment. Evidence from the qualitative analysis allows us to propose that local government investment is in part the outcome of local governments’ decisions for development