A Look At Equitable Allocation of CDF [column]

Last week’s column looked at the challenges faced by rural constituencies in dealing with developmental activities compared to their counterparts in the urban setting.

This time around, the Zambia Institute for Policy Analysis and Research presented a case study on the variables in resource allocation pertaining to Constituency Development Fund (CDF) in the country and highlights several key issues.

It is vital to note that the issue of increasing resources to less privileged constituencies is a source of concern to many players in resource management and not the affected parliamentarians alone.

Under this development, it is also gratifying to note that Finance Minister Alexander Chikwanda backs this feeling and is not against a shift in policy direction on this issue, as indicated during proceedings in the last sitting of Parliament, when the matter was raised by several members of Parliament.

The disbursement of an equal quantum of funding per constituency has equity concerns because constituencies are not equal.

This favours smaller, least populated constituencies against greatly populated and or the poorest – where needs are greatest.

The blanket allocation of CDF across the country, without recourse to policy targets underscores national failure to address important policy concerns. This is unfortunately the case in Zambia.

In this report, we devised a model that reallocates resources based on the socio-economic conditions prevailing in constituencies. The research developed a composite index of material and social deprivation using data from the Census of 2010.

Furthermore, the study evaluates the distribution of deprivation in constituencies and considers ways in which deprivation index can contribute to discussions relating to public resource allocation of the CDF.

The research results has potential usages beyond the CDF reallocation, it informs decision-makers on resource allocation and planning and budgeting activities.

The CDF has been described as a ‘one-size-fits-all’ programme. The Government disburses equal lump-sums to all the 150 constituencies every year. These disbursements do not take into account the differences that exist among constituencies.

Constituencies differ in terms of size, population as well as in terms of the nature and magnitude of desires and developmental problems in different localities.

There are concerns, for example, that urban constituencies were better placed, in terms of developmental opportunities, because of the presence of lucrative economic activities, and that the CDF is more beneficial to smaller rather than larger constituencies.

It is acknowledged that in some cases a larger constituency may not necessarily be densely populated compared to a smaller one, a situation which may support the allocation of more resources to the densely populated constituencies.

The disbursement of the CDF is therefore inequitable. Studies that have been done on the CDF in Zambia have identified this weakness and

have recommended for the introduction of a formula to guide allocation of CDF.

In this light, the primary consideration for allocating the CDF should be on constituencies suffering from multiple deprivations. That is, the lacking in goods and services that enable people lead adequate lives. This means that a distinction should be drawn between individuals who do not have and those who have these goods and services.

Using the 2010 Census data, the study identified socio- demographic variables that have the greatest influence on wellbeing in the Zambian constituencies. These include but not limited to lack of access to piped water and toilets, traditional dwelling whose material for walls, roofs and floors are not solid, lack of access to electricity, solar power, gas or bio fuel, among others.

Using statistical methods, these factors are assigned a weight which reflects their relative importance. Weighted deprivations are then counted in each constituency to identify the level of the socio-economic conditions in the constituency. This is done using a deprivation index formula that takes into account the number of deprivations and their weights.

The highest levels of deprivation based on the identified variables are experienced in the Sikongo, Luapula, Lukulu-West, Sinjembela and Zambezi-West constituencies located in the Western, Luapula, North-Western, Muchinga and Northern provinces while the richest constituencies are Kabwata, Lusaka Central, Nkana, Kantanshi and Roan located in Lusaka and Copperbelt provinces respectively.

The analysis shows that deprivation is skewed to rural dominated constituencies. To equalize development across the country there is need for policy intervention to re-allocate more resources in these needy areas. Further analysis shows that 25 percent of constituency’s populations are least deprived, while 60 percent are the most deprived.

How should Government ensure equitable development? The model uses the aforementioned variable to derive a deprivation index score for each constituency. The deprivation index scores can be used in considering the allocation of public resources between constituencies.

In Zambia where disparities in the distribution of income, in socio-economic status and in access to key social services are substantial, prioritising human development benefits for the most disaantaged through the differential allocation of government resources could be argued to be an appropriate approach.

There are two key ways in which the deprivation index can be used to inform resource allocation patterns, the first one being inclusion of the index in a resource allocation formula developed. The second way, in which the deprivation index can be used to inform resource allocation, is to simply use it to guide marginal resource allocation, rather than incorporating it in a formula.

Possible Policy Simulation

The research reported on in this paper has calculated a composite index of deprivation using the 2010 Census data, drawing on similar initiatives in other countries and using internationally accepted statistical techniques.

The index highlights the socio-demographic variables that have the greatest influence on deprivation in constituencies and also indicates the relative importance of each variable in contributing to deprivation. It clearly demonstrates that the highest levels of deprivation are experienced in the Sikongo, Luapula, Lukulu West and Sinjembela Constituencies.

For equitable development, the current provision of the CDF can be re-allocated on the basis of deprivation and population size of the constituency where the most deprived constituencies get a significantly higher allocation than the least deprived.

The other way the resources can be re-allocated is by setting a minimum allocation and re-allocating the additional funds.

The article is based on the ZIPAR working paper, “The Resource Allocation Model for the Constituency Development Fund” by Frank Kalunga.

Source : The Times of Zambia

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