The Chiefdom Finance Study conducted by CMDA-SL, in collaboration with the Ministry of Finance, assesses the financial management capacity and revenue generation potential of chiefdoms and local councils in Sierra Leone. The study, completed in 2021, provides key insights into the challenges and opportunities surrounding local governance, fiscal decentralization, and the effective mobilization of revenues at the chiefdom level. By utilizing a mixed-methods approach, including both qualitative and quantitative research, the study engaged over 4,000 households, chiefdom authorities, and local council officials to explore various sources of revenue and the existing financial management practices.
The findings reveal that local tax remains the most important source of revenue for most chiefdoms, but there is significant underutilization of other potential revenue streams such as mining royalties, market dues, and licenses for local businesses. The study also highlights the strained relationship between Chiefdom Councils (CCs) and Local Councils (LCs), particularly around the sharing and control of revenue. This has led to inefficiencies and tensions, which hinder the overall effectiveness of decentralized governance in the country. Moreover, the study identifies a clear need for capacity-building within local governance structures to improve financial management practices and ensure transparency and accountability in revenue collection.
Ultimately, the study's recommendations emphasize the need for legislative reforms to clarify roles and responsibilities between CCs and LCs, improve financial reporting and resource management, and enhance the capacity of local governance bodies to generate and manage their own revenues. It calls for more strategic use of bylaws and community engagement to create a sustainable framework for local revenue mobilization and economic development. This research provides valuable evidence to inform policy decisions and strengthen the fiscal autonomy of local governance structures across Sierra Leone.