Abstract:
This study paper describes the fiscal decentralization in Sibu Sire Woreda, East Wallaga Zone,
Oromia Regional State with particular emphasis on the selected basic sectors i.e. Education,
Health, Agriculture, Rural road and Rural Water. The thesis described the issue by employing
primary and secondary sources of data. The study employed mixed approach and descriptive
design. Probability and non-probability sampling are used to select respondents. Interview,
FDG, Observation and open ended questionnire were the methods of data collection for this
study. The legal framework, revenue and expenditure trend of the Woreda and that of selected
sectors; fiscal gap and challenges of the fiscal practice is described. The study also incorporates
the selected sectors’ performance in revenue collection and expenditure responsibilities as well
as the imbalance among sectors. On the other hand sectors are selected to describe the revenue
and expenditure autonomy of the woreda regarding the sectors in particular and then the paper
generalize the issue under study at the Woreda level.
The finding of this paper revealed that the fiscal decentralization contributed to revenue
generation and expenditure autonomy in the Woreda and increasing trend of expenditure needs
with fluctuate own revenue trend in the Woreda as well as poor revenue generation at sectors’
level. Presence of legal frameworks for the fiscal autonomy of the Woreda is not a guarantee for
the real practice. Another fact emerged from the study is that centralization of capital
expenditures and decentralization of some portion of recurrent expenditures, high dependency of
the Woreda on the regional government, lack of capacity and low revenue sources and fiscal
imbalances leads to lack of autonomy in the woreda. With respect to horizontal imbalance,
previous studies regarding the issue, this paper revealed the imbalance among sectors in terms
of budget share, revenue generation and human resource in the Woreda under discussion and
the imbalance is one of the challenges that hinder the fiscal autonomy of the Woreda.
