The concept of local governance can have different meaning to different peoples and groups. Itrndoesnâ€˜t have a universally accepted meaning. It should be understood based on the purposes ofrnits application. Aid donors, development agencies, international financial institutions and socialrnactivists have developed their own concept and indicators of governance. Even though there arernconceptual differences among these groups, all of them agreed up on the need for governance tornpromote development and improve the quality of citizens well being.rnLocal governance requires the involvement of various stakeholders living and working togetherrnto achieve different objectives. Local governance is more than the provision of services by localrngovernment. It requires the interaction and cooperation among different stake holders to promoterntheir rights and discharge their responsibilities.rnThis study was conducted on Akaki Kality sub city. The main objective of the study was tornassess the state of local governance in the sub city and describe the related practices, challengesrnand opportunities.rnIt was found that Akaki Kality sub city has a fairly low level of local governance practices.rnDifferent factors can be used to explain this situation. The study attempted to describe the localrngovernance of the sub city based on five indicators.rnThe assessment was conducted by using Local Governance Barometer which was developed byrnImpact Alliance. The barometer consists of five indicators which include effectiveness,rnaccountability, participation, equity, transparency and rule of law.rnThe study employed descriptive research methods. Survey and interview have been used torncollect the primary data. The survey was conducted through stratified random sampling whilerninterview was applied through purposive sampling. Non-governmental organizations, communityrnbased organizations, charity organizations, private business sectors, and governmentalrnorganizations were the key informants from whom the primary data was collected