Africa-Press – Tanzania. THE United Nations Capital Development Fund (UNCDF) in Tanzania has highlighted the need of using municipal revenue bonds to raise funds for addressing development challenges.
According to UNCDF, municipal revenue bonds is one of the untapped sources of funds that can help to address challenges of financing in urban infrastructure and services in African cities and local authorities.
Currently, the dependency on fiscal transfers from most central governments is approximately 70- 90 per cent of their budgets. It is from this backdrop that UNCDF organised a webinar to raise awareness among stakeholders to make efficient use of the municipal revenue bonds to raise funds for executing key development projects.
Around 250 participants from government, local authorities, academia, financial institutions, development partners, the UN system, and the private sector heard first hand new financing initiatives that the government is introducing to support national development plans.
The Commissioner for Financial Sector Development in the Ministry of Finance and Planning, Dr Charles Mwamwaja said the Ministry is working with UNCDF to create an enabling environment for cities and sub-nationals to access a new source of development finance, including municipal bonds critically needed to provide services in their communities.
Chief Officer Municipal Finance, Fiscal Policy and Local Economic Development at South African Local Government Association (SALGA) Masefateng Dorcas Khomotso said although local authorities in many countries are spheres of government and are responsible to deliver urban infrastructure and services, in many cases the funding models results in the significant funding gap.
“Therefore, it is important to change policies that create an enabling environment to tap into alternative financing solutions,” said Khomotso.
The Capital Markets and Securities Authority Chief Executive Officer, Mr Nicodemus Mkama said there is a capital market appetite for innovations such as municipal revenue bonds. He said infrastructure is there and there is a political buy in to develop this untapped finance for development.
The Head of UNCDF Tanzania and UNCDF Chief Technical Advisor, Peter Malika said as a UN agency with the capital mandate, UNCDF is supporting Tanzania to diversify the finance mix in the national budget to include municipal bonds.
“We, therefore, commend the ministries of finance and local governments for their reforms and innovations around this subject,” he said.
The webinar is part of a series to raise awareness on the use of financial instruments to fund development and achieve inclusive economic growth by fulfilling the commitments in the 2030 Agenda.
