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29.09.2005 General News

Ministry to initiate Municipal Bonds for assemblies

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Accra, Sept. 29, GNA - The Ministry of Local Government and Rural Development (MLGRD) would soon initiate Municipal Bonds to access funds from the capital market to meet the ever-mounting infrastructure obligations of Metropolitan, Municipal and District Assemblies. This would enable the Ministry to source funds for the district assemblies for development projects without depending too much on the national budget.

Mr Abraham Dwuma Odoom, a Deputy Minister of MLGRD, told journalists at a press conference organised in Accra on Thursday that the issue of financing urban infrastructure services by mobilising domestic capital more effectively had been on the drawing board over the years.

He said municipal finance through the issue of Municipal Bonds was identified as a potential source of accessing funds from the capital market to embark on development projects.

He said the Ministry in conjunction with Ministry of Finance and the World Bank had scheduled a conference on the "New Ghana Municipal Finance and Management Initiative" from October 10 to October 11 in Accra to discuss the issue.

The conference to be on the theme: "Towards a Sustainable Revenue Generation for Urban and Local Government Infrastructure Development Through Municipal Finance and Management" would allow stakeholders to deliberate on appropriate, suitable and effective, alternative sources of funding the district assemblies to lift them out from the doldrums. Other collaborators include banks, insurance companies, Ministry of Works and Housing, Ministry of Women and Children's Affairs, Ministry of Tourism and Modernisation of the Capital City and Ministry of Environment and Science.

Mr Odoom said limited financial assistance from the national budget, as well as the high cost of urban infrastructure investment, especially in water and sanitation projects, made long-term debts a vital option for local government. He said to effectively and efficiently respond to district assemblies' enormous infrastructure backlogs and plans for the future growth, Ghanaian cities needed to be proactive developers of urban infrastructure rather than passive providers of services. Mr Kofi Poku-Adusei, also a Deputy Minister, said the Ministry had realised the need to venture into Municipal Bonding and called for a stakeholders' conference to brainstorm possible ways to source finance apart from the traditional methods.

He said the MLGRD had always been looking out for a window of opportunity to augment the efforts of the metropolitan and municipal assemblies to face squarely the myriad of urban problems and the looming crisis of urban squalor through alternative financing approaches and mechanisms.