UNCDF Launches National Consultations on Municipal Investment Finance
UNCDF launches national consultations on municipal investment finance
Exploring the prospects of Tanzania issuing municipal bonds
May 31, 2017, Arusha: In collaboration with the President’s Office – Regional Administration and Local Government, the United Nations Capital Development Fund (UNCDF) today launched a two-day technical workshop on municipal investment finance with various local key stakeholders in Arusha to explore the possibility of tapping into capital markets in Tanzania.
This international expert workshop which has been tailored for six cities and municipalities in Tanzania with the potential for municipal bondsbrought together senior government officials, local government representatives, financial institutions, and private investors. The participating cities included Tanga, Mwanza, Mbeya, Arusha, Dar es salaam and municipalities of Dodoma, Ilemela, Temeke and Kinondoni.
The workshop was officially opened by Honorable MinisterGeorge Simbachawene, the President’s Office - Regional Administration and Local Government,who commended UNCDF and local government authorities for their efforts in exploring ways in which municipalities can access long-term finance to improve local economic development and improve livelihoods.
“There is clearly a need to consider alternative practical ways of financing our growing cities to contribute to local economic development. We are truly grateful to UNCDF as we have learnt some valuable lessons from participating in this key technical workshop. I have taken note of the relevant issues that have been raised in improving municipal finance that can be applied by our local governments across the country to help stimulate and improve local economic growth.”
This workshop was aimed at supporting key stakeholders to strategize in municipal finance, with a focus on weighing the pros and cons of issuing municipal bonds in the Tanzanian context. Furthermore, it will analyze prerequisites, potential terms and conditions, as well as critical steps to be undertaken in the preparatory phase. The workshop also considered the wider national context related to fiscal decentralization, legal and regulatory framework, overall institutional capacity, as well as the execution capacity of municipalities, their public financial management and revenue collection capacity, and market appetite for prospective investors.
UNCDF’s approach to local development finance acknowledges the challenges municipalities in Tanzania face in enhancing local basic services, promoting local economic development and increasing local resilience to climate and economic shocks. The approach recognizes that the national economy has grown dramatically over the past decade, however underinvestment at the local level remains a key setback in structural transformation within municipalities.
The Head of UNCDF Tanzania, Peter Malika, noted that finance is one of the keys to sustainable development. “It is important to capacitate and empower local government authorities to access municipal finance to enable them to provide access to basic services within their municipalities. We are here to support municipalities with creating an enabling environment for municipal financing. We believe that this will provide a brighter future for the growing cities in Tanzania and its people.”
Mr. Malika further pointed out that following this technical workshop, UNCDF will engage in deeper discussions with Arusha City on June 2, 2017 to support them with the capacity to sustainably finance local infrastructures in the long run.
UNCDF is the UN’s capital investment agency for the world’s 48 least developed countries. With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.
UNCDF’s financing models work through two channels: financial inclusion that expands the opportunities for individuals, households, and small businesses to participate in the local economy, providing them with the tools they need to climb out of poverty and manage their financial lives; and by showing how localized investments — through fiscal decentralization, innovative municipal finance, and structured project finance — can drive public and private funding that underpins local economic expansion and sustainable development.
By strengthening how finance works for poor people at the household, small enterprise, and local infrastructure levels, UNCDF contributes to SDG 1 on eradicating poverty and SDG 17 on the means of implementation. By identifying those market segments where innovative financing models can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access, UNCDF contributes to a number of different SDGs.