Govt counsels financial institutions on municipal bonds

Govt counsels financial institutions on municipal bonds

THE government has called upon financial institutions to facilitate the issuance of municipal bonds to finance their development projects.

In a speech delivered on her behalf by the Arusha Regional Commissioner, John Mongella, Minister of State in the President's Office, Regional Administration and Local Government (Po-RALG), Ummy Mwalimu said the move in a way would offload the central government burden of financing municipals’ development plans.

“You’re welcome to support the agenda of the government, as far as development is concerned,” she appealed.

Ms Mwalimu further said that adopting municipal bonds would be another source of the funds aimed at increasing their access to sustainable source of capital, including mobilising public and private capital investments.

Gracing the Sub-National Bonds Knowledge Series three-day event on Tuesday, MS Mwalimu further appealed to the United Nation Capital Development Fund (UNCDF) to complement government’s development agenda.

In his earlier remarks, UNCDF Country Head Peter Malika said the UN agency recognized the mismatch between national budgets, rapid urbanisation and increase demand for critical services such as water, transport, health and education.

He underscored the need of exploring on alternative ways of financing that could result to a smooth implementation of different development projects.

On his part, the commissioner for budget-ministry of finance John Cheyo said that municipal bonds would speed up the development of the areas in the country.

“We are very optimistic that municipal bonds will mobilise public and private capital investment,” he said.

UNCDF is currently working together with the Ministry of Finance and Local governments to jump start the use of untapped alternative financing mechanism, all aimed at supporting the government to meet its objectives as articulated in the third phase of the five year development plan (FYDP-III).

It has however been present in Tanzania since 1982, promoting local economic development and financial inclusion, and enhancing local government alternative sources to finance domestic infrastructures.

The three-day event attracted over 85 senior officials from government, public and private sector including ministry of local government, ministry of finance and planning, Treasury Register’s Office.

It also featured the Zanzibar ministry of Local government, capital market and security authority (CMSA), central Bank of Tanzania (BOT), Dar es Salaam stock exchange (DSE) and the regional secretariat.

Author: ABDINEGO MARTIN in Arusha

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