Finance Minister, Seth Tekper has explained why Metropolitan and Municipal Chief Executives (MMDAs) have to borrow to support development of infrastructure in their various Municipalities.
According to the Finance Minister the MMDAs must develop the habit of savings to enhance their financing and ability to support projects.
Mr. Seth Tekper indicated that, this is something that many countries have done and therefore Ghana is the first to do so, because it has helped these countries to Finance projects without necessarily depending on government.
“The city of London raises municipal bonds to develop London; Lagos State has started and they are borrowing and we all know the development that’s going on there. We have the same property tax system as Lagos and Lagos State is able to finance for instance the construction of Highways. So the question is whether the AMA is able to collect property taxes effectively from all the structures and hotels that are springing up? So are we able as we develop to also improve? So this is what we are working on with the Ministry of Local Government where we talk about the Municipal Bond initiative.
“It is not only central government that should shoulder the burden of development; and this is done by cities, provinces and states. There are even municipalities in Kenya that have started this initiative and I mention Kenya because we have the same characteristics coming out of this tradition and they have also realized it. And indeed we are going to have a bilateral discussion with Kenya on this initiative. Our approach is solutions and they are they are for the long-term” he indicated.
The minister revealed that government was in the process of consulting stakeholders to review a draft 2008 Local Government Finance Bill for an appropriate framework and policies which will help the assemblies to promote economic development at the local level.