Ghana to empower local gov’ts with Municipal Finance Bill …MMDAs to raise independent capital for infrastructure dev’t

Metropolitan, Municipal, and District Assemblies (MMDAs) across Ghana will soon be empowered to raise capital beyond their internally generated funds, as the government prepares to introduce the “Municipal Finance Bill.”

This landmark legislation aims to fortify the financial autonomy of MMDAs, enabling them to undertake and complete critical infrastructural projects within their jurisdictions.

Dr. Mohammed Amin Adam, the Finance Minister, announced that the government plans to table the Municipal Finance Bill in October, when Parliament reconvenes. The bill is designed to assist MMDAs in significantly boosting their Internally Generated Funds (IGF), while simultaneously addressing financial leakages and enhancing management and accounting systems.

The overarching goal is to generate sufficient funds to address the backlog of infrastructure and service delivery needs, ensure the adequate provision of essential services, and restore public confidence in local governance.

During a Town Hall engagement with officials from various MMDAs in Accra, Dr. Amin Adam emphasized the government’s commitment to supporting these assemblies in securing external financing. “MMDAs will actively seek external finance, and the government will facilitate interactions with investors. We intend to present the bill to Parliament as soon as it resumes in October. We cannot afford delays in project execution,” he stated.

The lack of financial resources has led to the stalling of numerous infrastructural projects across the country. However, the Finance Minister assured that with the enactment of this bill, MMDAs will no longer need to rely solely on the central government’s funds to complete their projects. Instead, they will be able to raise capital independently, with the expectation that the projects will be self-sustaining.

All 261 MMDAs across Ghana are expected to embrace this initiative, which is anticipated to significantly enhance their financial stability and operational efficiency.

Reports indicate that the key activities under this initiative will include: the organization of the Ghana Municipal Finance and Management Initiative Conference, studies on existing fiscal and financial instruments in Ghana, collation of laws and existing reports on municipal finance, assessments of the capacity of MMDAs in municipal finance and management, and identification of potential pilot projects for development through private sector financing under Special Purpose Vehicles (SPVs).

The Ghana Municipal Finance and Management Initiative is a pioneering effort by the Government of Ghana, spearheaded by the Ministries of Finance and Economic Planning in collaboration with the Ministry of Local Government. The initiative is supported by the Cities Alliance, the World Bank, and UN-HABITAT, reflecting a robust partnership aimed at transforming local governance in Ghana.

By Eugene Davis