Metropolitan, Municipal and District Assemblies (MMDA) will soon have the power to borrow for capital projects that will pay for themselves.
This is because the Securities and Exchange Commission (SEC) is championing for the municipal finance bill to be passed into law to allow MMDA’s access funds from the capital market to meet infrastructure obligations through municipal bonds.
Citi Business News understands that the introduction of municipal finance bill will create a strong regulatory framework that will prevent MMDAs from engaging in multiple borrowing and incurring unsustainable debts, which is usually on to the central government.
Director General of the Securities and Exchange Commission, Dr Adu Anane Antwi tells Citi Business News, the tax free nature of the bonds will allow for the construction of major projects in the country.
”If we have that bill passed into law, then people who have project ideas that can self-finance itself and can go to the market and borrow for that particular project and it will not be a government issue.”
According to him, Ghana can take a cue from Nigeria where almost every state has bonds that are used for roads, bridges and other infrastructure.
”The municipal finance bill has been on the drawing board for some time and its now gratifying that the Finance Minister has given the assurance that they are going to work on that; adding that he doesn’t see why the AMA for instance cannot borrow and use rentals from their property rate to service the debt.