2 July 2007

Ghana: Assemblies Asked to Improve Internally Generated Funds

Sunyani — THE BRONG Ahafo Regional Minister, Mr. Ignatius Baffour Awuah, has called on Metropolitan, Municipal and District (MMD) Assemblies to come out with strategies to raise funds to embark on their own development projects.

He said the high dependency by the Assemblies on the Central Government grants especially the Common Fund could not effectively strengthened decentralization, if the capital base of the assemblies is not expanded to enable them to borrow money from the capital market to undertake development projects and other services.

Mr. Awuah was speaking at the opening of a technical workshop on the Proposed Local Government Finance Bill for MMDs/RCCs of both Ashanti and Brong Ahafo Regions, organized by the Ministry of Local Government, Rural Development and Environment (MLGRDE) in Sunyani.

He stressed that most assemblies cannot undertake any meaningful development projects without the Common fund, which is a problem that has been agitating the minds of stakeholders in the local Government administration in the country.

Mr. Awuah noted poor mobilization of local revenue as one of the major problems facing all Assemblies, saying, it is pertinent to note that most Assemblies have inadequate revenue base and no matter the modalities put in place they cannot collect enough revenue.

According to him, the few Assemblies, which have huge revenue base have not been able to improve upon local revenue generation.

The Regional Minister said the MLGRD&E has accordingly come out with the proposed Local Government Finance Bill to help expand the capital base of Assemblies to enable them borrow from the capital market to undertake development projects.

He urged all participants to contribute effectively to the discussion of the Bill during the workshop before it goes to Parliament to be passed into legislation.

In a speech delivered on his behalf, the Deputy Minister for Local Government, Rural Development and Environment, Mr. Abraham D. Odoom said whilst the country has achieved significant political and administrative decentralization as well as decentralized planning, fiscal decentralization has been unyielding component of the process.

Mr. Odoom added, since the mandate of MMDAs in the provision of infrastructure is accompanied by the responsibility of generating sustainable financing for the infrastructure development, the government has made significant efforts at strengthening local government finance and diversifying financing methods, through reform of taxation and expenditure systems reshape intergovernmental transfers and privatize hey projects.

He said the government of Ghana seeks to deepen the financial base of the local government through developing and building a formidable local government credit market.

The Deputy Minister disclosed that, the local government would be assisted in accessing log-term credits which shall involve enacting Local Government Finance Act and the establishment of a Special Financing Intermediary to assist Local Governments to access debt markets for infrastructural investments.

According to Mr. Odoom, the MLGRD&E and the Ministry of Finance and Economic Planning have embarked upon a Municipal Finance and Management Initiative with the view to developing a sustainable, vibrant and reliable Local Credit Market for MMDAs to cope with the backlog of infrastructural development and service delivery.

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