Municipal Finance and Management Initiative (MFMI)

Project

At-a-Glance

Approval Date
Actual Completion Date
Proposal Focus
1471
Core Focus
Secondary Cities
Country Type
Ghana
Lesson Learned for Cities Alliance Members and Partners
Participation: Following the acceptance of the initiative by the municipalities, there has been active participation in activities of the initiative. The financial institutions and various stakeholders are always ready and willing to participate in the meetings and workshops of the Initiative. Indeed, the clamor for inclusion in the pilot phase of the program by various district assemblies and some financial institutions is a testimony to the acceptance and ready participation by various stakeholders. Partnership: The Initiative has created the awareness among local governments about the need to enter into public-private partnerships to undertake various development projects. Some district assemblies have begun talking to some financial institutions and private investors about possible joint ventures. Scaling up: Though it was initially planned that the pilot phase should involve only the four metropolitan Assemblies and Tema Municipality, because of the enthusiastic response by the various district assemblies, it has been decided to select at least one district/project per region during the pilot phase. This will bring to ten (10), districts/projects during the initial phase of the program. Financial Sustainability: It is anticipated that donor funding would be sought from the Cities Alliance and other agencies such as AFD and the EU, and technical assistance from the UN-Habitat to further develop Ghana’s Municipal Finance and Management Initiative during the initial phase. In the longer term, the Ministry of Finance and Economic Planning, together with the Ministry of Local Government, Rural Development and Environment, will make budgetary allocations towards the management of the Program. District Assemblies will also be in the position to generate adequate resources to fund programs and services for the implementation projects in their areas of jurisdiction.

Detail

Summary
The rapid growth of urban settlements in Ghana has not been matched by the corresponding increase in infrastructural and other services. This called for improved local government capacity for urban planning and management to cater the basic needs of the dwellers in these urban areas. The Ghana Municipal Finance and Management Initiative project attempted to address this issue. As part of this preparatory assistance project, the Ministry of Local Government and Rural Development of Ghana, in partnership with key local, national and international stakeholders, organised a stakeholders’ conference on Municipal Finance and Management. The project enabled the Government of Ghana to sensitise and train local stakeholders and develop a plan for the successful implementation of a municipal finance and management programme in Ghana. The project suggested improvements in legal framework by proposing Municipal Finance and Management Bill to the parliament. The project also prepared an application for CA funding for the identified initiatives in the plan. As a result, selected district assemblies were identified for the pilot phase for implementation of identified initiatives.
Objectives
The project aims to provide an opportunity for local and international experts to review the opportunities and methods for financing urban and local government infrastructure as well as other development programmes in Ghana. The specific objectives of the project are: a) Develop a plan for a successful municipal finance and management programme implementation in Ghana b) Sensitise and train local stakeholders in financial management through stakeholder workshops c) An application for Cities Alliance funding to support implementation of the identified initiatives
Activities
1) Organisation of a Stakeholders Conference on Municipal Finance and Management 2) Establishment of a Municipal Financing and Management Secretariat 3) Preparation of a report on the conference proceedings 3) Review and synthesis of existing municipal finance reports with the conference report and 4) Stakeholder and public sensitization 5) Preparation of bills to parliament for legal framework 6) Preparation of application for CA funding for identified initiatives
Expected Impacts and Results
The Municipal Finance and Management Initiative was formulated with active participation of local governments, the financial sector and NGOs. This initiative successfully designed improvements in local finances for provision of infrastructure and service delivery for low income population. A lot of enthusiasm has been generated at the central government level about the need to re-look at how to generate adequate financing for infrastructural projects at the local level. Many municipalities have become aware of their potential in mobilizing internally generated revenues for infrastructural development. Various District Assemblies have now embarked on local revenue mobilization initiatives, and are seeking to be part of the initial pilot phase of the implementation program. Investments mobilized: Financial institutions including HFC Bank, DataBank Financial Services, Prudential Bank, National Investment Bank, SDC Brokerage, etc have expressed keen interest in providing some Special Purpose Vehicles under the Pilot Project of the Initiative for specific municipal projects. Some financial institutions are ready to partner with some district assemblies and finance viable projects. Follow-up activities: The four Metropolitan Assemblies - Accra, Kumasi, Sekondi-Takoradi, and Tamale, the Tema Municipality, and selected district assemblies have been identified for the pilot phase. A physical, financial and management needs assessment will be conducted towards the development of a program to assist them in bridging the gaps identified to make them adequate in their provision on infrastructure and service delivery in their municipalities, as well as access the financial market.