Finance Minister Seth Terkper, has justified moves by government to make it compulsory for Municipal Metropolitan and District Assemblies (MMDAs) to borrow money for development projects to reduce the burden on central government’s finances.
The assemblies among other means are to raise their own monies for infrastructure projects by issuing bonds.
It is unclear when this would start but there are indications it will take off next year and will most likely begin with the larger metropolis and municipalities.
[contextly_sidebar id=”Cx9DCt72zvYYKxRS2UBAOyji4oN7BlD5″]Speaking on the Citi Breakfast Show, the Finance Minister said the decision has been influenced by plans to reduce the burden on government’s finances from assemblies.
According to him, this is the practice in many cities across Africa and the world, and that it was time Ghana adopts it in the face of the pressure on central government finances.
“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 noted.
Meanwhile government says is stepping up efforts to get property owners to pay taxes on their structures as a way of improving tax collection.
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By: Ebenezer Afanyi Dadzie/citifmonline.com/Ghana