Municipalities to be supported in urbanisation

By Vision Reporter

AS Uganda prepares to embark on its urbanisation process, the government in collaboration with the World Bank to prepare municipalities and town councils to improve their financial management performance.

A statement from the World bank said this presents an opportunity to build the capacities of the Local Governments on matters of financial management of the available assets, as well as assessing the extent of liabilities at Local Government level, in order to catalyze investment for municipal projects to cater for the rapid increasing population.

The Ministry of Lands, Housing and Urban Development tin collaboration with the World Bank has organised the City Creditworthiness Academy, under the City Creditworthiness Initiative, a statement from the World Bank Kampala office said. “This will be a 5-day intensive training to support about 35 Local Governments which include 22 Municipalities and 5 best-performing Town Councils to improve their financial management performance,” the statement said.

“It is evident that the urban sector plays a very important role in the social economic development of any country. It is estimated that in Uganda, the urban sector contributes up to 70% of the GDP”,  the statement quoted Sam Engola, State Minister for Housing.

“Government is therefore committed to ensuring that an enabling environment is provided to mane the urban sector more competitive to attract investment and stimulate economic growth.”

The Academy that will run from May 4-8 in Entebbe, is targeting Town Clerks, Chief Financial Officers, and Economic Planners from Kampala Capital City Authority, 22 secondary cities and 5 best performing Town Councils.

The training will build the capacities of the LGs on how to prepare capital investment plans, the fundamentals of financial management for LGs, how to make climate smart capital investment plans, debt management and best practices on own source revenue generation enhancement. At the end of the 5-day training, participants will assess their credit risk and will design action plans to strengthen their performance, it said.

The World Bank said Uganda’s urbanisation clock has already started to tick: between 2002 and 2010, Uganda’s urban population grew by 5.6 percent, almost twice as fast as the rural population. As a result, Kampala is projected to become a mega-city of over 10 million by 2030, and other regional and strategic cities will also see a demographic explosion. With this increasing pool of urban residents, local government authorities have to be able to secure the basic social services and facilities for the urban population.

‘For Uganda to achieve her dream of becoming a middle-income country by 2040, the urban sector will play a central role given its contribution of 70% towards the GDP. However, improved financial management will be critical to address the challenges that come with urbanization.” said Mr. Martin Onyach-Olaa, Senior Urban & Rural Development Specialist. “Government alone cannot provide the resources required for urban development. It has to empower municipalities with knowledge to spearhead preparation of their respective cities and municipalities to participate in the finance market.”

The rapid rates of urbanization have escalated the importance and need for extending the City Creditworthiness Academy to Uganda. At the same time, the investment needs are mounting, decentralization initiatives are transferring greater responsibility for investment choices and investment financing from central government to local and state governments. Prudent financial management are impelling all levels of government to try and establish financial intermediaries of this kind.

The Academy will work with Urban Local Governments - including utility bodies - in providing comprehensive, hands-on, and long-term support to help them:  Achieve higher creditworthiness by strengthening financial performance;  Develop an enabling legal, regulatory, institutional, and policy framework for responsible sub-sovereign borrowing through reforms at the national level;  Improve the “demand” side of financing by planning/developing sound project and  Improve the “supply” side of financing by engaging with private sector investors.

Over all the City Creditworthiness Initiative is a step in the right direction for Urban Local Governments to implement their financial management performance and enhance their opportunities to mobilise resources for improved service delivery, the World Bank said.