Municipal Finance By Anusha Magendram & Kamarul Ariff Omar Sustainable Development Technology Division, MIGHT
Urbaniza�on has become one of the most pressing development challenges of the 21st century. Development of a city costs a lot of money. The challenge for many ci�es is that municipal revenues are insufficient to meet the large and growing needs for infrastructure financing. Municipal finance is about ensuring sound and efficient financial performance. It covers the sources of
revenue that are used by municipal governments – taxes (property, income, sales), user fees, and intergovernmental transfers. This also includes ways of financing infrastructure through the leveraging of revenues and borrowing as well as charges on developers and public-private partnerships. Municipal finance also addresses expenditure management and accountability.
“only 4% of cities in low and middle-income countries are assessed to be creditworthy”, which means that “the availability of massive investments is currently out of reach for cities”. - Joshua Gallo, UNIDO’s Head Investment Coordinator and former Senior Municipal Finance Specialist at the World Bank
Challenges faced by local governments
To Keep Cities Economically Viable By Delivering A High Level Of Services
Keeping Taxes Sufficiently Low So As Not To Discourage Individuals And Businesses From Locating In Their Jurisdiction
Local governments faced several issues and challenges that put stressed on their ability to meet to provide transporta�on network, digital infrastructure, water & sewerage system, fire & police protec�on, parks & recrea�onal facili�es, cultural ins�tu�ons, social & public health services, and housing unit. These services and
infrastructure must coop with the current rapid urban popula�on growth, yet the limited funding for infrastructure has put further strain on local governments to maintain exis�ng services or even to meet future demands. This has resulted infrastructure deficit among local government.
Globalization is another challenge faced by municipalities.
To Provide The Supportive Infrastructure To Attract Business
Action taken by municipalities to be globally competitive
Municipalities in some countries deliver primary and secondary education
to provide a wide range of services for cities movement .
Malaysia Smart City Outlook 2021 - 2022 |
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