"Access to Municipal Bond Market": the AfDB promoted an intensive training for African cities’ officers

From May 29 to June 3, 2023, in Johannesburg, some 50 representatives of African municipalities trained and shared experiences on infrastructure and service financing, with a special focus on access to capital markets. The workshop was organized by the African Development Bank and United Cities and Local Governments (UCLG).

Called  "Access to Africa’s Municipal/ Sub- Sovereign Bond Market: A Practical Approach," the training has been designed to increase the practical understanding of municipal Chief Financial Officers (CFOs), with a particular focus on Sub-Sovereign Bond Markets, seen as  an opportunity to finance crucial infrastructures in African Cities.

Johannesburg hosts the largest Stock Exchange on the Continent, and the participants of the training benefited from the South African experience, engaging in discussions with experts, reviewing successful case studies, consolidating their networks and developing strategic partnerships. The program also included a review of opportunities related to the new green/climate funds, as well as reflections on the improvement of the local and national regulatories environments.

This workshop was part of the  “Municipal CFO Initiative,” a program launched in 2022 by the African Development Bank Group and United Cities and Local Governments of Africa (UCLG), which aims at supporting cities financial management teams to improve their governance systems and fiscal conditions, with the objective to access capital markets, banks, other development financial institutions and local finance.

The initiative assists decentralized authorities to enhance their financial autonomy, including establishing or strengthening municipal bond markets to finance needed investments. It encourages lending  to cities and subnational governments, alongside supporting cities on risk mitigation mechanisms.

The Johannesburg workshop follows a first training session, held in September 2022 in Abidjan, which included 44 participants from 26 countries on the continent.  This new training enlarged the number of participants and included an additional 10 cities from Kenya, Uganda, Côte d’Ivoire and South Africa.  It has been sponsored and supported by the AfDB Urban and Municipal Development Fund (UMDF), the Development Bank of Southern Africa (DBSA), the European Investment Bank (EIB),  C40, the South African National Treasury and the South African Local Government Authorities (SALGA).

The potential for getting cities right is enormous, but African cities need to get out of the low development traps and play a transformative role in the development of the continent. To do this, the governance capacities and capabilities of cities and towns must be significantly strengthened, and systems devised enabling city  and local government administrations to raise and manage their own source revenues and leverage both  domestic and external finance to fund investments in needed essential services and infrastructure.

Effective financial management, better governance and improved access of municipalities and subnational entities to finances and financial markets are key medium- to long-term goals of the African Development Bank, and one of the pillars of the Bank’s Sustainable Urban Development Action Plan.