The Ministry of Finance and Economic Planning in collaboration with the World Bank has initiated a Creditworthiness Academy, a five-day capacity building program to support districts improve financial management performance.
With implementation of the second Economic Development and Poverty Reduction Strategy (EDPRS2) in gear, districts are undertaking ambitious development projects such as road construction, agriculture mechanization and rural electrification that require huge amount of funding. But the amount of funding disposable to districts is not sufficient. Apart from central government budgetary disbursements, districts revenues are limited to collections from property, income and business license taxes.
“Districts cannot rely on central government transfers or the few revenue sources they have to finance huge development projects. You need to devise alternative revenue sources if you are to deliver,” Claver Gatete, the Minister of Finance and Economic Planning told districts officials at the official opening of Creditworthiness workshop.
The Creditworthiness Academy will support district officials develop capacities and necessary competences that will help foundations for strong municipal financial management. This would set districts on the path to generate revenue through the debt market by issuing municipal bonds.
Minister Gatete warned that attaining the right criteria to become creditworthy won’t be a walk in the park as substantial groundwork has to be done. “A lot of groundwork must be done to attain a credit rating. It may not be achieved in the short to medium term,” Minister Gatete cautioned.
Participants are expect to gain knowledge on revenue management; expenditure control and asset maintenance; capital investment planning; debt management; the use of special purpose vehicles to “ring fence” specific revenues; scoping of options for financing; and developing the enabling environment for private sector involvement.
“To finance subnational development initiatives through various requires various skills set. We hope that the experts will impart the right knowledge that will help generate the real change at the subnational level,” Carolyn Turk, the World Bank Country Manager said.
Creditworthiness workshop will involve all of the 30 Districts and the City of Kigali. In particular, the target audience for each participating will be the revenue officer, economic planner and head of the business development unit.