IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/4585.html
   My bibliography  Save this paper

Municipal Bonds for Financing Development of infrastructure: A way forward for KCC and Local Governments in Uganda

Author

Listed:
  • Mayanja, Abubaker
  • Mayengo, Israel

Abstract

The world over municipalities and cities often rely on capital markets for their long term financing needs. It is envisaged that such debt issues accelerate the development of cities. The rationale is that since the projects are supposed to benefit the public over time, the issuance of debt to spread the payments between generations is optimal. Municipal bonds are still unexplored as a mechanism of financing capital projects of municipalities in Uganda. This study assesses the legality, the advantages and challenges as well as likely projects to initiate the Municipal bond market in Uganda. It is legally possible for local governments to issue bonds; they can borrow up to 25 percent of their revenue. However, the conditionality in the law that requires them to maintain a balanced budget may be a limiting factor. It is important to note that a yield curve exits for government bonds that can be used as a benchmark for pricing Municipal bond. It is our view that the size of the bond market is already encouraging enough to be confident that the market may receive such issues favourably

Suggested Citation

  • Mayanja, Abubaker & Mayengo, Israel, 2007. "Municipal Bonds for Financing Development of infrastructure: A way forward for KCC and Local Governments in Uganda," MPRA Paper 4585, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:4585
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/4585/1/MPRA_paper_4585.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. J. M. Culbertson, 1957. "The Term Structure of Interest Rates," The Quarterly Journal of Economics, Oxford University Press, vol. 71(4), pages 485-517.
    2. Fama, Eugene F., 1976. "Forward rates as predictors of future spot rates," Journal of Financial Economics, Elsevier, vol. 3(4), pages 361-377, October.
    3. Nelson, Charles R, 1972. "Estimation of Term Premiums from Average Yield Differentials in the Term Structure of Interest Rates," Econometrica, Econometric Society, vol. 40(2), pages 277-287, March.
    4. McCulloch, J Huston, 1975. "An Estimate of the Liquidity Premium," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 95-119, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Sub-National Finance; Municipal bonds; Public infrastructure development;

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:4585. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.