The Reserve Bank of Malawi (RBM) says it is impressed with Nkhotakota District Council’s plans to issue municipal bonds to finance its planned reforms activities.
Speaking after meeting council officials in Nkhotakota last week, RBM manager for financial sector development and monetary policy implementation Franklin Khoza hailed the council’s ambitious plans to raise money for various projects from the capital market.
“As RBM, one of our mandates is to promote the development of capital markets by helping potential issuers such as district councils to be able to access capital from these markets,” he said.
Khoza said RBM’s meeting with council officials was meant to assess how ready the council was to issue a municipal bond.
He said information from the council will be analysed to see if there are any gaps the council needs to address for it to issue the bond.
Khoza commended the council’s initiative and plans, saying it has taken a broader approach in dealing with issues.
“It is impressive that the council is not only focusing on social problems, but is now putting a lot of emphasis on economic development of the district,” he said.
Nkhotakota district commissioner Ben Tonho said the council has ambitious plans to transform the economic status of people in the district and wants RBM to help it to achieve its vision.
He said the lakeshore district is endowed with natural resources such as water bodies and fertile soils that can make it an exporting district besides being a tourist destination.
Nkhotakota District Council will become the first council in the country to issue a municipal bond once the plan materialises.
A municipal bond is a debt security issued by a State, municipality or a country to finance its capital expenditure needs, including construction of roads, bridges and schools, among others.