The Role of the Municipal Bond Market in Municipal Infrastructure Development in South Africa

Municipalities are responsible for providing basic household services to residents, and for building municipal infrastructure. Municipal bonds can offer a way of helping local governments to fi nance infrastructure with domestic private capital. This article aims to determine what conditions are important for private capital to contribute meaningfully towards the provision of additional capital to address the current municipal infrastructure backlogs in South Africa. A comparative study between South Africa, the United States (US) and India is conducted and followed by a survey among metropolitan municipalities to establish the conditions under which bond instrumentscan be used successfully in South Africa