Major cities in developing countries struggle to get funds for infrastructure projects from international financing institutions, adding to the inequality between poor and rich cities, Johannesburg Mayor Parks Tau said.
"The ability to access international financing in the developing world is very limited because of the structure and mechanisms created," Tau said on Thursday at the C40 Cities Climate Leadership Group’s Mayors Summit in Johannesburg.
"We look at the local markets because international finance and international finance mechanisms is nearly impossible."
The City of Johannesburg sold seven municipal bonds since 2004, according to the city’s website. The yields on Johannesburg's rand-denominated bonds maturing in June 2018 rose 85 basis points, or 0.85 percentage point, this year to 9.53% on Wednesday.
The C40 is a group of mayors and senior officials from 66 cities that focus on climate-related actions that can be taken locally to help address climate change globally.
Seven African cities are represented in the group after Cape Town, Nairobi and Dar es Salaam joined this week.
The number of African cities that have accessed credit from institutions like the World Bank is insignificant compared with those in developed countries, Tau said.
"That is an indicator of increased inequality as a result of inaccessibility to these institutions," he said. – Bloomberg