Municipal Infrastructure Financing in Batu Town, Ethiopia

Abstract

Good finance is a key to provide adequate, efficient and well maintained infrastructure. Most developing countries local governments including Ethiopian municipalities have shortage of finance for the infrastructure investment. This study used descriptive type of research, both primary and secondary data sources to examine Batu town municipality infrastructure financing. A non-probability (purposive) sampling technique was employed and the data collection instruments comprised of questionnaire, interview, field observation and reviewed documents. The study has found that: the municipality existing coverage of road, drainage, solid waste management and street lighting infrastructure are poor, they mostly applied traditional source of finance, highly utilizes own revenue to finance the infrastructure, the actual revenue collected is not sufficient to finance the infrastructure adequately. The major challenges of municipal infrastructure financing are insufficiency of municipal revenue, low level of expenditure management, least bid price proclamation, and low revenue basis.