2023 has been a particularly challenging year for Urban Economies. The global economy growth itself is declining to about 2.5% and, apart from the initial COVID-19 crisis in 2020 and the global financial crisis in 2009, this is the weakest growth experienced since 2001. (IMF, 2023).
Given the size of the contribution of cities to the national economy, the future of many countries will be determined by the productivity of its urban areas. (UN-Habitat, 2022). Cities are the engines that create value that boosts economic recovery.
For this economic growth and recovery to be sustainable, we need cities that can absorb, recover, and prepare for future economic shocks. (OECD, 2023). It is crucial that this is also packaged under the green recovery framework that scales up private and public investments to finance the transition to a climate neutral economy in a post-COVID world.
Cities all over the world have already embarked on this journey through implementing various models.
UN-Habitat, in partnership with the World Economic Forum, believes that these models can be localised and scaled up through the Global Partnership for Local Investment, where experiences are shared to build a local finance framework for cities and communities, to help distribute existing funding and finance to where it can deliver the greatest impact.
In the prevailing economic situation, local governments have faced increased difficulty to gain increased access to external resources to fund their development.
The local finance framework integrates three key solutions to facilitate this access:
- Cities Investment Facility (CIF)
- UN-Habitat/UNCDF Guarantee Facility for Sustainable Cities
- Rapid Own Source Revenue Analysis (ROSRA)