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In the era of the Sustainable Development Goals, local communities are almost always the lead development actor. In fact, a deeper examination of the goals’ underlying targets shows that almost 65 percent of them are supposed to be implemented by local governments. And yet the global financial architecture does not operate on that basis.

Around 80 percent of global GDP is already being generated in cities, while 68 percent of the total global population will be made up of urban residents by 2050, according to World Bank data

of the 1.4 billion-person increase in population projected to occur within developing countries by 2030, 96 percent are expected to live in urban areas. And 30 of the world’s 35 most rapidly growing cities are in the least-developed countries.

Relative to national governments, local governments are singularly positioned to advance projects to address climate change, including infrastructure projects for climate adaptation and resilience: They have the clearest understanding of local needs, they are able to convene local stakeholders to democratize the creation of a climate action plan, for example, and they can pass appropriate policies in much easier fashion than central governments.

cities are stuck between hoping that more money trickles down from the central government or accessing international credit. But in a nation-centric system, the second is often impossible

Under this nation-centric architecture, national debt determines whether cities can access international credit almost regardless of that city’s own debt profile

In Bangladesh, when cities were graded for credit at the local level, over a third of them attained a rating that was above investment grade. Yet those ratings make no difference, because Bangladeshi capital markets are not accessible by municipalities. The same is true for many cities in developing and least-developed countries, such as Kenya, Morocco, Botswana, and Indonesia.

between now and 2050, the urban population in sub-Saharan Africa is expected to more than triple, reaching approximately 1.3 billion people. Yet, barring fundamental changes, the region will likely lack the levels of capital investment necessary to finance development to support this population growth—including investment in infrastructure and urban planning, as well as commercial and residential real estate. If financing is not able to reach the local level, this will practically assure that the rise in urbanization in this part of the world, as well as others, will coincide with a rise in poverty—especially urban poverty and the growth of slums and unplanned communities—and its attendant consequences.

Urban areas can leverage their new capability and financial strength to help rural areas access international credit, whether by creating a pooled fund where urban and rural areas can issue a single bond or by collectively accessing thematic funds that focus on specific interests like climate change, women’s economic empowerment, or financial inclusion.

an independent municipal investment fund that will exclusively focus on delivering investment to local projects, notably in developing countries and particularly in the least-developed countries—the creation of which was supported by the United Nations Capital Development Fund, United Cities and Local Governments (an umbrella organization for local and regional governments around the world), and the Global Fund for Cities Development (their technical partner). The hope is that the successful investments will create demonstration effects that will incentivize public and private lenders to expand financing of the municipal finance space.