Posted: Sunday, January 19, 2025. 4:18 pm CST.
By Zoila Palma Gonzales: If you’re looking to invest your money while supporting the development of Belize City, municipal securities could be the perfect opportunity. At a public investment forum hosted by the Belize City Council, potential investors learned about the benefits of funding municipal infrastructure projects by purchasing bonds, notes, and other securities.
Mayor Bernard Wagner emphasized that while tax revenues cover the city’s operational costs, they are insufficient for large-scale projects like paving streets, improving drainage systems, and building parks. While taxes are used to finance the day-to-day operations of the Council, the Mayor said that capital projects “need significant capital, and you will never be able to get those funds on a day-to-day basis from property taxes, trade licenses, liquor licenses, or traffic fees”.
Municipal securities work by allowing investors to lend money to the city in exchange for regular interest payments and the return of their principal investment at maturity. This funding model is more cost-effective than traditional bank loans. Financial Analyst Abigail Castellanos from Legacy Fund Limited explained that municipal securities offer interest rates between 4.5% and 7%, compared to bank loans, which can charge rates exceeding 8.45%.
“The council saves between 2.45% and 4.95% in borrowing costs by using securities instead of bank loans,” Castellanos noted. Additionally, she highlighted that municipal securities provide investors with higher returns compared to traditional savings accounts, which currently offer interest rates as low as 0.93%.
The Belize City Council also announced plans to issue a new series of municipal bonds with maturities ranging from 5 to 20 years, offering interest rates between 5.75% and 6.5%. One of the most attractive features of these bonds is their tax-free status: investors are exempt from income tax, business tax, and stamp duty on earnings from municipal securities.
“These investments will allow us to pave more streets, improve drainage, and create spaces that foster community development and growth,” said Mayor Wagner. He pointed out that 150 streets were rehabilitated in 2023 and 2024 using similar funding and that the council aims to prioritize concrete infrastructure for durability and climate resilience.
According to Wagner, significant financial resources remain untapped in Belize, with over $700 million currently sitting idle in the banking sector. By investing in municipal securities, individuals and businesses can help transform Belize City into a more modern and resilient urban center while earning attractive returns on their investments.
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