January 22 nd, Ede Ijjasz-Vasquez Senior Director Social, Urban, Rural & Resilience The World Bank

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1 TICAD Seminar Series 4 th Seminar Land Use Planning & Spatial Development for Smart Growth in African Cities January 22 nd, 2016 Ede Ijjasz-Vasquez Senior Director Social, Urban, Rural & Resilience The World Bank This presentation is based on research under the spatial development of African cities, financed by UK DFID

2 Fatma is one of many people living in a city To be close to opportunities 2

3 But their homes are in slums With access to few jobs and services 3

4 To harness shared prosperity They need better jobs and services 4

5 Africa needs to build Cities that work

6 Africa s urban population 472 million today

7 7 659 million by 2025 Adding another Nigeria 7

8 8 1 billion by 2040 Double in 25 years 8

9 160 million additional jobs needed in Africa by 2030

10 Africa has the opportunity To get urbanization right

11 Cities are growing, but at lower income levels Urbanization at 40% GDP per capita (2005 US$) 1,860 1,806 3,617 1,018 Latin America Caribbean 1950 Middle East North Africa 1968 East Asia Pacific 1994 Sub-Saharan Africa 2013 Source: WDI (2014); U.N. World Urbanization Prospects 2014; Maddison Project.

12 Cities are growing, but manufacturing is declining Sub-Saharan Africa Manufacturing value added, % of GDP Urbanization rate, % 50

Cities are growing, but the population is sprawling Bangkok 1988 Dar es Salaam Density (people/hectare) 300 200 100 0 1 5 10 15 20 300 200

13 Cities are growing, but the population is sprawling Bangkok 1988 Dar es Salaam Density (people/hectare) Km from Central Business District Source: Bertaud (2002) Source: based on village level census data, NBS 2002 & 2012

Cities are growing, but the population is sprawling Bangkok 1988 Dar es Salaam Density (people/hectare) 300 200 100 0 1 5 10 15 20 300 200 100 0 2002 1 2 3 4 5 6 7 8

14 Cities are growing, but the population is sprawling Bangkok 1988 Dar es Salaam Density (people/hectare) Source: Bertaud (2002) Km from Central Business District 14 Source: based on village level census data, NBS 2002 & 2012

15 Cities are are growing, but but the the population is is sprawling Density (people/hectare) Bangkok Bangkok Density (people/hectare) Dar es Salaam Dar es Salaam Km from Km from Central Business District District Source: Bertaud (2002) Source: based on village level census data, NBS 2002 & 2012

16 Africa at 2 am: Satellite data reveals lack of infrastructure density

17 Africa s mega cities need mega investments Light (infrastructure) -to-population ratio Maputo Lusaka Kigali Barcelona Durban Dar es Salaam Nairobi Abidjan Dakar Addis Ababa Kampala Kinshasa Population Size Paris Rio de Janeiro Lagos Source: World Bank calculations.

18 Africa by day: Satellite data identifies land use Commercial/Industrial Residential Dense Residential Shanty Residential Sparse

19 Housing: informal settlements and low affordability 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 70% of Africa s urban population live in informal settlements. Over half population are in slums. Slum Dwellers (% of pop, 2015) Source: UN (2014). World Urbanization Prospects: The 2014 Revision.

20 Commercial and industrial land is missing in the city center Dar es Salaam Addis Ababa KGALI Residential shanty Residential non-shanty Industrial/commercial

21 Where are the jobs in the city? 1.1% 0.9% Kigali Nairobi 5.9% Addis Ababa 23% Ho Chi Minh Share of industrial and commercial land (as % of total land) Source: World Bank calculations (2015), EO World.

22 Jobs: informality and low productivity 50% % of jobs by sector in low-performance vs. high-performance businesses 40% 30% 20% Currently, 60% of urban jobs in Africa are informal, mostly in household enterprise sector, which usually have low productivity. 10% 0% Survivalists Top-performers Petty Trading Manufacturing Transport and construction Wholesale/Retail Services Source: Grimm, Michael, Peter Knorringa, and Jann Lay. "Constrained gazelles: High potentials in West Africa s informal economy." World Development 40.7 (2012):

23 Jobs: firms are small 100% Proportion of firms with less than 5 employees 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Kigali Kampala Lusaka Source: Economic censuses of Rwanda, Uganda and Zambia. 23

24 How do people get to their jobs? In Nairobi, 70% walk or take the matatu to work % of jobs within 60 minutes 42% Walk 8% 28% Matatu 14% limiting access to opportunities Source: JICA Personal Travel Survey (2013)

25 How much do people pay to get to their jobs? 100 Percentage of household budget on transport 2 trips/day Source: Kumar and Barrett (2008) Average Poorest quintile

26 The Solution: Africa needs to build cities that work Housing Jobs Transport/ Infrastructure Coordinated actions needed in three areas for productivity and livability.

Infrastructure: need policy interventions at all levels National resources Improve intergovernmental transfers to city governments for infrastructure

setting tax levels and administering revenues City governments and urban service delivery agencies Institutional reform to strengthen city governments and

27 Infrastructure: need policy interventions at all levels National resources Improve intergovernmental transfers to city governments for infrastructure investment Regional resources Expand revenue assignments for city governments Simplify the systems for local revenues Expand autonomy of city governments in setting tax levels and administering revenues City governments and urban service delivery agencies Institutional reform to strengthen city governments and service utilities to address service-delivery and urban planning and management challenges Develop metropolitan government arrangements for rapidly expanding megacities.

Improving local governments own source revenues: The case of Arusha, Tanzania Reference: The Arusha Experience: Improving Local Government s Own Source Revenues.

28 Improving local governments own source revenues: The case of Arusha, Tanzania Reference: The Arusha Experience: Improving Local Government s Own Source Revenues. Brochure available through Washington, DC: World Bank, Issues: Transfers as main revenue source, suffering from delays and constraints Actions: Helping Arusha build Local Government Revenue Collection Information System (LGCRIS) Achievements: City s own source revenue collection increased by 76% in 15 months Self-financed 90% of annual development projects in city

regulations, and access to land Invest in and subsidize infrastructure and slum upgrading Strengthen residential rental

29 Housing: policy goals and action areas Core policy goals Key action areas Drive access to low-cost formal housing increasingly down market Provide direct support to bottom 70% of the market Improve city planning, building regulations, and access to land Invest in and subsidize infrastructure and slum upgrading Strengthen residential rental markets Strengthen local construction & building materials sectors; support private housing development Expand access to housing finance

Informal settlement upgrading and improvement: The case of Nouakchott, Mauritania Reference: Implementation Completion and Results Report no. ICR1359, Urban Development Project.

30 Informal settlement upgrading and improvement: The case of Nouakchott, Mauritania Reference: Implementation Completion and Results Report no. ICR1359, Urban Development Project. Washington, DC: World Bank, Challenges: Largest kebbe of 40,000 households with no/poor services Actions: Offered serviced plots nearby Issued microcredit loans for home improvement and compensation Achievements: Great improvements in housing conditions with access to services Created jobs and helped NGOs to scale up the work

31 Jobs: policy focuses and actions Support small businesses with potential to grow Job-creation policies can help transform the realities. Improve business environment and reduce business costs Facilitate business transition from non-tradable to tradable

Creating jobs through urban development projects: The case of Adigrat, Ethiopia Reference: Ethiopia Development Project Creates Jobs, Transforms Cities, retrieved from World Bank Group website,

32 Creating jobs through urban development projects: The case of Adigrat, Ethiopia Reference: Ethiopia Development Project Creates Jobs, Transforms Cities, retrieved from World Bank Group website, Photo courtesy of MUDH, Ethiopia Activities: Labor-intensive public investment (paving cobblestone streets) under the Bank-financed Urban Local Government Development Project (ULGDP) Achievements: Created more than 95,000 jobs, especially for woman, youth and the unemployed Encouraged creation of micro and small scale enterprises

33 Towards cities that work! Infrastructure Jobs Housing With coordinated actions in the three areas, cities of Africa will become engines of growth that are productive and livable.

Somik V. Lall Lead Economist World Bank Group. April 20th, World Resources Institute

Somik V. Lall Lead Economist World Bank Group April 20th, 2016 @ World Resources Institute CITIES ARE CENTRAL TO ECONOMIC DEVELOPMENT Source: World Development Indicators Why Cities? THE PRODUCTIVITY OF