Getting Ugandan cities to work

By Philippe Dongier

The time to act is now because rapid urbanisation will offer opportunities and present challenges

In 2040, more than 20 million people, or one third of Uganda’s population will live in cities. The urbanisation clock has already started to tick: between 2002 and 2010, Uganda’s urban population grew by 5.6 percent, almost twice as fast as the rural population. And we know from global experience that urbanisation is likely to accelerate with economic development. As a result, Kampala is projected to become a mega-city of over 10 million by 2030, and other Ugandan cities will also see a demographic explosion. Will this increasing pool of urban residents be able to secure good jobs, access affordable housing, clean water, sanitation and public transport?

On March 03, 2015, the World Bank released the fifth edition of the Uganda Economic Update. These updates take stock of the economy and focus on a special topic of interest. Titled “The Growth Challenge- Can Uganda Cities get to Work?”, the fifth Update discusses specifically how Ugandan cities can propel growth by attracting more capital, innovation, and skilled labour. It also examines how quality services and housing can be delivered to the rapidly growing urban population.

Urbanisation has already contributed to Uganda’s transformation. About 70 percent of manufacturing activities and formal jobs are found in urban areas and along transport corridors between cities.  Data from the National Household survey reveals that the living standards and welfare outcomes have improved significantly faster in Uganda’s cities than in rural areas. The relatively rapid economic progress in cities has not occurred in isolation since rural households too, have benefitted through increased remittances from relatives or friends in cities, and as urban agglomerations offer new markets for farmers.

While the rapid urbanisation process will offer a unique opportunity for Uganda to achieve its aspiration to become a middle-income country, the challenges are also vast. While migrants are getting jobs, most are not highly productive, and youth unemployment is picking up. The housing shortage is serious, with more than 60 percent of urban dwellers living in slums. Traffic congestion underscores the strains on current infrastructure especially in Kampala and high transport cost reduces job opportunities for those who live far away from economic centers.  Households in the bottom quintile spend up to 41 percent of their incomes` on transport.

Both national and local governments have an important role to play for Uganda to capitalise on economic opportunities and address the multiple challenges associated to urbanisation. There is an urgent need to plan, adopt and enforce regulations, and make or catalyse the investments necessary to ensure the rapid expansion of firms and the delivery of adequate services and infrastructure in cities. The Update proposes three priority policy areas:

Ensure land markets function well, to improve the efficiency of land use and spatial planning. Incentives need to encourage development of existing underused urban land to prevent sprawl and take advantage of increased economic density;

Improve connectivity between and within cities, with affordable public transport systems for people to get to work and minimize congestion, and to benefit producers and consumers in urban and rural areas;

Enhance urban planning to coordinate public and private investment. Well-planned investment in Uganda’s cities is critical particularly in the context of East African integration and exploitation of the country’s oil resources

Fortunately, Uganda has just begun its urbanisation process, which means the country has the opportunity to get it right from the start, drawing from global experience to inform country decisions. The time is now for Uganda’s leaders to shape the future of their development, and to create opportunities for all.

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Philippe Dongier is the Country Director of The World Bank for Uganda, Tanzania and Burundi

In-depth discussion of these issues can be found in the World Bank’s Fifth Uganda Economic Update, The Growth Challenge – Can Uganda Cities get to Work?