Last year two of my friends welcomed new babies into their families: James and Maureen (not their real names). Both babies were born in Metropolitan Nairobi - the fastest growing urban area in the country. Their births added to the growing urban popluation in Kenya, which will double to 24 million by 2035 and more than triple to 40 million by 2050. The Kenya Urbanization Review projects that by that time, that there will be nearly as many Kenyans living in urban areas as there are Kenyans today. Kenya’s urban transition has begun.
When these two babies reach their parents’ ages, Kenya will no longer be a mostly rural country. This should be a good thing for Kenya which aspires to be an upper-middle income country by 2030. No country has ever got there without urbanization. As an upper-middle income country, urban Kenyans should look forward to a nearly universal access to basic urban services and improved economic opportunities. But as a lower-middle income country today, only 60% of urban Kenyans have a water connection (and dropping), 50% have an electricity connection (and increasing) and 30% have access to sanitation (and remaining constant). Formal sector jobs are scarce. The road ahead will be long.
Fortunately for Kenya there are some bright spots. Firstly, Kenya is urbanizing rapidly, but at a slower pace than most of the rest of Sub-Saharan Africa. With 27% of its population living in urban areas, Kenya’s urbanization rate is well below the 40% average for Sub-Saharan Africa.
Secondly, with a GNI per capita of $1,200 Kenya is urbanizing at a higher income than most other countries in the region and should therefore have an opportunity to invest more in its urban areas before it reaches similar levels of urbanization. Thirdly, Kenya’s nascent devolution process holds great promise to facilitate the urbanization process, but this will not be automatic. With an annual urban population growth rate of around 4.3% per year, Kenya’s leaders will have about one generation to get urbanization right.
What will the urban future look like for these kids? A few things are fairly predictable. It is most likely that they will live in a city along Kenya’s Northern Corridor where about 85% of the urban population currently lives. They are also likely to live in a city of over 100,000 people because Kenya will add more secondary and large cities to its portfolio than any other type of urban area. Besides, there is high likelihood that they will live in one of three metropolitan region. Forty percent of urban Kenyans live in metro Nairobi which generates and estimated 35% of Kenya’s gross domestic product (GDP.) Metro regions will continue to grow and investing in them will be important for Kenya’s urban future as a driver of poverty reduction and shared prosperity. But, James and Maureen may have very different urban lives. James was born to one of the 60% of urban households that live in informal settlements. Maureen was born to an upper income family. The percentage of families living in informality in Kenya has not changed over the past twenty years. If this percentage remains constant, Kenya will have 24 million people living in informal areas by 2050 – twice the total of urban population today. James could possibly be one of them.
Other trends are also of concern: It will take 200 years to reach universal water coverage in urban areas at current investment rates. Poorly functioning land markets and land institutions impede formal housing development and expands informality and almost no counties have institutions in place to manage their urban areas. If current trends continue, both Maureen and James will find it hard to secure good paying formal sector employment. Kenya’s urbanization has thus far failed to drive structural transformation and only 40% of all wage earners are formally employed. Informal employment is growing more rapidly than formal employment in urban areas. The problem is exacerbated by historic under-investment in urban transport, combined with poor land-use planning which impedes everyone’s ability to access jobs - particularly the poor – and drive up labor costs.
In Nairobi, for example, matatus and walking account for 70% of all trips but only about 4-20% of formal sector jobs can be reached with a 35, 40 and 60 minute time frame by these modes. A daily commute of 45 minutes each way translates into 16 days spent in transit every year, and in Nairobi that means a value of time lost between $800,000 and $4 million per workday. As incomes increase, and if investment continues to lag, this loss will only increase. Reducing congestion will not only be imperative for more livable cities in the future, it will also be imperative to keep Kenya’s cities regionally and globally competitive.
To secure a better urban future for James and Maureen and the other children of their generation, Kenya’s leaders must embrace the opportunities that urbanization can bring, and address the constraints to a smooth urban transition.
As a priority going forward, Kenya’s policy makers will need to leverage the devolution process and ensure counties have the resources and incentives to better manage their urban areas. Modernizing planning and land institutions, which currently make urban land markets dysfunctional and formal housing inaccessible should be a second priority.
Finally, policy makers must ensure that counties have the financial resources to invest in urban areas, by increasing funding for urban investments, and by enabling urban areas to generate more own-sources revenues.
Focusing on at least these three policy areas will lay the foundations for more economically vibrant and livable cities for all Kenyans. But this must be done in tandem with policies that will accelerate economic growth. Kenya must grow at rates as high as 7.5% per year if it wishes to become an upper middle-income country in the next generation. Urbanization can help drive such growth. But, that won’t be easy as Kenya has reached such growth rates only four times in the past 40 years.