Delivered to the
Fifth Heads Of State Implementation Committee Meeting of NEPAD
ECOWAS Secretariat
Abuja, Nigeria
3 November, 2002

Chairman, President Obasanjo, Excellencies, ladies and gentlemen,

I am indeed grateful to President Olusegun Obasanjo of our host country, Nigeria, for the cordial invitation to address this, the Fifth Heads of State Implementation Committee Meeting of NEPAD. My message will be as short as it is urgent: Africa’s leaders need to pay more attention to urbanization and the sustainable development of their cities, and the place to do this effectively is in NEPAD, adopted only last month by the United Nations General Assembly as a framework for its work in Africa. Please allow me a few minutes to present you with the argument behind this message.

Today, the fastest urbanizing region in the world is Africa, with an urban population that is expanding at double the rate for the world as a whole.Yaounde, Douala, Addis Ababa, Bamako, Antananarivo, Maputo, Lagos, Dar es Salaam, Nairobi, Luanda, Ndjamena, Lumumbashi and Mogadishu are all growing at rates faster than 4 percent per year. Kampala and Ouagadougou are each expanding at more than 5 percent per year. And there are towns like Mwanza and Tabora, in my home country of Tanzania, whose growth of over 6 percent per year has been fuelled largely by conflict in neighbouring countries. In the past decade, over 30 million Africans have been made homeless by armed conflict. The natural instinct of most of these unfortunate people is to migrate to nearby cities, where much-needed services and employment may be more likely
to find.

The combined population of African cities will double in the next 14 to 18 years, as 200 million additional people – mostly from the countryside – take up residence in Africa’s cities. Half this urban growth – 100 million more people by 2015 – will be divided among all those African cities with less than 500,000 people. Another 60 million persons will be added to African cities that now have between 1 and 5 million persons. Sub-Saharan Africa’s megacity, Lagos, will, by itself, account for another 10 million people, growing to 23 million by 2015. Lagos will then become the third largest city in the world, coming only after Tokyo and Mumbai (Bombay).

The growth of Africa’s urban population will outpace that of rural Africa over the same span of time by a factor of two; Africa will, in fact, become an urban continent within one more generation, when fifty percent of all Africans will live in cities. For Africa, the main developmental challenge over the next two decades will be to manage the successful urbanization of the continent.

Mr. President, Excellencies, why should you as African Heads of State be so urgently concerned about your cities. After all it can be argued that the majority of your citizens are still in the countryside and perhaps they should be kept there. My first response is that urbanization per se is a good thing and invariably occurs with economic progress and structural transformation. People move to cities in search for better opportunities. They move not because they will be better off, but because they expect to be better off. The process is finite and irreversible – in a democracy. In almost every country, the city’s share of national output is much higher than its share of the population. Africa’s population is now only 37 percent urban, yet around 60 percent of its GDP is generated from within its cities. Cities are generators of national development, which invariably starts with migration. The well-functioning city will absorb excess rural labour into new better paying city-based occupations to become a more efficient producer and consumer, both locally and globally. Trade and competitiveness flourish in and around cities.

To the extent that cities and their economies are neglected in public policy, however, the rewards of productive employment will increasingly be denied to urban residents. Businesses of all types will struggle with deteriorating infrastructure, obstructionist bureaucracies and an uneducated and unhealthy workforce. As the frictions of doing business increase, foreign capital will be withdrawn or only directed at high profit extractive industries such as mining, fishing and logging, often at the detriment of the environment and impoverishment of those displaced by such activity. As monetary flows decrease, domestic firms lay off workers, who may find alternative employment, at first, in the informal sector and, then, not at all.

This leads to the second reason why we must care for our cities – the urbanization of poverty. Cities are growing at twice the rate of rural growth, Africa-wide. Ominously, city slums in Africa are growing at twice the rate of overall urban growth. In other words, we have already neglected our cities far longer than good public policy would suggest. Most newly arrived city migrants are not able to find decent shelter or sufficient work. Their hopes for a better life are not being realized as they are trapped in a vicious circle of urban poverty, social exclusion and deprivation. The majority of these newcomers have had to accept squalid living conditions in urban slums that lack even the most basic services and shelter. These are places where HIV/AIDS breeds and spreads rapidly. These are places devoid of hope where an alarming number of young people become drawn into anti-social behaviour, which claims many, particularly women and girls, as its victims.

Of the world's 6 billion people, 1.2 billion – 1 person in five – live on less than $1 a day. Between 750 million and one billion of these absolute poor live in city slums. 300 million of these urban poor live in the slums of Africa. There are cities in Africa, such as Lagos and Nairobi, where it is estimated that as much as 60 percent of the population resides in unliveable slum conditions. What is worse, these poor people pay exorbitant rents to rapacious slum landlords. They also pay more for basic services such as water delivered by vendours, as they have no access to subsidized municipal supplies.

Excellencies, for the past three decades, it was thought that economic growth, by itself, would enable countries to eventually reach down and lift their poorest citizens from poverty. Yet development strategies aimed primarily at income growth have failed the poor. Yes, economic growth is crucial but often not sufficient to create conditions in which the world's poorest people can improve their lives. Where the poor become trapped within such stagnant economies as we find across Africa, other means must be found to retrieve our people from a life of poverty.

In the vital search for effective poverty reduction strategies, many of you joined with fellow heads of state in the year 2000 to sign the Millennium Declaration. A key target in that momentous document is to improve the living conditions of at least 100 million slum dwellers around the world by 2020. The Millennium Declaration also endorsed the Cities Without Slums Initiative of UN-HABITAT and the World Bank. Also, more recently in Johannesburg at the World Summit on Sustainable Development, you were instrumental in identifying adequate shelter alongside other priority areas for action, like water, sanitation, energy, health, agriculture and biodiversity.

Against this background, Your Excellencies, I would like to advocate that issues of adequate shelter and sustainable settlements – also warrant greater attention in NEPAD – itself conceived by the enlightened African leadership as an innovative people-centered approach with focus on regional linkages, synergies, and cooperation backed by individual country programmes. The NEPAD strategy promises to break the vicious circle of Africa’s underdevelopment, provided it takes into account the reality of rapidly changing settlement patterns, and plans and budgets for a sustainable urbanization of the continent.

In pursuit of implementing the Habitat Agenda, we have already found that urban poverty and, particularly, slums can often be dealt with most effectively through properly prepared local authorities and organizations of civil society. This strongly indicates that policy-makers have a responsibility to help improve the life of slum dwellers through better urban governance – calling for greater participation of the poor in local decision-making and building capacity among local authorities in order to better collaborate with the poor and the private sector in upgrading slums and shantytowns.

And, in a strategic step to encourage investment in shantytowns and squatter
settlements – by private investors, the public sector and the poor themselves – we must work to insure secure tenure, greater productivity in the urban informal sector and more responsive housing finance systems.

Often housing finance issues in developing economies are treated in isolation, without serious contemplation of their linkage to the general well being of the national economy. The potential for housing finance to serve as the engine for creating national wealth has not been fully understood or appreciated by those responsible for central planning ministries and national treasuries. Yet, in countries where savings rates are very low, housing finance is a good motivation 5 for household savings. Traditional collective savings schemes, such as the “susu” in Ghana are well known and could provide a cultural basis for successful housing finance and micro-finance for the urban poor. The development of the housing industry and real estate has great potential to create jobs and generate livelihoods to a broad-based urban population.

In this vein, Excellencies, I submit that it is important that African Governments, through the African Union, give the subjects of slum upgrading and housing finance the necessary attention by including urbanization, housing and human settlements development among the functions of its Executive Council and establishing a “Committee on Sustainable Urbanisation, Housing and Human Settlements Development”.

Please be assured, that all this in no way diminishes the rural dimension of national development. Rather than treat rural and urban as different and competing development spaces, however, it is imperative that they be seen as a whole – as a dynamic system – and their linkages strengthened. One cannot do without the other. The quest for sustainable urbanization is thus a quest for balancing rural and urban solutions. Premature urbanization, not accompanied by rises in rural productivity and improvement in transport and marketing infrastructure leads to economic insecurity in cities. That is what we are dealing with at present.

The most important rural-urban flows are economic – goods, services and labour. Economically, rural and urban areas are linked by the reciprocal exchange of unprocessed and processed products, with both areas acting as mutually reinforcing markets. Strengthening this linkage requires, in many countries, decentralization through the promotion of small- and medium-sized cities and hierarchical networks of places. These can increase the accessibility of agricultural inputs for rural producers, while at the same time provide the necessary marketing infrastructure like bulk collection points and periodic markets. Rural and urban development have to go hand in hand. There is no other way.

In order to reduce poverty and inequality, sectoral policies need to address the main structural defects in both city and countryside, including: urban and rural landlessness and insecurity of tenure; unfair terms of trade between urban and rural areas; and insufficiency of income, partly resulting from lack of diversification of jobs in rural areas.

Mr. President, Excellencies, in these few minutes, I have focused on the challenges of urbanization in Africa, on the need for balanced territorial development, and on the need to mainstream shelter and housing in such macroeconomic policy frameworks as Poverty Reduction Strategy Papers. NEPAD, as the new blueprint for Africa's development, must provide the lead in this direction, first and foremost by recognizing the realities of urbanization in Africa. African 6 leaders must show the world that they cannot only deal with the soft sectors but confront investment areas like housing resolutely. In this, institution building is key. And, I am here to declare that UN-HABITAT – one of the only two UN agencies headquartered in Africa – stands ready to provide the necessary technical assistance that you might deem necessary.

Let me close by once again thanking President Obasanjo for the exemplary attention and support he has given to the Human Settlements sector in Nigeria. By inviting me to address this august assembly, I believe you have opened doors for mainstreaming human settlements issues in the NEPAD, the African Union Executive Council, and individual country programmes. Excellency, since you graciously launched the campaign for good urban governance here in Abuja last year, we are happy to confirm to you that the office you asked UN-HABITAT to open here in Abuja is being staffed at this moment and will be operational by January 1, 2003. I thank your very able Ministers of Works and Housing who have been there for us and with us to implement your request. I have a feeling this will soon be emulated in other countries of our continent.

Excellencies, I thank you for your kind attention.