Managing Rapid Urbanization Can Help Uganda Achieve Sustainable and Inclusive Growth

Uganda’s urban population will increase from six million in 2013 to over 20 million in 2040. Policy makers need to act now to ensure that this rapid urbanization is managed well, so it can contribute to Uganda’s sustainable and inclusive growth, a report released today by the World Bank Group shows.

For the first time, the report compares data on urban areas and their populations in a consistent manner across Uganda, providing governments and local leaders with analyses to improve planning and coordination to deliver better services, jobs and opportunities, making cities more competitive.

“The typical Ugandan city has grown rapidly, but without sufficient policy coordination. As a result, urbanization has not necessarily resulted in increased productivity, with the majority of jobs created involving low productivity activities,” said Hon. Daudi Migereko, Minister of Lands, and Housing and Urban Development. “This report will help government get a better picture and take action on how to spur the economy from the lackluster growth performance experienced over the past half-decade, to a higher growth path that can catapult the country into middle income status.”

The Fifth Uganda Economic Update, titled: “The Growth Challenge: Can Ugandan Cities get to Work?” focusses on urbanization and notes that while the majority of the population is still concentrated in rural areas, non-agricultural economic growth and jobs are concentrated in urban areas. The report shows that while cities can help propel growth, the speed of urbanization is challenging and can lead to congestion and strain infrastructure, lowering productivity.

“By managing the urbanization process effectively, Uganda will be more likely to achieve middle income status by 2040. However, current patterns of growth pose a significant challenge,” said Philippe Dongier, the Country Director for the World Bank Group for Uganda, Tanzania and Burundi. “Urban population growth multiplies the number of challenges already facing urban areas and hinders their ability to be the sources of growth, to create productive jobs and to provide decent housing to urban residents.”

The Update has been prepared to assist government in ensuring that its cities are ready to accommodate the increasing number of residents expected to settle in urban areas and able to facilitate the growth of business enterprises, thereby creating opportunities for productive employment for a greater proportion of city residents.

[i"Cities have the potential to propel growth, attracting capital, spurring innovation, providing higher productivity jobs. Services can be provided more cost-effectively, improving access for all,”[/i] said Somik Lall, Lead Urban Economist. “To reap these benefits, urban growth needs to be managed well by planning for land use and basic services, connecting to make a city’s markets accessible, and financing to meet infrastructure needs.”

“To ensure the development of functional cities, the public sector will require the coordination of a range of different types of investment, including investment in physical planning for buildings and the provision of transport, housing and social services,” said Rachel Sebudde, Senior Economist and Lead author of the report. “Each layer faces its own coordination challenges. It is better to anticipate and plan for this at the very early stages of the urbanization process, as it becomes very difficult to correct mistakes retrospectively.”

Policy makers at national and municipal levels have an important role to play in ensuring that urbanization is sustainable and inclusive by ensuring that land and property rights are conducive for increasing economic density of cities. They will also have to improve mobility through better transport infrastructure and systems, as well as improve living conditions through better housing policies. Furthermore, it will be critical to improve access to social services such health and education; and levelling access to, and quality of, public services such as water and sanitation services.

Urbanization in Numbers

• 6.4 million Ugandans live in urban areas
• 70 percent of non-agricultural GDP in Uganda is generated in urban areas
• 54 percent of people living in Central region are residing in urban areas
• Central region has the highest number of people living in urban areas, but the Eastern region is the fastest urbanizing region during the first decade of 2000s
• Kampala is home to 31 percent of Uganda’s urban population
• 69 percent of Uganda’s urban population live in small cities with less than 500,000 people
• 21 million people will live in urban areas in Uganda by 2040
• By 2013, 38 percent of the urban population was connected to the electricity grid
• The number of firms engaged in real estate and business services in Kampala is 11 times the overall average across districts
• Over the first decade of the 2000s, cities accounted for 36 percent of overall job growth
• Walking is the main mode of transport in Kampala, and 70 percent of the residents of Kampala walk to work
• 80 percent of the global economic activity is generated in cities

Urbanization in Numbers

• 6.4 million Ugandans live in urban areas
• 70 percent of non-agricultural GDP in Uganda is generated in urban areas
• 54 percent of people living in Central region are residing in urban areas
• Central region has the highest number of people living in urban areas, but the Eastern region is the fastest urbanizing region during the first decade of 2000s
• Kampala is home to 31 percent of Uganda’s urban population
• 69 percent of Uganda’s urban population live in small cities with less than 500,000 people
• 21 million people will live in urban areas in Uganda by 2040
• By 2013, 38 percent of the urban population was connected to the electricity grid
• The number of firms engaged in real estate and business services in Kampala is 11 times the overall average across districts
• Over the first decade of the 2000s, cities accounted for 36 percent of overall job growth
• Walking is the main mode of transport in Kampala, and 70 percent of the residents of Kampala walk to work
• 80 percent of the global economic activity is generated in cities