Urban and Regional Development in Ethiopia

Presented by Martha Bisrat

Policy, Research and Planning Bureau Ministry of Works and Urban Development (MWUD)

Training on

Urban and Regional Development Policy

August 21- September 5, 2007

General Background• Ethiopia’s total population was estimated to be 81.2

million in the year 2007 and is projected to reach 170.2 million in 2050 which will make Ethiopia the 10th largest nation in the world

• There has been significant GDP growth over the last 4 years (on average 4.8% & 2.2% for PCI)

• The highest share in the GDP is agriculture (~48%) • There are 9 Regional States and 2 City Governments• Its political system before 1991 was a Military

Dictatorship• Post 1991 Federal Democratic System was established

Background

• Despite long history of urbanization Ethiopia is among the least urbanized country

• Current urban population is about is 13 million (16% of the county’s total population).

• Urban growth rate is 4%• The capital city Addis Ababa is the primate city

with a population of over 3 million and is 10 time larger than the second largest city (Dire Dawa)

Background …• Addis Ababa contains about 25% of the country’s

urban population• There are a total of 925 Urban settlement in

Ethiopia, of which 84 have been granted status as Urban administrations (as of Feb. 2007)

• The vast majority of centers classified as urban have population of less than 20,000 (or 89%).

• With the exception of new Urban centers including the capital Addis Ababa the remains towns are closely linked with activities in their respective hinterland

Background …Characteristic of Ethiopian’s urban centers• Poorly developed economic base• High level of unemployment (estimated to be 16.7% and

up to 28.6% in Addis Ababa)• A worrisome incidence of poverty and slum dwelling• Prevalence of informal economy• About 70% of the urban population is estimated to live is

slum areas especially is in Addis Ababa

Critical Challenges• Urban population living in extreme poverty (~40%)• Urban unemployment

– Higher in bigger cities– Worse for youth and women

• Low productivity and economic growth• Increasing growth of slums in cities (~70%)• Critical housing shortage• Weak infrastructure & municipal services• Poor governance & weak institutional capacities• Weak municipal finance• Weak R-U Linkage & Planning Challenges

Urban Policies, Strategies & Programmes

The short, medium and long term intervention areas are:

• The Federal Urban Development Policy• Plan for Accelerated and Sustained

Development to End Poverty (PASDEP) – Five years plan

• Urban Programmes– Urban Development Program– Urban Good Governance Program

Urban Development Policy• The Policy underlies

– The Federal Government System of the FDRE

– Rural and Agricultural Development Strategy

– Industrial Development Strategy– Promotion of Rural Urban Linkages

Urban Development Policy

• The Policy Aims to– Enable cities and towns become centers of

growth and thereby increase their role in rural and national economic development

– Improve the income and livelihood of urban residents

– Empower urban residents and ensure good governance

Urban Development Policy - Principles

• Promoting interlinked development of rural and urban, as well as urban-urban centers

• Increasing growth opportunities for all urban centers by promoting balanced development

• Promoting interlinked development of urban centers with different economic roles by ensuring decentralized urbanization

• Orienting urban development endeavors towards poverty reduction

• Promoting active public participation • Establishing partnership with the private sector• Pursuing decentralized governance system and thereby

empowering cities and towns with self-governance

Urban Development Policy – Key Urban Tasks

• Ensuring Accelerated & Sustained Development– Promoting MSE development– Promoting Housing Development– Improving Urban Land and Infrastructure Delivery– Improving Social Infrastructure and Services– Improving Urban Planning and Environment

• Ensuring Democracy and Good Governance– Promoting democratization– Promoting good governance– Building urban capacities

PASDEP

• Urban Development ProgramContains mainly two programs

– Integrated Housing Program– Micro and Small Enterprises Development

Program

• Other issues addressed by PASDEP– Land, Infrastructure, Services– Urban-Rural and Urban-Urban linkages

Integrated Housing Development ProgramMajor Targets

• Construct ~400 thousand housing units (~61 thousand in 2006/07 in 33 towns).

• Develop 3200 hectares of land for the Program.• Create ~200 thousand Jobs.• Promote the Development of 10,000 MSEs• Capacity Building of Contractors, Consultants,

Engineers and Foremen.• Construction Materials Capacity Building.

Beneficiaries

• Mainly Low and Middle Income Urbanites (~360 thousand).

– At least 20-30% Women.• 200 thousand Jobs to daily labourers, semi-skilled

labour and highly skilled labour engaged in the construction industry.

• 10 Thousand Micro and Small Business Operators.

The Strategy• Integrated Approach to Housing Development

– Job creation & developing private sector – Developing competitive construction industry– Linking with slum reduction– Mobilize savings & wealth creation through home

ownership– Linking with finance sector development– Creation of better functioning housing markets– Promotion of affordable houses: Low-cost and labor

intensive technology, cost-saving designs and construction methods, economical land use & use of local materials

• Mobilization of All Actors: Private Sector, Housing Cooperatives and Government

Role of the Government

• Provision of land and Infrastructure• Capacity Building• Technology (low cost)• Facilitating finance• Project Management - 100% Construction by

private sector.

MSE Development ProgramMajor Targets• Reduce Unemployment • Promote Private Sector Development• Create 1.5 Million jobsThe Strategy• A One-Stop Services for MSEs• Train >2500 Extension Workers.• Working Premises for 820 thousand MSE

Operators– Mainly Clustering Approach.• 5.2 Billion Birr Loan for 1.2 Million MSEs (Via

MFIs).

The Strategy• Improving policy, legal, institutional &

regulatory environment through One Stop Services

• Extension services• Provision of clustered production premises and

serviced land• Increased financial access to MSEs • Increased training & business development

support• Improving Marketing and sales outlets• Technology

Beneficiaries

• 1.5 Million Urban Residents• Existing MSE Operators• MSEs Involved In Government Programs (e.g.

IHDP) • New TVET Graduates• Unemployed Youth.• At least 50% Women.

Land and Infrastructure

Major Targets

• Investment in Urban Infrastructure to Develop 3800 ha/a of land

• Emphasis on critical urban infrastructure: water, sanitation, access roads, drainage, etc

• Addressed in Detail in Governance Package

Urban-Rural & Urban-Urban Linkages

Major Targets

• Small Towns Development Program (<20,000 pop.)

• Planning and Development Needs of 600 Small Towns Identified and Implemented

• Addressed in detail in Governance Package

The Urban Good Governance Program

Objective• To provide the basis for the implementation of good

governance practices in Ethiopian towns to facilitate accelerated &sustained urban development

The Urban Good Governance ….

Guiding Principles• Subsidiarity-Administrative &Fiscal Decentralization

• Sustainability &Participations

• Efficient & Effective Service Delivery

• Transparency & Accountability

• Rule of Law& Security

• The principles and practices are cross-cutting they are applied to the development & implementation of all programs

The Urban Good Governance …

The seven specific sub-programs resulted because:-• Required focus on the major urban issues identified in the

urban development policy, lessons learned in urban centers • Key findings & recommendations of different studies• A need to empower local urban government authorities• To implement the urban development policy principles of

promoting participatory democracy• To reform the civil service at local level

The Urban Good Governance …

Urban Good Governance Subprograms: • Land Development And Administration Systems Reform subprogram• Urban infrastructure and service reform subprogram• Urban Finance & Financial Management Reform Subprogram • Organization& Human Resource Management Reform Subprogram • Urban planning reform subprogram• Justice reform subprogram • Public participation reform program

Thank You