Decentralisation Can Help Poverty Reduction

from All Africa

New Times (Kigali)

By Florence Mutesi and John Gahamanyi
Kigali

Across the entire continent, Africans face debilitating poverty. A number of strategies have been put forward to address the problem, mostly involving large amounts of foreign aid.

However, many today look to African governments themselves to contribute to the effort by decentralizing, in hopes that decentralization will reduce government spending and increase revenue generation.

Decentralization is demanded of African governments not only to meet International Monitory Fund (IMF) and World Bank requirements for aid, but also to help the countries develop.

World Bank official Sylvie Debomy agrees with this view but believes that the major challenge is to make cities function better, thereby creating an enabling environment for trade and economic activities.

She explains that in West Africa alone, by 2020 an estimated 63 per cent of the population will live in cities (270 million out of 430 million).

Within just the next ten years, the urban population of West Africa will have increased by 43 million, or 10 per cent.

"Even in a country like Rwanda, population growth combined with land availability constraints imply increased urbanization to absorb increased population," Debomy said.

With a handful of programmes aimed at combating poverty in the region, the Rwandan government has recognized that it should move along with improved governance and urbanization, she said. To manage urbanization in particular, Kigali's municipal governance must be strengthened.

The municipal or city contract is a tool that has been widely used in Northern Europe for decades, and applied in a number of African countries, in particular for improving urban services and infrastructure delivery.

It aids response to local issues and increases accountability mechanisms for local leaders.

According to Debomy, national and municipal governments must have clear institutional roles in the management of a city, clearly assigned and defined responsibilities, and adequate human and financial resources to fulfill their responsibilities.

She also considers other implementation issues like sector collaboration, coordination of donors, supported interventions, monitoring and evaluation.

"Investments in primary infrastructure are still a necessity.

Yet, at the same time, targeted poverty programmes through neighbourhood upgrading and income generation activities are needed," she explained.

Good governance

The minister for Infrastructure, Stanislus Kamanzi, says that good governance and planned urbanisation are the determining factors today in the acceleration of growth and reduction of poverty.

Statistics show in sub-Saharan Africa economic growth between 1990 and 2003 was primarily attributed to the industrial and service sectors, which constituted 60-80 per cent of the region's GDP.

"If one was to add the informal sector, which accounts for 93 per cent of new employment and 61 per cent of urban employment, the contribution of the urban sector to national economic growth is even larger," says Kamanzi.

According to Debomy another challenge ahead is to sustain improvement of city governance and management, which are plagued by both poor financial situations and weak technical management capabilities.

She applauds the contractualization of public intervention in Rwanda as a powerful tool to support development, service delivery and good governance.

Adaptation of the imihigo (performance contracts) spirit in which a group of people commit publicly to respective engagements has played an important part to development.

Decentralization contributes a lot to urbanisation yet it is also believed that urbanisation is a key factor for growth and development.

According to Kamanzi, in Rwanda as in other countries, there is a linear relationship between urbanisation and economic growth and the tendency to accelerated urbanisation must be interpreted as a positive sign spearheading the reduction of poverty.

He adds that our cities will soon become the principal players in the process of economic growth which will make it possible for better use of resources in an environment where all economic agents will interact more easily.

"Accelerated urbanisation on economic development and poverty reduction with a view to highlight and register the urban sector among the priorities of public investment, an aspect which is entrenched in our national development strategies, the EDPRS and our Vision 2020," he says .

Through articulate and innovative urban governance, the populations living in Rwandan cities, especially the neediest, can enjoy access to basic infrastructure and decent housing, in alignment with target 11 of Millennium Development Goal 7, which aims to "improve significantly the lives of 100 million slum dwellers by the year 2020."

Kamanzi also says that as far as Rwanda is concerned in the past, little has been done in adequate settlement planning in general and urban planning in particular, leading to 80 percent of the urban population living in unplanned zones that lack sufficient basic infrastructure and social services, a situation which is to be eagerly changed in a sustainable manner.

To achieve that goal, urban Master Plans are contemplated as a major tool.

Urban planning is a critical task that entails cross sectoral consultations, whereby principles of good governance that emulate participatory planning and transparency, in order to achieve equity among the diverse social strata of urban populations are paramount, Kamanzi says.

The rate of urbanization in Rwanda currently stands at 18.7 percent, which is among the lowest in the World and in Africa in particular, the average rate being 35 percent for Africa.

However, it must be noted that the rate of urbanization has more than tripled in Rwanda from 5.5 percent in 1991 to 18.7 percent in 2007.

"Mindful of this catalytic role of urbanization to Rwanda's economic growth, our aim is to quadruple this rate under Vision 2020 to increase our urbanized population to 30 percent," Kamanzi says.

The urban environment and cities in particular, are privileged places that provide business opportunities, services, and employment for both rural and urban settings, and therefore contribute to economic growth of a nation, and there exists a positive correlation between the rate of urbanization and economic development, he says.