Sucess Story- Working with Municipalities to Plan for the Future

Working with Municipalities to Plan for the Future Deconstructing Urban Economic Planning as a tool for spurring Economic Growth

Challenge Urban areas are replacing nation states as the primary economic governance and driver mechanism for trade and investment. Linkages to global, regional and national networks of trade, knowledge, competitiveness and investment have a significant impact on the status and functioning of towns within global and national urban systems. The link between urbanisation and economic growth is demonstrable by the benefits experienced in urban settings from increased high-density economic activity, shorter trade links and shared infrastructure.

In the future urban areas are expected to account for two thirds of the world’s population. Most of this growth will occur in developing countries such as Kenya. Without proper management of the urbanisation process, the risk of weak infrastructural systems and economic disparity remains. Furthermore, the lack of strong governance systems on which to embed urban development could result in greater social and gender inequalities.

Kilifi’s Governor where Malindi Municipality is domiciled H.E. Amason Kingi shares his commitment towards the development of the UEP during the celebration ceremony to kick-start the UEP development process in the municipality

With the promulgation of the 2010 Kenyan Constitution and subsequent General Elections in 2013, Kenya adopted a devolved system of government premised on addressing regional economic marginalisation and providing a platform through which public participation in regional development would be espoused. The Constitution also provides for allocation of resources to the devolved units and provides for a legislative framework at the county level. Despite the positive intent of devolution, there have been challenges since its inception. An example is the little technical support counties have received to implement critical urban functions such as urban economic planning. This has further been exacerbated by the competition for limited resources within the county structure leading to insufficient allocation of funds for urban economic planning.

To help prioritise urbanisation in Kenya and provide the means through which counties could manage their urban areas, Kenya enacted the Urban Areas and Cities Act (2011). In it counties were given the mandate to create municipalities. As a result, 59 municipalities were formed.

These municipalities hold devolved functions from the County such as management of their urban centers and revenue collection from local businesses. However, they are also suffer from a lack of funding and capacity in the technical skills needed for key urban services. These challenges have left municipalities economically vulnerable with weakened structures that has increased their reliance on the County

governments. As such, municipalities are greatly hampered in advancing inclusive urbanisation including long-term maintenance of critical infrastructure inherited from the counties and planning for future climatic changes. In addition, they have not yet developed a platform through which they can advocate for public-private dialogue and collaboration that would help them leverage on their unique market offering to investors.

Intervention To help address these challenges and harness the municipal urban potential to improve economic resilience and positively impact their social and economically vulnerable population in a sustainable way, the UK Government through the Department for International Development (DFID) is funding the Sustainable Urban Economic Development Programme (SUED). SUED is working with 12 1 municipalities to develop sustainable Urban Economic Plans (UEPs) and attract investment for critical-resilient infrastructure and value chain projects, to better harness inclusive economic growth. The plans are aimed at assisting the municipalities and their respective counties to identify and prioritise economically viable and bankable projects that would involve the private sector and help create a conducive environment for inclusive and sustainable economic growth.

To kick-start the process SUED supported three municipalities (Kitui, Isiolo and Malindi) to develop their UEPs. To do this the Programme worked closely with the local municipal and county leadership to identify sectors with the highest economic growth potential. This was done through a multi-tiered stakeholder engagement process. First, the leadership helped identify stakeholders within the community who were representative of the interest of the intended beneficiaries. Second, indepth workshops were held with the stakeholders sharing the Programme’s objectives and how it would partner with them to identify viable economic opportunities. Thirdly, SUED held key informant interviews with the opinion leaders drawn from the community who provided local insight of the emerging opportunities. The Programme used these three approaches to ensure that there was in-depth understanding at the local level of the economic trends and context. This created

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Bungoma, Eldoret, Isiolo, Iten, Kathwana, Kerugoya, Kisii, Kitui, Lamu, Malindi, Mandera and Wote

the foundation through which SUED was able to assess the municipalities’ sectoral specialisms, unique demographics and social landscapes and identify the natural resources available. In addition, the Programme was able to assess the infrastructure support at municipal level and the dynamics it presented to potential investors.

SUED additionally carried out business surveys to understand the types of businesses at the municipality and county level and how they operated. The Programme was keen to see how it could work with the respective municipalities to address any constraints they faced. The survey also helped to identify linkages on local business marketing strategies and economic growth prospects. In Kitui for example, limited access to markets was identified as the main constraint, while for Malindi it was limited infrastructure that could support economic growth and Isiolo lacked proper drainage systems that would help the municipality manage heavy rainfalls that can flood the central business district.

Furthermore, the Programme worked with the municipalities to identify socially excluded groups. This informed the UEP with the need to ensure equity in the proposed economic sectors while integrating opportunities that predominantly excluded community members could take advantage of.

SUED carried an in-depth desk review of all existing County development plans that were geared towards economic development such as County Integrated Development Plans (CIDPs) and the Integrated Strategic Urban Development Plans (ISUDP). This helped the Programme to analyse the economic priorities at the County level and see how best to align the emerging opportunities to the County’s vision. It also helped the municipalities to develop the UEP as an advisory document that aligned with requirements set out in relevant legislation and strategic planning framework.

The programme also worked with municipalities to understand their vulnerability to climate change and to plan their future resilience. This was embedded within their wider environment and how it related to the economic activities they could participate in. This is because certain economic sectors such agriculture are viable within particular climatic conditions. Additionally, SUED was able to determine the critical gaps in infrastructure using the climate resilience lens.

SUED then worked with the municipalities to carry out further analysis on their economic and spatial planning within the context of their

capacity to implement a robust economic development plan. This resulted in the programme developing a municipality specific socio-economic development profile. The profile provided the programme with insights into the current economic situation and trends incorporating the labour market and how it related to key economic sectors. This diagnostic phase helped provide a comprehensive assessment of each municipality’s economy, infrastructure and environment within the local, national and international context.

Finally, the programme worked with the local leaders to develop a vision that incorporated the findings from the stakeholder interactions, business surveys as well as the social inclusion study. This collaborative approach between the programme and municipalities, meant SUED identified an agreed vision that prioritised actions with the maximum potential impact on the municipality’s economy.

After determining the economic sectors within the municipalities, SUED worked with the local leadership to evaluate and prioritise value chain and climate -resilient infrastructure opportunities that would be explored further to determine their investor attractiveness.

Result These compounded processes ensured that stakeholders at both the municipal and county level were aligned in setting the economic vision and determining which sectors to focus on. As a result, SUED was able to work with the municipalities to create a municipality-specific development framework that had key value chain and infrastructure projects.

This framework formed the basis for the UEPs. The three municipalities now have an economic planning strategy that will inform their future development by incorporating best practices regionally and internationally in the development of urban areas.

The UEPs, which are the first in Kenya that are municipality-specific, will enable transformative development of the municipalities to support emerging economic growth and to create jobs. They are based on four key principles: Resilience -SUED wanted to help the municipalities identify how they could shift their economic dynamics and make them adaptive to climate change while harnessing the natural and environmental potential of their urban areas.

Resource efficient -The Programme was keen to work with the municipalities to ensure that the projects selected in their UEP were resource

efficient. This meant that priority was given to projects that were geared towards a circular economy and zero waste. In addition, the projects that would ensure efficiency in water and energy management were highly preferred due to existing constraints in the municipalities’ access to stable energy and water supply. Both the municipalities and the Programme invested in seeing how the economic opportunities will provide rural-urban linkage ensuring that the impact of the Programme was felt beyond the municipality.

Social inclusive - To ensure that the identified value chain and infrastructure projects were socially inclusive, SUED incorporated ways through which marginalized and vulnerable groups could be engaged in the economic development of the municipalities.

Sustainability - The Programme ensured that the infrastructure and value chain projects identified are sustainable beyond the programme’s support.

By incorporating these four key principles, SUED has helped the three municipalities develop an economic plan that will enhance their competitiveness while promoting sustainable growth. This support provides an inclusive urban and economic growth strategy enabling the municipalities to identify sectors needing prioritisation. The UEP provides a tool through which municipalities are now empowered to manage their economic development and determine how best to foster public-private collaboration through the identified projects. As a result of SUED’s support towards the UEP development process, the municipalities are now in a better position to unlock their economic potential and become selfsustaining and resilient urban centers.