African Cities urged to strengthen financial planning for sustainable development

Atkeyelsh Persson, Chief of Urbanization and Development at the UN-ECA. [Courtesy]

An expert meeting in Naivasha has underscored the importance of robust financial planning for African cities, particularly in light of rapid urbanisation and increasing demands on public services.

The meeting, organised by the United Nations Economic Commission for Africa (UNECA) in collaboration with UN-Habitat and UNCDF, focused on the financial assessment report of Nairobi City County. The discussion highlighted the need for cities to diversify their revenue sources and improve their financial management practices.

“African cities, particularly capital cities, are expected to see a significant influx of urban residents shortly,” said Eshetayehu Kinfu, Head of Strategic Programmes Management Office at Addis Ababa City Administration. “It is crucial for these cities to prepare for this urbanisation wave and ensure they have the necessary financial resources to meet the needs of their growing populations.”

Godfrey Akumali, County Secretary and Head of County Public Service for Nairobi City County acknowledged the city's reliance on national government funding and the need to diversify its revenue streams. He emphasized the importance of technology in improving revenue collection and reducing leakages.

"Nairobi aims to increase its own-source revenue from the current Sh12.8 billion to Sh13 billion by the end of the financial year," Akumali said adding, "This will be achieved through digital revenue collection, enhanced compliance, and efficient use of technology."

Experts at the meeting also stressed the importance of capacity building, innovative financing mechanisms, and partnerships with the private sector to support urban development. UNCDF's Jenifer Wakhungu highlighted the need for national governments to simplify policies and create a conducive environment for local governments to thrive.

She emphasised the importance of research to keep up with dynamic systems, and alternative financing mechanisms including working with private/financial sectors and proper fiscal planning.

Ms Wakhungu highlighted the necessity of wealth distribution among regions especially those rich in natural resources.

 “Capacity building and introducing new financing instruments such as municipal bonds are key strategies for the development of cities in Africa,” she said.

Additionally, she said local governments should partner with international organizations like the UN, especially for finance for cities and new financing methodologies or instruments.

 She emphasized the need to simplify and popularize the existing policies to make them more actionable.

The two-day meeting was organized in collaboration with UN-Habitat, UN Capital Development Fund (UNCDF) and Nairobi City County Government and is geared towards validating and enriching the financial assessment report of the City of Nairobi.

The review is part of an ongoing project known, in UN parlance as the Development Account, which seeks to accompany six selected cities in cities in Africa - Addis Ababa, Dar es Salam, Kigali, Lusaka, Nairobi, and Yaoundé – and assess their fiscal space limitations due increased to challenges of meeting development needs, including infrastructure and housing, healthcare and education in the post-Covid era. 

Atkeyelsh Persson, Chief of Urbanization and Development at the ECA noted that like Nairobi and Lusaka, ECA provides support to the local team to review and validate the collected data, ensuring its accuracy, completeness, and reliability before proceeding with the analysis and report preparation for all the cities.

“This step is essential to maintain the integrity of the financial assessment report and to provide a sound basis for subsequent analysis and decision-making processes,” said Ms Persson.

The UN Development Account (DA-15) project, which supports six African cities, including Nairobi, aims to enhance the financial capacity of these cities and enable them to address pressing challenges such as infrastructure development, affordable housing, and climate change. By strengthening their financial management, these cities can become more resilient and sustainable.