Ecosystem Perspective for Sustainable Settlements in East Africa

World Bank, World Development Indicators (database), http://​databank.​worldbank.​org/​data/​reports.​aspx?​source=​world-development-indicators.

For instance, according to reports of the United Nations Economic Commission for Africa (ECA), in Burundi and Comoros growth remained weak due to political uncertainty, in South Sudan GDP continued to fall due to political and military conflicts and because the 2015 peace agreement had not been implemented, a drought-induced decline in agricultural output in 2016 for Kenya, Rwanda, and Uganda and political instability in Somalia.

According to reports of the United Nations Economic Commission for Africa (ECA) and the International Labour Organization (ILO), the services sector has seen its share of the regional economy increase by ten percentage points since 2000, representing 43% of value added in 2017; moreover, the sector share of formal employment in the region in 2019 stands at 26% with the permanence of low value-added trade services and a high degree of informality.

Before the pandemic, the manufacturing sector has grown in absolute terms but has seen its share of total value-added decline by four percentage points since 2000. The industry share of total value added had dropped to 15%—three percentage points lower than at the turn of the century. The sector was increasingly driven by growth in extractives and construction, with averaging growth of 9% and 7%, respectively, between 2008 and 2017 (AUC/OECD 2019a, b).

In the past years, tourism, also thanks to considerable national investments, was a major sector in East Africa, with receipts accounted for over 16% of total exports (goods and services) for Kenya, Rwanda, Tanzania, and Uganda, far above both the global (5.7%) and continental (8%) average (Gereffi 2015).

Agriculture remains a large sector in East Africa, but its share of GDP is declining in most countries (AUC/OECD 2019a, b).

“In the aspect of sectors, FDI inflow has improved on the efficiency of various sectors in both Central and East Africa. As far as industry dissemination, the primary sector (mostly coal, oil and gas) represented 43%, manufacturing for 29% (of which half was in the industry) and service (mainly real estate and communication) accounted for 28% (UNCTAD 2011). For instance, investment from foreign farmers and incentives for foreign farmers to invest in agriculture in Kenya and the United Republic of Tanzania has increased efficiency in production. Overall, FDI inflow and outflow in Central and East Africa has aided in transfer of expertise, technology and employment of both skilled and unskilled labor in both sub-regions” (Evans et al. 2018).

Several African countries are tapping into the pool of remittances funds by issuing bonds for investments in their homelands (AfDB, OECD, UNDP 2016).

DDI relates to direct investments whereby the investor has origins or heritage in the foreign country of investment, irrespective of their nationality. The notion of heritage-based African DDI is useful because millions of Africans diasporans are unable to identify their origin in a specific country in Africa, so their investments in any African country qualify as DDI (Faal 2019).

Government agencies attempt to improve their contacts with diasporas to generate investment opportunities for origin-country firms. Ethiopia, Ghana, Kenya, Nigeria, Rwanda, and other African countries tried to involve their diasporas for investments in their homeland countries. For example, the East African Community recognizes the need to create a suitable mechanism to encourage diaspora members to channel remittances towards investment projects in partnering states (Plaza et al. 2011).

In particular, in the reference year 2014, Ethiopia (USD 3.6 billion), Kenya (USD 2.7 billion), and Tanzania (USD 2.6 billion) topped the list of the recipients countries in the region (AfDB, OECD, UNDP 2016).

See the official EU website.

PanAf is an ambitious €845 million commitment to continental and inter-regional projects that mutually benefit Africa and Europe. The PanAf is based on Regulation (EU) No 233/2014 establishing a financing instrument for development cooperation (DCI) for the period 2014–2020. It is based on the Treaty on the Functioning of the European Union (TFEU), which establishes the fight against poverty as the primary objective of EU development policy and refers to the European Consensus on Development (2006/C 46/01), the 'Agenda for Change' COM (2011) and subsequent relevant Commission communications. In 2014, the PanAf was launched to lend support to a strategy first adopted at the Lisbon Africa–EU Summit a decade ago. PanAf is just one of the many EU instruments that are supporting the Africa–EU Partnership but it is the only EU program designed to ‘treat Africa as One’. (European Union 2018).

Aligned with the Roadmap 2014–2017, the PanAf focuses on five key areas of cooperation between Africa and the EU, namely:

Peace and Security.

Democracy, good governance and human rights.

Human development.

Sustainable and inclusive development and growth and continental integration.

Global and cross-cutting issues.

The added value of the PanAf builds on three main criteria:

The cross-regional, continental or global dimension of projects and programs in areas ranging from sustainable agriculture and environment to higher education, ICT and research.

The joint interest of Africa and the EU and therefore the clear link with the Strategic Partnership.

The financial complementarity with other instruments such as the European Development Fund (EDF), the European Neighbourhood Instrument (ENI), and the Development Cooperation Instrument (DCI) thematic programs.

In July 2014, the EU launched the first phase of the PanAf with a total allocation of €415 million for the period 2014–2017. As of August 2016, the total allocated funding of this instrument amounts to over 300 M€ implemented through 25 projects. (https://​africa-eu-partnership.​org/​en/​pan-african-programme).

The Commission Implementing Decision C (2014) 5072, adopting a Multiannual Indicative Programme for the Thematic Programme “Global Public Goods and Challenges” for the period 2014–2020 aimed to guide the implementation of the GPGC with an important role of the EU as a global actor also in the delivery of the 2030 Agenda and the Paris Agreement by encouraging the strengthening of inter-linkages and cross-sectoral action at the nexus between different action areas that can contribute to multiple Sustainable Development Goals.

The European Union (EU) Global Public Goods and Challenges Programme 2014–2020 (‘the GPGC') aims to contribute to poverty eradication, social cohesion, inclusive and sustainable development through the promotion of sustainable investments, job creation, broad multi-stakeholder partnerships, domestic resource mobilization, various sources of funding, notably from the private sector. In particular, with the COMMISSION IMPLEMENTING DECISION of 22.5.2018 “adopting a Multiannual Indicative Programme for the Pan-African Programme for the period 2018–2020 to be financed from the general budget of the Union” it is confirmed the role of the Multiannual Indicative Programme (MIP) in promoting sustainable investments and job creation, strengthening societal resilience, addressing irregular migration and forced displacement, boosting sustainability and security through several leverages such as multi-stakeholder partnerships, domestic resource mobilization, various funding sources from the private sector Source (Multiannual Indicative Programme for the Thematic Programme on Global Public Goods and Challenges for the period 2018–2020, ANNEX, Ref. Ares(2018)3,552,908—04/07/2018).

Before pandemic, Rwanda, South Sudan, Ethiopia, Tanzania, Uganda, Kenya, and Djibouti were the fastest growing nations of the fastest growing region in Africa.

The values of the East Africa’s top ten projects (51.7% of the total value of projects in the region) give a view of the most dynamic countries (Deloitte 2019):

Tanzania: Likong’o-Mchinga LNG Plant, Oil & Gas, 30.0 USDbn; Bagamoyo Mega Port, Transport, 10.0 USDbn; Mtwara Fertilizer Plant Real Estate, Industrial Construction, 3.0 USDbn.

Kenya; Kenya-Uganda-Rwanda-South Sudan Rail Project, Transport, 9.8 USDbn; Nairobi - Mombasa Highway Expansion Project, Transport, 3.0 USDbn.

Ethiopia: Grand Ethiopian Renaissance Dam Project, Energy & Power, 4.8 USDbn; Tams Hydropower Project, Energy & Power, 4.2 USDbn; New Addis Ababa International Airport, Transport, 4.0 USDbn; Fairfax Oil Refinery Project, Oil & Gas, 4.0 USDbn; Koysha Hydroelectric Dam Energy & Power 2.7 USDbn.

According to Deloitte analysis (2019) the composition of the companies responsible for building in 2019 was: 40.1% China, 14.8% Private Domestic, 14.8% EU Countries, 13.7% Single Countries, 4.9% African Countries 4.9% Consortiums, 4.4% Middle East Countries, 2.2% Government.

“All countries in East Africa had relatively high fiscal deficits, which were projected to decline in 2017 and remain at the 2017 level in 2018 and 2019. The deficits partly resulted from weak domestic resource mobilization in addition to high public investment spending. To address resource gaps, countries generally resorted to external borrowing” (Temesgen Furi, Impact of Financial Crisis on Economic Growth in East African Countries 2021).

Governments in the region are adopting a series of pro-trade reforms to reduce barriers to trade and improve the overall trade environment (AUC/OECD 2019a, b). In this regard, it is interesting to mention the East African Community (EAC) Common Market Protocol. It is a customs union that covers: goods, in addition to zero tariffs on intraregional trade, there is a common external tariff toward non-partners and the removal of nontariff barriers; capital, free movement covers 20 operations related to securities, direct investments, a credit operations, and personal capital operations; services, partner states are obliged to guarantee the free movement of services and service suppliers. In addition to progressively removing restrictions, EAC customs laws prevent member states from introducing any new restrictions on the provision of goods, capital, and services. This initiative is part of a wider regional integration strategy based on the idea of an “integrated continent with free movement of people, goods, capital, and services and infrastructure connections” in support of broad-based economic and human development, that has been part of the African Development Bank’s mandate since its creation in 1963 and is also now a key priority for the African Union under the New Partnership for Africa’s Development, Agenda 2063, and the RECs (Regional Economic Communities) (ADB 2019).

In particular, the total value of construction projects increased by 67.6% between 2018 and 2019, from USD 87 bn to USD 146 bn, with investments in large infrastructure projects within the Transport and Oil & Gas sectors stemming the increase.

According to data from the IMF Financial Access Survey, the region has 1106 registered mobile money accounts for every 1000 adults, compared to 600 for the whole of Africa, 533 for Asia and 245 for Latin America and the Caribbean (AUC/OECD 2021).

For example, in Madagascar, 233 BPO (Business Process Outsourcing) companies are employing between 10,000 and 15,000 people, in Mauritius, about 800 ICT/BPO enterprises employed about 24,000 workers and contributed about 5.7% to the country’s gross domestic product (GDP) in 2018 (AUC/OECD 2021).

In some regions, such as East Africa and North Africa, schools were closed for much longer—an average of 137 days in East Africa and 106 days in North Africa (African Development Bank 2021a, b).

According to Deloitte (2020) East African countries have experienced increasing foreign debt burdens in light of the COVID-19 pandemic. Consequently, China has reconsidered African countries’ debt repayments in 2020, with some financing commitments reduced as a result,

leading to projects being stalled. There has also been increased scrutiny of China-funded infrastructure projects in the region, given a greater focus by African governments on financial.

sustainability. This too has contributed to a decline in China’s funding involvement in East African infrastructure projects.

According to the UNHabitat_APA (2014) all Africa regions (except those in Eastern Africa) have urban populations greater than 40%. Africa has the highest urban growth rate in the world. Most of this growth takes place in cities with populations of fewer than 750,000 people. An estimated 21.6 million Africans lived in cities in 2000; in 2010 there were 30.7 million. It is estimated that the population of Africans in intermediate cities will increase to 47.2 million by 2025.

In absolute numbers, about 69 million African urban residents have no access to safe water services, in East Africa it is estimated 19 million (UN-Habitat 2020).

Urbanization yields significantly less value to the GDP in Africa than it does in Asia and the existing GDP growth does not translate into matching improvements in the quality of life.

“Since the adoption of the SDGs, funding for data and statistics has increased four years in a row. (…) Despite a surge in data demand to inform pandemic-related policymaking, development support to data and statistics has not risen commensurately. A recent survey found that 63 per cent of low-income and lower-middle-income countries are in need of additional financing for data and statistics to face the challenges posed by COVID-19. In 2020, 132 countries and territories reported that they were implementing a national statistical plan, with 84 having plans that were fully funded. Only 4 out of the 46 LDCs (Least developed countries) reported having fully funded national statistical plans that year” (United Nations 2021).

When dealing with settlements surely the 2030 Agenda Sustainable Development Goal 11, “make cities and human settlements inclusive, safe, resilient and sustainable” is the main reference goal. Anyway, the cross-cutting nature of urban issues imposes to consider the links and the impacts on a number of other Sustainable Development Goals, including SDGs 1, 6, 7, 8, 9, 12, 15, and 17, among others. UN-Habitat's complementary New Urban Agenda, adopted as the outcome document from the Habitat III Conference in 2016, seeks to offer national and local guidelines on the growth and development of cities through 2036.

Oumar Sylla, Africa Regional Director for UN-Habitat. Interview by Onyekachi Wambu, In: Housing is at heart of social change in Africa, New African Magazine, April–May 2021.