Address challenges of informal settlements

Contribution of urbanisation to development is a well documented fact with 53 per cent of the world’s population living in cities.

Kenya’s population distribution bears testimony to this fact. Since Independence, Kenya has experienced a high growth rate of urbanisation with recent notable surge of growth centres in Nairobi Metropolitan Region (NMR) and along the Mombasa- Kisumu transport corridor.

However, the new surge is problematic because it is driven by mostly private initiatives in the absence of enforced planning regulatory framework.

Lack of planning incentivises the private sector to disregard the potential external costs in form of commuting, pollution and congestion among others, which may lead to a market failure.

The proliferation of informal settlements in NMR is an embodiment of such market failure that has confined 71 per cent of urban dwellers who constitute 34 per cent of the total population in the slums.

These statistics reflect Kenya’s Achilles heel of five per cent annual informal settlement growth rate, which is among the highest in the world. Failure to address the informal settlements challenge and its associated problems would negate the promise of future urbanisation.

While the government has been alive to the problem of informal settlements, its policies have not dared address the land question, which has been at the core of growth of the slums.

Land tenure in these settlements is a manifestation of historical unclearly defined land rights of public, community and private land where the settlements are located.

For example, when the government recently proposed to issue leasehold to some residents of Kibera slums, which covers about 2.5 square kilometres and is home to hundreds of thousands, the proposal sadly attracted outright public condemnation, which denied it public debate.

Such condemnation notwithstanding, the proposal would be a game-changer and audacious move of transforming slums.

If implemented, it would unlock the great vaults of informalities that have trapped billions of shillings in assets that have been rendered commercially invisible.

Consequently, Kibera residents live on a highly undercapitalised lonely island of poverty sitting on a vast underground ocean of material prosperity.

Economic convention theory states that when property rights are well-defined and transaction cost low, the allocation of resources will be efficient regardless of the initial assignment of property rights.

When we say property rights are well-defined, that simply means that the party with possession right over a given plot is known. Furthermore, low transaction cost is a necessary requisite for bargaining process to take place.

In layman’s language, as long as the bargaining process is allowable, it does not matter who is issued with the leasehold because efficient outcome will eventually emerge through a vibrant land market.

While urbanisation is inevitable it must be guided by proper planning to ensure its sustainability as a major contributor to development. Such planning must be part of a broader urbanisation policy that includes land use policy to halt further growth of informal settlement.

To address the problems of existing informal settlements we need to develop an adjudication framework of determining land ownership in the settlement areas where it does not exist.

Such framework must be loaded with incentives to ensure that the benefits of formalisation of ownership outweigh the cost of adjudication. In cases where rightful owners are known, leasehold should be issued and legally protected.

Prof Kieyah is a principal policy analyst at Kenya Institute of Public Policy Research and Analysis (KIPPRA)