DIRECTIONS IN DEVELOPMENT The _ut -rities ,ifor Uement CATHERINE FARVACQUE-VITKOVIC LUCIEN GODIN 4/0 t~ ~~hs& t .Si a dQ~~~~~~~~~~~~~~~' > ir-lA ' s,a0 DIRECTIONS IN DEVELOPMENT The Future of African Cities Challenges and Priorities for Urban Development Catherine Farvacque-Vitkovic' Lucien Godin The World Bank Washington, D.C. (D 1998 The International Bank for Reconstruction and Development/ THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433 All rights reserved Manufactured in the United States of America First printing in French July 1997 First printing in English August 1998 The ideas, interpretations, and conclusions presented in this paper are the responsibility of the authors and do not necessarily reflect the opinions of the the World Bank, its Board of Executive Directors, or the governments they represent. Cover: David Coulibaly drew this scene from life in an African city. This study was prepared by Catherine Farvacque-Vitkovic, senior urban development specialist in the Africa Department, The WVorld Bank, and Lucien Godin, architect and urban planner, Groupe Huit. ISBN 0-8213-3886-2 (English) ISBN 0-8213-3869-2 (French) Library of Congress Cataloging-in-Putblication Data Farvacque-Vitkovic, Catherine. [L'avenir des villes africaines. English] The future of African cities : challenges and priorities for urban development / Catherine Farvacque-Vitkovic, Lucien Godin. p. cm. - (Directions in development) Includes bibliographical references. ISBN 0-8213-3886-2 1. City planning-Africa. 2. Urbanization-Africa. I. Godin, Lucien. II. Title. III. Series. HT169.A35F3713 1998 307.1'216'096-dc21 98-20604 CIF Contents Foreword v Acknowledgments vii Abbreviations and Acronyms viii Summary 1 1 Overview of Past Experience and Recent Trends 7 The Evolution of Urban Projects in Francophone Africa 8 Recent Trends 16 2 What Should Take Priority in Future Urban Projects? 21 Objectives and Definitions 22 Project Content 22 Providing Basic Services 23 Complementary or Supporting Measures 31 3 Who Should Be the Partners? 45 Decentralization and the Rise of Municipal Governments 46 Decentralization: Goal or Opportunity? 47 Selecting Project Partners 50 Agetip Projects and Urban Projects 52 Recommendations 57 4 How Should Urban Investments Be Financed? 61 A Brief Historical Review 62 Can We Count on Local Governments? 64 Moving On 70 Adapting New Projects to the Local Context 73 Possible Measures 75 Conclusions 88 5 Implementation Tools 91 Aerial Photography and Urban Sketch Maps 94 iii iv THE FUTURE OF AFRICAN CITIES The Urban Reference Plan 101 The Urban Grid 103 Infrastructure and Services Programming Inventory 105 Catalogue of Typical Municipal Facilities and Public Works 115 Environmental Impact Assessment Indicators for Municipal Projects 118 Underserviced Neighborhoods and the Agetips 121 Agetips: Performance Indicators 124 An Occupancy-Based Tax: The Urban Tax 126 Street Addresses and Tax Registries 133 Urban, Financial, and Organizational Audits 140 The Urban Audit Framework 141 The Municipal Financial Audit Framework 151 Municipal Contract: Contrat de ville 163 References 173 Foreword rThe massive migration of people from rural into urban areas is the most 1 spectacular demographic upheaval that Africa has experienced in recent decades. While Africa was 80 percent rural at the time of indepen- dence, its rate of urbanization now stands at 50 percent, and the trend is expected to continue over the coming years. The growth of Africa's cities has outstripped local capacities of management, absorption, and financ- ing. Yet cities do not have to be a drain on the national economy; on the contrary, they can add new dynamism to the process of economic growth. The World Bank has played a fundamental role both in strategic thinking about urban problems and in implementing urban develop- ment programs and projects. Such projects fall into several generations, representing a succession of intervention strategies. This book surveys 25 years of experience in the urban development sector in Francophone Africa and suggests an agenda for the future, focusing on the following fundamental questions: What should be the priority areas of action under future urban pro- jects? Who should be the partners? Where should urban investments be made, and how should they be financed? The answers proposed here, and the tools suggested for implement- ing them, represent an interesting new approach to a pragmatic frame- work for intervention, based on a clear set of priorities. Basic principles underpin this approach: * Find simple solutions to complex problems: Urban development pro- jects, by their very nature, have traditionally been complex, since they are multisectoral and multi-institutional and also have a spatial dimension. The early generations of urban development projects were often cast in terms that were too ambitious, requiring physical investments in a wide variety of subprojects, ranging from creating urban institutions to liberalizing real estate markets. And indeed, the pressure to try to do everything persists today. Over the past few v vi THE FUTURE OF AFRICAN CITIES years the development paradigm has become considerably more complex, with the need to take into account not only the economic and social effects of projects, but their environmental impact Eas well. * Don't lose sight of the beneficiaries: It is important to reconcile the social agenda with macroeconomic reforms. The tendency has often been to shift from one extreme to the other. * Choose the right partners: Although central governments are still the partners of choice, the trend toward decentralization means that it should be possible to maintain a dialogue with local authorities and to delegate urban services increasingly to the private sector, depend- ing on the situation within the particular country. The future of Africa's cities is closely tied to their macroeconomic and political environment, and hence to the choice of investments and partners. This point stands out clearly from the present study, which takes as its starting point the experience of countries in Francophone Africa. Jean-Louis Sarbib Peter WlVatson Vice President Regional Director Africa Region for Infrastructure Africa Region Acknowledgments This book was prepared in the West and Central Africa Urban Development Department, under the leadership of technical man- agers P. Watson, A. HIarth, M. Pulgar-Vidal, and L. Obeng. The authors are grateful for the support and counsel that each provided in turn. Helpful advice was also given by many officers at the World Bank, col- leagues, and African partners. Among them, special thanks are due to M. Cohen, C. Diou, and J. Mazurelle, who reviewed and annotated the various versions, and to A. Sinet, who had a large hand in the review of chapter 4. The authors also wish to acknowledge the thoughts and ideas con- tributed by P. Bultynck, P. Canel, A. Caroll, N. Carrere, J. M. Lantran, H. Larbi, R. Maurer, L. P6an, as well as by P. Annez, A. Bertaud, A. Blakely, R. Buckley, 0. Grimes, C. Kessides, N. Levine, C. Moisson, A. Pellegrini, C. Reliquet, B. Renaud, and B. Veuthey. Thanks also to A. A. Ahmed, L. Ben Barka, J. Massein, M. Rajaobelina, M. Sarr, M. Sidibe, M. Wade, and to I. El Amrani, A. Basti, C. Bouchaud, V. Chomentowski, J. M. Cour, F. Damette, G. Josse, H. Leroux, F Pechon, and J.L. Venard. vii Abbreviations and Acronyms AGETIP Agence d'Ex6cution de Travaux d'Interet Public pour l'Emploi (Public Works and Employment Executing Agency) AFRICATIP Association des Agences Africaines d'Execution des Travaux d'Interet Public (Association of African Agetips) AGETUR Agence d'Execution de Travaux Urbains (Benin) ADM Agence de Developpement Municipal (Municipal Development Agency, Senegal) BHS Banque de l'Habitat du Senegal (Senegal Housing Bank) CAA Caisse Autonome d'Amortissement CARPOL Cartographie Polyvalente (Mali) CCC Compte de Credit Communal (Municipal Credit Fund, Senegal) CCCE Caisse Centrale de Cooperation Economique (now the CFD) CFC Cr6dit Foncier du Cameroun (Mortgage Finance Fund, Cameroon) CFD Caisse Francaise de Developpement (French Development Fund) DCGTx Direction et Contr6le des Grands Travaux (Public Works Department, C6te d'Ivoire) DCL Direction des Collectivites Locales (Department of Local Government) DGF Dotation Globale de Fonctionnement (Global cperat- ing grant, C6te d'Ivoire) DIU Projet de D6centralisation des Infrastructures Urbaines (Urban Infrastructure Decentralization Project, Mauritania) DNTP Direction Nationale des Travaux Publics (National Public Works Department, Burkina Faso) viii ABBREVIATIONS AND ACRONYMS ix FECL Fonds d'Equipement des Collectivites Locales (Municipal Services Fund, Senegal) FEICOM Fonds d'Equipement et d'Investissement des Communes (Municipal Services and Investment Fund) FIAU Fonds d'Investissement d'Amenagement Urbain (Urban Development Investment Fund, C6te d'Ivoire) FPCL Fonds de Prets aux Collectivit6s Locales (Municipal Loan Fund, C6te d'lvoire) FRAR Fonds Regional d'Amenagement Rural (Regional Rural Development Fund, C6te d'Ivoire) GDP Gross domestic product GIE Groupement d'Interet Economique (Local Business Initiatives Group) IDA International Development Association IFL Investissement de Fonction Locale (Locally initiated public investment) MACOM Mission d'Appui aux Communes (Municipal Support Mission, C6te d'Ivoire) MAETUR Mission d'Amenagement et d'Equipement des Terrains Urbains MOD MaRtre d'Ouvrage Delegue (Delegated Contract Manager) NGO Nongovernmental organization PAC Programme d'Appui aux Communes (Urban Development and Decentralization Program, Senegal) PACOM Projet d'Appui a la Conduite d'Operations Municipales (Municipal Operations Support Project, Cote d'Ivoire) PADDUS Projet d'Appui a la Decentralisation et au D6veloppement Urbain (Decentralization and Urban Development Support Project, Senegal) PAPH Projet d'Appui a la Politique de l'Habitat (Housing Policy Support Project, C6te d'Ivoire) PDCC Projet de Developpement des Communes Cotieres (Coastal Communities Development Project, C6te d'Ivoire) PDM Programme de Developpement Municipal (Municipal Development Program) PUH Permis Urbain d'Habiter (Occupancy permit) RAF Reforme Agraire et Fonci&e (Agrarian and Land Reform, Burkina Faso) SETIU Societe d'Equipement des Terrains Urbains (Urban Land Development Agency, C6te d'Ivoire) TF Titre Foncier (Land ownership title) x THE FUTURE OF AFRICAN CITIES UDP Urban development plan VRD Voirie et Reseaux Divers (Roads and utilities) One U.S. dollar equals aboutt 500 CFAfrancs. Summary W S _;;* .-.- zE | | ~~~~V 2 THE FUTURE OF AFRICAN CITES W ith 25 years of experience in the urban development sector, 110 urban projects executed in the Africa region alone (US$3,461 mil- lion)-58 in Francophone Africa (US$1,581 million)-and 35 new urban projects under preparation (US$1,098 million), the World Bank has a solid record to show the international community. Yes, mistakes have been made, and some of the more ambitious objectives have not been met. Yet despite these shortcomings, according to the World B3ank's Operations Evaluation Department, the sector has performed much better than many others. A challenge of major proportions still lies ahead. The numbers speak for themselves: 50 million people are expected to migrate to the cities of West Africa over the next 10 years, and it will take 80,000 hectares of land to accommodate them. It is projected that by 2020, 63 percent of the population will live in cities. This represents a potential time bomb over the next decade, and there could be explosions of urban violence and social unrest as social disparities become more acute. At the same time, as highlighted in the World Bank's 1991 urban policy paper, Urban Policy and Economic Development: An Agendafor the 1990s, a major share of GDP is produced in cities: it is therefore essential to ensure that cities function in ways that contribute to the national economy, rather than burden it. Over the past few years the sector has been overwhelmed by an avalanche of issues and ideas, some new and legitimately important (in the environment area, for example), others rediscovered from the past. This has led to confusion and a blurring of operational objectives. In try- ing to address every outside criticism, justified or not, the urban devel- opment agenda risks failing to confront the really fundamental Lssues. This book addresses two basic questions: What have we learned? Where are we going? It takes stock of two decades of experience in urban development, proposes a common-sense priority agenda for the urban sector in the region, and suggests some operational tools to carry it out. What Should Take Priority in Future Urban Proj ects? Provide Basic Services Urban projects should provide basic services to the greatest number of people in ways that will enhance standards of living for the most dis- advantaged groups. SU UMARY 3 Beyond the question of what should be financed is the need to deter- mine where it should be financed. The spatial dimension needs to be reintroduced into investment planning. Three types of geographic areas offer potential for intervention: (a) irregular and spontaneous settle- ments (slums); (b) existing, underserviced neighborhoods; and (c) peri- urban areas (future extensions). Attempts to deal with squatter settlements are complicated by a num- ber of factors: a complex urban fabric, conflicting land claims, widely dis- parate populations who are hard to mobilize, limited impact in relation to the scale of the problem, and, last but not least, resettlement issues. These projects are worth revisiting, however, if we really want to tackle the poverty agenda. Similarly, the question of urban sprawl (that is, peri- urban areas) demands more attention if we are to anticipate urbanization rather than simply react to it. Here the book suggests undertaking nego- tiations with customary landowners to earmark land for future settle- ments, and leaving the subdivision and allocation of plots to them. This would be a drastic departure from previous practice. Promote Complementary Measures Complementary measures relate to information, urban planning, and land management. They also include measures related to municipal management and finance, which are discussed in the following two sections. INFORMATION. We know relatively less about cities today than we did 15 years ago. Without reliable information, sound decisionmaking is impossible. Chapter 5 (the "tool kit") proposes a user-friendly inven- tory of infrastructure and public facilities to help assess both existing capacities and future needs. URBAN PLANNING. The book argues that urban planning should be revived as a viable tool. The goal is not to reintroduce regulatory plan- ning, but rather to provide a simple tool for locating the major infra- structure that will shape future urbanization. The tool kit discusses the Urban Reference Plan as a possible option. LAND MANAGEMENT. Land tenure has always been a stumbling block in urban projects. Ownership problems have often been under- estimated, and any solution proposed is bound to be highly sensitive politically. The wealth of the urban elite is based largely on its 4 THE FUTURE OF AFRICAN CITIES monopoly of landholdings. The report argues for alterniative approaches to public land administration, and less interference by the state in land allocation and development. These alternatives would include negotiations with landowners, abolition of current site improvement practices, and a greater emphasis on the rights of occupancy as opposed to those of ownership. Who Should Be the Partners? The tide of decentralization is sweeping over most countries in the re gion, although levels of commitment and progress vary. Decentralization should not be seen as an end in itself, however, but as an opportanity. Donor support should be viewed as part of a long-term process and offered only where there are sufficient signs of central government commitment and local dynamism. A new group of projects is attempt- ing to establish contractual agreements between municipalities, the central government, the funding agency, and the executing agency, whereby financing of physical investments will be tied to a set of rmunic- ipal reforms. These reforms are aimed at improving the progranuning and selection of municipal projects and assisting in the mobilization of local resources. The great number of actors involved (institutional, pri- vate, and parastatal agencies) makes it important to determine clearly who is doing what, and who should be responsible for what, in the pro- vision of municipal services. The "Agetip"-type of agency is a new arrival on the scene. Moie than a dozen of them are currently operating in the region. They were intro- duced originally to (a) promote speedy, transparent procurement for public works, (b) generate employment and stimulate small and medium-scale enterprises, and (c) inject funding into modest but visible and politically rewarding projects-and they have certainly livecd up to those expectations. Their objectives had the merit of being clear and easy to implement, and they could draw on direct funding from the World Bank and other donors. The challenge now is to improve the eflective- ness of these agencies in support of urban development projects. This will mean addressing some of the problems that have emerged since the creation of the Agetip, such as subproject selection criteria-are we financing the right investments?, the spatial dimen- sion of activities, the monopoly issue, the transfer of skills at the institutional level, sustainability beyond the time frame of World Bank and other funding, and the financial contribution to be expected from beneficiaries. Yet the most important argument for improving SUMMARY 5 and strengthening the cooperative relationship between Agetips and urban projects is the need to join forces to meet the overriding objec- tive: enhancing the management capacity and responsibility of local governments. How Should Urban Projects Be Financed? Households have paid for a large share of the urbanization process. Local capacity to finance urban services is increasingly limited, how- ever, and 90 percent of investment today comes from external aid. This assistance remains vital, but new rules for its use should be defined. Can we count on central governments? Yes, if they are willing to con- front three major obstacles: transfers, "unicit6 de caisse" (the "consoli- dated revenue" approach to budgeting and funding, whereby the central government appropriates local revenues), and legal reform con- ceming local taxation. Can we count on local governments? Their situ- ation is worrisome. They are hard hit by the macroeconomic crisis and the continuing financial constraints of central governments, and they must face their own problems of governance and management, with little or no local tax base. This book provides a number of recommen- dations for achieving four main goals: improving the quality of expen- ditures, improving local accounting and budgetary practices, improving taxpayer identification systems, and improving local tax collection. Some Operational Tools Finally, the tool kit (chapter 5) suggests a number of operational tools covering urban planning, land management, urban finance, taxation, and municipal contracts. While these tools may not answer every need, they can help in building a coherent strategy. 1 Overview of Past Experience and Recent Trends !~~~~~~~~~~~~~~~~~ ~ E~~~~. ~ |S ~~~~~~~~~~~~~~~~'- 8 THE FUTURE OF AFRICAN CITIES Since 1972, when the World Bank's first urban project was launched in Senegal, some 7,500 projects (all sectors included), representing investments of close to US$500 billion, have been brought to cornple- tion and some 2,000 projects are currently in progress. During this period (1972-96) 361 urban projects were completed worldwide (with Bank financing of $24,273 million), including 110 in Africa (US$3,461 million), of which 58 are in French-speaking (Francophone) Africa (US$1,581 million; table 1). The project portfolio reveals two distinct periods: 1972-82, which was a time of learning by doing, and 1982 to today, a period of expansion and finding new directions. The WMorld Bank's Urban Policy and Economic Developmen t: Ani Agenda for the l990s, published in 1991, laid out a four-point strategy for meeting the chal- lenge of urban growth: (a) broadening the Bank's involvement, with an emphasis on the productivity of the urban economy, (b) combating the rise in urban poverty, (c) reducing the degradation of the urban envi- ronment, and (d) promoting research to enhance the understanding of urban problems. Several other recent World Bank papers have supplemented this analysis of urban activities: "Twenty Years of Lending for Urban Development, 1972-92" (Operation Evaluation Department 1994), the sector review on "Municipal Development" (Urban Development Division 1994), and World Development Report 1995, which was devoted to infrastructure issues. The Evolution of Urban Projects in Francophone Africa Some Milestones THE 1970s. These years saw the construction and consolidation of the African states that had achieved independence during the previous decade. Urban projects at this time were focused on housing maximum numbers of people and alleviating urban poverty (sites and services operations and slum upgrading). The message was clear and simple and can be summarized as follows: * Public authorities do not have the means to provide dwellings for every household and ought to devote most of their resources to ser- vicing plots for people to build their own homes. * Spontaneous squatter settlements and underserviced neighbor- hoods should not be razed, but improved and upgraded. * Costs should be recovered, so that operations can be repeated (replicability). OVERVIEW OF PAST EXPERIENCE AND RECENT TRENDS 9 Table 1. World Bank urban projects, 1972-96 All projects Urban projects No. of Cost No. of Cost projects (US$ million) roects (US$ million) Com- In Com- In Com- In Com- In pleted prep. pleted prep. pleted prep. pleted prep. World 7,447 2,078 493,367 148,552 361 121 24,273 7,765 Sub-Saharan Africa 2,346 657 69,396 19,537 110 35 3,461 1,098 East Asia and Pacific 1,149 237 104,385 29,349 66 22 6,036 2,330 South Asia 912 205 86,822 23,276 29 8 3,030 1,105 Europe and Central Asia 844 400 74,331 33,218 33 21 2,536 1,278 Middle East and North Africa 677 138 35,629 9,172 44 18 2,637 1,015 Latin America and the Caribbean 1,519 441 122,804 34,000 79 17 6,573 939 Africa 2,346 657 69,397 19,537 110 35 3,461 1,097 East Africaa 1,539 427 49,475 13,378 54 17 1,590 593 West Africab 789 217 19,517 5,883 56 18 1,771 504 Regional projects 18 13 405 276 Francophone Africa 1,054 269 25,174 6,845 58 23 1,581 480 Benin 56 15 881 280 2 1 58 35 Burkina Faso 62 19 1,394 600 6 2 117 20 Burundi 50 7 871 164 2 0 36 0 Cameroon 68 14 2,277 539 3 1 176 10 Central African Republic 30 8 559 148 1 1 18 18 Chad 43 16 757 226 2 1 27 10 Congo, Dem. Rep. of 69 11 1,838 296 1 1 8 8 Congo, Rep. of 25 9 473 108 1 1 12 12 C6te d'lvoire 94 26 5,446 1,574 6 1 367 40 Djibouti 13 5 114 62 2 0 16 0 Gabon NA NA NA NA 1 1 20 20 Guinea 58 14 1,278 335 4 2 103 31 Madagascar 85 25 1,891 502 4 2 61 30 Mali 68 19 1,447 477 5 2 160 90 Mauritania 47 13 610 118 2 1 22 10 Mauritius 35 4 455 46 3 1 37 10 Niger 51 16 1,008 334 4 3 95 65 Rwanda 50 7 965 265 1 0 32 0 Senegal 94 23 1,887 398 6 1 142 23 Seychelles 3 1 19 8 NA NA NA NA Togo 53 17 1,004 365 2 1 74 48 NA Not applicable. a. All Sub-Saharan African countries not mentioned in footnote b. b. Benin, Burkina Faso, Cameroon, Cape Verde, Central African Republic, Chad, Congo, Rep. of, Cote d'lvoire, Gabon, Guinea, Guinea-Bissau, Mali, Mauritania, Niger, Sao Tome and Principe, Senegal, Togo. Source: World Bank Information System. 10 THE FUTURE OF AFRICAN CITIES THE 1980s. This was the decade of structural adjustment and:insti- tutional, economic, and financial reforms. Poverty received little attention in the 1980s. Urban projects lost their sense of direction somewhat, as they were broadened to include housing finance and municipal development. The Bank's message was blurred, and the step-by-step approach that had characterized its first projects, where lessons learned from one experiment could be applied to the next, lost prominence. THE 1990s. This decade opened against the backdrop of the colatinu- ing economic crisis. The CFA franc was devalued. Francophone African countries moved toward multiparty politics and decentralization, which at times resulted in the loss of political and institutional stability and a weakening of central authority. The Bank entered a period of change and internal reorganization, in an attempt to respond more effectively to the new needs of its bor- rowers. Under pressure from an assortment of lobbies with varying and sometimes diverging interests or points of view, the Bank sought to assert itself on all fronts: protecting the environment, women in development, and community participation, among others. The confusion deepened with the arrival of a new kind of project- the Agetip (the French acronym for Public Works and Employment Agencies). With their focus on job creation the Agetips were not specif- ically called "urban" projects, although their thrust directly involved urban services and facilities. The Urban Projects Record Despite the gradual blurring of their message, the urban projects have a positive record, as documented in the Operations Evaluation Department report "Twenty Years of Lending for Urban Development." In fact, 80 per- cent (116) of urban projects completed before 1993 were ranked "satisfac- tory," a better score than the average for all other projects taken together (74 percent). In Francophone Africa all of the 11 urban projects reviewed were ranked "satisfactory." That said, the principal characteristics of projects completed or under way can be summarized as follows: (a) projects evolved dif- ferently from country to country; (b) projects were targeted at the larger cities and were centrally managed; (c) there were successes, but local capacity building was inadequate; (d) financing remains a problem. OVERVIEW OF PAST EXPERIENCE AND RECENT TRENDS 11 Housing for the greatest IA number Tt The evolution of urban projects 12 THE FUTURE OF AFRICAN CITIES PROJECTS EVOLVED DIFFERENTLY FROM COUNTRY TO COUNTRY. If we clas- sify projects by their principal components and dates of completion, we find (table 2): * There was a shift from housing and infrastructure projects toward municipal and Agetip projects. * The degree of progress varied by country: in some countries several projects were executed (C6te d'Ivoire-five, including two munici- pal; Senegal-six, including one municipal and two Agetip); in other countries projects were sometimes prepared but never executed: Central African Republic, the Democratic Republic of Congo (Congo DR), the Republic of Congo, and Rwanda. PROJECTS WERE TARGETED AT THE LARGER CITIES AND WERE CENTRALLY MANAGED. Projects focused essentially on the capitals and, on the few large cities that contained the bulk of the urban population and sui:fered the most serious problems; secondary towns benefited little, if at all. Project management was highly centralized and generally sup- ported by a project unit in one of the technical ministries (public works, urban affairs, and the like), which took responsibility for the entire process, from conception and design to execution. Local officials (in particular, mayors) had only limited involvement, for a number of reasons: donors prefer to deal with the central govern- ment, the central government is omnipresent and is modeled on the former colonial power, local authorities are often relatively new and inexperienced in their job and have few resources. THERE WERE SUCCESSES, BUT LOCAL CAPACITY BUILDING WAS INADEQUATE. The desire to tackle urgent problems often took precedence over any transfer of responsibility to the local level. In a few notable cases pro- jects did have a major impact on urban policies, even when they could not be called an outright success. Thus: (a) the first serviced plots pro- vided in Dakar (1972) served as mode!s for nearly all subsequent pro- jects of a similar nature; (b) lessons learned during the first project in Burkina Faso (1978) were helpful in the huge effort to upgrade the peri- urban settlements on the edge of Ouagadougou; (c) the auctioning of the bulk of the plots from the second Mali project (1986) effectively marked the end of the system of centrally controlled land allotmnent; (d) the (admittedly limited) experiments with providing credit to local governments (CFC in Cameroon, FPCL in C6te d'Ivoire, CCC in Senegal; see list of abbreviations) marked a significant milestone in the evolution of municipal finance; and (e) the creation of the Agetips pointed to an alternative to traditional approaches to project execution. OVERVIEW OF PAST EXPERIENCE AND RECENT TRENDS 13 Table 2. Urban projects in Francophone Africa Project Project Country Name of project order Appraised type Senegal Sites and Services Project 1 1972 U Cote d'lvoire Urban Development Project 1 1976 U Burkina Faso Urban Development Project 1 1978 U Mali Urban Project for Mali 1 1979 U Burundi Urban Development Project 1 1980 U Cote d'Ivoire Urban Development Project 2 1981 U Mauritius Urban Rehabilitation and Development 1 1981 U Guinea Urban Development Project for Conakry 1 1983 U Cameroon Urban Development Project 1 1983 U Madagascar Urban Development Project 1 1984 U Djibouti Urban Development Project 1 1985 U Mali Second Urban Project 2 1986 U Cameroon Douala Infrastructure Project 2 1986 U Senegal Technical Assistance Project 2 1987 U Cote d'lvoire Third Urban Project 3 1987 U Cameroon Second Urban Project 3 1988 U Rwanda Sectoral Institutions Development 1 1989 U Burundi Second Urban Development Project 2 1989 U C6te d'Ivoire Municipal Development Project 4 1989 M Senegal Municipal Development and Housing Project 3 1989 U+M Senegal Agetip Project 1 4 1989 A Burkina Faso Second Urban Development Project 2 1989 U Madagascar Antananarivo Plain Project 2 1990 U Guinea Second Urban Development Project 2 1990 U Burkina Faso Faso Baara Project 3 1991 A Niger Nigetipe Project 1 1991 A Mali Agetip-Mali Project 3 1991 A Congo, Dem. Rep. of Kinshasa Urban Project 1 1991 U Mauritius Urban Development and Environmental Monitoring 2 1991 U+E Benin Urban Upgrading and Manage- ment Project 2 1992 U+A Senegal Agetip Project 2 5 1993 A Mauritania DICE -Amextipe Project 1 1993 I+A Chad Atetipe Project 1 1994 A Burkina Faso Urban Environment Project 4 1994 U Togo Togo Urban Development Project 1 1994 U+A Madagascar Agetipa Project 3 1994 A Central African Republic Municipal Project 1 1995 U+A 14 THE FUTURE OF AFRICAN CITIES Table 2. (continued) Project Project Coutntry Name of project order Appraised type C6te d'lvoire Municipal Action Support Project 5 1995 M+A Mali Infrastructure and Decentralization Project 4 1996 U+A Mauritania Infrastructure and Decentralization Project 2 1996 U+A Senegal Urban Development and Decentralization Program 6 1997 M+A C6te d'Ivoire Housing Policy Support Project 6 1997 H Guinea Conakry Urban Development Project 3 In prep. Chad Urban Development Project 2 In prep. Note: Project order (1, 2, 3 ... .) refers to the order in which projects were undertaken within a given country. Project types include U-mainly urban, M-municipal, A-agency/Agetip, I-infrastructure, and H-housing (institutional). Many other examples could be cited for the progress achieved in individual projects, but there was an apparent lack of similar success in terms of empowering local authorities to run projects of this type. There were two reasons for this failure: the decisionmaking process was too centralized and excluded the mayors, even in the capital city; and the use of project units located within the central goverrnent did little to promote management continuity. The project unit system proved successful at executing projects efficiently, to a degree that governments find difficult to match, for two reasons: * Government is more suited to regulation and control than to project execution. * Official rules and regulations are often inappropriate to the circum- stances and too cumbersome to allow projects to be completed on time. While the project unit was generally linked to the administration, its nature and input were more those of a mission than a manager. The pro- ject unit would normally be disbanded at the end of a given- project (with a few significant exceptions) and could seldom be reconstituted for the next one. The objective of each project is different, and rnew skills have to be learned each time. The life expectancy of a project unit is too short (at five or six years) for it to make much of a permanent contribu- tion to capacity building. FINANCING IS A CONTINUING PROBLEM. The financial issues involve cost recovery and mobilization of resources. As one of the clear messages of OVERVIEW OF PAST EXPERIENCE AND RECENT TRENDS 15 the first projects, cost recovery was all the more significant because it emerged at a time when the idea of the welfare state was still very much alive. Indeed, the goal of cost recovery encountered strong opposition- for example, in projects aimed at slum upgrading. Residents found that they were expected to help bear the costs of their new facilities, while many of those living in richer neighborhoods had never had to pay for the far higher level of amenities they enjoyed. To overcome these difficulties, projects gradually began to pay more attention to resource mobilization and local taxation. But overall, results were disappointing when measured against the obvious needs. There were three reasons for this: * It is impossible to mobilize local resources if local people are excluded from a meaningful role in project identification. * The fiscal health of local authorities in Francophone Africa cannot be improved without overcoming certain dogmas (which most countries have managed to circumvent). * Urban projects are not the best context in which to tackle such shortcomings, since the underlying problems have more to do with the finance ministry than with the urban development min- istry. The problems associated with cost recovery, and the emphasis placed on alleviating poverty or preserving the environment, gave rise to projects where cost recovery was abandoned, and where in the end costs were borne by the state, rather than by local beneficiaries. This is what happened with the first Agetip projects. These projects went ahead as if governments could be compelled to make transfers of resources to local authorities or to low-income groups; indeed, gov- ernments were supposed to do just that but were handling the trans- fers ineffectively, or not at all. Proceeding in this way no doubt makes it easier to get projects up and running, and even to attain some of their key objectives, but it poses a number of risks that have become increasingly obvious: - It discourages local residents and authorities from taking responsi- bility for projects and risks deepening their dependency. * By failing to demand even a modest local contribution, it forgoes an opportunity to mobilize local resources, at a time when public funds are becoming increasingly scarce. * By exhibiting an inconsistent approach to cost recovery, it can create confusion locally, since people wonder why one project requires them to make a contribution, while another project funded by the same donor does not. 16 THE FUTURE OF AFRICAN C ITIES In conclusion, reliance on centralized structures, combined with the problems of local financing, has done little to engender a sense of responsibility or ownership of projects among local beneficiaries. The flow of funds has been sustained since independence, but if it contin- ues for too long, it risks becoming a form of welfare, rather than pro- moting real development. Recent Trends As discussed, the fate of urban projects has been largely dependent on the global context. It is thus worthwhile to look more closely at the context within which future urban projects will be undertaken. Three features will be significant: urban management is becoming more complex, the economic crisis is ongoing, and the institutional setting is shifting. The Growing Complexity of Urban Management Urban management is becoming increasingly complex, as the urban population swells, informal settlements proliferate, and poverty becomes more pronounced in the cities. A STRUCTURAL CHANGE: THE URBAN POPULATION IS NOW IN THE MAJORITY. Cities today account for the greater part of GDP, and the urban popu- lation is now in the majority. In the Sahel region urban dwellers con- stitute 35 percent of the total population (12 million out of 32 million), and they will account for 50 percent of the population within 2.5 years (34 million out of 68 million).1 Over the next 10 years cities will grow by 6 million people, or 50 percent more than their population today, and these people will occupy an additional 100,000 hectares. In West Africa as a whole the outlook is even more alarming: 63 percent of the popu- lation will be city dwellers in 2020 (270 million out of 430 rnillion). Within 10 years the urban population of West Africa will have increased by 43 million. It is true that urban growth has slowed over the past decade, and urban migration has been restrained by better world economic con- ditions and the effects of structural adjustment. Yet the traditional image of an essentially rural Africa is increasingly out of touch with reality. OVERVIEW OF PAST EXPERIENCE AND RECENT TRENDS 17 THE IMBALANCE BETWEEN THE ECONOMIC IMPORTANCE OF CITIES AND THEIR AVAILABLE RESOURCES. Urban areas account for only one-third of the total population, but they produce 60 percent of national GDP. Yet local governments currently collect scarcely 1 percent of the urban GDP in revenues, or somewhere between $6 and $8 per inhabitant, and their resources are growing more slowly than the urban popula- tion. Finally, there is an analogous discrepancy between the economic dynamism of cities and the general weakness of municipal manage- ment at the technical level. RISING URBAN POVERTY AND THE SPREAD OF SQUATTER SETTLEMENTS. The urban population is growing at a rate of more than 6 percent a year in the capital cities of West Africa, as a result both of a natural increase in the cities and the continuing influx from the countryside. These grow- ing numbers are absorbed in part by the increasing density of existing neighborhoods and in part by the creation of new ones. In these infor- mal settlements, which often spring up overnight, living conditions are rapidly deteriorating as overcrowding intensifies. The chaos in the housing situation-attributable to governments' inability to come to grips with the land management issue-makes it impossible, or very difficult, to provide basic services: passable roads, storm sewers, drinking water supply, street lighting, and the like. URBAN PLANNING TOOLS ARE INADEQUATE. Policies and tools for manag- ing urban growth (master plans, in particular) are less and less adequate for coping with the economic and social situation of the cities. Urban pro- jects have helped highlight the obsolescence of these tools, by providing facilities and services (sites and services, upgrading) that are more attuned to reality. But the old tools have not been discarded-they survive, at least on paper, even though the departments responsible for applying them no longer have the know-how or the capacity to use them effectively. A Permanent Economic Crisis The economic crisis of the past few years persists and is becoming deeper, in the face of limited resources, ineffective tax structures, and the inability of the economy to generate added value. The current tur- moil stands in sharp contrast to the early days following independence, when states still had the capacity to manage urbanization and finance its infrastructure. 18 THE FUTURE OF AFRICAN CITIES RESOURCE RESTRICTIONS. The growing demands of newly indepen- dent countries and the general international economic situation have made donors more selective, particularly when it comes to funding for countries whose economic performance is regarded as unsatisfactory. Yet while available resources are becoming more restricted, urban growth continues unabated. THE WEAKNESS OF LOCAL TAXATION. With resources shrinking, efforts to raise money through local taxation have been frustrated by taxpayer resis- tance, and attempts to improve municipal revenue systems have been disappointing. Moreover, the fiscal fragility of local governments stems as much from their own management shortcomings as from their depen- dence on the central government. Yet current attempts at decentralization seem to put more emphasis on the formal division of powers between the state and the municipalities than on ensuring any degree of fiscal auton- omy for local government. What can be done to circumvent this problem? Low VALUE ADDED IN THE URBAN ECONOMY. While industry stagnates under the impact of the economic crisis, and the tertiary sector registers only feeble growth, the informal sector is becoming the dominant eco- nomic force. Although it is difficult to judge value added in this sector, it should not be underestimated-in fact, urbanization throughout the region depends largely on the flourishing of the informal economy. The Shifting Institutional Setting Several elements have contributed to rearranging the institutional land- scape: the collapse of the welfare state, decentralization and the con- comitant weakening of the central government's role, and the emergence of new players. THE COLLAPSE OF THE WELFARE STATE. The end of the welfare state, in the wake of the economic crisis, was a major shock and had a profound impact on behavior. The welfare state had been virtually the only model for Francophone Africa since independence. It was not without its ambiguities: sustained in part by the largesse of the former colonial power, it also reflected the influence of newfound friends who had sup- ported the national emancipation movements. DECENTRALIZATION. Decentralization, and the simultaneous move- ment toward democracy, are under way in some 15 countries. OVERVIEW OF PAST EXPERIENCE AND RECENT TRENDS 19 Decentralization has mainly benefited the municipalities-the primary players at the local level. The shortcomings of the preceding centralized governments and the need for broader political outlets have fed the dynamism of the municipalities. But new urban institutions have tended to proliferate faster than the resources at their disposal, and in the cur- rent context it is far from certain that they will have the means, in the short run, to fulfill the obligations they have taken on. THE RETREAT OF GOVERNMENT AUTHORITY AND THE RISE OF THE COOPER- ATIVE SECTOR. The weakening of central government has not been offset by the rise of any real private sector, nor has any parapublic sector arisen to take its place. There has, however, been a move toward priva- tization of marketable services (water, electricity), and an increasingly potent cooperative sector drawing on local community support has evolved. This sector is now trying to fight unemployment by providing local services that would normally be the responsibility of municipal govemment (household garbage collection, for example). THE ARRIVAL OF NEW PLAYERS. The institutional landscape has been enriched by the arrival of "delegated contract managers" in the form of the Agetips, which have proved far more effective than government authorities in undertaking public works. To this scene we must add the "customary" or traditional righthold- ers, who have been around for a long time. As democracy has spread, this group has again advanced its land claims, which were suppressed during the previous period, with the state's claim of eminent domain over all national territory. In this context, the book addresses the following questions: * What should take priority in future urban projects? * Who should be the partners? * How should urban investments be financed? It also suggests specific tasks and operational instruments to help implement the proposed recommendations. Notes 1. The Sahel is understood as embracing the following countries: Burkina Faso, Chad, The Gambia, Mali, Mauritania, Niger, and Senegal. 2 What Should Take Priority in Future Urban Projects? 22 THE FUTURE OF AFRICAN CITIES This chapter argues that the basic strategy and objectives for urban Tprojects in Africa should be simplified. It takes account of the pecu- liar features of the African context and does not attempt to offer a sin- gle solution to a multifaceted problem. Urban projects will always be fairly complex, yet if priorities are carefully selected and practical tools put in place, significant obstacles can be overcome. Objectives and Definitions This argument advocates a return to fundamental principles: (a) pro- vide basic services to the greatest number of people, to improve living conditions for the poorest segments of society; and (b) improve pro- gramming, financing, management, and maintenance in a way that is both economically sustainable and environmentally sound. If the primary objective today is to alleviate poverty, priority must be given to the provision of basic services, with a view to making the greatest possible improvement in the living conditions of those in great- est need-often the majority of a country's population. If the second objective is to enhance the urban environment, the best approach again is to improve basic services (maintenance of sec- ondary roads, solid waste management, individual and community sanitation facilities, water supply, and mobilization of local resources). Finally, if the third objective is to enhance the productivity of cities, then adequate infrastructure is a precondition for productive urban economic activity, which in turn is vital to the national economy. Project Content Future projects should focus on supplying basic services anc support- ing complementary measures. By "basic" services we mean the facilities a municipality is generally expected to provide and maintain: (a) road, drainage, and sanitation infrastructure; (b) household garbage collection, provision of public standpipes and street lighting; and (c) neighborhood facilities related to basic services (primary schools, dispensaries), commercial services (mar- ketplaces, bus and truck stations, slaughterhouses), and administrative services. We might add (d), the production of serviced plots, although this task is generally the responsibility of central government. Other rev- enue-producing, "marketable" services (domestic water supply, electric- ity, telephones) are not part of this category. They are generally WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 23 "delegated" through a concession or lease and fall into a class of projects that are beyond the scope of this document. By "complementary" measures we mean those deemed necessary for provision or upkeep of public services, whether they are directly related to project components or are more far-reaching, for example, legislative or policy reforms. Such measures might include urban management, local finance, and land management. Their implementation would require the use of specialized "tools" and appropriate training (see chapter 5). Providing Basic Services What Should the Priorities Be? Priorities will differ, depending on the city or country. For the most part, however, priorities will involve roadways, drainage, water sup- ply, sewerage, and household garbage. Another area where assistance might be provided is for production of serviced land. STREETS AND ROADWAYS. Priority should be given to: a Overcoming the ghettoization of slums and poor neighborhoods, which results from inadequate links to the rest of the city. * Enhancing the viability of irregular or spontaneous settlements. Road links are often a precondition for the installation of other net- works (water supply, storm sewers, lighting), the introduction of services (garbage collection, transport of water or goods), and the construction of neighborhood facilities (schools). * Providing services to urban extension zones, with special attention to accommodating low-income newcomers. The provision of streets and roads is expensive and imposes heavy recurrent expenditures on government. Road projects can no longer be financed, for example, on the grandiose scale attempted in Yamoussoukro. Rather, undertakings should focus on meeting minimum requirements and should be set to modest standards. In most African cities maintenance of the primary street network falls to the central authorities, since local government generally does not have the resources to pay for it. Perhaps the process of transferring responsibility for financing this network to the local level could begin with the planning and upkeep of secondary roads. In Guinea, for example, technical assistance has been provided to set up a secondary 24 THE FUTURE OF AFRICAN CITES roads maintenance unit within the municipal technical services of Conakry. This unit, with technical assistance support, is responsible for iden- tifying and updating annual tranches of priority maintenance work. An inventory of the existing roads network has been drawn up, along with a methodology for updating it, and counterpart funding (equal to 10 percent of the annual total) has been mobilized by the city. DRAINAGE. There is generally strong public demand for drainage facil- ities: runoff from storms and the risk of flooding are a particular threat in poorer neighborhoods, where earthen houses and family belongings can easily be swept away. Measures to control the runoff include rehabilitat- ing low-lying areas, and cleaning out and maintaining drainage ditches and canals.' These tasks can be justified for their impact on health and hygiene alone. Experience shows that the residents of riparian areas can be mobilized to assist in such highly visible projects and to take on their continued maintenance as a community responsibility. WATER SUPPLY. The supply of drinking water is generally left to a concessionaire company that contracts for a specific project. The most pressing situations are those where the water supply is corrLplicated by problems of solid waste disposal, with the attendant risks to public health. These problems arise most commonly in: * Densely populated neighborhoods, where there is no water supply network and where residents still draw their drinking water from wells that may be contaminated by seeping sewage * Peripheral areas that are not connected to water supplies and where the water table is not sufficient to support either wells or hand pumps. SOLID WASTE. A host of problems can impede the establishment and maintenance of garbage removal service, and few experiments in the Africa region have been successful in this regard. The first urban pro- jects financed by the Bank in the area (Burkina Faso, Guinea, Mali, Senegal) were devoted to upgrading technical services, at great expense in terms of both equipment and technical assistance. These undertak- ings improved service for a few years, but they eventually succumbed to a plethora of problems-principally, the lack of sustainable funding. As a result, equipment was eventually cannibalized, technical staff drifted away, know-how was lost, and the service typicatlly ended up meeting less than 10 percent of demand. Ongoing efforts, both haphazard and short term in their approach, fail to deal with the two biggest and most intractable problems: financing the WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 25 system and giving it the proper institutional structure. These attempts are often limited to the first and easiest stage of service, namely, collec- tion, foregoing the transfer and disposal of waste collection. Several experimental pilot projects have been undertaken with joint participation by beneficiaries, neighborhood organizations, small and medium-size enterprises, and nongovernmental organizations. Although interesting, these efforts have been too limited in scope to handle the problem. The lessons learned from these experiments were several: the private sector's ability to provide a service that is not necessarily prof- itable should not be overestimated; beneficiaries' willingness to pay is limited (most city dwellers cannot afford to pay the full cost of the ser- vice); public awareness and education campaigns are a crucial part of any such undertaking; and better coordination is needed between donors and local or international nongovernmental organizations. Solid waste management is quite complex when viewed in its full scope, including all the links in the chain, such as transportation and disposal. The cost of such service exceeds by far beneficiaries' capacity to pay and demands a judicious contribution from various sources of funding. Unlike urban areas in developed countries, African cities have little or no tax base and suffer from tight financial constraints-in short, they have no way of coping. PRODUCING SERVICED URBAN LAND AND HOUSING. Projects of this kind, especially producing serviced plots, have been undertaken on a signif- icant scale. But improvements are still needed: • Financing. How can the replicability of successful operations be improved? What mechanisms should be put in place to facilitate the financing of housing? e Land management. Government policy in West Africa has generally asserted the state's eminent domain over the land. How can policy be shaped to focus on major infrastructure needs rather than on the micromanagement of land subdivision, while leaving the improve- ment of individual plots increasingly in the hands of the private sec- tor (box 1)? Where Should Investments Take Place? The spatial dimension of projects needs to be at the core of any strategy for urban development. The primary challenge is still to cope with the rapid pace of urbanization, as reflected in the growing population density in 26 THE FUTURE OF AFRICAN CITIES Box 1. Land development agencies: a missed opportunity? The CCCE (today the CFD) was responsible for the creation of a number of housing corporations,2 whose basic activity was to produce affordable housing for the local elites (civil servants and officials) and to provide a supply of serviced plots. Various difficulties led in 1974 to an abrupt halt in such funding. With respect to housing construction, the funding halt reflected a desire to end a system that was a major drain on funds, made all the worse by the growth in bureaucracies and the number of civil servants following independence. On the one hand, the CCCE was trying to limit construction costs to keep them in line with reasonable rent levels; but on the other hand, governments were eager to provide modern housing, with all the comforts, for their public servants. With regard to servicing plots, governments were supposed to pro- vide the housing corporations with serviced plots, complete with road access and utility connections, and free of all liens and encumbrances. This was easier to do for small operations than for big ones. But the fact that operations did not involve direct transfer of land ownership tended to disguise deficient land tenure policies. In effect, the property was being leased, and even though the legal status of the land might be poorly reg- ularized, the housing programs were able to proceed without being unduly restrained by ownership questions. With the halt in financing, housing construction collapsed and the housing corporations experienced growing financial problems and a slowdown in business. At the very time the CCCE was thus redirecting its activities, however, the World Bank was launching its first urban pro- jects. It might have been expected that funds would find their way into the financing of land development operations and that the housing cor- porations would be able to put their valuable know-how to work under the new approach proposed by the Bank (sites and services). But such a conversion never took place, apart from SETU (C6te d'Ivoire, 1972) and MAETUR (Cameroon, 1975). In short, there are no longer any housing companies with capabilities comparable to those of the housing corpora- tions of the early days of independence. urban centers and the mushrooming of unserviced squatter settlements or "irregular" neighborhoods in peripheral areas. Three types of prior- ity zones should be distinguished, each requiring a particular kind of assistance: * Spontaneous or irregular settlements * Existing, underserviced neighborhoods * Urban extension (peri-urban) settlements. WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 27 SPONTANEOUS OR IRREGULAR SETTLEMENTS: REHABILITATION. Squatter settlements are not generally accorded official recognition because their occupants have no legal rights. But there are so many of them that they constitute a large part of the city. These districts have no clearly defined road system, and thus no service networks. Living conditions are most critical in these neighborhoods, due to the lack of access to services and basic facilities. Priority assistance should thus be directed to these set- tlements. In some cases traditional techniques are no longer practical, especially in zones prone to flooding. More radical solutions for providing shelter in these areas must be found. In other cases assistance can be limited to improving basic infrastructure, even though land ownership may not be fully regularized. Such works often give rise to a kind of implicit admis- sion of a neighborhood's existence (droit de cite), even if it is not officially recognized by the authorities (Balbala in Djibouti, Magnambougou in Mali).3 In any case, project implementation is still difficult: on the one hand, the inhabitants are likely to be recent arrivals who have yet to adjust to urban constraints, or they may consist of widely disparate groups who are difficult to mobilize for work on a project. On the other hand, the urban fabric is complex, and installing a services network requires clearing rights of way and demolishing existing dwellings. These processes can lead to lengthy negotiations and litigation (box 2). In the past, in the aftermath of independence, these neighborhoods were sometimes treated in ways that smacked of harsh colonial habits: houses were simply torn down, or the occupants were evicted in the name of expropriation for some planned roadway. Victims were sel- dom offered compensation. The first urban projects tried to reform such procedures through rehabilitation operations that would result in regularizing land tenure and providing basic services (developing road, drainage, and water and electricity networks; building neighborhood facilities). The process was not always looked on favorably by the authorities, who might have preferred more radical methods. It was also cumbersome and not sufficiently replicable, a particular drawback in light of the rapid growth and proliferation of such settlements. Spurred by evidence of abusive practices in certain major infra- structure projects (dams and reservoirs), and under pressure from nongovernmental organizations to take action, the World Bank insti- tuted a supervision and monitoring system (directives, oversight committee), with a view to ensuring that households would be fairly compensated if they were disrupted in the course of such projects. The reason for this initiative was clear: to protect residents in the most vulnerable neighborhoods. 28 THE FUTURE OF AFRICAN CITIES Box 2. Guinea: Operation Lambanyi Operation Lambanyi I, covering an area of 200 hectares, is the first tranche of a new urban extension of some 600 hectares and is a pilot project for Guinea's new housing policy. The second urban project (UDP 2) financed the secondary infrastructure network, and was based on the principle of cost recovery, in order to ensure the project's replicability It was expected to result in the development of 200 self-financed hectares per year, equipped with secondary services, equivalent to a supply of 4,000 to 5,000 plots. The Lambanyi-Kobaya zone was set aside as a land reserve by a November 1989 decree that vested ownership of the land in the state and prohibited unauthorized construction. An occupancy survey, con- ducted in July 1991, provided the basis for estimating compensation costs for expropriations and calculating the size of the area that was to be developed. The intended protection, however, was not strictly enforced. By the time the developers were designated, much of the land had already been illegally occupied. The adoption in 1992 of a land tenure code, which gave implicit recognition to the property righats of the customary occupants, reinforced their belief that they were free to sell or build on their land. The delay of the developers in taking pos- session of the plots and the failure of attempts at public control over the process, which were virtually abandoned during the long lead-up to the presidential election, produced a situation where nearly 40 percent of the plots with secondary services already had buildings completed or under construction. To the problems of land tenure and management must be added iinanc- ing difficulties: the strategy was based on the theory that public and private developers could be found who were capable of taking over and paying for the equipment and facilities. Yet Soloprimo was the only developer to sub- mit an offer. As a result, the city, which was originally supposed to get involved in developing only a few plots, as a demonstration project, was left in the end with almost half of the plots on its hands. On a more positive note, the land ownership problem has been largely overcome, basically as a response to the donor's threat to cut off financ- ing for the secondary infrastructure. A new census of illegal squatters was conducted in July 1993, and negotiations were undertaken to regu- larize land ownership and start the commercialization process. The "ser- vicing fund" was opened and the developers' contributions are slowly being recovered. However, this newfound vigilance had unexpected and unwanted results. It discouraged the undertaking of neighborhood restructura- tion because of the technical, bureaucratic, and financial (resettle- ment costs borne by the government) difficulties commonly encountered. WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 29 Recommendations for dealing with irregular settlements include: * The sheer number of people involved argues strongly for mak- ing this a priority-if not the pri- ority-for urban projects, in keeping with Bank directives stressing poverty alleviation and environmental protection. * It would be advisable to downplay the vigilance aspect of this pol- icy-to cast it in a more positive light-both in the texts of the directives themselves and in the participation in the field by the gatekeepers of the dogma. * Slum rehabilitation programs should be simplified and should focus on upgrading neighborhood infrastructure and facilities. Addressing the land ownership issue is a long-term undertaking that requires a gradualist approach and it should not be con- sidered a priority in rehabilitation programs.4 Experience to date shows clearly that efforts to pro- vide clear title to lands are not worthwhile in light of their results. The problems of scale and replica- bility have not been resolved. * Active involvement of the people affected is essential for success in this type of operation. This requires a time horizon, however, that is often incompatible with the constraints of the project cycle. Our recommendation is to take advantage of a permanent struc- _ ture, perhaps of the Agetip kind, to help neighborhoods prepare Vigilance: Unexpected programs for funding. results 30 THE FUTURE OF AFRICAN CITIES REGULAR, UNDERSERVICED NEIGHBORHOODS: UPGRADING AND MAINTE- NANCE. These districts correspond to the old colonial sections of cities, with a regularized structure and ownership records. Today they are only a small part of any city, since recent urban growth has taken place largely outside the legal and regulatory framework. Many of these estab- lished older neighborhoods are underserviced, but their regular layout lends itself to step-by-step installation of networks (roads, drainage, water, public lighting, electricity, and so on) and, where suitable lands have been reserved, to the construction of neighborhood facilities. If upgrading of this kind is to have a positive impact, it must involve as many neighborhoods as possible. But it will be difficult to provide facilities along every street, or to service every potential zone. It would be best to be selective, and especially to determine priority routes, not only to maximize the benefits of the new infrastructure, but also to facilitate integration of the new works into the citywide network. PERI-URBAN AREAS: PREVENTIVE ACTIONS. Urban sprawl involves the spread of cities into peripheral zones and the filling in of interstitial areas. Customary property owners in these areas often uncertake developments that start as low-density neighborhoods, but degenerate progressively into large irregular settlements. The drawbacks of this practice are many. As such areas become more crowded and unman- ageable, it becomes increasingly difficult to integrate them into the urban services network. For the most part, efforts to control this phenomenon as part of urban projects have been modest. They have focused largely on providing serviced plots for new settlers and have only rarely tried to anticipate the direction of urban development (which would require faith :n town planning documents that are widely dismissed as unrealistic). The inability or unwillingness to provide proper services in the wake of urban sprawl means that now, two decades later, the problems to be confronted in peri-urban areas are enormous: • The objective should be to channel growth in peri-urban zones more effectively, by establishing a viable basic setting for new occupants. Such work needs to be tackled swiftly and on a large scale, with the goal of making only modest improvements. A broad "super grid" outlining road and drainage routes should be drawn up, and all necessary rights-of-way secured, although the services will only be carried out in stages. * Improvements within the zones on the grid (covering perhaps 25 to 100 hectares) can then be carried out by various parties, public or private, or even by the customary owners. WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 31 * Subdivision of these zones into plots should imply no obligation to undertake public works, beyond the building of roads and providing protection against water erosion. It should be done in a careful and regular pattern, to facilitate installation of utility networks (water, electricity). Such an approach not only meets time and financing con- straints, it can also be implemented on a large scale and can be kept more compatible with the habits and living standards of the majority of the candidates for housing. Implementing these recommendations will imply a drastic break with traditional approaches, since they presuppose both an entirely new scale and a broader field of players: they take account of urban development as a whole, by focusing attention not on individual plots but on the big picture (the super grid; see chapter 5). This new approach also presupposes the beginnings of a cultural change, whereby the cen- tral authorities will agree to give up some of their prerogatives. Complementary or Supporting Measures Complementary measures in support of physical investments in urban development are crucial for ensuring their sustainability and replicabil- ity. These measures can be grouped under four headings: urban plan- ning, urban information, land management, and financial management. Redefining Urban Planning Tools Urban planning has fallen out of fashion. The limited impact of the guidelines and master plans that embodied the concept, and that con- sumed so much energy, has cast doubt on the wisdom of the concept itself, in particular since urban growth has continued virtually unabated. And the precarious state of public budgets has made any kind of financial planning hazardous. Urban planning has been criticized for (a) being too centralized; (b) being an isolated process, undertaken without reference to the parallel task of planning investments; (c) failing to consult with the people affected; (d) taking too long and thus not keeping up with constantly shifting circumstances on the ground; and (e) being inap- propriate for the current context-urban plans have failed to adapt to real needs and to the radical changes that have taken place since independence. 32 THE FUTURE OF AFRICAN CITIES Nonetheless, urban planning still has a vital role to play in coordi- nating public and private undertakings, whether for providing services and infrastructure in older neighborhoods or for developing new urban extension zones. Its essential tasks are to help ensure: * Installation of services and infrastructure, including securing the rights-of-way needed for developing utility networks * Fair and equitable distribution of services among neighborhoods, remembering that haphazard sprawl often results in poor districts being inaccessible, thus contributing to their marginalization * That people can go about their business, in particular by ensuring that roadways are sufficient to accommodate transport * Greater attention to the environment: it is easier to supervise pro- tected or high-risk areas when they are part of an orderly urban setting. It is recommended, therefore, that the tools now in use not be dis- carded, but that they be radically simplified. It is best to stick to a structure-oriented plan (avoiding detailed zoning indications) that can serve as a reference for installing services and prograrnming future developments. It should show only the layout of the primary roads, the main drainage systems, and sites earmarked for major infrastructure, and should clearly delineate areas deemed unsuitable for development. The planning document should lay out a medium-term frarnework for activities, informed by a careful application of the various planning tools. Developing such a document would require joint action by local leaders, especially for the identification of priorities. Consolidating an Urban Database and Establishing a Planning Framework To improve our assessment of needs and provide useful guidance for planning and urban management decisions, readily available and up- to-date information on city growth patterns will be needed. REVERSING THE "LOSS OF URBAN MEMORY." The knowledge base about the urban reality in Sub-Saharan Africa is sketchier today than it was 15 years ago. The urban population was smaller then, and the practice of compiling systematic town plans (since abandoned) produced regu- larly updated information. WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 33 However, a greater number of local researchers are at work in the region than in the past and they are making valuable contributions to the information base. Indeed, concerted efforts are under way to compile specialized databases on various topics, and these efforts deserve to be supported. Joint programs among donor agencies have been launched to construct and introduce performance indicators for individual subsectors (infrastructure, shelter, municipal manage- ment). But data collection remains fragmentary and is generally inad- equate for meaningful comparisons to be made between countries, cities, or neighborhoods; hence, efforts to follow trends and evolu- tions are stymied. ESTABLISHING A PLANNING FRAMEWORK. Since the best is the enemy of the good, one should aim to establish in the context of each project a minimum inventory of data needed by participating cities, to be used for planning and programming purposes. The inventory should be built and maintained cumulatively, thus expanding progressively the list of data to be collected. This "continuous" inventory will show how the land is being used and how well the population is being served by infrastructure and ser- vices, both at present and over the planning horizon of the Urban Reference Plan.5 It will permit comparisons of facilities among zones and help identify the most pressing needs and priorities. The inventory would typically include: • Content. Schematic plans and tables containing graphical coordi- nates and indicators for identifying priorities.6 • Data. A limited set of data, collected by neighborhood or homoge- neous area (50 to 100 hectares, at first), that will allow comparisons at the city level. * Reference plan. This schematic plan will suggest what the city will look like in 15 years. Projections for population, areas built, and level of facilities will be shown, like those in the inventory, in such a way as to allow comparisons between the actual and projected situation and to make periodic adjustments to forecasts. The inventory will be a key tool during project execution (for example, for urban, Agetip, water, and transport projects). The municipality itself should gradually take over responsibility for keeping the inventory updated, perhaps after an initial training period with a more centralized agency. The Bank's project supervi- sion missions will offer an opportunity to monitor how the inventory is being kept. 34 THE FUTURE OP AFRICAN CITIES Coming to Grips with the Land Management Question Land ownership problems in the region are a major stumbling block to urban development. Regulations and practices generate confusion over the ownership and management of the land, confusion that seems at times to be in everyone's interest: political leaders, officials, and cus- tomary owners alike. This stems from the fact that in Francophone Africa land is still the major attraction for both investors and specula- tors. There is wealth in the ownership of real estate, and there is always money to be found for land purchases. A HEAVY HISTORICAL BURDEN. The land tenure regime in mos't coun- tries of Francophone Africa is a burdensome holdover from the tradi- tion of chef de terre, which was adopted by the colonial system as a means to distribute lands according to the "merits" of the recipient. Thus the people have no rights over the land, except as granted by the state, under its self-proclaimed right of eminent domain. Ownership is only conditional: the beneficiary of a so-called provisional transfer must first "improve" the land to the authorities' satisfaction before receiving definitive title to it. Final award of clear title is in effect a reward for the recipient's perseverance over a lengthy obstacle course. There is no provision for transforming occupancy into legal owner- ship, or for proving ownership from date of purchase. The state "pro- duces" property rights, even if it has negotiated the purchase with the customary rightful holders. The state's eminent domain over the land governs land tenure, translating into both centralized management of land allocation and micromanagement of individual plots. Cumbersome and time-consuming official procedures have meant that relatively few plots have been allocated (thus encouraging parallel or informal markets) and that even fewer titles have been assigned (:Few peo- ple have been able to fulfill the conditions for definitive transfer). The sys- tem has become corrupted at all levels, and increasing nurabers of transactions and improvements have taken place outside the formal, offi- cial system. Finally, the negation of customary rights has led to anarchy in city expansion, since the state's refusal to negotiate with customary own- ers has not inhibited them from "selling" or making deals with their land. AN ARCHAIC SYSTEM PREVAILS. The failings of the current systemn inhibit development: The system is cumbersome, nontransparent, inefficient, and costly to manage. To appreciate this, one has only to look at how long it takes WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 35 to go through the procedures for obtaining a plot and the number of departments that are involved in the land management chain. * It produces a situation of "no rights." Take these examples: (a) The number of legal owners, that is, the few who have obtained clear title to their land, is completely overshadowed by the de facto owners of the thousands of buildings that have been erected outside the law; (b) There is increasing resort to forcible occupa- tion by those who, through sheer strength of numbers, have moved in on lands reserved for public use, or those who, through their connections, have appropriated large landholdings; (c) Denial, or at least the marginalization, of customary rights is a source of much of the anarchy in urban growth, since the refusal to negotiate with the customary owners does not prevent them from making deals. * It impedes land development. The production of serviced plots is not generally considered "site improvement" for legal purposes and actually inhibits the promotion or sale of building plots. * It stifles economic development. Generalized illegal dealing in land and lack of ownership titles make it difficult to attract serious investors. With no functioning mortgage market, how are funds to be mobilized, and how can one really speak of a housing policy? Moreover, how is construction to be encouraged if there are no plots legally available? Finally, how can there be a property tax in a sys- tem where there is no legal ownership? Redressing this situation will require steps to reform or at least adjust the system, both in law and in practice. The reform measures discussed below might seem radical and should perhaps be regarded as long- term objectives. The proposals for adjusting the current situation could then be seen as interim measures. REFORMING THE SYSTEM. Reform should start with the following steps, which have already been applied to varying degrees in some countries (box 3): * Abolish the site improvement requirement. The obligation to make improvements to a property and to have the authorities approve the work before receiving clear title should be abolished. The sale of unimproved land, which though illegal is widely practiced, would then be allowed, and the market for such land would be legalized. This measure would serve the twin goals of lubricating the real estate market and contributing to greater transparency. 36 THE FUTURE OF AFRICAN CrITES Box 3. Significant progress in land tenure Recent experiments in several Francophone African countries, particu- larly in the implementation of urban projects, reflect significant progress on the land tenure issue: Buirkina Faso-site improvement. Aware that the obligation to improve land prior to receiving definitive title or selling a plot is regularly evaded, Burkina Faso has virtually eliminated it, as part of its reform of land tenure law (RAF). This measure, which was supported by the Third Urban Project, should have an important impact on the transparency and liquidity of the real estate market, which up to now has been virtually impenetrable. Cote d'Ivoire-development concessions.7 In C6te d'Ivoire a new type of land transfer or concession has been introduced. The public authorities confer a double mandate on the concessionaire: (a) to undertake a spe- cific urban development project; and (b) to make an investment on a plot allotted by the government-against delivery of a clear title that allows sale of the land after it has been developed, and thus recovery of the funds invested. The concession or transfer agreement specifies the rights, obligations, and reciprocal undertakings of the state and the con- cessionaire. The concessionaire may sell the improved land at the going market price to any eligible buyer within the terms of the concession. Once the agreed works have been completed, the concession on the land becomes definitive rather than provisional, that is, the concession- aire becomes the owner and can then transfer title to the final user. The land development and sales "chain" is thus considerably simplified (Tribillon 1994). Djiboutti-land titles. The first and second urban projects led to major simplifications in land ownership legislation. Occupants of older neighborhoods (wooden dwellings) can now obtain title through the simplified "private transfer" (cession amiable) procedure. The same applies to purchasers of new plots under UDP 2 in Balbala. Mali-anctioning of plots, wvith transfer of title. A large number of plots that were improved under the Second Urban Project were sold at auction, with clear title. Traditionally, such plots would have been transferred or "conceded" by the state at very low prices and then later resold at much higher prices. The new method of sale has (a) permitted project cost recovery, (b) made visible the true market value of the plot, and (c, led to the issuance of many land titles. WHAT SHOULD TAKE PRIORYTY IN FUTURE URBAN PROJECTS? 37 * Sell with clear title. Plots made available by the state should be sold and should convey clear title of ownership at the time of sale. * Sell at market prices.8 The selling price for a piece of land should reflect its market value, which will be affected particularly by its location. The practice of auctioning plots should thus be encouraged, if not made the norm. This system (adopted in Mali UDP 2) has many virtues: it helps discourage speculation and unfair enrichment, it makes building plots available to households who have the savings to buy them,9 it alleviates the lack of serviced plots, and it allows fur- ther plots to be prepared with the resources thus mobilized. * Generalize land titles. The allocation of a plot requires the issuance of three successive documents, which may have various names depend- ing on the country: (a) a lettre d'attribution, or letter of allocation, which is usual but not obligatory (Cote d'Ivoire), conveying an initial right to the attributaire; (b) a permis d'habiter, or occupancy permit, issued after confirmation that improvements have been made; and (c) the titrefoncier, or ownership title or deed. In fact, most plot-hold- ers have only the letter of allocation (which reduces the taxes and duties they must pay). Under the proposed reform there would be only one document, the ownership title. Holders of letters of alloca- tion or occupancy permits would have to convert their de facto peace- ful occupancy into a legal occupancy, after a certain grace period. They would need to register and transform their documents into ownership titles, at which time the records on land allocations would be updated. Clearly, the success of this reform measure will depend heavily on strong support from interested parties; if there are too many constraints (excessive fees, slow procedures), it will fail. • Address the problem of customary owners. The state, through its right of eminent domain, disposes of and develops land. This entails, first, recognition of the rights of customary owners. But recognition of these rights is fraught with difficulties, and conflicts frequently arise (C6te d'lvoire).10 Customary owners may resort to obstruc- tionist tactics-they may, for example, remove survey markers from a plot for which their "interest" has not been sufficiently compen- sated, or they may encourage squatters to build homes on it, in an effort to force the authorities to recognize their rights. If solutions are to be found, the state will need to engage in a more sustained dialogue on the issue and show greater respect for commitments to customary owners. * Regularize the situation offoreigners. Domestic policies in some countries prohibit foreigners (individuals or businesses) from acquiring property. Long-term leases (called "emphytheotic" leases under the civil code, as in Switzerland) may be one way of overcoming these difficulties. 38 THE FUTURE OF AFRICAN CITIES * Broaden the scopefor land development. The state, as owner of the land, is the most important, if not the only, major player in real ,estate development. Devices such as development concessions (Cote d'Ivoire) could be adopted to broaden and simplify the system for producing and selling land. Customary owners could be recognized as rightful partners of such concessions. * Reform the property taxation system. Property ownership should imply not only a right but a financial obligation (see section on property taxation, below). ADJUSTING THE CURRENT SYSTEM. This is a less radical option than the previous proposal, but it could represent a first step. It involves all the preceding points, but suggests adjustments to the first three: * Reexamine the conditions imposed on site improvements. If abolishing the present system governing improvements encounters heavy opposi- tion, an interim position is possible: let the attributaire pay for the rights pertaining to his plot and allow him to dispose of it without developing it. The obligation to develop the land will, of course, remain as an encumbrance on it, and its holder-the initial beneficiary or the person to whom it is resold-will have to pay for all or part of these rights again, if the land is not developed within a prescribed period. This relates back to the issue of taxing unimproved land. * Simplify procedutres. Governments have generally resisted direct transfer of land ownership titles.'" Adjusting the system could be accomplished by abolishing the letter of allocation and granting an occupancy title (titre d'occupation) directly, in the form of an occu- pancy permit, once the duties have been paid.12 This compromise solution should be a simple procedure, less constraining than obtain- ing an ownership title (and thus not offering the same secutity), but it should represent only an interim stage before definitive title is given. It would be applied first to new plots sold by the state and then gradually to the existing stock of land. Successful implementation of these recommendations will require a major public awareness campaign to explain the proposed measures. Reforming Property Taxation Property taxation is in theory a key source of funds for local governments. In practice, taxation should represent a counterpart to the allocation of a WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 39 title to property-that is, ownership should convey not only rights, but also duties. A DIFFICULT ISSUE. Nowhere does the property tax yield much in the way of revenue. Several factors account for this: * The absence or scarcity of clear ownership titles that should be sub- ject to taxation * The lack of political will to enforce payment of this type of taxation * The complexity of a system that was inherited from the colonial era and is poorly suited to current conditions * The absence of systems for identifying taxable properties: street names, house numbers, and the like * The failure to carry out basic administrative tasks. It is often difficult to keep the simplest records; a case in point is the cadastral-type sys- tems, where so many attempts-often funded under urban pro- jects-have failed (box 4).13 Under these circumstances, what type of property taxation would be best, and how should it be applied? WHAT KIND OF PROPERTY TAX? Real property-land and buildings- can be taxed in many ways (table 3). The levy can be on: * Asset ownership, whether through a property tax or a wealth tax (where land and buildings will represent only a portion of the asset base) * Asset appreciation: in this case the capital itself is not taxed, but rather the capital gain accruing from possession of the asset. Increases in real estate values can be taxed either under a system that applies only to property appreciation or through a more general capital gains tax * Transfer of property, through land transfer taxes e Use of property: when a property is occupied, whether or not it is owned by the occupant, a "residential" tax, "housing" tax, "urban" tax (contribution urbaine), or something similar is an alternative. Surveys of property tax systems show that assessment is generally based on the rental value of a building or piece of land and that such systems are just as difficult to implement as a property tax based on periodic assessment of each property's market value. The cost of administering the property tax system is generally out of line with the expected yield from the tax, and the difficulties of calcu- lating the tax base and collecting the tax are common to all countries of 40 THE FUTURE OF AFRICAN CITIES Box 4. Land registries Several cadastral projects were undertaken in the 1980s at great expense, in the hope that they might become a magic instrument for managing local resources. Many projects failed or were abandoned halfway through (Cameroon, Mali, Senegal), suggesting that caution is required. Enthusiasm for such projects is still strong, however, because they are so gratifying for their promoters. The govemment sees the chance to modernize via com- puterization, outfit itself with new machines and vehicles, and upgrade staff and recycle their skills and knowledge (study tours). And the prov:der of services sees the dawn of a long-running project, with regular sales of materials, installation of software, training, and so on. Yet most of these projects have never reached maturity, for various reasons. * The context is usually poorly understood: weak political will to enforce payment, absence of real ownership (few clear property titles), the public's reluctance to be registered, lack of street addresses, chron- ically disorganized administrations, weak capacity to use the tool on a sustainable basis. * The goal is often poorly defined, and there is confusion between the fiscal (taxes) and legal (ownership) aspects of land registration. The manner of implementing the tool and degree of precision required vary depending on the way it will be used. Unless a firm decision is made, there is a risk that the most sophisticated, all-purpose system will be selected. Indeed, creating a simplified registry may not appeal to technicians who may see it as a bargain basement solution, or to government officials who are in no hurry to take on the burden of col- lecting property taxes. * The ranking of priorities is often skewed, even in the case of a fiscal cadastre. Attention is focused on the cartography aspect, while the more prosaic work of recording specific information receives little attention. Many problems crop up when it comes to collecting the property tax: all kinds of exemptions may suddenly be discovered, and the task of revising the legislation may seem so difficult, and the tax so unpcpular, that the idea is gradually abandoned. The following suggestions may help avoid the dilemma of a project that costs so much and yields so little: (a) evaluate available capabilities for doing the work, and the difficulties to be overcome, before defining what the product should be; (b) define the primary goal and decide whether it is to be fiscal or legal; (c) if a fiscal cadastre is to be performed, set priorities: strengthen tax collection first, record specific data next, and finally, define and produce the required cadastral map. WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 41 Table 3. Taxing real property What is to be taxed Example Ownership of assets 1. Wealth tax 2. Property tax Appreciation of assets 3. Capital gains tax 4. Tax on building appreciation 5. Tax on land appreciation Transfer of assets 6. Tax on property transfers Use of assets 7. Tax on occupancy of property 8. Tax on property income 9. Tax on construction the region. Under these circumstances one should look for the simplest possible taxation system: * Taxing property ownership can be accomplished through (a) a flat tax per square meter of land or by type of plot: this does not, how- ever, take into account buildings, thus eliminating the possibility of taxing apartment units individually; or (b) a system based on the number of rooms occupied, to which a simple tax scale is applied: this is without doubt a more equitable system, but it is also more complex to implement. * Taxing property occupancy may be a means of reconciling the prin- ciples of equity and simplicity. A discussion of this approach, based on the experience with a "residential" tax in Burkina Faso, is found in chapter 5. Notes 1. Rehabilitation of low-lying areas is often made more difficult by its tech- nical complexity and by the fact that the residents are there illegally. 2. Senegal: SICAP and OHLM. Mauritania: SEM. Mali: SEMA. Niger: SONUCI. Cote d'lvoire: SICOGI. Cameroon: SIC. Gabon: SGAEI. Congo: SCAH. Chad: SUT. Madagascar: SEIMAD. Djibouti: SID. The housing stock amounted to 50,000 dwellings in 1975, concentrated mainly in three countries: Senegal, 20,000; Cote d'Ivoire, 20,000; and Madagascar, 5,000. See Venard, 1986. 3. Under the First Urban Project in Mali, for example, the Magnambougou district in Bamako was rehabilitated: previously, the authorities had virtually denied its existence, and it was not shown on maps of the city. 4. The problem of enhancing security of land tenure can be approached at the individual plot level, but this is a disproportionately heavy task, given the scope of the problem and the scarcity of resources for tackling it. Establishing a few local facilities (probably financed with donor support) will generally provide a 42 THE FUTURE OF AFRICAN C1TIES degree of overall landholding security that did not exist before. This shortcut approach is less individualized than a full-scale undertaking, but it is still com- mensurate with the problem. Plot-by-plot regularization can then wait until later. 5. See chapter 5, Infrastructure and Services Planning Inventory/Inventaire pour la Programmation des Infrastructures et Equipements (IPIE). 6. The geographic information system tool is to be introduced gradually, after first familiarizing local consultants with it and training them to integrate it with the tools they currently use for keeping the inventory. 7. The principle has been recognized for many years, but as of this writing there were no examples of its having been put into practice. 8. A simple calculation (proposed for Mali UDP 3) suggests a way oE bring- ing officially administered land prices closer to those of the market. The basic land price is adjusted to reflect location value (LV) and is increased for adminis- trative costs. LV is by definition highest in the center of town and zero on the periphery. For an urban plot, LV corresponds to the capitalization of the annual economic value of the plot in light of its location, as compared with an identical plot on the edge of town. For a downtown plot, LV equals the cost of moving from center to periphery, and reflects thus the "time radius" of the city. 'ro put it another way: the map of real estate location values is based on an isochronic or time-zone appreciation of public transit services. Schematically, the epicenter of workplaces is the center of town, which each worker must commute to and from daily. This represents a cost in bus fare and lost time, and this cost is estimated at one-half the market value of his working time. For example, if the public transit fare from the center to the farthest outlying district is CFAF 150, and the trip takes one hour, and if the monthly average wage is CFAF 75,000 for 173 hours, then the value of a working hour will be CFAF 433; the expense of travel for this worker per year is: (150 x 2)+ 0.5 (433 x 2) x 23 days x 12 months, or about CFAF 200,000. Since every plot accounts on average for one and a half workers, the cost of a peripheral location applied to a plot is CFAF 200,000 x 1.5 = 300,000. This travel cost is understood as the "locational rent" of a plot located in the center, which enables the locational capital to be calculated; on the basis of an interest: rate of 5 percent, this would amount to CFAF 6,400,000, which represents 16,000 ('FAF/m2 for a plot of 400 m2, or 15,600, including administrative costs. Prices per M2 of land for housing use, taking account of the distance-time factor, would then be as follows: 16,500 in the center, 12,500 at a distance of 15 minutes from the center, 8,500 at 30 minutes, 4,500 at 45 minutes, and 500 at a distance of one hour. 9. The virtually free allocation of improved plots generally benefits only a few people and in effect entails unfair preferential treatment for a minority. It leads, moreover, to rapid exhaustion of public resources. 10. Government negotiation with customer property owners is most sys- tematic in C6te d'Ivoire, but this does not necessarily mean that it is a smooth process. Direct transfer of ownership title may be of limited interest to the pub- lic in any case. WHAT SHOULD TAKE PRIORITY IN FUTURE URBAN PROJECTS? 43 11. This is because it involves time-consuming and cumbersome procedures and the payment of sizable duties and taxes. It is not surprising, therefore, that most people are content to have a letter of allocation or a dwelling permit, even if its value is less in terms of modern law, as long as it meets their needs. The security offered by these documents is for the most part considered acceptable, especially since infractions (failure to develop, nonpayment of duties) are rarely punished (for example, through forfeiture of the plot) and, in certain cases, a dwelling permit can serve, if not to guarantee a mortgage, then at least to secure a modest loan. 12. This occupancy title could bear the name of the successive purchasers and, to be valid, the registration stamps for each recorded transfer. For such transfers to be properly registered, the rates should not be discouragingly high, and in most cases they should be lowered (say, to less than 10 percent). 13. Several land registry projects (CARPOL in Mali; fiscal cadastre in Senegal, Cameroon) were aborted because, in order to obtain resources, they succumbed to the temptations of computerization: more attention was paid to setting up computerized tools than to collecting taxes and registering deeds. The systems used by the cadastre, the domaines, and the Treasury should be the same. The first step should be to computerize actual data collection, and only later should the system be extended to geographic planning uses. The temptation to establish a geographic information system at the outset involves costs that are out of proportion to its immediate usefulness-which is not to say that such a move might not be appropriate in the future. 3 Who Should Be the Partners? I 1~~~~~~~~1 %e~ i 46 THE FUTURE OF AFRICAN CITIES Decentralization and the Rise of Municipal Governments The transition to democracy and the multiparty state initiated at the end of the 1980s, and reaffirmed in the course of the 1990s, has led to a redefinition of the Bank's partnership with its borrowing member countries. At the same time, most countries have taken steps toward decentralization and have allowed municipalities, for example, tD play a more important role in the dialogue with donors. The influence of former colonial powers, which had themselves just gone through decentralization, did much to encourage ancl facil- itate this drive. Yet their example was not always strong enough to temper the enthusiasm of some African countries, where multiple levels of decentralized authority were created, and the ranks of local officials expanded, without sufficient attention to the question of resources. That said, there are significant differences among the experiments under way in the region and the amount of progress achieved. The widely varying approaches taken in these experiments, often with the support of international assistance, reflect the players' differ- ent viewpoints. Some see the municipality as the way of the future; others think that locally elected politicians will be no more likely than central authorities to focus on the real issues and that things should therefore be left to the private sector. Consequently, assistance has taken many different forms: * Municipal development, which has been the fashion for much bilateral aid * North-south cooperation at the decentralized level, that is, between municipalities * Support for the private sector, especially for opening up electricity, water, and communications services e Support for small business, through Agetips Support for local efforts at community participation, particualarly by nongovernmental organizations or through local business initiatives (groupements d'interet economique, or GlEs) * Steps by central governments to devolve more authoritv to their regional or "deconcentrated" services, which are sometirrLes repre- sented as the key to local development. WHO SHOULD BE THE PARTNERS? 47 Decentralization: Goal or Opportunity? Regardless of the level of progress, decentralization figures promi- nently on every African country's agenda. Yet decentralization is not an end in itself. Donor assistance should only support a decentralization process that is already under way; and such support should certainly not be automatic: this approach will enable donors to sidestep the polit- ically sensitive issue of selection criteria, while providing help to dynamic local governments of all sizes. For urban projects decentralization presents an opportunity to rein- force local government and involve it more closely in project partici- pation. It may take a long time for such participation to materialize, since so many mayors still lack the resources and experience to play a meaningful role. But every effort should be made to help them move from their current marginalized status to a position of progressively greater responsibility. Why should we grasp this opportunity? Promoting Efficiency The primary argument in favor of municipal development is that it serves the goal of efficiency. The principle of subsidiarity that under- pins decentralization efforts is this: centralization of functions that can be decentralized takes place only with a serious loss of efficiency. Decisions affecting cities will be more relevant if made by the author- ities closest to the scene, since they know best how to adjust services to meet the needs of beneficiaries. Locally elected officials are also likely to act with greater accountability and transparency, since they must answer directly to their constituencies. Broadening the Scope of Assistance Urban projects have traditionally been targeted at capital cities and large regional centers. Support for decentralization will permit a broader geo- graphic focus for assistance and make it possible to involve municipalities that have not yet received technical, institutional, or financial assistance. 48 THE FUTURE OF AFRICAN CITIES Ensturing the Suistainability of Investments Municipalities empowered to plan their own investments and mcbilize resources will be ready to undertake the maintenance work necessary to ensure the sustainability of these investments. Many projects today are stressing this (UDP 3 in Mali, PAC in Senegal). Assessing the Risks Despite the current enthusiasm for decentralization, we must not over- look the inherent risks: • The proliferation of local governments and multiple levels of decen- tralized authority is no guarantee that the new municipal stnictures will be viable (table 4). * The transfer of resources does not always automatically accompany the devolution of powers and responsibilities, and local authorities are often left to fend for themselves. Table 4. Local institutions, selected countries C6te Bulrkina Institution Senegal Cameroon d'Ivoire Faso Benin Local governments 538 200 135 102 77 Urban communes 60 28 10 Rural communes 470 170 67 Fully empowered communes 135 33 77 Partially empowered communes 69 77 Average number of inhabitants per local government 14,836 55,500 89,926 88,235 62,338 Commune d'arrondissement 19 8 8 Urban community 1 2 1 Regions 10 8 28 9 1 Deconcentrated agencies 40 59 60 330 92 Districts 86 Departments 30 49 50 300 1 Regions 10 10 Provinces 10 3C 6 Source: Agence Francaise de Developpement. WHO SHOULD BE THE PARTNERS? 49 * Priorities are sometimes muddled with the creation of new local authorities; there is a temptation to put all new cities and towns on an equal footing, giving them all the same powers and responsibilities. * The state's abdication of its responsibilities vis-a-vis local government may become more serious once powers are transferred to the local level. It should be stressed, too, that urban projects cannot lend significant support for decentralization unless the following issues are addressed simultaneously: * Strengthening local government and the role of the deconcentrated services * Transferring resources and ensuring their availability * Ensuring that local reforms are consistent with the country's overall structural and macroeconomic reforms. A new town hall at last-municipalities are in fashion! 50 THE FUTURE OF AFRICAN CITIES Selecting Project Partners What does it take to make appropriate municipal investment choices? What tasks are involved, what actions must be taken, and how will responsibilities be divided? In establishing project partnerships it is essential to clarify the tasks and responsibilities of each party to avoid working at cross purposes. The basic questions-Who decides and who executes?-beg for greater clarification: Who prepares the decision and who manages its execution? Defining Tasks: From Needs Assessment to Project Maintenance The principal tasks are as follows: * Public consultation. Rarely practiced in the past, consultation is increasingly required by donors as a condition for providing funds. * Planning. This involves determining overall needs, in terms of areas and infrastructure, and setting schedules and deadlines--taking account of existing and projected population trends. * Programming. Municipal activities are scheduled over a certain period, consistent with needs and the availability of funding. * Decisionmaking. Decisions are made concerning investments to be undertaken during the year and the means of executing them. a Execuition. This implies directing, overseeing, and implementing the investment. * Maintenance. Following implementation, maintenance efforts ensure the sustainability of the investment. Taking Action: Shifting between the Central and Local Levels Actions that must be taken can be divided into: * Actions that are the responsibility or are under the management of the central authorities, such as: building hospitals, schools, universi- ties, and urban arterial roadways * Actions that are the responsibility of local authorities, for example: markets, secondary roads, public lighting, and garbage collection. WHO SHOULD BE THE PARTNERS? 51 Dividing Responsibilities: Many Players Are Involved Responsibilities will fall to: * Contract managers, who may represent either the central authorities- sectoral ministries, deconcentrated services-or local municipalities. * Delegated contract managers (maltre d'ouvrage delegue, MOD). In sev- eral Francophone African countries the Agetip formula (see below) has proved highly effective. Some nongovernmental organiza- tions have also tried to fulfill this function, but with less success. Executing authorities, who operate at two levels: (a) planning and over- sight (contract managers): these functions are still performed largely by the ministerial or municipal technical services; more rarely, they may be han- dled by private agencies or consultants; and (b) implementation: this is in the hands of contracting companies and GIEs. Over the past few years some small and medium-size enterprises have been successfully involved in labor-intensive projects (Agetip). Clarifying Roles: Decisionmaking and Management Who prepares the decisions? Who decides? Who executes? An analysis of Bank-financed projects reveals the following patterns and suggests future directions: • Early projects. Whether undertaken as central or local responsibili- ties, early projects tended to ignore or evade official plans that were seen as out of date or lacking credibility. Many tasks, from programming to execution, were performed by the ministries, often through a special project unit. The municipality, if involved at all, usually had a marginal role. i Agetip projects and their evolution. Agetip can be involved solely as a provider of services (delegated contract manager) and limit its role to project execution. It can also be involved simultaneously as a provider of services and as financier. It has a role as well in planning the imple- mentation phase in municipalities with little or no experience in such undertakings. There is a risk that, in the absence of financial constraints or a need to decide among investment priorities at the municipal level, the agency will have too heavy an influence on the choice of invest- ments. This can lead to jurisdictional conflict among the parties. The 52 THE FUTURE OF AFRICAN CITIES Agetip approach is suitable for emergency situations or where local authorities have no interest. But it needs to evolve toward a systern that involves the municipalities in both the choice of investments and their financing. Futuire projects. Planning and maintenance, tasks that tended to be avoided in the past, must be given more attention, and the pro- gramming and financing aspects of projects need to be strength- ened. For actions under local responsibility, decisionmaking falls to the municipality and requires programming work for which this authority is generally ill prepared. Urban projects must there- fore pay particular attention to this task and must certainly pro- vide for contract management support (through a support mission or agency-for example, MACOM in C6te d'Ivoire, PAC-ADM in Senegal). Municipal involvement needs to be scrutinized, with regard not only to the programs prepared but also to the municipal- ity's financial participation (there should be no "free money") and its commitment to overcoming its weaknesses in management. The municipal contract formula (described later) is a way of summariz- ing these commitments, including modes of execution. Execution will involve delegating contract management, either through Agetips and private companies (an effective solution) or through a nongovernmental organization and local people (local conmnunity involvement); and working with an official agency, with input from tech- nical services-a solution that may be best suited to maintenance work. Agetip Projects and Urban Projects Agetip projects were launched in the early 1990s.1 Because of their num- ber and impact, they must be recognized as a major factor in the urban history of the past 10 years in West Africa. Indeed, the lessons cf previ- ous urban projects cannot be reviewed without referring to them. The "Intrusion" of the Agetips into Urban Development in Africa To speak of "intrusion" in this connection is not to denigrate these pro- jects, but rather to acknowledge their somewhat mixed reception, which has included both enthusiasm and frustration (a) among the authorities, depending on whether they felt involved; (b) among other donors, who either applauded the new mechanism or were a bit envi- WHO SHOULD BE THE PARTNERS? 53 ous that they had not invented it; and (c) within the World Bank, which was taken by surprise, both by the novelty of this product and the fact that it originated in West Africa. Public Works and Employment Agencies (Agetips) were established primarily to overcome some of the effects of structural adjustment pro- grams. By devoting themselves to highly labor-intensive building and civil engineering projects, these agencies sought to improve living stan- dards by creating a significant number of new jobs and by encouraging and strengthening the capabilities and know-how of local small and medium-size enterprises and consulting companies. The Agetip approach has had such a positive and visible impact on urban projects that there is little temptation to replace its simple for- mula with anything more ambitious or more complicated-which might in the end have a less successful outcome. Why Agetips Were Successful The first Agetip project (1989-93) took place in Senegal. Its initial objec- tives were achieved to the extent that it was judged "highly satisfac- tory."2 These objectives consisted of creating a significant number of jobs in urban areas, at least temporarily, and as quickly as possible; upgrading the know-how of craftsmen, small enterprises, and small- scale contractors; undertaking highly labor-intensive works that would be economically and socially useful; and testing the idea of an effective, private delegated contract manager as an alternative to the inefficiency of the public sector. One of the major reasons for the success of the Agetips has been their operational approach, which is based on exemptions from standard procurement and bidding procedures, ready access to financing, a moti- vated and well-paid work team, and operating rules that are more flex- ible than those governing conventional executing agencies. More specifically, several innovative factors have contributed to the success of the Agetip experiment: * The general objective of the Agetip project was clear and focused on urban services that are highly labor-intensive. * The Agetip was acting on behalf of both the state and the mayors (the mayors signed the delegated contract manager contracts). * The procedures followed were expeditious, from identification of suppliers to disbursements. From the outset, flexibility was recog- nized as indispensable if the formula was to have the hoped-for 54 THE FUTURE OF AFRICAN CITIES impact on job creation. Moreover, craftsmen and small firrns, who usually have no cash reserves, could be paid in less than two weeks. * The modus operandi was greatly simplified in comparison with other urban projects. Works supervision was carried out ex post, thus limiting the need for recourse to the Bank's "no objection" procedure. * The agency had a private legal status and was paid on a percentage basis directly from the Bank's and other donors' share of project financing. Agetip directors were selected on the basis of competence, by other directors of the member agencies of Africatip.3 * The full extent of the work to be performed was not cast in stone at project appraisal, leaving some flexibility in the execution phase. Constraints related to the project cycle were greatly reduced. * The project was not based on a cost recovery approach, but it did allow for step-by-step financial participation by beneficiaries (Senegal). It amounted to a "forced transfer" from the state to the target groups. Replicability and Diversity of the Model The Agetip model in Senegal was quickly replicated: 17 similar exper- iments have been carried out in 14 countries (table 5). This was not a simple matter of cloning, however, since the system was div.ersified and enriched from one model to the next. The agency's role, which varies from project to project, may be that of technical and financial intermediary as well as planner; or technical intermediary only, for programs initiated by the project manager. As technical intermediary the agency acts as a delegated contract manager, in cases where it over- sees the execution of the work for the account of a client; as a financial intermediary, in cases where it provides the funding; and as a planner, in cases where it chooses both its projects and clients. When the agency plays all three roles, we refer to an "Ageltip pro- ject," and in cases where it acts only as technical intermediary, a "pro- ject with an Agetip." Making this semantic distinction fit is not so simple, however, since the agency may be involved in a projeci: in two roles or may serve only as executing agency. The financing and plan- ning roles are often linked: whoever pays for the project makes the decisions (or the plans). Financial involvement by the municipal gov- ernment is thus of strategic interest for clarifying the relationship between the contract manager and the delegated contract manager. WHO SHOULD BE THE PARTNERS? 55 Table 5. Various forms of Agetip Name Situtation with Position in Country of entity Activity' respect to other projectsb project cycle Senegal Agetip 1 Multi Completed Senegal Agetip 2 Multi Parallel to UDP3 Completed Mauritania PDU 1 Multi Amextipe: exec.ag. for UDP 1 Under way Mali Agetip-Mali Multi Completed Mali UDP 3 Multi Agetipe-Mali: exec.ag. for UDP 3 Under way Gambia, The UDP Multi Gamworks: exec.ag. for UDP 2 Under way Guinea Bissau Agetoppe Underway Burkina Faso Faso Baara Multi Parallel to UDP 3 Under way Niger Nigetip Multi No UDP Under way Benin Agetur Mono Agetur: exec.ag. for UDP 1 Under way Togo Agetur Multi Agetur: exec.ag. for UDP 1 Under way Chad Atetip Multi UDP being identified Under way Chad Atetip Multi Atetip: exec.ag. for UDP 1 In prepar- aration Madagascar Atetipa Mono No UDP Under way Congo, Rep. of CFD project No UDP In design Gabon Agetip In design a. Mono: a single activity, for example, roads; multi: other projects being implemented. b. Parallel: potential "competition" with other projects. Criticism of the Agetips The Agetip agencies have been the subject of a number of criticisms, in particular because they are seen as enjoying too much power and as competing with other urban projects. THE IMPORTANCE OF PREROGATIVES. When an Agetip plays all three roles-as technical, financial, and planning intermediary-its powers are broad. In practice, it has special prerogatives that allow it to shortcut the bureaucracy, and it can decide on its own-within limits-which works to undertake. On the municipal front such powers evoke criticism, since they allow the Agetips to bypass the mayor's authority; further, their use may run counter to efforts at municipal capacity building that may be under way at the same time in other projects. Nonetheless, such powers can be useful for responding to an "emergency" situation, where a mayor's ability to intervene may be virtually nil. In such a case, public undertakings may be able to regain 56 THE FUTURE OF AFRICAN CITES lost credibility, by demonstrating that funds are actually being used to benefit the people. Such projects can thus help rebuilcl people's confidence in their public institutions. COMPETITION BETWEEN AGETIP PROJECTS AND OTHER URBAN PROJECTS. Competition can arise when an urban project and an Agetip project undertake similar work in the same city, but under different operat- ing and financial conditions. Lack of coordination can lead to compe- tition rather than complementarity between various "financing windows" and can thus become a source of confusion for local invest- ment managers. Pending Issues The evolution of the Agetips leaves some questions and unresolved issues:4 * What is the impact on the administration? It would be salutary if Agetip procedures were increasingly reflected in the central administration, in terms of transparency and speed. Some progress has been made in this regard (Burkina Faso); but the desired impact on procedures should be clearly spelled out in the agenda for future projects.5 * Planning and programming. The choice of projects, even if discussed with the mayors and carried out in accordance with strict selection guidelines, has not always been based on a comprehensive analysis or had an appropriate spatial focus. Some recent projects involving Agetips have tried to remedy this deficiency (Mali, Mauritania, and in particular Senegal, where within the Urban Development and Decentralization Program the planning tasks fall to the Municipal Development Agency, and execution to the Agetip). i The sustainability of the agencies. Are the Agetips doonmed to disap- pear at the end of the project, like the project units? If the agency has a good track record, it stands a fair chance of expanding its clientele and becoming sustainable, even without continued donor funding. Otherwise, it runs the risk of disappearing. The problem is a thorny one. There is a risk that aid projects may be justified on the basis of the business they will create for the Agetips. Ultimately, it would be best if the agencies ensured their sustainability by becoming inde- pendent of donor financing. * Interagency competition. The current situation, where only one agency is involved, presents some risks. The agency may fa]l victim to its own success: in the face of more numerous and varied requests, it WHO SHOULD BE THE PARTNERS? 57 Agetip: Superman or 'Great Satan"? may respond well, and risk monopolizing the market, or poorly, and risk eroding its credibility-and that of the whole system. The lack of competition has thus always been viewed by the system's pro- moters as temporary-less than ideal. Yet if competition is to take place under the best conditions, several agencies will have to be cre- ated; this in turn assumes that there is sufficient work for all and that all will have the same prerogatives, especially when it comes to exemptions from standard procedures. Recommendations Following are recommendations regarding partnership in urban pro- jects and the role of, and possible improvements to, the Agetips: CONTINUE BUT ADJUST COURSE. It seems essential, given the cumber- some and slow-moving institutional setting, to employ delegated con- tract managers. The undeniably successful formula should be continued and expanded, with an important adjustment. The "emergency" or short-term focus (job creation, small civil engineering projects) should give way to a regularized, long-term approach in which Agetip agencies 58 THE FUTURE OF AFRICAN CITIES operate on a more normal footing within the institutional landscape, through an exclusive role as delegated contract managers. ENCOURAGE COMPLEMENTARITY WITH OTHER URBAN PROJECTS. The Agetip-urban project competition should be left behind, as one of the program's "sins of youth." In light of its potential and proven record, the Agetip should be considered a preferred executing agency for urban projects, especially projects that are highly labor intensive. Bat it should not be regarded as a universal remedy: considerations of expediency must not be allowed to push the agency into projects it may not be qual- ified to execute. MOVE FORWARD ON SIX THEMES: * Separate the roles of executing agency and financier. The executing agency is responsible for performing the work and monitoring its regularity. The financier's role should be limited to managing (dis- tributing) the resources, but this can expand inapproprictely to deci- sionmaking about the appropriateness of the works. * Limit the opportunity for monopoly, by promoting competition from other agencies or perhaps by encouraging government involvement (which entails requirements for recruitment, acceptable pay scales, and closer controls). This issue should be approached carefully: an agency must have enough business to keep running. * Seek the participation of beneficiaries, in particular, (a) financial partici- pation (Amextipe, Agetip 2): Although there is room for expanding such participation beyond the current modest level, it; has already proved itself a valuable means of involving mayors in the choice of projects. Continuing difficulties must be expected, however, given the financial constraints that uniciMde caisse imposes on the raunicipalities (see chapter 4); and (b) public participation: community leaders should be encouraged to seek public input for the selection of projects. * Establish a contractual basis for the agency's role at the local level. The low level of cost recovery and financial participation achieved to date must not create expectations of a return to the days of the welfare state. To avoid this, the municipality could be made party to a nunicipal con- tract, or contrat de vzille, clarifying the steps it will take in the short term to improve its financial and administrative management. (This will involve a catalogue of works to be carried out and complementary actions to be taken (see chapter 5, with its model municipal contract). * Be restrained about publicity. Though it is important for the agency to build a reputation and pay attention to public relations, in the end the political benefit of the project should rebound to the mayor. * Select projects that can evolve over time. WHO SHOULD BE THE PARTNERS? 59 These recommendations can be implemented using one of the fol- lowing formulas: * The "basic" formula (Agetip 1, Senegal) applies to the most difficult situations, where the credibility of the public institution must be restored (Chad, Republic of Congo, Guinea-Bissau). The agency will need to exploit fully its prerogatives because the authorities have abdicated or are unable to fulfill their responsibilities. * The "participatory" formula (Amextipe, Mauritania) applies where the situation is somewhat better than above. The agency works to secure a municipal financial contribution and encourages a progres- sively greater level of public participation. * The "partnership" formula (UDP3, Mali; PAC, Senegal), where the context enables the agency's role to be embodied in a municipal con- tract in which the mayor and the agency are partners. PROVIDE EXPLICIT GUIDELINES. Once an approach is selected, it will need to be explained clearly, and perhaps repeatedly, in the host coun- try. Past efforts to build a proper understanding of the relationship between urban projects and the Agetips must be continued and strengthened. The logic is very clear. Each party has a role to play: the state regulates, the town is the contract manager for work within its competence, and the agency is a subsidiary player, at the service of the mayors. PROVIDE THE MISSING LINK. Agetip-type agencies have become an exe- cuting link between the central and local authorities. What is still lack- ing is an agency or structure mandated to manage and coordinate support at the local level. For a number of reasons, both technical and political, it can be difficult for the local government directorates to per- form these functions. In such cases, a small structure should be created (UDP3, Mali; PAC, Senegal), with recognized and accepted autonomy, to perform the fol- lowing functions: keep an eye on the municipalities, program subpro- jects, help the towns prepare municipal contracts (where these are adopted as the management tool of choice), and monitor municipal reform plans. INVOLVE OTHER REPRESENTATIVES OF THE GENERAL PUBLIC. Action at the local level must not be limited to institutional players. Many projects have failed in their implementation because they did not pay sufficient atten- tion to representatives of the various interests at stake (customary own- ers, for example; see chapter 2). Experience shows that it is vital to identify and engage these people early in the urban development process. 60 THE FUTURE OF AFIUCAN CWIES Notes 1. Characteristics of some "TIP" (Public Works) agencies: Investment IDA,financing Jobs (person- Name Country Established to end-1996 (inc.forecast) days, p/d) Agetip Senegal 1989 84,000 M CFAF 9 M p/d Agetur Benin 1990 15,000 M CFAF 10,500 M CFAF 1.13 M p/d Nigetip Niger 1991 20,600 M CFAF 2.1 M p/d Faso Baara Burkina Faso 1991 17,000 M CFAF 29,000/ jobs Amextipe Mauritania 1992 US$24M US$44M 3,417/year Agetip Mali 1992 43,300 M CFAF 6.86 M p/d Gamworks Gambia, The 1993 US$6 M 200,000 p/d Atracom Central African Republic 1994 US$1.4 M Ageoppe Guinea-Bissau 1995 US$3.8 M 3, 715 jobs 2. Implementation Completion Report (Cr. 2075-SE). 3. Africatip is an association of African Agetips that was set up in January 1993 to promote and facilitate the work of these agencies throughout the continent. As a tool for inter-African integration and cooperation, Africatip is intended to encourage synergy among the agencies in their experiences and undertakings and to optimize the assistance they can bring to the author- ities. The members of Africatip are Agetur (Benin), Faso Baara (Burkina Faso), Atetip (Chad), Gamworks (The Gambia), Agetipa (Madagascar), Agetipe (Mali), Amextipe (Mauritania), Nigetip (Niger), Agetip (Senegal), and Agetur (Togo). 4. Agetip projects were initially known as "Public Works and Employment Projects" or "Public Works and Capacity Building Projects." In other cases, where the agency was involved only in execution of an urban project, they came to be called "Infrastructure and Decentralization Projects." 5. The Burkina Faso authorities set out to apply the Faso Baara procedures designed under the UD2 project to the National Department of Public Works. 4 How Should Urban Investments Be Financed? iS X X X 0 . M . 11 : SA f 3 |g g E X f X I || | g | g 0W\ IN | | |g || S SI g2,| 0|| 62 THE FUTURE OF AFRICAN CITIES Tom between the urgency of taking action and the strict demands of cost recovery, the financing of urban projects has suffered f rom lack of a clear doctrine. Decentralization and the rise of municipal governments as urban development players have led to renewed efforts to find ways to pro- mote greater financial involvement on the part of beneficiaries, and at the same time to manage the inherent risks. Any new approach must be able to overcome two major handicaps: the generalized shortage of public funds and the weak crecditworthi- ness of the Treasury. Nonetheless, there is already a trend toward modernizing the mecha- nisms of development finance and urban management. A doctrine for the financing of projects can be based on three guidelines: globalization, mixed funding, and the contractual approach. A Brief Historical Review Until recently, urban projects were financed through loans extended to governments, which in turn passed the funds on to the benefici ary munic- ipalities in the form of grants. The government thereby assumed directly the burden of costs generated by urban projects. Only a few components were susceptible to cost recovery (water supply, land development, and so on): these were generally undertaken by autonomous or ad hoc agen- cies, which were required to service their debts on conditions that were frequently far less favorable than those accorded to the government by IDA (an outstanding example is the case of ACI in Mali). In West Africa funding for urban infrastructure (streets and roads, drainage, market facilities, housing) has represented between 10 and 20 percent of government capital budgets, and nearly double the financial capacity of the beneficiary communities.' This disproportion between outside financing and local financial capacities meant that for many years the cities were in no position to make reimbursements. It also set back the prospects for municipal development and added to the wors- ening debt burden on governments. This approach had its origins in the financing channels used by IDA, which was required to lend to central governments, and in the financial weakness of the beneficiary municipalities, which could only be reme- died over the medium and longer term. The introduction of structural adjustment programs, together with the move to decentralization, have helped effect a change in the approach to financing urban projects. Toward the end of the 1980s, new mechanisms for lending to municipalities appeared in four countries of the region: Senegal (the Compte de Cr6dit Communal, Municipal Credit Account), HOW SHOULD URBAN INVESTMENTS BE FINANCED? 63 Cameroon (Credit Foncier and Feicom), Cote d'Ivoire (Fonds d'Equipement des Collectivites Locales, Local Government Development Fund), and Niger (Caisse de Prets aux Collectivites Territoriales, Municipal Fund). The intent was to give beneficiary municipalities greater responsibility for investment policy and to forestall the rising debt burden on government that urbanization, in particular, was generating. The economic and political instability that afflicted some of these coun- tries, and the change in parity of the CFA franc, together with the arrival of less restrictive funding, meant that these initiatives never had the time to prove themselves. Always experimental, they ran head-on into the princi- ple of unicit de caisse,2 which still held sway in all countries of the region. The second generation of Agetips (1994-95) took a different form, as they attempted to work partly with municipal financing, either for investment (Senegal-Agetip, Mauritania-Amextipe) or for maintenance work (most other agencies). These experiments are still at an embryonic stage, and the municipal counterpart contribution has usually only been made possible through assistance from the government or a donor other than the World Bank (Senegal-Agetip). Now is an excellent time for serious thinking about city management, and the sharing of urban development costs between the central and local levels, and the public and private sectors (box 5). Box 5. The need for a clear message The first Agetip project was begun in Senegal, which had undertaken the first urban project with the World Bank and had adopted the Bank's doc- trine of cost recovery. The initial reservations expressed about Agetip projects doubtless arose because objectives were not sufficiently under- stood, despite efforts to explain them. It might have been best to dispel any notion on the mayors' part that these projects were some form of "easy money" by making it clear at the outset that they were to be regarded as urban projects, with the requirement for cost recovery tem- porarily deferred because their priority was employment creation. Similarly, a clearer explanation of the respective roles of the UDP 3 and Agetip 2 (Senegal) projects, which were unfolding simultaneously, might have removed the impression that there was some kind of competition between these two projects with respect to their funding conditions. Subsequent clarifications, the evolution of the new Agetips, and above all, the success they have enjoyed have helped relegate these early defects to the category of youthful mistakes. But the lessons learned would become even more valuable with clarification of the objectives of the dif- ferent types of city-oriented projects: poverty alleviation, social funds, Agetip projects, and urban projects. 64 THE FUTURE OF AFR3CAN CTITES Can We Count on Local Governments? Cities are the scene of major economic activity and wealth creation, yet their financing remains a problem. The financial resources they can mobi- lize are insufficient to finance even basic services. There are sharp imbal- ances in the way urbanization costs are shared between the public and private sectors, and between the central and local levels of government. Three points stand out: (a) most funding for urban developrment comes from the private sector, through self-construction and individual initia- tive; (b) public revenues have not kept pace with the econonmic growth and rapid urbanization that have taken place since the 1980s, resulting in the compression of public resources; and (c) the rise of local rnunicipali- ties today appears to be a key element in urban financing, from both the macroeconomic viewpoint and that of urban management. The Private Sector Provides the Bulk of City Funds Settling people in new areas requires major investments, and every new arrival implies settlement costs that may be two or three times the average local income per capita. Between 1960 and 1990 more than three-quarters of these settlement investments were made by the pri- vate sector. Cumulative investment in housing in the region now amounts to some US$500 billion, or ten times the total net transfer of external resources during that period. Thanks to this accurnulation of residential capital, "the high rate of demographic growth has been accommodated without major disturbances or conflicts" (Cour 1994). The mechanisms of development show, however, that pri vate invest- ment cannot be properly mobilized unless it is accompanied by locally initiated public investments in such areas as roads, drainage, water and power supply, and other basic urban services. It Is Increasingly Difficultfor Governments to Finance Locally Initiated Public Investments Public investment has fallen well behind the pace of urbanization set by the private sector. The state's ability to provide funding for locally initiated public investment has been sharply curtailed, at least in rela- tive terms: funding for public facilities on an urban per capita basis has been cut by three-quarters since the early 1970s. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 65 National economies are finding it increasingly difficult to finance cities, which become more expensive as their populations grow. The proliferation of underserviced neighborhoods and squatter settlements is the most visible expression of this fact. This forced withdrawal of government from urban financing is a direct consequence of falling public revenues and the reduction in pub- lic purchasing power. Nor is it limited to the urban sector. The shortage of public finance strikes some sectors harder than others, however. The urban sector has not always been able to assert its place among the leading priorities. The urban economy has thus not yet been able to exert much lever- age on the conventional mechanisms for financing urbanization. There are several reasons for this failure, but the importance of the informal economy and the weak management capabilities of the authorities and agencies involved in such financing are the major ones. Structural adjustment programs have been attempting to remedy this situation since the mid-1980s. The enormity of the task has some- times led to policies that focus on increasing the fiscal performance of the "modern" sector (that is, businesses and households), without really giving it the means to broaden the tax base to include the infor- mal sector, where the greatest numbers of people are involved and where the greatest economic and social potential lie. The results to date have thus addressed only the most urgent issues: covering mandatory spending and, in particular, servicing the debt. Any greater role by government in assuming urban management costs, either with its own or with borrowed resources, must therefore await an improvement in the country's macroeconomic situation. Consequently, there is no alternative but to turn to other partners and sources of funds. Involving the Municipalities: An Opportunity and a Challengefor the Future The interest today in projects at the municipal level has generated a much better understanding of local finances in Africa. There is still a long way to go before the municipalities can become real financial part- ners in urban projects, but a start has at last been made. THE LOCAL FINANCIAL BASE: A 1-To-3 GAP. In West Africa local govern- ment budgets generally represent less than 1 percent of GDP, and between 3 and 5 percent of the state budget (table 6).3 These percent- ages demonstrate: 66 THE FUTURE OF AFRiCAN CITIES Table 6. Relative weight of local government budgets by type, selected countries, 1992 (CFAF billions) Buirkina Cote Item Benin Faso Cameroon d'Ivoire Senegal GDP 532 841 2,774 2,644 1,628 State (central government) 69 128 502 605 327 budget Local government budgeta 1.4 2.7 23.1 24.7 15.1 State budget as share of GDP (percent) 13 15 18 23 20 Local budget as share of GDP (percent) 0.3 0.3 0.8 0.9 0.9 Local budget as share of state budget (percent) 2 2 5 4 5 In U.S. dollars GDP per capita 222 187 500 456 423 State budget expenditure per capita 29 28 90 104 85 Local budget expenditure per capita 2 4 17 11 9 Population (in millions) Total population 4.8 9 11.1 11.6 7.7 Urban population 1.3 1.4 2.7 4.5 3.5 a. Local budgetary capacity of urban communes. • The low degree to which these countries have achieved decentral- ization: the central government's share of public revenlues is still more than 95 percent. * The relative weakness of total public revenues (central government plus municipal resources) as a portion of the economy: the average share of public revenues is 15 percent of GDP.4 The situation, however, must be interpreted carefully. There are wide discrepancies between countries, in terms of the financial capacity of both central government, and municipalities. There is still hope for countries that find themselves in less favorable circumstances, and they do not necessarily have to follow those countries that are held up as models of decentralization (in particular, Senegal, C6te d'Ivoire, and Cameroon, which have followed different paths in this area). CAPITAL CITIES VERSUS THE OTHERS. The concentration of p)opulation in the cities has had a heavy impact on the municipal revenue base. As HOW SHOULD URBAN INVESTMENTS BE FINANCED? 67 with the central government the major cities have seen their revenues per capita fall noticeably over the past 10 years, as growth in the local economy and the tax base has failed to keep pace with rising demo- graphic pressures (table 7). Nonetheless, the very large cities have a far greater financial capacity than the others. The per capita revenue gap Table 7. Local government resources, selected countries Municipal Cote Burkina category Senegal Cameroon d'Ivoire Faso Benin Largest city (metro area) Dakar Douala Abidjan Ouaga. Cotonou Population 1,680,394 900,993 2,502,717 737,924 533,212 Share of national population (percent) 22 8 22 8 11 Resources (CFAF billion) 10.8 15.6 16.0 1.8 1.0 Resources per inhabitant (CFAF) 6,378 17,314 6,393 2,439 1,941 Local resources (percent)a 71 68 65 66 73 Second largest city Thies Yaounde Bouake Bobo D. Porto N. Population 202,591 739,294 442,848 370,936 177,680 Share of national population (percent) 3 7 4 4 4 Resources (CFAF billion) 0.4 3.9 1.6 0.6 0.1 Resources per inhabitant (CFAF) 2,098 5,275 3,613 1,618 788 Local resources (percent)a 3 17 6 22 10 Communes over 50,000 inhabitants Population 1,651,702 1,015,087 1,508,606 250,000 634,429 Share of national population (percent) 21 9 13 3 13 Resources (CFAF billion) 3.9 4.2 3.0 0.4 0.3 Resources per inhabitant (CFAF) 2,360 4,138 2,121 1,538 500 Local resources (percent)a 26 18 13 3 13 Communes under 50,000 inhabitants Population 587,796 300,044 2,080,236 - 0 Share of national population (percent) 22 8 22 8 11 Resources (CFAF billion) 10.7 15.6 16.0 1.8 1.0 Resources per inhabitant (CFAF) 4,579 2,000 Local resources (percent)a 7 3 - Not available. a. Compared with resources of urban communes. Source: The authors. 68 THE FUTURE OF AFRICAN CITIES is generally on the order of 1 to 3, as can be seen from the following figures: * US$20 per inhabitant for the largest cities: Abidjan, Dakar, Douala (these figures reflect total resources for the two levels of local gov- ernment in these metropolitan areas: the district "communes," at the submunicipal level, and the communaute urbaine, or metropolitan or municipal government). * US$4 to US$6 per inhabitant for other capitals (Bamako, Ouagadougou). * Less than US$2 for secondary cities. These differences call for a dose of realism in allocating project financing shares (the capital city is still the engine of development), and flexibility in the institutional solutions regarding financial relations between the central and local authorities. DIFFERING FINANCIAL STRUCTURES. Local direct taxation (business fees and property taxes) is the basis of financial autonomy for most municipalities. The most stable and advanced of these systems are based on grant allocations or a share of government taxation rev- enues. This is the case in Cameroon, C6te d'Ivoire, and Senegal. It is also the case generally in the local finance systems of the more devel- oped of the world's countries. These systems ensure that municipali- ties have access to a minimum operating grant, and they generally involve an equalization formula that favors the secondary cities. They may be financed either by the central government or by the local gov- ernments themselves (table 8). Municipal taxes may constitute up to one-third of local revenues and are derived mainly from commercial facilities (market stall fees, tolls, and parking charges at bus stations). Although collecl:ion is usu- Table 8. Structure of financing (current revenues), 1992 (percent) Burkina Cote Revenme souirce Benin Faso Cameroon d'Ivoire Senegal Share of state tax revenues 4 40 6 Operating grant 16 Direct local taxesa 76 55 21 57 64 Municipal taxes and asset revenues 21 18 8 19 28 Other 3 22 41 8 2 a. Share in C6te d'Ivoire (business fees and property taxes). HOW SHOULD URBAN INVESTMENTS BE FINANCED? 69 ally haphazard, it is directly controlled by the municipality (without any intervention by the Treasury). MANEUVERING ROOM FOR INVESTMENT? Municipalities in most of the region's countries generally have little or no room for maneuver when it comes to capital spending. This situation flows directly from their limited revenue base and is aggravated by the lack of proper programming or budgeting and by the perverse effects of the unicite de caisse principle. Several countries have attempted to break this vicious circle by set- ting up specific financing systems (for example, funds for municipal facilities) and clearly delineating state and municipal efforts for pro- gramming and financing investments (table 9): for example, FEICOM in Cameroon, FIAU and FRAR in C6te d'Ivoire, and FECL in Senegal. The transfer of real responsibility to the municipalities can only be accomplished by placing their financial participation in a project on a systematic footing, and organizing it in a series of incentive-driven steps. Relying on the municipalities will certainly be risky. But there is virtually no alternative: whatever the organizational system, local governments are going to have to take over responsibility for urban issues. This is the real challenge of urban development. Table 9. Investment as share of local government expenditures, selected countries (thousands of CFAF) Cote Burkina Expenditure Senegal Cameroon d'Ivoire Faso Benin Operating expenses 11.8 13.4 22.0 1.7 1.3 (80) (59) (88) (61) (93) Capital investments 3.0 9.5 3.0 1.1 0.1 (20) (41) (12) (39) (7) Total expenses 14.8 22.9 25.0 2.8 1.4 (100) (100) (100) (100) (100) Of which: Dakar Douala Abidjan Ouaga.Cotonou Operating expenses 10.6 7.5 18.4 0.7 0.9 (91) (48) (87) (44) (90) Capital investments 1.0 8.0 2.8 0.9 0.1 (9) (52) (13) (58) (10) Total expenses 11.6 15.5 21.2 1.6 1.0 (100) (100) (100) (100) (100) Share of largest city investments/ total investment (percent) 33 84 93 83 100 Note: Numbers in parentheses are percentages. 70 THE FUTURE OF AFRICAN CITIES Moving On Our purpose is not to draw up a critical balance sheet for 25 years of urban project financing. Indeed, the context has been constantly shift- ing throughout this period: priorities and approaches have chlanged to the point where meaningful comparisons are difficult to draw. The absence of any clear financial doctrine is nonetheless real. The mantra of cost recovery (box 6) has led to rules that are often highly restrictive and unsuitable to the local setting: * Rate-of-return targets have been set too high. * Loan repayment conditions have exceeded the capacity of local gov- ernment. * Burdensome and time-consuming cadastral registries and comput- erized revenue information systems have been undertaken in an attempt to deal with the problem of resource mobilization, without Box 6. Limits to cost recovery for basic services Revenue-earning utility services (water supply, electricity, telephones, and the like) are most often run by competently managed companies; cost recovery takes place through the charging of tariffs for service and is all the more effective when users face the threat of having their service cut off if they fail to pay. Nonrevenue-producing services (roads, drainage, sanitation, garbage collection, and so on), on the other hand, are run by the municipalities, which rarely have the means or ability to recover costs directly from the user. These costs must therefore be defrayed indirectly through l ocal tax- ation. Cost recovery is practiced in different ways, depending on whether it concerns roads, garbage collection, or revenue-producing faci]ities: Roads, drainage. Cost recovery is especially difficult for these kinds of services. Though they are of course essential, and costly in terms of both investment and upkeep, the imposition of direct payment and sanctions systems is scarcely feasible. While toll booths might be easy enough to install on an expressway or major highway, it would be inconceivable to try to set them up on neighborhood streets. The same goes for drainage works. We are left, then, with indirect cost recovery, via the tax system. Logic suggests that automotive fuel tax revenues should first be devoted to pay- ing for urban arterial roads, which carry the heaviest traffic flows. Yet pri- ority is commonly given to highways serving intercity traffic, and for the most part the portion of fiscal revenues allocated to urban road systems is small or nonexistent. They must therefore be financed from general public tax revenues. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 71 taking into account the nature of the tax base and the inadequacy of administrative procedures. The resulting failures have recently led to an excessive relaxation of financial conditionality (for example, releasing Agetips from their cost recovery obligations). Today there are three themes that should serve as guidelines for thinking about the financing of urban projects: glob- alization, mixed funding, and the contract approach. Globalization There is no point today in trying to address the question of urban pro- ject financing component by component, or subproject by subproject. The record of experience in public finance shows that the financing of operations needs to be approached from a global or comprehensive Ho_sehold garbage. Local governments throughout the region are responsible for garbage collection, and the system suffers from financing problems everywhere. To overcome these problems, it would be best to distinguish three tasks: collection, transfer (from collection to dumping points), and treatment. Recent but still limited experiments (Burkina Faso, Guinea, Mali) have attempted to combine direct and indirect financing. Thus the costs of collecting and moving garbage from homes to the local transfer point, for example, are borne by the user. But the costs of trans- port from this station to the final dumping site usually have to be covered indirectly, and with difficulty, through local general revenues. Even where efforts have been made to composte garbage into salable products, the results in terms of receipts have often been disappointing. Revenuie-produicingfacilities (markets, slaughterhouses, parking lots, truck and bus depots, and so on). Cost recovery for such facilities is accomplished directly, through collection of various kinds of user fees. This should yield significant and regular revenues for the municipality, and yet such receipts are often lower than expected, due perhaps to inept or lax municipal management. Delegating services, through leases or concessions, should in principle allow a municipality to enjoy a steady stream of revenues without having to provide the services (since it is often less efficient than a private sup- plier). But there are various obstacles to such solutions: (a) the munici- pality may not want to risk losing control over daily receipts, however modest they may be; (b) a private entrepreneur may not be interested in providing the service, particularly if he has to repay the initial investment (as was the case in a Bangui neighborhood project). 72 THE FUTURE OF AFRICAN CITIES perspective, in which the keywords are savings capacity and maneu- vering room. The only way to ensure the sustained financing and ma:ntenance of urban investments is to provide them with global financing in the form of tax revenues or transfers. While the financial stability of a water supply component, for example, can generally be guaranteed by recovering costs from users, this is more difficult to achieve in the case of a commercial installation such as a central market or a bus ter- minal, and it is out of the question when it comes to capital projects such as roads, drainage, or basic public facilities. Improving the over- all financial situation of project partners, in particular the local municipalities, must therefore be taken as a starting point for future projects. Globalization as a guiding principle applies equally to the institu- tional context that should underlie the financial approach. It is no longer appropriate in most countries to think of working solely with the state as a partner in urban financing. It is essential to involve the municipalities in the financial arrangements, either direct]y or indi- rectly (through the private sector). Mixed Funding Apart from the systematic appeal to national counterpart funding in World Bank-funded projects, mixed funding is not curreitly being used in urban projects. One reason is that the mechanism requires a fairly sophisticated agency to manage it. More important, however, lenders have been cautious about making specialized loans to munic- ipalities, on the grounds that, since only revenue-producing facilities are likely to allow rapid cost recovery, it is best to limit experimental lending mechanisms to projects of this type. As the context has evolved and the major stumbling blocks have become better understood, this approach is being revised. Mixed funding is now seen as one response to the diversification of partners (in particular, the state and the local municipalities), given the scarcity of "cheap money" and the need to modernize project finan- cial management. In principle, mixed funding could involve varying proportions of self-financing, state subsidies or grants, and loans. The nmechanism has already proved itself in most middle-income countries. It is the best route for developing low-risk systems for lending money to municipalities. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 73 The Contract Approach The sharing of the financial burden and the structuring of the resource contributions from the public and private sectors, the state, and local governments will depend in large part on the answer to the question, "Who does what?" in the area of urban management and development. In the varied and changing institutional landscape that characterizes most countries of West Africa, the contractual approach appears to offer a satisfactory compromise that allows state and local governments to share in project execution and to shape the role of the Agetips within a clear institutional framework (examples include the contrats de ville, or municipal contract, for decentralization and infrastructure under- takings in Mali, Mauritania, and Senegal; box 7). The municipal contract approach also offers greater flexibility and speed of intervention than any formula linked to the slow-moving process of regulatory reform. Moreover, it makes it easier to cope with municipal diversity, offering an alternative to the typically monolithic legal and institutional framework where every municipality has the same rights, the same powers, and the same source of revenue. The establishment of a contractual relationship between the various part- ners is a pragmatic approach that has been used in a number of recent projects to clarify the division of powers and to define financial com- mitments among the partners. Adapting New Projects to the Local Context The success of any project depends heavily on proper analysis of the context in which it will be developed. Depending on the current status of urban and institutional development in a municipality, there are three main options. These options are not offered as reference models, but merely as benchmarks. They are based on three indicators: * The stability of the institutional context, recognizing that such stability can take many forms: centralized, decentralized, or in a stage of evo- lution from one to the other. The key element is the control the authorities have over policy choices and over the process of change. * The sector'sfinancial strength: this measure generally depends on how favorable the macroeconomic situation is. * The method of urban financing, which may depend on subsidies, rely to some extent on credit, or have heavy private sector involvement. 74 THE FUTURE OF AFRICAN CITES Box 7. Local empowerment and contrats de ville Project activities should provide an occasion for formalizing the commit- ment of local government to participate in the project. This commitment could take the form of a contract between the local authorities and the state, that is, a contrat de ville (municipal contract) that sets out the condi- tions the municipality must fulfill to qualify for project funding. During the initial learning phase it will be important to keep conditiona Lity flex- ible in order to avoid any impasse. This is the approach adopted in pro- jects in Mali, Mauritania, and Senegal. * Anticipated benefits. Local involvement of this kind should help restore a sense of confidence and trust between people and their institu- tions, an essential foundation for legitimizing any tax regime. It must lead to greater accountability in the behavior of institutions toward tax- payers and users, and vice versa. Finally, it should open the way to a more appropriate sharing of the municipal financial burden between the state and local levels; this should be an essential ingredient in the finan- cial design of future urban projects. * Constraints and risk. The guidelines suggested here are more constrain- ing than those applied to previous projects. Repayment of the credit will be a charge on the state's general budget (but normally after a grace period that is longer than the project execution phase). The risks implied by greater municipal involvement in project execution are considerable: their opera- tional shortcomings could well have a negative impact on the level and rhythm of project activities. There could, for example, be disbursement delays, and in the case of an Agetip-type undertaking, the project could be held hostage to the decisionmaking timetable of local and ministerial offi- cials. The objective should be to reduce these risks, by giving the munici- palities a direct financial stake in the project, and by providing strong contract management support at the beginning of operations. Project Option 1: Municipalities Are Economically Weak The context is one in which municipal governments have little financial autonomy and few means for taking action. Their resources come essen- tially from state transfers. There is no specialized financial agency. There has been little decentralization. In this case the project's priority focus will be on making urgent investments, primarily in the major city, and a few targeted undertak- ings in municipal services (management of revenue-producing facili- ties, solid wastes). Execution procedures should allow for swift disbursement. Financing will be provided by the central government, without any financial involvement on the part of the municipalities. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 75 Project Option 2: Municipalities Have Greater Resources The economic context is still weak, but the municipalities enjoy greater autonomy and have more resources at their disposal. There is a clear policy of strengthening the municipalities. In this case the project's objective is to reinforce municipal financial autonomy, and to promote their investment capacity. It may involve one or several municipalities, with a particular focus on the institutional capacity building efforts of the government. Financing is provided essen- tially by the central government. Project components may relate to: * Building management capacities and enhancing the resources of beneficiary municipalities * Financing municipal investments, essentially through the central government * Examining the conditions for setting up a specialized lending agency for local governments. Project Option 3: Municipalities' Financial Capacity Is Greater In this case the economic situation is close to being stabilized. The municipalities' capacity to take action is greater, overall, than in the preceding options. They have sufficient self-financing capacity that they can envision borrowing. The project objective is to establish a lending system for all the municipalities involved. At first the system will benefit from low-cost financing and procedural exceptions that take account of the specific market characteristics of the municipalities: a mixture of loans and grants. The project components will include: * Establishing a line of credit for municipal investments * Building municipal managerial capacities * Enhancing municipal resources. Possible Measures The following recommendations are grouped into three types: mea- sures for general improvements to the local system, measures for encouraging municipal financial participation, and measures for mobi- lizing resources and improving financial management. 76 THE FUTURE OF AFRICAN CITIES Improving the System It will be difficult to undertake urban projects without coming to grips with the overall system of financing and local management. Compromise measures will likely be required at first; they could be introduced in con- junction with studies funded under the project. Such measures will require government action and could be made part of project condition- ality. They relate particularly to measures for improving local finances over the short, medium, and long terms. By implementing them, the government will be demonstrating its willingness to undertake a real improvement of the system. A few examples: abolish exemptions from property taxation (Senegal); institute some form of urban tax (Burkina Faso); reform business taxes (Burkina Faso); make the laws governing the municipal civil service more flexible; authorize the opening of special municipal accounts (Cameroon, Chad, C6te d'Ivoire), even if this breaches the tinicitW de caisse principle. Three other examples are discussed below: define the state's finan- cial role, amend and update the unicite de caisse principle, and reform local taxation. ENHANCING STATE PARTICIPATION IN LOCAL FINANCING. In French- and English-speaking industrial countries alike, governments have estab- lished systems for transferring state resources to local government. In Africa such transfer systems are found mainly in those coumtries that have made the most progress toward decentralization (C6te d'lvoire, Senegal) or those where the economic situation is somewhat less tight (Cameroon, C6te d'Ivoire). State-municipal resource transfers may be effected through additional tax points (Cameroon), shared tax revenues and investment grants (FECL in Senegal; see figure 1), global operating grants (C6te d'Ivoire, Central African Republic, Madagascar); an invest- ment fund (FIAU and FRAR in C6te d'Ivoire), and Treasury advances that can be converted into budgetary grants (in all systems). A number of countries still provide neither tax transfers nor grants, however. Several countries are currently in the midst of decentralization, and this kind of state participation can enhance that process. Over the medium term it will be essential to the financing of local governmen.t. Recommendations are as follows: * The issue of state-local financial relations should be included in structural adjustment negotiations, particularly for countries under- taking ambitious decentralization programs. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 77 Figure 1. Grant allocation through the Municipal Services Fund (FECL), Senegal, 1996 1. MUNICIPALITY Financing request 2. GOVERNOR Transmission &.PREFECT Transmission I 4. DCL Analysis 5. MANAGEMENT COMMITTEE Allocation 6. MEFPIMinistry of Municipal Affairs Notification decree B.RFCT7 OVRO DAGEl Transmission_ _s Trnmsin Expenditure 9. MUNICIPALITY 10PEFC special authonzation B. 10PEFCO81F l t , ~~~~~~~~~~Approval 12. Department of t.GVRO Local Govemment Trasiso analysis1 13. Ministry of 14. GOVERNOR Pyetnt Decentralization _ Transmission Pyetnt Decree confernng special authorization l |FIRM 1 6. MUNICIPALITY | PECT ;R n Inoce Authonzationof 4 smis Deposit order | l >| t~~~~~~~7. RECEIVER |l Available cash t 8. Treasury check to| firmnor supplier| 78 THE FUTURE OF AF^RICAN CrTIES * Lands should be transferred to local government ownership. The state (usually the "eminent owner") can compensate in this way for the lack of financial transfers. Yet such devolution of property must be done gradually (in periodic tranches) and subject to conditions (to avoid any risk of abuse). * Where grants are used, they should incorporate incentives, so that they bear some relationship to local revenue-raising efforts. AMEND THE UNICITE DE CAISSE PRINCIPLE. This principle has become distorted and represents a barrier to transparency. In Francophone Africa, where it is a holdover from former times, the mechanism has been perverted in the wake of the crisis in public finance. It has tended to block or interfere with the regular devolution of resources, since states are tempted to hold on to funds that were collected for the benefit of local government. From the state's viewpoint the impact of such funds is minor, but for local government the effect of losing them can be devastating (box 8). Very few major cities have succeeded in negotiating regular advances from the Treasury (which they must have to pay salaries and wages). Only late in the fiscal year do cities know how much they are going to receive. Under such cir- cumstances local government may simply drift for much of the year (box 9). This situation has prompted continuous efforts to circumvent the sys- tem and to develop irregular parallel systems: accounts in private banks with or without supervisory approval (Bangui, N'Djamena), the prolifer- ation of municipal entities that have their own cash accounts (official or Box 8. Medium-size towns are the hardest squeezed Not all local governments are equally dysfunctional. The capital city, which commands roughly 90 percent of the fiscal potential (apart from customs revenues), has usually managed to strike a compromise with the Treasury for monthly advances. Smaller municipalities, with fewer expenses, can generally cope with the system and may even enjoy special treatment in local financing (in C6te d'Ivoire, the amount of the global operating grant is inversely proportional to population). The medium- size towns often fare the worst: they have little negotiating strength, their needs are constantly growing, and they often have to shoulder the cost of poorly organized "deconcentrated" services (for example, Ziguinchor). Economic turnover is modest, and not much money circulates. The tax base is similarly weak: the prevalence of the informal economy offers vir- tually no opportunity for taxing personal or business earnings, or for levying a value added tax. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 79 Box 9. Spinning wheels The French-inspired financial system is based on the principle of recipro- cal responsibilities, between the ordonnateuir (who authorizes expendi- tures) and the comptable (who ensures that funds are available); between the tax collector and the treasurer; and between the state and the munic- ipalities (transfers). This system has been perverted in its African mani- festations, where for a variety of reasons the minimum conditions for its proper operation do not exist: the generalized scarcity of resources means that the state exerts first claim on whatever funds are available, at the expense of the municipalities; and distrust and suspicion still pervade the relationship between central and local governments, while the quality of administration has deteriorated over the past 10 years. In general the system has been undermined by the constant granting of exceptions and has never taken root firmly. Only a few traditionalists remain attached to rules that present-day administrations simply cannot understand. The original system, for example, requires the state to collect taxes destined for the municipalities, advise them of how much they will receive for the year, and remit these funds regularly each month. But in fact, most African municipalities have no guarantee either of how much they can expect to receive, or when they will receive it. Dysfiinctionalism at work. The tax department prepares tax assessments from which it expects to raise, say, CFAF 100 million through business levies, though it has no clear knowledge of the tax base that will produce them. The Treasury accepts these assessments but in fact manages to col- lect only CFAF 50 million because taxpayers refuse to pay, tax collectors fail to follow up, there are no mailing addresses for sending notices, or the tax rolls are out of date. The Treasury remits only CFAF 25 million to the municipalities and keeps the remaining CFAF 25 million for central govemment purposes-all in perfect accordance with unicitW de caisse. At the same time, the municipality is preparing to spend the CFAF 100 mil- lion it was told by the tax department to expect-or at least, the CFAF 50 million actually collected by the Treasury-and so the municipal deficit continues to grow, year in and year out. Under such circumstances munic- ipalities are often tempted to set up unofficial accounts for their own locally generated revenues (for example, market fees), which will never reach the Treasury. Thus are the bonds of mutual responsibility broken; what is left is a system that is essentially "running blind," and that pro- vides a poor basis for local authorities to participate in the financing of urban projects. otherwise), resort to prefinancing, collusion with the local receiver, and so forth. At the same time, externally funded projects have led to: * Compromise solutions involving creation of a municipal revenue bureau (Burkina Faso, Cameroon, Chad, Senegal) 80 THE FUTURE OF AFRICAN CITIES * A more radical approach, where local governments are allowed to apportion and deposit in a bank account funds earmarked for spe- cific operations, such as lines of credit for municipal facilities (CFC in Cameroon, BHS in Senegal). Under these conditions there is not much scope for promoting trans- parency in municipal finances, or encouraging mayors to mobilize resources, since they have no assurance that they will be able to keep the money, or that decentralization will really be made to work. Municipalities need to know what their revenues are going to be (including those collected via the state services), if they are to prepare and manage their budgets properly. Otherwise, the public will have lit- tle confidence in their local authorities. We therefore recornmend that any investment project should include complementary measures aimed at dealing with the problem of unicite de caisse, whether this means abandoning it, reforming it, or reinforcing it: * Abandoning the principle. Allow municipalities to open accounts in pri- vate banks, and let them finance themselves either by collecting their own taxes, or by replacing local taxes with additional tax points. The banks in question would be responsible for supervising these funds. * Reforming the principle. Allow creation of specific municipal accounts, creation of specialized municipal revenues, and a system of monthly advances, with priority for the larger cities. Set up a central Treasury fund for other municipalities. • Reinforcing the principle. Make municipal accounting procedures less open to interference by the mayors, and introduce a system of assured and regular monthly advances to municipal treasuries. Reform is perhaps the most realistic short-term approach, in light of the many current municipal shortcomings. A compromise should be worked out with the finance ministries, with a view to providing for: X Monthly advances from the Treasury, for the largest city (cities), or from a central Treasury fund, for the major municipalities; a system of advances funded by the municipalities, the state, and perhaps other donors and managed by a committee of locally elected repre- sentatives and officials. * A municipal revenue reserve funded from locally generated rev- enues and managed as part of the municipality's accounts, in the case of the major cities. Revenue centers can be established in other cities, depending on their size, and on the density of their urban population, with a "liaison account" to the municipal collection system. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 81 REFORMING LOCAL TAXATION. Local taxation is expected to finance the bulk of local expenditures. It consists of direct taxation: property taxes, business taxes, license fees, rental value taxes, poll taxes, garbage col- lection fees, and so on, and indirect taxation: water rates, advertising taxes, public-space user fees (stall rentals, parking fees), and the like. Property taxes and business fees are supposed to provide the bulk of municipal revenues. This tax configuration, inherited from the colonial era, may well have met the needs of a comfortable expatriate society, but it has proved totally inadequate in the very different circumstances of today: * Business taxes and fees produce limited revenue as a result of the cur- rent stagnation of the modem sector and are generally unsuited to the informal sector that represents the real mainstay of urban economic life.5 * The property tax applies both to developed and undeveloped land (that is, land without buildings). Its application is hampered by several problems: the limited number of land owners with official title, and the many exemptions (as in Senegal) for improved lands; the lack of ade- quate land-ownership records; repeated, costly, and ultimately failed, attempts to create land registries throughout the region (Cameroon, Mali, Senegal); and continued resistance to paying the tax. Moreover, the state system for collecting this tax functions poorly-partly because of these constraints, but also because the stakes involved are modest-while the deconcentrated tax collection services have limnited means at their disposal. In the end it will be hard to justify local taxes as long as the municipalities are so inefficient or ineffective at providing public services (box 10 ). Box 10. The "good old twelfth century" Should we perhaps go back to the method that Kublai Khan used in the twelfth century to wring taxes from property holders? He required every business to place over its front door a seal, which changed color each year (rather like modem automobile license stickers). Anyone (owner, occu- pant, neighbor) could buy this seal at the nearest store-but if a seal of the right color was not properly displayed, the delinquent's house, and the entire block surrounding it, would be razed to the ground. Needless to say, the neighbors were quick to take steps to avoid this fate. Tax collection rates verged on 100 percent. The whole process had an elegant simplicity to it: no assessments to issue, no checking of invoices against receipts, no complicated distinctions between budget officials and tax collectors. 82 THE FUTURE OF AFRICAN CITIES The recommendations offered relate primarily to the future of the property taxation system. Because of the urgency of the land tenure question all over West Africa, there is reason to include or extend spe- cial legislative reform components in a number of projects (Burkina Faso UDPs 2 and 3, Mali UDPs 1 and 3): * Estimate the fiscal potential of cities and towns (households and businesses). * Reexamine local taxation laws: statistical analysis of tax assess- ment notices issued and actually paid (by municipality and by type of tax) and the impact of exemptions granted; reform simulation exercises. * Move toward an urban tax (contribution urbaine) based cn use rather than ownership (table 10). The justification for such a move is that city dwellers should bear the costs of the services they consume. The goal should be to ensure that the taxpaying population is as broad as possible, the tax base can be readily and equitably managed to reflect differences in the level of services and the quality of houtsing in each district, and administrative costs are kept as low as possible. Table 10. Residential taxes in Burkina Faso Comfort Comfort indicators Base ratea level Electricity Ruinning water (in CFAF) 1 No No 2,500 2 Yes 3,500 3 Low No 4,000 4 ("Low-income" rate: 3 Amps) Yes 5,000 5 Average No 7,500 6 ("Household" rate: 5 Amps) Yes 9,000 7 Average No 10,000 8 ("Comfort" rate: 15 Amps) Yes 12,500 9 High No 18,000 10 ("Comfort" rate: 15 Amps, uniphase) Yes 20,000 11 High No 28,000 12 ("Luxury" rate: 20 Amps, or all 3-phase) Yes 32,000 13 High High consumption 36,000 ("Luxury" rate: 20 Amps, or all 3-phase) Note: $1=CFAF 500. a. The base rate applies to the poorest neighborhoods; it is multiplied by a coefficient of 1.5 and 2.5 for progressively better-served districts. Thus a "comfort 5" plot in a wealthy area will pay CFAF 7,500 x 2.5 = 18,750 (US$38) a year, instead of the CFAF 7,500 (US$15) paid in a poor area. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 83 * Focus property taxes as far as possible on the (admittedly rare) hold- ers of official titles, and avoid the cumbersome and expensive effort of setting up cadastral registries. * Review business tax rates on a regular basis and simplify the tax burden on the small businesses that are the backbone of the urban economy. Encouraging Municipal Financial Participation and Mixed Funding The goal is to design a simple and transparent mechanism to facilitate the systematic participation of municipalities in project financing. Their financial share may remain modest initially, but the important thing is to establish a viable mechanism. The financial arrangements of the project should determine the level, form, and mechanism for participation and could also address the question of how the resources will be used. WHAT LEVEL OF FINANCIAL PARTICIPATION? The municipal share of financ- ing should be given in-depth consideration with the central authority, to ensure a smooth beginning. (In the Senegal Agetip 2 project, the origi- nally fixed share of 30 to 50 percent was found to be too high.) The level set might depend on the city's financial capacity, the portion of the work to be handled under municipal contract management, and the level of state involvement in the financing. For example, the municipal share could be greater for a household garbage project, an area clearly within municipal jurisdiction, than for a primary infrastructure undertaking, where the state should logically assume the major role. WHAT FORMS OF PARTICIPATION? Several forms of participation could be adopted, perhaps in combination, depending on the context (table 11): - Self-financing. The municipality finances a specific part of the invest- ment from its own resources: the amount varies with the size of the city and the type of operation (direct cost recovery operations, sub- sidized operations, and so on). In some cases a 12 percent share might be acceptable, but this would be hard to live up to in a large project where such a share might be four to six times the town's yearly revenue. * Reimbursable loan. This may be the most appropriate system, since it allows the burden of paying for urban investments to be spread over several generations of beneficiaries. It could be difficult to imple- ment, however. In any case municipalities, unaccustomed to bor- rowing and repaying money, have been slow to embrace the idea. 84 THE FUTURE OF AFRICAN CITIES * Mixedffinding. In future more use will have to be made of mixed fund- ing, combining loans and other forms of financing (self-financing and subsidies) in the same operation. Such a mechanism could be intro- duced in one of two ways: (a) one system, which would not require a specific financial intennediary, would employ a sinking fund, along the lines of a caisse autonome d'amortissement (CAA), that would have to offer attractive repayment conditions (which is rare); (b) the other system would require setting up a specific financial intermediary (for example, CFC in Cameroon, FPCL in C6te d'Ivoire, CCC irt Senegal), which presupposes a suitable credit market (again, rare). * Maintenance account. Creating a maintenance account reipresents a minimalist version of financial participation. The municipalities would mobilize funds amounting to 2 or 3 percent of the initial invest- ment, earmarked for maintenance costs. This mechanism would help introduce the idea of municipal financial participation and would at the same time serve a heuristic purpose. It would compel municipal- ities to think about upkeep and maintenance before undertaking new investments, and to establish a specific program of maintenance work (with room for possible involvement of small and medium-size enterprises). This type of arrangement, which should be kept as sim- ple as possible, could be implemented in cooperation with an Agetip, for example. * Settlement of arrears to suippliers. This is in effect symbolic participa- tion. Financing would be made conditional on observance of some elementary rules of good management. WHICH MECHANISM? The mechanism selected will depend on the kind of participation envisaged, but the issue remains the same: how to divert a portion of municipal funds into a maintenance account, a Table 11. Municipal participation in project financing; scenario: CFAF 100 million, five-year project to double municipal budgetary capacity each year Soluition I Soluition 2 Soluition 3 Solution 4 Miunicipal (loan at IDA (loan at IBRD (self-finance (maintenance participation conditions) conditions) 10 percent) fund 2 percent) Annual charge 2,931 11,683 2,000 2,000 Municipal budget 20,000 20,000 20,000 20,000 Share of municipal budget (percent) 15 58 10 10 Note: The annual charge should not exceed about 10 percent of current revenues, unless it is clear that more funds can be mobilized. Solution 1 might be acceptable, if it is for revenue-producing facilities. Solution 2 would not work. Solutions 3 and 4 are acceptable. HOW SHOULD URBAN INVESTMENTS BE FINANCED? 85 Keeping hold of municipal resources... special treasury account, an account in a commercial bank, or a CAA- type bank account. Possible solutions include: • Work through the central government (local government or other min- istry). Funds are taken directly from the grants or transfers (DGF, FECL) normally allocated to the municipality (DIU in Mauritania). This arrangement presupposes, however, that there is such a trans- fer or grant in the first place; moreover, it will work best if the min- istry in charge of the project is also responsible for municipal affairs (interior ministry, local affairs administration, and the like). This arrangement has the merit of simplicity, but it has the disadvan- tage of blurring the learning and capacity building impact on the municipality. * Work through the Treasury. The receiver of the Treasury is the only official empowered to credit the project account. To ensure that such deposits are made on time, the Treasury must agree to give them pri- ority over other expenditures. That agreement is not always forth- coming (PDCC in C6te d'Ivoire). * Go the private route. Accounts are credited directly by the private enti- ties that run revenue-producing facilities (markets, bus stations). 86 THE FUTURE OF AFIUCAN CITIES WHAT SHOULD PARTICIPATION FUNDS BE USED FOR? It is important to ensure that participation funds are used as earmarked. Here again, the Treasury is ultimately responsible for allocating public revenues. Any exception to this system should be negotiated (double signatures and endorsement of the entity responsible for the project should be required). Improving Resource Mobilization and Financial Management Tools for improving resource mobilization and financial mnanagement include: expenditure control systems, effective accounting systems, utility costs recovery, and good fiscal management. INMPROVE QUALITY OF EXPENDITURES. Without a transparent system for raising funds, municipalities today learn to spend first and then "make do." Financial rehabilitation is a prerequisite for gaining public confi- dence; this means offering good public services at the local. level, intro- ducing effective and transparent initiatives such as Agetip-type operations, and enhancing neighborhood services (GIE). Recommendations are as follows: * Improve control over muinicipal expenditures. This can be promoted through assistance or incentives aimed at improving the program- ming and execution of priority expenditures. The "par tnership con- tract" is a good way to enlist the support of the mayor. * Improve billing and collection procedures for public utilities and services. This can be achieved by a policy of signing contracts bel.ween munic- ipalities and their partners (GIE, local firms, and the like). ENHANCE MUNICIPAL ACCOUNTING CAPACITIES. Accountinig nomencla- ture often hampers municipal budgetary control and financial man- agement (budget preparation, cost controls, and so on). Weaknesses abound: there is no separate budgeting for service licenses, nor are investment records kept; reports are hard to read; and self-financing is uncertain. On the technical side, budget documents and account reports are produced late, and there are often sizable discrepancies between the initial budget forecast, actual municipal expenditures, and the figures entered in the municipal accounts. Recommendations are as follows: a Provide help in modernizing municipal nomenclature, through the Department of Local Government (DCL) and the Treasury (Senegal-PADDUS). HOW SHOULD URBAN INVESTMENTS BE FINANCED? 87 * Introduce a system of separate budgets (investments, revenue-earning facilities, and so on). * Provide help in producing regular budgets and accounts. * Set upfinancial databases on municipalfinances, within the DCL and the Treasury's municipal services. INCREASE COST RECOVERY FROM REVENUE-PRODUCING SERVICES. Market stall rentals and bus stations are an important component of municipal financial resources (between 15 and 30 percent for mid-size towns, and up to 70 percent for many cities of between 50,000 and 100,000 inhabi- tants). Because collection is in the local authorities' hands, such fees enjoy greater public acceptance and can thus be more readily enhanced. Yet cost recovery cannot be increased without first improving services. The best way to effect such improvement is through delegated man- agement, or the services of an autonomous public corporation. Experience shows that this approach works better for larger facilities (Central African Republic), where there is likely to be strong private sector interest, than for smaller ones. Recommendations are as follows: ^ Develop a system for contracting out the management of markets, bus and truck depots, and household garbage collection (with standard contracts indicating responsibilities and financial conditions such as tariffs, amount payable to the municipality, and so on). * Provide assistanice to the official service providers, if the service has not been delegated (appointing authorized collectors, creating a sepa- rate budget, and the like). IDENTIFY THE TAX BASE. The scope of this recommendation is gov- erned by the prerequisites for cost recovery. Despite many ambitious projects (cadastral registries in Dakar, CARPOL in Mali), municipal- ities do not have even the most basic tools for identifying service users and potential taxpayers. Cities have grown up without any system of cartographic or physical coordinates. Streets have no names, buildings have no addresses. It is difficult to find, let alone take readings from, water or electricity meters, or to collect license fees and other taxes. Moreover, even a simple listing of recently allo- cated plots is often lacking. Under such circumstances, how can resources be mobilized? Recommendations are as follows: * Develop tools for creating and managing taxpayer rolls. Establish a sys- tem for assigning addresses and introduce tax registries, particularly for collection of business taxes and license fees. Such registries are 88 THE FUTURE OF AFRICAN CITES similar to tax rolls, but the emphasis is on recording the name of the taxable business and the potential it represents. * Set up a registry of lots (starting with those most recently allocated). Conclusions There is a risk that external assistance may be diverted away from pro- viding support to municipalities, for two reasons: * The tendency of structural adjustment policies to concentrate on central government finances-at the expense of urban development issues. * The enthusiasm for community development projects, whereby an ever-greater share of assistance is channeled directly to community groups for the provision of local services, without attention to the need for a comprehensive and coherent approach to city governance as a whole. Although the proliferation of external assistance can cause confu- sion in the sector, and attempts at coordination are often inadequate, a clearly stated policy of intervention that can be adopted and supported by local authorities is essential to improve the manageme'nt, program- ming, and financing of urban investments. The following chapter sug- gests some tools for putting such a policy into effect. Notes 1. Urban and similar projects financed by the Bank and other donors involved in the sector have represented about 10 percent of total capital spend- ing; this proportion rises to 20 percent when sectoral projects, such as water and electricity supply, that make a significant contribution to urban development are included. If, in addition, funding for education and health projects in urban areas is taken into account, the proportion of total capital spending wculd be roughly equivalent to the urban share of total population. An "average" urban project of 3 billion CFAF per year represents an external contribution of 2,000 CFAF per person per year for a city of 1.5 million inhabitants. 2. This principle requires all public monies to be deposited in the Treasury, as a kind of consolidated revenue fund. In the case of local finances, this involves the municipalities' "small change" (receipts from parking fees, market stall rentals, and the like) and funds collected for local government by agents of central services (commercial licenses, land taxes). In theory the state is to HOW SHOULD URBAN INVESTMENTS BE FINANCED? 89 return these resources to the local level, typically on a monthly schedule of pay- ments known as "douziemes" or twelfths. 3. In West Africa the concept of "local government" (collectivitW locale) cov- ers the communes and other levels of government within an urban area. Departmental, provincial, or regional levels of government are not at this time organized as collectivites locales, except in Senegal, since 1996. 4. This weakness in public revenues should be looked upon as relative, since there is still debate about where the ideal balance lies. From a liberal viewpoint an economy's capacity to support public revenues depends on three factors: the level of income per capita, the degree to which the economy is mon- etized, and the importance of export earnings. In developing economies, or those in transition, this approach is inadequate to permit the level of public demand needed to stimulate economic growth. The public revenue share is dis- torted, moreover, by certain features of both GDP and public revenues. GDP is everywhere in aggregate terms, because many transactions take place infor- mally. To a varying extent the countries of the region tend to focus their taxa- tion efforts on only one segment of the value added economy, the so-called modern sector that comprises businesses and households, and on customs duties, thereby ignoring the revenue-producing potential of the rest of the economy. 5. The modern sector has suffered most from the economic crisis: it grew at a rate of around 6 percent during the decade 1960-70, but this fell to about 1 percent during 1980-90 (Cour 1990). 5 Implementation Tools : : 4 f;i( |\i ?:2:a; f t;40:;40 i:l; : : ; \ t 4uf ;SS y;;| tdS:00 :ffiE0;k0xASl) t0 ;i v: \ ;0: t00 ffE fff000Vg;de d0SSSzg000 \ a0fd;:D00:: : f 92 THE FUTURE OF AFRICAN CITIES This chapter describes "tools" that might be used in future urban Tprojects. Reflecting some of the ideas developed in the preceding chapters, they may help in implementing the various recommenda- tions found there. The tools relate to: * Planning: aerial photography and urban sketch maps, reference plans, infrastructure and services programming inventory, the Urban Grid. * Implementation and control: catalogue of municipal facilities and works, Agetips and irregular settlements, Agetip performrance indi- cators, environmental impact assessment indicators for municipal projects. * Identification of the tax base and the levying of taxes: the urban tax (con- tribution urbaine), address systems and tax registries. * Implementation of municipal projects: the urban audit and the financial and organizational audit, preparatory to signing a contrat de ville (municipal contract) between the municipality and the state. These tools may be used individually in the course of an urban pro- ject, but they should be employed with reference to each other. Ways of linking them for use in conducting urban audits and implementing municipal contracts are shown in figure 2. The chapter will discuss the following tools in turn: X Aerial photography and urban sketch maps * The Urban Reference Plan • The Urban Grid * Infrastructure and Services Programming Inventory * Catalogue of municipal services and public works i Environmental impact assessment indicators for municipal projects e Agetips and irregular settlements e Agetips: Performance Indicators e An occupancy-based property tax: the urban tax * Street addresses and tax registries • Urban, financial, and organizational audits * The urban audit framework . The municipal financial audit framework * The Municipal Contract. IMPLEMENTATION TOOLS 93 Figure 2. The implementation tools network |Aerial photography Urban sketch maps| Infrastructure Underserviced Street addresses and Services neighborhoods and tax registres Programming Inventory and Agetips Urban Reference Agetip: Urban tax Plan Performance Indicators (contribution urbaine) Urban Grid ~~Municipal facilities Urano Gridd 0 catalogue Environmental impact evaluation indicators U rban Financial and Audit organizational audit | Municipal l Contract 94 THE FUTURE OF AFRICAN CITIES Aerial Photography and Urban Sketch Maps Objectives and Content The objective is to produce up-to-date plans or maps for each city that will make it easier to track urban growth and thus help improve city management. CONTEXT. Updating is generally accomplished using aerial pho- tographs, but budgetary cutbacks have led many donors to abandon this kind of work, or to turn to less satisfactory substitutes.1 This has frequently left cities in an unfortunate situation where growth is expanding steadily into new zones, but there is no basis for planning, other than perhaps old maps dating from 10 or 20 years ago. OBJECTIVES. To overcome such problems, the following need to be more clearly defined: * The costs: a cost of less than $10,000 per city * The expected "products": an "urban sketch map" at a scale of 1:5,000, in digital and graphic form * The potential users: urban development officials, in particular local consultants. The following principles have been used to limit costs: grouping aer- ial photography missions to cover several cities at once, to reduce air- craft operating expenses; keeping the photography to a fairly large scale (1:20,000), to limit the number of photos required; establishing "urban sketch maps," in graphic and digital form, based on the pho- tographs. These urban sketch maps are produced by imposing a graphic or digital grid over the photographs, without undertaking any special geometric corrections, that is, without performing any ground-based control measurements. This restriction allows significant cost reduc- tion but the very notion of a "sketch map" troubles cartographic experts, who are generally concerned with obtaining a high degree of IMPLEMENTATION TOOLS 95 precision. The urban sketch map therefore represents a compromise between achieving the ideal and having nothing at all; but it is fully satisfactory for analyzing urban growth and identifying investment needs. Results from calls for bids in the preparation of recent urban projects (Mali, Mauritania, Senegal, Togo) suggest that the following package can be obtained for a cost of less than $6,000 per city: photography, neg- atives, contact prints, photo enlargements on paper and reprography materials, photos on CD-ROM, urban sketch maps on paper and reprography materials, and computer diskette. Implementation The photography and mapping are undertaken by specialized firms selected through a public bidding process or negotiation by invitation. The project manager enlists the help of experts in adjudicating the bids. The bidder submits samples of work and, if the bid is accepted, is expected to produce work whose quality equals that of the samples. When the product has been accepted, it is best to store the negatives in a specially equipped facility, keep the products available (in full detail) at the project manager's office, ensure access to paper or elec- tronic versions for any services or consultants engaged during the pro- ject, and arrange for training sessions as required. Output The urban sketch map serves as a basis for creating other tools, such as the Infrastructure and Services Programming Inventory and the Urban Reference Plan. The information layers can be augmented and used to produce different kinds of plans, showing utility networks, facilities, housing, economic use, and so on. In general, the innovative aspect of this time-honored tool relates to its cost and the overall consistency of the products obtained, particularly in electronic format. Illustrative terms of reference for using this tool are given in box 11. 96 THE FUTURE OF AFRICAN CITIES Box 11. Terms of reference for aerial photography and urban sketch maps Under Project - a series of aerial photographs will be produced and urban sketch maps will be prepared for the following cities: . The project manager for the operation is The work to be conducted includes: AERIAL PHOTOGRAPHY The work will be performed with an aircraft especially adapted for taking vertical-axis aerial photographs for use in producing standard aerial surveys. 1. Cities and territories to be covered, by city (see annex, table 1, at end of box). 2. Photographic scale, emulsion. Format 23 cm X 23 cm, on panchromatic emulsion, at an average scale of 1:20,000. 3. Camera. The photos will be taken with a standard-field photogram- metric camera, with a calibrated focal length of 152 mrn, of type Wild RC 10 or Zeiss RMK TOP15. A calibration certificaie for the camera, issued by a duly approved certification firm within the past two years, must be provided to the project manager, no later than 10 days after award of the contract. 4. Flight plans, overlap. Overflight authorization requests will be sub- mitted by the project manager to the competent authorities once the consultancy services contract comes into effect. * Flight plans will be prepared by the consultant and submitted to the project manager for approval, at least 10 days before flights begin. If at the end of that time no objection has been made, the flight plans may be considered approved. * Aerial photographing passes will be exclusively oriented in an East- West direction. If the flight plan consists of only one pass, the operator will take a photograph centered over the city. * Longitudinal photograph overlaps will be 60% +± 5%. Lateral overlap between adjacent passes will be 20% + 5%. 5. Indication of the optical axis of the camera. The angular deviation of the optical axis must not exceed three degrees from the vertical. 6. Drift. The drift correction error must not exceed four degrees from the flight axis. 7. Exposutre, image movement. The exposure time and aircraft speed must be such that image movement does not exceed five micrometers. 8. Development, presentation of photographs. The density of the original negatives must fall between 0.5 and 1.2. They must be numbered consecutively by city, and must include reference information, namely: year, country, number, average scale. Photos must be cut and delivered in separate plastic envelopes in carefully numbered and labeled boxes. IMPLEMENTATION TOOLS 97 9. Contact printing. The photographic medium used for contact prints must be of a stable plastic material, of minimum thickness 0.1 mm and of a grade that allows for the best possible contrast. All information on the margins of the negatives must be clearly visible. Prints must be delivered in carefully numbered and labeled boxes. 10. Index map. An index map for each city must be provided on cardboard (1:50,000 or, if not available, 1:100,000 or 1:200,000). In addition to the center position for each photo, this must include photo mission refer- ences, photo scale, date and time the photo was taken, camera num- ber, type and focal length. 11. Deliverables. For each city the following items are to be provided: (a) original negatives, (b) three contact prints on paper, and (c) index map in reproducible format, along with two paper prints. PHoToGRAPHIc ENLARGEMENTS 1. Selection of photos. The photos will be examined at the 1:20,000 scale, and those with the best coverage of the urban area will be selected-in principle, one photo in two, depending on overlap. A single photo may be enough for the geographically smaller centers. The project manger will be responsible for selection. 2. Enlargements. The photo or photos selected will be blown up, using a photographic enlarger equipped with an orthoscopic lens. The aver- age scale required is 1:5,000. 3. Deliverables. (a) One set of enlargements to 1:5,000 per city, on plasti- cized paper, approximately 90 cm X 90 cm; (b) a set of enlargements to 1:5,000 per city, on reproducible medium; (c) the digital raster for the selected enlarged photo or photos, on CD-ROM for PC use. The pho- tos will be scanned with a high-resolution scanner. The supplier will provide a system for organizing the photos scanned onto the CD- ROM, for optimum utilization. 4. Deadlines. The documents must be delivered no later than _ [date] at [time], to the following address:_ URBAN SKETCH MAPS 1. Methodology. The photos will be used to prepare digital urban sketch maps. These maps will be to a scale of roughly 1:5,000. In cases (a) and (b) below, they will be produced on a digital plotting device as "flat mod- els" that allow the plotting details to be viewed stereoscopically. This may be done in three ways, depending on the number of stereopairs to be processed: (a) Six pairs or more: The pairs will be keyed to aerial triangulation points calculated using control points identified and measured on maps and/or from the flight path recording (if this is available). (b) Three to five pairs: The pairs may be mounted without specific control points. (continued) 98 THE FUTURE OF AFRICAN CITES Box 11 (continued) (c) Two pairs: If the city is contained within the single central pDhoto, the sketch may be made by vectoring the scanned photo directly on the screen. The surface area covered will be the same as the urban zone selected from the enlarged photos. 2. Features to be shown. The following objects should be identifled: (a) major hydrographic features; (b) major slopes and escarpments; (c) the contours of built-up areas, without showing buildings; (ci) com- munication routes, including those around the urban periphery; (e) major facilities, with the principal contours of their buildings (air- ports, stadiums, large municipal buildings, train and bus stations, major marketplaces); (f) the most important property boundaries, or those that can be readily identified from the photos; and (g) schematic contours of large treed areas (for example, dal:e palm groves). These features will be organized into separate information layers, with a legend to be provided by the supplier. 3. Deliverables. The urban sketch map product as described above will be delivered in both graphic and digital form, for each city, a fol- lows: (a) a print on paper of format Al, to a scale of 1:5,000 (as in the accompanying model); (b) a print on reproducible material in for- mat Al, to a scale of 1:5,000 (as in the accompanying model,; and (c) a DXF-format, PC-compatible diskette (for use on a PC wita appro- priate software). 4. Deadlines. The documents must be delivered no later than _ SUBMISSION OF BiDs 1. Submission of technical bid. Offers must contain the following ele- ments in order to qualify: (a) a brief overview of the con.pany or group, summarizing its capabilities (four pages maximurn; a sam- ples board may be enclosed); (b) a list of recent references (photos, urban sketch maps) relating directly to the services covered by the terms of reference, particularly in Africa and, if possible, in the spe- cific country; (c) comments on the terms of reference (three pages); (d) a methodological note explaining in detail the tasks thle bidder proposes to perform with respect to producing the aerial pho- tographs and the urban sketch maps. The bidder will present for each city a schematic flight plan, showing the number of passes and photos, and the number of sheets in the format as defined; (e) a timetable for producing the aerial photos and the urban sketch maps; and (f) samples of products similar to those requested in the terms of references: IMPLEMENTATION TOOLS 99 * For the aerial photos, the following five samples relating to the same photo: negative, contact print on paper, enlargement to 1:5,000 on paper, enlargement on reproducible medium, digital raster on CD- ROM for PC. * For the urban sketch map, the following three samples relating to the same photo as above: paper print to a scale of 1:5,000 (as in accompa- nying model); print to scale of 1:5,000 on reproducible medium (as in accompanying model); diskette in DXF format for PC. (g) list of human and material resources the bidder proposes to com- mit to the work: personnel involved in the project with accompany- ing CVs (one page maximum per CV); features of the aircraft; photographic equipment and processing materials; materials and software for producing the urban sketch maps. Generally speaking, the bidder will limit itself to detailing only those elements directly related to the work requested, without going into a description of other company resources that will not be used in the pro- ject. The project manager reserves the right to verify, during execution, that the resources proposed in the bid are actually used for the project. The quality of samples submitted will be taken into account in adjudi- cating the bids, and the samples will be used as standards for reference during performance of the work. The quality of the final delivered prod- ucts must not be less than that of the samples submitted with the bid. 2. Submission offinancial bid. In order to qualify, the bidder must submit detailed prices for the items indicated in the accompanying table. Prices will be expressed in _ [currency], net of tax. ADJUDICATION OF BIDS The technical bid will be judged against a possible score of 65 points, awarded as follows: a Presentation of the company: 2 points * Recent references: 4 points * Comments and observations: 4 points * Methodology: 15 points * Timetable: 5 points * Work samples: 25 points * Resources devoted to the project: 6 points * CVs: 4 points (including 2 for the pilot). The financial bid will be judged against a potential score of 35 points. The project manager reserves the right to select only a portion of the headings requested, upon awarding a contract. (continued) 100 THE FUTURE OF AFRICAN CITIES Box 11 (continued) ANNEx 1. Aerial Photographs and Urban Sketch Maps: Quantities Furnished Aerial photos Urban sketch maps Price Surface Number Number area of Carto- of prints to be Number Number enlarge- graphic in Al Aerial Urban City covered of passes of photos ments suirface format photos sketch Total I ... ... ... ... ... ... . ... ... 3 .. . -.-. . ... .. .. 3 . ... ... ... ... ... ... ... ... 3Total.. .. 2. Aerial Photographs and Urban Sketch Maps: Cost Printing of urban Aircraft Entlargemerts sketchi map Aerial Reprodu- Aerial Urban Reprodu- Delivery photo- Contact cible photos sketch cible of aircraft grapliy printirig Paper niedium on CD map Paper medium to country (mt/ha) (mu/unit) (mu/mu2' (mu/m2' (mu/tnit) (mu/ha) (mu/Al) (mu/Al) Unit price ... . ... ... ... ... ... mu = Monetary unit of offer. 3. Urban Sketch Map: Model Format 84 cm I ________84____cm ____ Name of city 3cm I - Legend 10cm Scale IMPLEMENTATION TOOLS 101 The Urban Reference Plan Objectives and Content The Urban Reference Plan is a simplified urban planning document. Its purpose is to indicate the broad options for development in a city over the next 10 to 15 years and so serve as a reference tool for plan- ning future investments. The content is brief, must be prepared quickly, and should be updated regularly. It should impose a minimum of constraints: it does not include zoning regulations, or any reference to future land use restrictions (apart from high-risk areas to be protected, and lands to be earmarked or set aside in land banks). On the other hand, it indicates growth areas and major facilities, as well as the principal arterial roads, the major drainage options, and lands reserved for large public facilities (such as airports). In other words, the urban reference plan indicates the projected urban struc- ture and serves as a point of reference for major players (water and power companies, in particular). The urban reference plan consists of a map (at a scale of 1:10,000 or 1:20,000) and an explanatory text that sets out the present and pro- jected levels of public services by district or homogeneous area, pri- orities over the next five years, and the main guidelines for development in peripheral growth areas and improvements to the existing framework (urban reference plan for N'djamena). The urban reference plan can be supplemented, as needed, by other planning documents (zoning, subdivision plans, and so on) that define more closely how the land is to be used. Implementation IMPLEMENTATION STEPS. 1. Draw up an inventory of public services currently provided by exist- ing facilities and infrastructure (hereafter the Infrastructure and Services Programming Inventory tool). 2. Deduce short-term priorities: analyze insufficiencies by zone and by sector (roads, schools, and the like) on the basis of the indicators in the inventory. 3. Define needs in terms of space, infrastructure, and facilities over the next 10 to 15 years and show these on maps and tables. The process 102 THE FUTURE OF AFRICAN CITIES is similar to that for Infrastructure and Services Programming Inventory, but the plan and the tables will reflect the situation in the future. 4. Draw up a 15-year investment program, on the basis of the indica- tors obtained. RESPONSIBILITIES. The urban reference plan is prepared by the urban planning authorities, in cooperation with the municipalities. Since this is essentially a tool, it should not have to go through a lengthy official approval process and should be subjected, if possible, to a minimum number of sign-offs or endorsements. Output The expected output is a permanently established set of data and a medium-term outlook so that needs can be assessed and investments programmed for all projects to be undertaken in the town (urban pro- jects, water, electricity, and so forth). Figure 3. The urban reference plan and the urban grid x4 *~~~~~~ IMPLEMENTATION TOOLS 103 The Urban Grid Objectives and Content The Urban Grid outlines the major urban roads system.2 The idea is to superimpose such a grid over the areas most susceptible to unplanned urban sprawl (as described below), in an effort to anticipate or channel the direction of future growth. THE FORMATION OF IRREGULAR SETTLEMENTS. In contrast to cities of the North, African cities have developed in a rural setting where land tenure is precarious, that is, plots are not permanently settled or culti- vated, and property boundaries and road alignments do not serve as fixed and permanent markers to guide subsequent urbanization. It is not surprising, therefore, that growth around the edges of cities has been disorderly. Initially, the settlement's spreading may look like the beginnings of just another village, but it soon reaches alarming pro- portions, expanding to several hundred hectares and becoming increas- ingly overcrowded. By then it is difficult to install service networks and facilities, and living conditions collapse all the faster as the sprawl con- tinues (for example, Bardo in San Pedro, Malimaka in Bangui, Diguel and Dembe in N'djamena). Rehabilitation work requires the opening of roadways, and thus evictions and relocations, for example, actions that are time-consuming, difficult, and costly. DESCRIPTION. To forestall such conditions, we propose that an "urban grid" system be adopted (as in Djibouti, Conakry, Bangui) as a way of earmarking or delineating new areas where urban development will occur over the coming 5 to 10 years. Implementation CHARACTERISTICS. The Urban Grid corresponds to the pattern of the major arterial roads. This layout cannot be rigid, since it is subject to factors of physical relief and thus drainage, and must mesh with exist- ing links to the city and to future growth areas. The layout must be con- tinuous, however, so that traffic can flow smoothly. By way of indication, and to establish orders of magnitude, the interval between major roads is about one kilometer: this corresponds 104 THE FUTURE OF AFRICAN CITIES to an Urban Grid of 100 hectares (or 30,000 inhabitants) to be subdi- vided into four urban blocks of 25 hectares-which implies providing for one major road every 500 meters. The gridwork can be on a larger scale (one kilometer or more), however, if necessary to accommodate densely populated areas, as in Conakry. THE URBAN GRID'S ROLE IN URBAN PROJECTS. The purpose of the grid is to guide and channel urbanization so as to forestall the kinds of sit- uations described above. The project should consist of two compo- nents: physical actions and human resources: • Physical actions. The point is not to build grand infrastructure pro- jects: the initial investment should be modest and should seek only to indicate the grid's layout (perhaps marking this with tall stakes at the axes). To minimize the risks, improvements within this grid should be undertaken only gradually, in step with the progress of urbanization. (For example: (1) lay out and stake the rights-of-way, (2) build a simple earth roadway with drainage ditches, (3) reinforce the roads that carry the most traffic and improve drainage and intersections). * Training and h2uman resources development. Setting up the UJrban Grid should be accompanied by information and training sessions, cov- ering such matters as implementation and subsequent monitoring, land management, relocation of people inhabiting the rights-of- way, and laying out the roads scheme with reference tc, the layout of building lots or as a framework for development corcessions. Output The main output expected is a degree of organization in urban growth areas sufficient to allow basic services to be introduced in these neighborhoods and to avoid the progressive collapse of living conditions. A secondary benefit should be that urban autlhorities will be encouraged to make use of other, complementary tools: the Urban Grid is only one link in the chain that leads from reference plan to programming inventory to municipal contract. IMPLEMENTATION TOOLS 105 Infrastructure and Services Programming Inventory Objectives and Content The Infrastructure and Services Programming Inventory is an aid to decisionmaking. Its purpose is to provide a framework for planning urban projects and to identify priorities. It uses a limited number of inputs to produce indicators and "scores" that convey information about local public services, as provided by existing facilities and infrastructure. It thus allows neighborhoods to be classified, and pri- orities to be identified by neighborhood and type of facility. The document consists of a set of maps and three tables (inven- tory, indicators, and scores) that summarize the information in the plans. TABLES. The tables are interrelated and allow neighborhoods to be scored automatically (on a spreadsheet program) using the input data: * The inventory contains perhaps 50 pieces of data, for each neigh- borhood or zone, on population, land occupancy, and services provided by existing infrastructure and facilities. These data can be collected from specific surveys, or whenever the inventory is updated (box table 12A). * The indicators (about 30) are calculated automatically: they quan- tify the characteristics of the neighborhood and the public ser- vices provided by existing infrastructure and facilities: for example, the number of public standpipes per 1,000 inhabitants, population densities, total extent of paved roads, and so on (box table 12B). * The scores are calculated from the above indicators, and the results for the neighborhood are compared with numbers for the city as a whole, which will be taken as the average or mean. A neighbor- hood's score is defined in qualitative terms, as "zero, poor, aver- age, acceptable, or satisfactory," and in quantitative terms, measured on a scale from 0 to 4 (box table 12C). 106 THE FUTURE OF AFRICAN CITIES The scores indicate the following: * Zero (rating 0): The neighborhood has no facilities or infrastructure. * Poor (rating 1): The neighborhood indicator is below the mean. * Average (rating 2): Services are at the level of the city mean. * Acceptable (rating 3): The neighborhood indicator falls between the mean and 1.5 times the mean. * Satisfactory (rating 4): The neighborhood indicator is higher than 1.5 times the mean. Each scoring line is given a weighting coefficient, for example: 2 for a paved road, 1.5 for a lighted street. Calculating this weighting is done by assessing the facility's importance to the local population. We have given identical weightings to the following headings: housing, roads, energy (water, electricity), sanitation and environment, and institu- tional facilities (schools, health centers, and the like). PLANS. The cartographic document is established (ait 1:5,000 or 1:10,000) on the basis of recent maps and aerial photos.3 The base map is the urban sketch map described earlier. It is supplementecl by various plans or information layers (the data for which are shown in the inven- tory table), including: • Site constraints and urbanization trends: (a) major relief features, direction of water flow, major obstacles, no-build zones; and (b) recently settled areas and urban sprawl trends. e Land occupancy: housing, businesses, open spaces (avoid introduc- ing too many types). * Major facilities and principal neighborhood facilities (for example, markets). * Roads according to their condition and classification, showing the extent of paved roads, unpaved roads, and unimproved roads; roads with public lighting. - Drainage: main outflow points and run-off channels (with lengths). : Sanitation and household garbage: wastewater systern, treatment plant, local garbage transfer points, public dumps, equipment garages, and so on. * Potable water supply: water treatment plant, reservoirs, wells, water mains (with lengths), public standpipes. * Breakdown by neighborhood (data collection neighborhoods or zones): principal place names. * Planned growth corridors (see the section on the Urbam Reference Plan). IMPLEMENTATION TOOLS 107 Priority actions (to be determined by the authorities on the basis of the inventory documents). Implementation A SIMPLE TOOL. The Infrastructure and Services Programming Inventory was designed for use by services with very modest means at their dis- posal. This explains why it is presented in the form of simple tables and maps; the number of data headings is low, but is not intended to be lim- iting. The list of data to be collected can be modified, but it would be better for the same list to be used for all cities, to make it easier to derive common indicators from them and make comparisons between cities. The result will be a comprehensive urban database that can be updated and, if possible, enhanced over time. IMPLEMENTATION. This tool is designed to be implemented, initially, in departments of the urban affairs ministry, and then to be transferred in stages to municipal units in the capital and secondary cities. The scheme is not the only one possible, but it is generally appropriate to situations where implementation capacities are satisfactory at the cen- tral level, but weak at the local level. This may help the ministry to regain a degree of legitimacy that it may have lost over the years, by introducing and updating an effective urban database and helping municipalities develop their own expertise in this area. PRACTICAL ASPECTS. The tool can be used in a rudimentary form at first, and then progressively developed with more sophisticated tech- niques. The first stage can be handled with a manual spreadsheet and hand-drawn maps; the second with computerized spreadsheets and maps; the third through the use of Geographic Information System.4 Output The tool should be useful for obtaining an overall appreciation of the urban milieu, and for identifying and ranking priorities. AN URBAN "SNAPSHOT." The systematic compilation of data, maps, and indicators will provide an overview that can be used to more clearly assess the problems ir a city and its component districts. 108 THE FUTURE OF AFRICAN CITIES IDENTIFICATION OF PRIORITIES. Results will allow classification of neigh- borhoods in terms of their levels of service and will indicate those neigh- borhoods where upgrading should be given priority. Classification is determined by the total score obtained for each neighborhood. Thus, in the example shown in box table 12C, the least well-servicecl neighbor- hood is District C (with a score of 26), followed by District EB (score 36), and finally District A (score 109). The results make it possible to detail the neighborhoods that are most poorly serviced, with respect to each type of infrastructure or facility, and to determine priorities. Thus, in box table 12C, District C should have priority for public street lighting, followed by District B. RANKING OF PRIORITIES. Ranking priorities is easy enough with regard to defining target districts: the global score can serve as the ref- erence point. It is more difficult to assign a priority ranking to specific works, particularly if they fall under different headings-roads, energy, sanitation, facilities-since it is hard to arrange these head- ings in order of importance. However, the first cut will normally be made by comparing the cost of each type of work against the avail- able funding envelope-projects that seem too costly will simply be dropped. The ultimate selection will have to be left to the central or local authorities (and perhaps to arbitration by the donor agency). ILLUSTRATIONS. The sequence of tables is shown in box 12. Starting from the inventory table, the indicator and score tables can be deduced. An example is given in box tables 12A to 12C. Note in table 12C, in particular, that District A is far better serviced (score 109) than Districts B (score 36) or C (score 25). Note also that District A is satisfactorily served in terms of primary school facilities (line 19, coefficient 1.5), but that these facilities are poor in District B (score 2) and acceptable in District C (score 5). (Text continues on page 115.) IMPLEMENTATION TOOLS 109 Box 12. Outline of Infrastructure and Services Programming Inventory tables Table 12A INVENTORY, BY FACILITY AND DISTRICT District Item A B C Total Population Land occupancy Access to infrastructure Access to services Data are entered only in this table. Table 12B INDICATORS, BY FACILITY AND DISTRICT District Indicator A B C Total Density Facilities per capita Services per capita The indicators are calcilated automatically and are stated in terms of population:for example, paved roads per capita. Table 12C SCORES, BY FACILITY AND DISTRICT District District Indicator A B C A B C Density Facilities per capita Services per capita District score The indicatorsfor the district are compared with thosefor the city as a whole, and scores are automatically translated into qualitative terms (poor, average, acceptable, and so on) and quantitative terms (1, 2, 3,...), so that the districts can be scored and ranked. 110 THE FUTURE OF AFRICAN CITES Table 12A. Inventory Unit of District measutre A B C Total Population Population in serviced housing n 910 126 1,036 Population in underserviced housing n 520 4,800 2,000 7,320 Population in irregular housing n 10,800 3,310 14,110 Other n 0 Total population n 1,430 15,726 5,310 22,466 Residents per household n 6.5 Land occupancy Area with serviced housing m2 57,425 9,875 67,300 Area with underserviced housing m2 9,000 64,350 63,725 137,075 Area with irregular housing m2 181,000 57,0)25 238,025 Total area in houising m2 (66,425) (255,225) (120,750)(442,400) Major services m2 120,000 55,000 35,000 210,000 Activities m2 50,000 17,000 20,O00 87,000 Green space m2 50,000 12,000 1,000 63,000 Road, open area m2 65,075 170,000 78,550 313,625 Total area ha 35 51 26 112 Access to infrastructure Paved road in good condition ml 1,800 1,400 600 3,800 Paved road in poor condition ml 2,100 1,900 1,100 5,100 Unpaved road in good condition ml 2,220 1,875 6,495 21,390 Unpaved road in poor condition ml 1,130 850 1,980 Unimproved road (tracks) ml 200 2,270 1,970 4,440 Total road ml 6,320 8,575 6,495 21,390 Road with lighting ml 1,100 600 1,700 Road with addresses ml 2,100 200 2,300 Bus stop or taxi stand n 8 2 1 11 Energy/telecommuntications Standpipes n 4 2 6 Water connections n 302 450 120 872 Water main ml 4,200 2,860 130 7,190 Water reservoir m3 500 500 Water treatment stations n 0 Electric connections n 375 682 120 1,177 Electric power stations n 1 1 Low-tension distribution line ml 6,100 3,890 2,100 12,090 Public telephones n 4 1 5 IMPLEMENTATION TOOLS 111 Table 12A. (continued) Unit of District measuire A B C Total Sanitation/environment Main outflow point, lined ml 690 690 Storm sewerage, lined ml 2,465 1,570 1,060 5,095 Public latrines n 4 1 5 Wastewater sewerage ml 550 550 Garbage collection points n 7 4 2 13 Unauthorized dumps n 1 12 8 21 Dumps n 1 1 Treatment stations n 0 Access to services Eduication Primary schools n 1 3 2 6 Primary school classrooms n 6 15 10 31 Secondary institutions n 1 1 Health Hospital beds n 6 6 Maternity beds n 1 2 3 Health centers/1,000 inhabitants n 0 Pharmacies/drug sales points n 2 1 3 Commercial services Central markets n 1 1 Neighborhood markets n 1 1 2 Bus stations n 0 Bus stops/taxi stands n 0 Slaughterhouses n 0 Commercial zones or streets n I I Major hotels n 2 2 Sports/youth Stadiums n 1 1 Equipped playing fields n 2 2 4 Other (public halls, swimming pools) n 0 Government services Administrative offices n 4 3 2 9 Post offices/1,000 inhabitants n 1 1 2 Police stations/1,000 inhabitants n 3 2 1 6 Note: n = number; m2 = square meters; m3 = cubic meters; ha = hectare; ml =linear meter. 112 THE FUTURE OF AFRICAN CITIES Table 12B. Indicators Unit of District Average Indicator measuire A B C Total Density and houtsing Underserviced housing % Superficial 14% 25% 53% 31% Irregular housing % Superficial 0% 71% 47% 54% Density of serviced housing habitants/ha 158 128 0 154 Density of underserviced housing habitants/ha 578 726 :314 534 Density of irregular housing habitants/ha 0 597 580 593 Density of housing habitants/ha 215 616 440 508 Gross density habitants/ha 41 309 208 201 Roads and streets Paved road ml/hab. 2,73 ml 0,21 ml 0,32 ml 0,40 ml Paved road (percent) % 62% 38% 26% 42% Paved road in good condition % 46% 42% '35% 43% Paved road per hectare ml/ha 111 ml 65 ml 67 ml 80 ml Road per hectare ml/ha 180 ml 168 ml 254 ml 192 ml Road with public lighting % 17% 7% 0% 8% Road with addresses % 33% 2% 0% 11% Bus stops/taxi stands U/1,000 hab. 5,59 0,13 J,19 0,49 Energy/telecommutnications Standpipes U/1,000 hab. 0,00 0,25 0,38 0,27 Population with water connection % 370/ 19% 15% 25% Water mains mi/hab. 2,94 ml 0,18 ml 0,02 ml 0,32 ml Population with electricity connection % . 70% 28% 15% 34% Low-tension distribution lines ml/hab. 4,27 ml 0,25 ml 0,40 ml 0,54 ml Public telephones U/1,000 hab. 2,80 0,06 0,00 0,22 Sanitation/environment Storm sewerage ml/hab. 1,72 ml 0,10 ml 0,20 ml 0,23 ml Public latrines U/1,000 hab. 2,80 0,76 0,00 0,71 Wastewater sewerage ml/hab. 0,38 ml 0,00 ml 0,C0 ml 0,02 ml Garbage collection points U/1,000 hab. 4,90 0,25 0,38 0,58 Unauthorized dumps U/1,000 hab. 0,70 0,76 1,15 0,93 Green spaces m2/hab. 350,0 m2 0,8 m2 0,2 m2 2,8 m2 Social services Primary school classrooms U/1,000 hab. 4,20 0,95 1,88 1,38 Health centers U/1,000 hab. 0,70 0,13 0,00 0,13 Maternity hospital beds U/1,000 hab. 4,90 0,13 0,00 0,40 Pharmacies/drug sales points U/1,000 hab. 1,40 0,06 0,00 0,13 IMPLEMENTATION TOOLS 113 Table 12B. (continued) Unit of District Average Indicator measuire A B C Total Administrative offices U/1,000 hab. 2,80 0,19 0,38 0,40 Post offices U/1,000 hab. 0,70 0,06 0,00 0,13 Police stations U/1,000 hab. 2,10 0,13 0,19 0,27 Playing fields U/1,000 hab. 2,10 0,13 0,00 0,22 Markets U/1,000 hab. 1,40 0,06 0,00 0,13 114 THE FUTURE OF AFRICAN CITIES Table 12C. Indicator scores by district Quialitative score Quantitative score by district by district Indicator A B C A B C Coeff. Density and houtsing 1. Underserviced housing 3 3 0 3 3 0 1,0 2. Irregular housing 4 1 3 4 1 3 1,0 Roads and streets 3. Pavedroad 4 3 3 8 2 2 2,0 4. Paved road in good condition 2 2 3 3 3 2 1,5 5. Percentage of road with lighting 4 1 0 4 1 0 1,0 6. Percentage of road with addresses 4 1 0 2 1 0 0,5 7. Bus stops/taxi stands 4 1 1 4 1 1 1,0 Energy/telecommunications 8. Standpipes 0 2 3 0 4 6 2,0 9. Water mains 4 1 1 4 1 1 1,0 l 0.Percentage of population with water connection 4 1 1 10 3 3 2,5 11. Percentage of population with electric connection 4 1 1 6 2 2 1,5 12. Public telephones 4 1 1 4 1 1 1,0 Sanitation/environment 13.Storm sewerage 4 1 1 8 2 2 2,0 14. Public latrines 4 2 0 4 2 0 1,0 15.Wastewater sewerage 4 0 0 2 C 0 0,5 16.Garbage collection points 4 1 1 8 2. 2 2,0 17.Unauthorized dumps 3 3 0 -2 -2 -6 1,5 18. Green spaces 4 1 1 4 1 1 1,0 Services 19. Primary-school classrooms 4 1 3 6 2 5 1,5 20. Health centers 4 2 0 4 '2 0 1,0 21. Maternity hospital beds 4 1 0 4 L 0 1,0 22.Pharmacies/drug sales points 4 1 0 4 1 0 1,0 23. Administrative offices 4 1 2 2 1 1 0,5 24. Post offices 4 1 0 2 1 0 0,5 25. Police stations 4 1 1 2 1 1 0,5 26.Playing fields 4 1 0 4 1 0 1,0 27. Markets 4 1 0 4 1 0 1,0 Total score 109 36 25 Notes: The scores are established automatically, from the indicators in table 12 B. Zero (rating "0"): The neighborhood has no facilities or infrastructure. Poor (rating 1): The neighborhood indicator is below the mean. Average (rating 2): Services are at the level of the city mean. Acceptable (rating 3): The neighborhood indicator falls between the mean and 1.5 times the mean. Satisfactory (rating 4): The neighborhood indicator is higher than 1.5 times the mean. IMPLEMENTATION TOOLS 115 Catalogue of Typical Municipal Facilities and Public Works Objective and Content This catalogue of facilities and public works is intended to help may- ors, particularly in the smaller municipalities, give concrete shape to their project ideas. The list of municipal investments is often much the same from one town to the next: marketplaces, dispensaries, schools, roads, and so on. Yet between application and execution lay many hur- dles, in many cases stemming from a tendency to underestimate costs, in others from the project manager's failure to accommodate the wishes of the municipality. To avoid such risks it is best to draw up a catalogue of model invest- ments and works, complete with plans and descriptions, so that even before hiring an architect the municipality can define and quantify its submission-a submission that may well be influenced by cost con- siderations, or by the development examples found in the catalogue. Implementation IMPLEMENTATION STAGES. The catalogue can be developed gradually, with additions made as projects are completed. It may be compiled in part from project files kept by the Agetip (Senegal, PAC). Catalogue development would entail these steps: * Draw up a list of the facilities and works with the highest priority for the municipalities. * Collect plans and descriptions of similar works undertaken elsewhere. * Supplement or update the documents collected. Establish possible variants (plans and descriptions). * Prepare a catalogue by type of facility or works, with plans, per- spective drawings, photos, descriptions, costs, implementation details, time schedules, and so on. RESPONSIBILITIES. The municipal affairs department can commis- sion a consultant to prepare the catalogue, with duties including gathering and processing the data and transmitting the results to the mayors. The technical ministries (utilities, construction, and the like) could also be involved with the municipal services in preparing the document. However, agencies such as the Agetips have a definite 116 THE FUTURE OF AFRICAN CITIES comparative advantage, since their work is so often of direct interest to the mayors. Oultput INDICATIVE LIST OF PUBLIC WORKS. Following is a list of docu:ments that might go into such a catalogue: * Neighborhood social facilities: primary schools, school canteens, dispensaries, maternity centers, health centers, latrines. * Comrnmercial facilities: bus and truck depots, abattoirs, market stalls. * Municipal facilities: meeting halls, municipal garages, municipal workshops, garbage collection facilities, basic recreational facilities, cemeteries. * Infrastructure: earthen roads, asphalt roads, cobblestone roads, drainage canals, public standpipes. MODEL FRAMEWORK. Following are categories to be addressed in spec- ification of municipal investments and public works: * Name offacility: For example, marketplace. * Definition, activities: Whom will the facility serve? What activities will take place at the facility? * Municipal powers: Is there a law or regulation that defines the respec- tive roles of the state and municipality in constructing and main- taining the services? If so, which one? * Service zone: Who and where are the people to be served by the new works? * Standards: Are there any mandatory or recommended standards to be observed? * Environmental impact: Will operations of the new facility have any harmful side effects? If so, what? * Physicalfeattures: Building site size, building "footprint," floor area; description of other features of the works. * Equipment and materials needed: For example, school furnishings, health supplies. * Staffing requirements: Operating staff, security, mainternance staff. * Detailed execution costs: Construction, finishing, furnishings. * Operating and recurring costs. * Anticipated output: For example, in the case of commercial services, what are the forecast revenues? What is the intrinsic riate of return? IMPLEMENTATION TOOLS 117 Figure 4. Specifications for a three-classroom school Definition, activities Primary education Municipal powers Law n° 96-07 of 5 February 1996, transferring education responsibilities to the municipalities Service area Neighborhood, population center Target population Population ages 6 to 12 years Standards Programming and design guidelines for ele- mentary schools under preparation by the educational facilities department Maximum number of plpils per class 60 Land area per pupil (i2) 16.07 m2 Floor area per pupil (i2) 2.27 m2 Physical characteristics Lot size 2,700 m2 Building 380 rn2 Classrooms (9 x 7 m2) 63 m2 Office and stores (if included) 19.5 M2 Roof: aluminum sheeting or ABC-type tiles Fiurnishings, materials Tables, benches, teaching materials Staffing Director and three teachers Execution costs (CFAF net of taxes and customs dutties) Three-classroom building, no annexes 12,000,000 One classroom 4,000,000 Three-classroom building, with annexes 13,500,000 Per classroom 4 ,500,000 Average cost per classroom 4,250,000 Teaching materials, type 1 1,000,000 Teaching materials, type 2 750,000 Wages as share of capital cost 25 percent Maintenance, management Standard layout 118 THE FUTURE OF AFRICAN CMIES Environmental Impact Assessment Indicators for Municipal Projects Objective and Content CONTEXT. Municipalities undertaking investment projects need to have not only technical and financial criteria to guide their project selection, but also a set of criteria that will allow them to make an environmental impact assessment. The following table of environmental eligibility factors has been developed to this end. The table is designed so that it can be used to assess subprojects against practical criteria, and sensitize local authorities to the enviromnental impact of projects. Implementation The criteria are appropriate for each type of investment: I;a) roads and utility networks, (b) sanitation and waste, (c) commercial facilities (mar- kets, bus depots, abattoirs), and (d) community facilities (health facili- ties, schools). The table is simple enough to allow use by even the smaller municipal service agencies. SCORING. The table consists of a three-part spreadsheet: service cate- gory, overall scores, and recommendations. There are 12 service category headings, with some 50 questions. Each answer is given a score (positive, negative, not applicable). The user simply checks the appropriate response (in the yes/no column) and receives an automatic score for the question. Overall Score The table allows automatic calculation of an overall score for the pro- ject and assigns one of the following ratings: very positive, positive, negative, very negative. The qualitative recommendaticns section sug- gests steps that might be taken to ameliorate the project's impact. A sample environmental assessment for a project to build a small abattoir is shown in table 13. IMPLEMENTATION TOOLS 119 Table 13. Environmental impact assessment table: impact of a small slaughterhouse project Scoring Resuilts Yes No Yes No Score A. SERVICES 1. Solid waste Does the project: *produce waste? -1 0 x m -1 *collect waste? 1 -1 E1 E 1 *remove waste to an appropriate dumping site? 2 0 r 0 2 *remove waste to an inappropriate dumping site? 1 0 0 E 0 Is the question relevant? 0 E El 2. Liquid waste Does the project: * generate wastewater? -1 0 E3 fl -1 *collect wastewater? 1 -1 El 0 1 * dispose of wastewater in an appropriate site? 2 0 0 0 0 -dispose of wastewater in an inappropriate site? 1 0 F vl 1 Is the question relevant? 0 - L 3. Sanitation Does the project: *generate sewage? -1 0 FJ z -1 scollect sewage? 1 -1 E n 1 -dispose of sewage in an appropriate site 2 0 m rn 0 -dispose of sewage in an inappropriate site? 1 0 x 0 1 Is the question relevant? 0 El E 4. Drainage Does the project: *aggravate erosion? -1 0 E xE 0 *discharge water into drains or canals? 1 -1 x 0 1 Is the question relevant? 0 E E 5. Water sources Does the project: *pollute water sources? -1 1 m x E -1 *protect water sources? 2 0 [lx 0 0 Is the question relevant? 0 Z z 6. Land and soils Does the project: *destroy agricultural land? -1 0 E [i 0 -destroy green spaces? -1 0 0E 0 *create green spaces? 1 0 m 1 0 * require the cutting of trees? -1 0 El 1 0 * enhance land use? 1 0 1 [lJ 0 Is the question relevant? 0 F E 120 THE FUTURE OF AFRICAN CITUES Table 13. (continued) Scorin Results Yes No Yes No Score 7. Project location Is the project: *difficult to access? -1 1 E] mn 1 *subject to flooding? -1 1 El rn 1 Is the question relevant? 0 E] C] 8. Relocation Does the project: *entail evictions or relocations? -1 1 ] C If so, is there an action plan for relocating the people affected? 2 -1 C] = Is the question relevant? 0 EX = 0 9. Traffic Does the project: *increase traffic? -1 0 C] ExJ 0 *reduce traffic? 1 0 F] F 0 *help to manage traffic? 2 0 C-] rx 0 Is the question relevant? 0 E] C 10. Public health Does the project: *have a negative impact on health? -1 0 E] rn 0 *have a positive impact on health? 1 0 EJ rx 0 Is the question relevant? 0 F] Z 11. Target population Does the project: involve the target population? 1 -1 E] Is the question relevant? 0 E3 C] 0 12. Maintenance plan Does the project: have a maintenance plan? 1 -1 CI = 1 Is the question relevant? 0 E: C] B. RESULTS Total score m According to the above criteria the environmental impact of the project is: (a) very positive >9 (b) positive 4 to 9 YES (c) fairly positive 0 to 4 (d) negative O to -10 (e) very negative <-10 C. RECOMMENDATIONS FOR FURTHER ACTION Upgrade liquid waste management. IMPLEMENTATION TOOLS 121 Underserviced Neighborhoods and the Agetips Objectives and Content The objective is to propose a method of dealing with underserviced neigh- borhoods, where rehabilitation is always a long-term undertaking; the approach needs to be compatible, however, with the constraints of the pro- ject cycle, where execution times are relatively short. Is it possible, in these cases, to make use of the resources represented by the Agetips? CONTEXT. In view of the large numbers of people living in these neighborhoods and the continuing degradation of their daily living conditions, any antipoverty campaign should start here. Recent Bank directives on this subject have tried to prevent rehabilita- tion work in these districts from leading inadvertently to the expulsion of the most vulnerable groups. But these directives, which include sanctions in case of "backsliding," appear to be so constraining that they may dis- courage project officials from undertaking such operations at all. To avoid this, the proposal in this section suggests new forms of intervention. The starting postulate is that no project can be attempted in these districts without a consensus among residents. Achieving such a con- sensus is a time-consuming process and can scarcely be accommodated within the standard project cycle. In fact, the normal 10 to 15 months allowed for preparation is generally too short to accommodate all the sensitization, surveys, technical research, discussions, negotiations, and local consensus-building needed. Some previous projects have succeeded in overcoming these sched- uling constraints, but they have been too small to have a major impact on these settlements generally. It would be desirable therefore to adopt a longer-term approach that would allow both for large-scale assis- tance and for the preparation and execution of projects at a rate that suits the local people involved. Government services and various local initiatives have sometimes tackled this problem (for example, Mali, "Save Our Neighborhood"), but they have seldom enjoyed the resources and know-how that urban projects can generally mobilize. Implementation We therefore suggest examining the potential of Agetips to provide support for such operations. 122 THE FUTURE OF AFRICAN CITIES Why an Agetip? Experience has shown that this type of agency not only has the required know-how for such undertakings, but that it can be sustainable beyond the end of the project calendar. Consequently, the agency should be able to see the project through and generate or support initiatives in these impoverished districts. CONDITIONS OF ASSISTANCE. We can suggest at least three conditions for assistance: (a) most important, an action strategy must be worked out with the local authorities; (b) it must be ascertained that these actions are compatible with the legal status of the agency.; and (c) there must be a period of apprenticeship and training, given the novelty and "pilot project" nature of the operation. POSSIBLE SCENARIOS. Assume that several underserviced neighbor- hoods in a given city require rehabilitation work. The strategy for upgrading them has been decided, as have the types of action to be taken: the kinds of works, the goals and costs per hectare, and the Figure 5. An underserviced neighborhood >~~~~~~~~~~~~~~~ IMPLEMENTATION TOOLS 123 ways of involving the local inhabitants. Finally, the required resources have been mobilized. * Phase 1. The Agetip assigns a specially created team to prepare pos- sible actions in squatter settlements. * Phase 2. Preliminary research is undertaken in several districts and leads to identification of the works to be undertaken, roads to be built, areas to be cleared, people to be relocated, and so forth; efforts are made to gain local support for the project. * Phase 3. With local support assured, the agency begins the works, according to its manual of procedures. THE AGENCY'S ROLE. In phases 1 and 2 the agency acts in its custom- ary role by selecting project managers and approving proposals sub- mitted by them. It can also provide support for local neighborhood initiatives. In phase 3 the agency assumes its traditional role of select- ing firms and awarding contracts. Output The expected result is an improvement in living conditions in the district, but the proposed process does not necessarily involve regularization of land tenure, which must be left to a later and no doubt longer undertak- ing (Senegal-Dalifor). RISKS. The risks involve delays in these activities and possible backsliding in the more difficult districts. The difference between this type of activity and those normally conducted by the agency is that when phases 1 and 2 are over, it is still not clear whether all the recommendations from this research will be implemented during phase 3. But the fact that the agency brings its know-how to bear and works to the rhythm of the local people can give fair assurance of success. 124 THE FUTURE OF AFRICAN CITIES Agetip: Performance Indicators Objectives and Content The objective is to assess the Agetip's performance on a regular basis. The following list of 20 performance indicators allows an overview of contracts signed and completed, jobs created, training provided, smrall and medium-size enterprises involved, counterpart contributions, and so on: Performance indicators 1. Number of contracts signed (studies, supervision, works). 2. Number of contracts completed (studies, supervision, works). 3. Average cost of contracts (studies, supervision, works). 4. Percentage of procurements completed on time (cumulative). 5. Percentage of procurements completed within established credit limits (cumulative). 6. Average time taken to prepare contract documents. 7. Percentage of payments made to firms within 30 days of receipt of invoice (payables turnaround time). 8. Percentage of wages and salaries in total costs (labor ratio). __ Project managers (studies and supervision). Firms (works). 9. Number of person-months of employment created (cumulative). Project managers (studies and supervision). Firms (works). 10. Number of person-days of employment created (cumulative). Project managers (studies and supervision). Firms (works). IMPLEMENTATION TOOLS 125 (continued) 11. Training/assistance (cumulative): Number of beneficiaries. Number of project managers. Number of firms. Number of trainees. 12. Number of small and medium-size enterprises prequalified. Number of project managers. Number of firms. 13. Number of new small and medium-size enterprises created. Number of project managers. Number of firms. 14. Number of small and medium-size enterprises developed. Number of project managers. Number of firms. 15. Number of small and medium-size enterprises before creation of the agency. Number of project managers. Number of firms. 16. Number of small and medium-size enterprises receiving at least one contract. Number of project managers. Number of firms. 17. Counterpart contribution: Percentage from own resources. Percentage from donors other than the World Bank. Percentage from grants. 18. Investment priorities: Does the agency's portfolio of completed projects meet the priority selection criteria? What is the basis for these criteria? 19. Geographic distribution of investments: Are completed or planned projects located in poorly serviced or low-income areas? 20. Maintenance of investments: Are there agreements that commit the beneficiaries to help maintain the investments? 126 THE FUTURE OF AFRICAN CITIES An Occupancy-Based Tax: The Urban Tax Land tax revenues in Sub-Saharan Africa have generally devolved to the municipalities. The tax is based on the value of the property, and its provisions are similar to those of the taxes inherited from the colonial era (taxes on "improved" land, that is, land with buildings, and on unimproved land). The property tax produces little revenue, for several reasons: * There is no real political will to enforce it. * There is little incentive for central tax departments and treasuries to collect a tax that devolves to the municipal level. * Tax laws are inadequate: there are few identifiable owners (the number of land title holders has hardly changed since independence). * It is difficult to implement in the absence of any effective registration system (cadastres and the like). * Attempts at creating cadastral registries have repeatedly failed, because of problems in defining their coverage (Cameroon, Mali, Senegal). This section proposes the establishment of a simplified "urban tax" that would be paid by all residents. It should be read in coniunction with the subsequent section on address systems. Objective: To Improve Property Tax Management The following principles are suggested as ways of overcoming tax management problems: * Direct property taxation at occupancy and not at ownership, thus delinking the tax from the tenure status of the property. (A resident consumes urban services whether or not he owns his home, and should be expected to help defray their costs). * Keep administrative costs to a minimum (avoid exhaustive field sur- veys), and thus reduce the risks implicit in the known pu'olic reluc- tance to pay such taxes. * Simplify tax collection, expand the tax base, and try to keep tax rates low. Various experiments, some still in their infancy, have been under- taken on this basis (Burkina Faso, Togo). This new taxation. approach will be referred to as an "urban tax."5 IMPLEMENTATION TOOLS 127 Description Given the difficulties surrounding ownership, as discussed above, the pro- posal is to focus the tax on property occupancy along the following lines:6 THE TAXPAYER. The person liable for the tax is defined as the occupant of an improved lot, whether he is the owner or a renter or is living there free. This enables payment of the levy to be kept separate from the legal aspects of property management and land ownership. The notion of ,occupant" can be applied in several ways: Residences * The taxpayer is the principal occupant (where there are several households on one property). To put it another way, "an address or main entrance = an urban tax." This variant places the emphasis on the fact of occupancy rather than on the identity of the occupant. * The taxpayer can be any head of a household that inhabits a dwelling, whether he is the owner or a renter or has some other sta- tus (for example, free lodging). This variant is more complex. * The choice of solution can be made in stages. Initially, the first solu- tion might be selected, so as to simplify tax collection by not trying to levy taxes systematically on every person or household within a single property. Subsequently, the second solution could be adopted. Business properties * The tax is applied only to dwellings, leaving business activities to be covered by commercial licenses and fees. * Properties occupied for business purposes can be taxed in the same way as residences; in the case of mixed-use properties, however, the question of whether the property should be subject to both taxes, or only to the higher of the two, will need to be addressed. ASSESSING THE TAX BASE. The suggested criteria relate to the degree of comfort of the premises and the level of neighborhood facilities available. Degree of comfort of the premises. A distinction needs to be made as to whether the premises are used for residential or business purposes: * Residences. The degree of comfort can be expressed in terms of the number of rooms and the quality of the construction (the conven- tional method), but this presupposes a costly, house-by-house sur- vey, or reliance on a self-assessment system of tax declarations, which in view of the low levels of literacy would be difficult.7 128 THE FUTURE OF AFRICAN CITIES To overcome these difficulties and limit administrative costs, cer- tain indicators that are already available can be used. Surveys have shown that the most significant and the most easily applied measures of residential amenities relate to water and electricity consUwLption: data for these indicators are available from the utility companies.8 The type of electric connection is often used, however, because it may be easier to measure than consumption (Burkina Faso). It is important to avoid confusion: (a) The urban tax is not an addi- tional tax on water and electricity, nor a tax that is indexed to consump- tion; (b) Utility companies should not be regarded as tax collectors, and the tax should not be added to their invoices; (c) There is no need to have precise consumption data: a few broad categories can be established, based on average consumption during the year. The purpose should be to determine whether consumption is high, average, or low. Finally, the most important criterion is electricity, which can be used as the sole indicator (see table 14). There are two variants to choose between: the simple variant is based solely on power consumption (type of connection), while the other, more complex variant is based on both power and water consumption (type of connection). Business premises. If businesses are to be subject to the urban l:ax, this should be based on an evaluation of the advantages that businesses Table 14. Criteria for assessing a dwelling's degree of comfort Criterion Indicator Coefficient of houising comfort Simple variant Electricity No consumption (or not connected) 1 Low consumption 2 Average consumption 3 High consumption 4 Complex variant (see table 11) Electricity Water Coefficient of hotusing comfort Not connected Not connected 1 Connected 2 Low consumption Not connected 3 Connected 4 Average consumption Not connected 5 Connected 6 High consumption Not Connected 7 Connected 8 High consumption 9 IMPLEMENTATION TOOLS 129 derive from being part of the urban environment, while taking due account of their capacity to pay. The urban tax for business offices is calculated on the basis of the level of facilities available in the neigh- borhood, but the degree of "comfort" seems ill-suited to such pur- poses. There are other, alternative criteria, physical ones that are less subject to argument and, above all, easier to gather than "accounting" data. For example: (a) The exterior configuration of the building (qual- ity of location, for example: corner lot, length of street frontage); (b) The nature of the business (commerce, manufacturing). Each criterion should have a related numerical scale of measurement. Level of neighborhoodfacilities. This method consists of preparing a simple tally sheet, based on a quick urban survey or on data from the Infrastructure and Services Programming Inventory, to differentiate zones according to the facilities they offer (table 15), for example: • Infrastructure (roads, street lighting, public standpipes, household garbage collection points) * Neighborhood facilities (primary school) * Closeness to the city center. Each zone will be assigned a score or rating, depending on its facilities and its location. This rating should be limited to three or four categories (table 16), as follows: * Zone A: Centrally located and well serviced. e Zone B: Average level of services. Table 15. Criteria for assessing level of neighborhood facilities Criterion Indicator 1. Roads Kilometers of paved roads per inhabitant Kilometers of unpaved roads per inhabitant 2. Utility services Number of standpipes per inhabitant Number of garbage collection points Kilometers of buried sanitation sewers per inhabitant 3. Public lighting Number of lamp posts per inhabitant 4. Municipal services Public transit service Number of primary schools per 1,000 inhabitants Number of health stations per 1,000 inhabitants 5. Central location Distance from downtown (in kilometers) Note: Centrally located, well-serviced neighborhoods are classed as "A" zones; periph- eral areas with few services are classed as "B" zones. 130 THE FUTURE OF AFRICAN CITIES Table 16. Scale of tax rates Neighborhood Zone A Zone B Zone C Zone D facilities (very good) (good) (average) (poor) HOUSING Degree of comfort Coefficient 1 ...... ...... ...... ...... Coefficient 2 ...... ...... ...... ...... Coefficient 3 ...... ...... ...... ...... Coefficient 4 ...... ...... ...... ...... Coefficient 5 ...... ..... ...... ...... BUSINESS PREMISES (optional) Type of business Small shop ...... ...... ...... ...... Artisan ...... I..... ...... ...... Store ...... ...... ...... ...... Corporation ...... I..... ...... ...... Manufacturing enterprise ...... ...... ...... ...... Siting Street frontage ...... ...... ... ...... Corner lot ...... ...... ...... ...... * Zone C: Poorly serviced, poor access, far from center. * Zone D: Very poor access, very poorly serviced, far from center. SCALES AND EXPECTED REVENUE YIELDS. The setting of service tariffs and tax rates reflects a compromise between municipal needs and res- idents' ability to pay Even in a context of decentralization, the advice (or oversight) of the central tax authorities will be needed in working out this compromise. Tax rates must be kept low, or else they will act as a deterrent, and the yields will fall. But moderation in the level of tax burden must go hand in hand with more frequent adjustments of rates than those noted in current tax systems. COLLECTION. The tax is collected either by: (a) the Treasury, with the support of the municipality (currently the most reliable system); or (b) the municipality or district officials (frequently not a very effective exercise). Payment of the tax can be accompanied by a system of receipts or quittances, issued by the municipality, certifying that the tax has been paid for the year. In case of nonpayment the delinquent can be denied IMPLEMENTATION TOOLS 131 access to various services (school enrollment, certificate of civil status, and the like). Municipalities can issue decrees, with the approval of the ministry of finance and the ministry of the interior, to define taxation zones, the tax scales, and the nature of the quittance. Implementation Putting these provisions into effect will require a system of identifying streets and buildings ("addressing") and creation of an addresses direc- tory or registry that can serve as the basis for a tax registry (including the urban tax), to be kept at municipal headquarters and in the taxation department. EXEMPTIONS. Except in very rare cases there should be no exemp- tions. The danger with any exemptions list is that, once started, it grows inexorably, and the city will end up with hardly anyone who still pays the tax. A VARIANT. The above proposal may be seen in some quarters as too radical a departure. Tax authorities, at least, are still strongly attached to the idea of a property tax based on the commercial or rental value of the premises, even if the revenue potential is very low. To meet such concerns, a variant, rather more complex than the pre- ceding proposal, could be envisaged. This variant would still retain the principles outlined above (tax on occupancy, minimum administrative costs, simplification), but would recognize a distinction between the two broad types of housing generally found in Sub-Saharan African cities: the "modern" type, located in proper residential zones; and the more "modest" type, found in most neighborhoods. e For these "modest" neighborhoods the new system described above would be used. It could even be further simplified, by reducing the tax calculation criteria to one factor, based on local facilities. Tax would then be levied at a flat rate, for each category of facilities. The tax could be weighted by the number of families living on the property. * For the more "modern" districts the assessment could be graduated to reflect the local level of services, the number of rooms to the premises, and the consumption of water and electricity. This latter 132 THE FUTURE OF AFRICAN CITIES tax would, however, be based on a self-assessment system: it is assumed that the residents of such districts are fully capable of fill- ing out the required forms, or hiring someone else to do it for them. A system of sending out assessments based on some standard num- ber of rooms could also be envisioned. In this case there is no need to conduct a building survey. The authorities would merely make random on-site checks and issue penalties against declarations found to be false. * If there are no districts that fit the definition neatly, then water and power consumption can be used to classify residences as ec[uivalent to those in a hypothetical "modem" neighborhood. Figure 6. Taxation districts, Ouagadougou Average ; Intermediate IMPLEMENTATION TOOLS 133 Street Addresses and Tax Registries Objectives and Content CONTEXT. The explosive growth of African cities in the wake of inde- pendence made it all the more difficult to manage the process of urban- ization, since the new municipal authorities had so little experience. Many new neighborhoods thus sprang up without facilities of any kind, while the city itself may have increased its population by a factor of five in the course of the past three decades alone. In this context, the street identification systems that had once been applied to the older city centers could not simply be extended into the new districts. Attempts were made at naming the new roads, of course, but they were restricted to a few streets. This has created an impossible situation when it comes to providing urban services. Without a system of street coordinates, how can anyone navigate in a constantly growing city? DEFINITION. Street addressing makes it possible to locate a lot or dwelling on the ground-that is, to define its address using a system of maps and charts showing the names or numbers of streets and build- ings. The addressing system is not a substitute for a cadastral-type sys- tem of coordinates, but it can be complementary to such a system. It allow,s anybody to go to a given point without having to use a special- ized map (geometric type). The two systems can be introduced together and will supplement each other at every stage. PURPOSES AND STEPS INVOLVED. Addressing is intended to make it easier to (a) locate residents and their homes by means of an address system that can be used by the people themselves and by government officials, concessionaires, and other service providers; (b) operate urban services (ambulances, fire trucks, taxis); (c) enforce collection for user-pay ser- vices, in particular those provided by utility concessionaires. The system introduced should take account of different types of urbanization (formal and informal districts), anticipate future urban developments, and be consistent with the financial and technical capac- ities of the municipality. The steps in creating an address system are (a) codification, (b) numbering of streets and erection of signage, (c) map- ping, (d) numbering of doorways, and (e) creation of a computerized addresses directory (boxes 13 and 14 and figure 7). 134 THE FUTURE OF AFRICA NZ CITIES Box 13. Five steps to an address system * CODIFICATION. "Codification" is the first step in any address system. It consists of establishing the principles that will guide the identification of streets and the numbering of buildings. Shotuld streets be named or nuimbered? The usual practice is to give streets names. Naming streets is a delicate task, however: it is commonly thought that streets should be named in honor of famous men, a process that may take so much time and discussion that most streets will go nameless for years. Consequently, we recommend starting out by numbering all streets. They can gradually be given names over time, beginning with the most important streets and those that mark address zone boundaries. * NUMBERING STREETS. To make it easier to establish local points of ref- erence, the city can be divided into address zones, each of which can be given an identifying number or letter. Street addresses will start with this identifier or "radical," followed by consecutive numbering. Thus, "Street 2.34" or "Street B.34" or "Medina Street 34" would be three ways of num- bering the 34th street in Zone 2, Zone B, or the Medina District. * MAPPING. This task consists of establishing an address map and its accompanying street index. The address map (with a scale of 1:10,000) shows the boundaries of address zones, the names or codes for st:reets, the starting point ("point zero") and end point of streets, a coordinates grid, and major facilities. * NUMBERING DOORWAYS. Numbering, the longest phase in establ'.shing the address system, is performed while road signs are being installed. Each street is visited, and a number is assigned to all doors and entrances. It is best to use a metric numbering system, where doorways are assigned a number according to their distance from point zero. Odd numbers are located on the left side of the street, even on the right, rising as they move away from point zero. House numbering will involve a meeting between the occupa:..t and the numbering team (working under an official municipal marndate), during which information can be gathered that will serve as the basis for the directory and a possible database for the city. * COMPUTERIZED ADDRESS DIRECTORY. This is compiled on the basis of information gathered during the doorway numbering exercise and will serve as reference for government agencies and utility concessionaires. To keep costs low, we recommend that (a) street signs be placed at only one corner of an intersection, or (b) at every second intersection, if num- bering is continuous; (c) durable materials be used for signs for named streets (materials for numbered streets can be of lower quality); and (d) sponsors for the operation be identified. IMPLEMENTATION TOOLS 135 Box 14. "Urbadresse": a relational address system database A directory of streets and doorways can be recorded in a relational data- base. A software program-(Urbadresse)-has been designed for this purpose.9 Its main features can be grouped into three modules: * Basic modutle. This comprises three submodules that form the backbone of the addresses database: sectors, streets, and doorways. They relate to the three locator elements that allow each "doorway," that is, each occupied unit, to be given a "unique identifier": sector (based on the administrative subdivision of the city into districts or arrondissements); street (numbered by sector); and doonvay (numbered according to its distance in meters from the beginning of the street), with perhaps sev- eral occupied units or mailboxes. * Geographic breakdown. This is a single module that groups together all doorways according to some method of geographic identification: for example, all addresses along a single water meter reader's route, a tax- ation district, and so on. This allows the database to be readily adapted to the geographic system in use in each service or department. * Aluxiliary module. This comprises three submodules: (a) "statistics," providing data on streets, on doorways (occupied units), or on census takings or surveys; (b) "parameters," personalizing the database as to the type of occupancy of each plot, the various kinds of usable land, and specific headings, in coordination with specific services (tax, land registry); and (c) "communications," allowing import and export of data (in particular with the services cited under the specific headings). Sample applications of different parameters include: (a) streets: length and average right-of-way; (b) type of occupancy: these classifications (there are more than 100 possible types) indicate the distribution of activities within the city; these data are retrievable as text files by the business taxa- tion services; (c) cadastral address; (d) occupant identity; (e) quality of local facilities, in terms of the condition of streets, drainage and sidewalks, and public lighting; (f quality of the plot (concession) in terms of presence of latrines or water, electricity, telephone connections, and the like; (g) occu- pancy density; (h) road maintenance; (i) urban tax scale: parameters for qualifying the district or plot in terms of the applicable tax rate. Implementation RESPONSIBILITIES. Addressing generally falls to the municipality, which will be the contract manager for the operation. Implementation is split among municipal services, consultants, and companies. The municipality may set up a unit to manage its involvement in the exercise. The unit can be made an appendage to an urban project, when 136 THE FUTURE OF AFRICAN CITIES Figure 7. Steps to an address system Codify streets and doors Media campaigns Preliminary maps Pilot operation SignaePublication cf Spglnage Maps address map End street inde>: iTenders for supply | Doorway of street signs x numbering l Tenders for supply Compile address Export data installation of directory to agencies | Install street j > Compile ta): > signs | i registries the work begins and can then be gradually integrated into municipal services (as in Burkina Faso, Guinea, Mozambique, Togo). There will be two distinct phases to its operations: * Implementation: The bulk of funding is committed at this stage, and the various players are encouraged to take the initiative so that the operation can be completed as quickly as possible. * Maintenance: With most of the work completed, the remaining task is to keep the addresses and the directory continuously updated. The mandate of the unit during the implementation phase will be to (a) ensure that the public is made aware of the addressing campaign and work with elected officials to find a name for each street, (b) per- IMPLEMENTATION TOOLS 137 form or supervise coding and mapping, (c) draw up the terms of refer- ence and requests for proposals from consultants and firms interested in undertaking the addressing, (d) supervise the erection of street signs and house numbers, (e) conduct interviews with the occupants, (f) oversee the preparation of the computerized addresses directory. During the second phase the unit's mandate is to (g) provide for main- tenance of the address system and (h) disseminate and exchange address data with the authorities and utility companies. The work of codifying, mapping, promoting public awareness, and training will typically be performed by consultants. Production of street signs will frequently be put out to international tender, with installation done by local businesses. The pilot operation, the numbering of door- ways, and the creation and upkeep of the address directory will be han- dled by the unit, with support from consultants as needed. PLANNING. An indicative schedule for implementing an address sys- tem for a city of 100,000 inhabitants would be as follows: * Codification-one month (including approvals) * Mapping-one to two months for the preliminary mapping work, six months for the definitive (computerized) version * Awareness campaign-three or four campaigns of one week each * Pilot operation (5 ha), training-two months i Construction and installation of signage-one year * Numbering of doorways, surveys-two years • Creation of the addresses directory-should keep pace with the numbering. CosTS. Costs will vary according to the method selected and the quan- tity and nature of the materials used. The cost for the overall operation per doorway will fall between US$1.00 and $5.50 (based on a sampling of 10 African cities). The number of intersections to be equipped with signs is an important determinant of the cost: it can account for between $0.40 and $2.60 per hectare (table 17). CONDITIONS FOR SUCCESS AND RISKS. Sensitizing the population through radio, television, and the press is vital for success in this under- taking. The effort must be repeated, sometimes for several months, if people are to understand how the system works and overcome what- ever skepticism they may harbor about it. The message should empha- size how useful the system will be for the delivery of public services (ambulances, fire trucks), rather than calling attention to the potential for easier tax collection. A launching seminar and training sessions for those involved in conducting the work should be undertaken before 138 THE FUTURE OF AFRICAN CITIES Table 17. Addressing operations in Sub-Saharan Africa Inter- Cost sectionis Nuimber per Popuilation Area Inter- per of azddress City (1993) (hectares) sections Streets hectare addresses (cdollars) N'djamena 600,000 3,600 3,700 2,600 1.0 56,000 2.0 Bobo-Dioulasso 300,000 4,050 3,650 1,370 0.9 50,000 3.4 Ouagadougou 600,000 10,750 12,400 4,910 1.2 100,00 5.4 Maputo 1,100,000 9,000 4,000 2,800 0.4 180,000 1.7 Yaounde 780,000 5,040 2,400 1,670 0.5 130,000 3.0 Douala 1,100,000 8,750 4,870 3,100 0.6 180,000 3.4 Bamako 880,000 5,700 6,700 3,300 1.2 150,000 1.3 Conakry 1,100,000 4,500 6,000 3,100 1.3 180,000 1.5 M'bour 100,000 1,450 3,800 1,750 2.6 16,500 5.6 Ziguinchor 140,000 1,800 4,500 2,100 2.5 23,500 6.4 activities begin. Moreover, priority should be given to regularized neighborhoods where the chances of success are greatest. In the poorer, underserviced settlements, the assigning of addresses is complicated and can even be taken as an implicit recognition of squatter rights- which may not be at all what the authorities have in mind. Ouitplut The link to improvements in local tax systems occurred only gradually in some of the addressing programs, such as in Burkina Faso arLd Togo. Experience to date is still limited, and the results are not conclusive. The most active interest in addressing comes generally from the utility IMPLEMENTATION TOOLS 139 companies (water, electricity), who are often happy to cooperate and take part in the work. With regard to tax collection, an address system makes it simpler to identify the tax base and in particular its business component. It is easy to identify business license holders in the course of numbering buildings. It is essential that the software used for handling the address directory be able to produce reports on business activities to facilitate collection of business license fees: these reports should in the end lead to the creation of a fiscal registry. It is a good idea to involve the utilities concessionaires in the address- ing operation, as a way of helping them locate their subscribers. At the same time, government agencies should ensure that the address is shown in their various records, for cross-reference purposes. FISCAL REGISTRIES. These registries can be reduced to a simpler ver- sion of tax rolls. They include a listing of "doorways" or taxpayers, each one's address, the amount owed in taxes, a possible reference to the method of assessment, and an indication of whether the tax has been paid. This same type of registry can be used for property taxes, especially if they take the simple form of an urban tax. Following are the typical steps involved in preparing a registry: * Estimate the urban tax potential, that is, the expected yield from business and property taxes, respectively. * Determine priority zones (those promising the highest yield). * Implement an address system in these priority zones. * Consult the addresses directory. * Set up the tax registry. * Implement collection (under the authority of the accounts office, with the help of municipal agents)."0 140 THE FUTURE OF AFRICANI CITIES Urban, Financial, and Organizational Audits Objectives and Content One methodical way to go about preparing a Priority Investment Program for a municipality is to use urban, financial, and organizational audits (PAC in Senegal). These audits can lead to negotiation of a Municipal Contract between the municipality and the state, which sets out, on the one hand, the investments to be financed by the project during the com- ing years and, on the other hand, the improvements or reforms the munic- ipality intends to make in its management over the same period (figure 8). The objective of the financial audit is to work out with municipal offi- cials what the municipality's financial resources are and, thus, how much capital expenditure it can expect to commit under the project. The organizational audit, for its part, is intended to identify the reform measures the municipality agrees to undertake. The objective of the urban audit is to propose, on the basis of a diagnosis of the city's needs, a coherent set of priority projects that can be undertaken within the limits of the envelope determined by the financial audit. Figure 8. From audit to municipal contract Urban Needs and audit priorities Priorit Investment Program Dimensioning the investment envelope lonetmn nvlp Financial and Municipal organizational audit b Adjustment Program Municipal Comract IMPLEMENTATION TOOLS 141 The Urban Audit Framework Objectives and Content The urban audit is essentially a diagnosis, with the objective of establish- ing a Priority Investment Program to be financed under an urban project. This Priority Investment Program, together with the Municipal Adjustment Program (MAP), serves as the basis for the Municipal Contract. Preparation Preparation for the urban audit takes place at the same time as that for the organizational and financial audits, and is done by a team that works closely with the municipal authorities and the deconcentrated services. The audit gives rise to a brief report, documented with maps and tables, that at the end of the project will serve as a coherent data- base of urban information. The audit is based on a standard format that allows data for various municipalities to be compared. The main data are gathered for each neighborhood using the Infrastructure and Services Programming Inventory model. The maps are established on the basis of the urban sketches, and on information gathered on the spot or from the central services, in the course of surveys or interviews. Training Training sessions are conducted for the audit teams to help them carry out their task, and to make it easier for the urban project manager to monitor their progress. Expected Output The urban audit should lead to definition of the Priority Investment Program. This program covers, in particular, (a) needs and priorities, as 142 THE FUTURE OF AFRICAN CITIES identified and discussed with the local authorities; (b) the municipality's financial capacity, as defined by the financial audit (conducted at the same time as the urban audit); and (c) a list of investments suitable for funding under the project, as described in the catalogue of investments. Urban Auidit Formnat The audit will lead to a brief report, accompanied by plans and tables. OUTLINE OF THE AUDIT REPORT. * Urban site and location: the municipality within its region; the city in its natural setting-advantages and constraints (slopes, flocd risk, water table, erosion). * City organization: municipal boundaries (current and projected); divi- sion into districts or neighborhoods; physical growth; land occu- pancy (major Infrastructure and Services Programming Inventory categories). * Recent projects andfuture commitments: urban growth trends; recom- mendations for the urban reference plan. * The urban economy: the city and its hinterland; economic activities and employment. * Demographics and land needs: population trends for the city and the region since the last census; population outlook for the next 5, 10, 15 years; population by district and by type of housing; density per district (according to the Infrastructure and ',ervices Programming Inventory); need for serviced sites in the next 5, 10, 15 years. • Urban infrastructure and services: inventory and classification of neighborhoods by score obtained; needs identification. * Priority projects: inventory of requests submitted by the local author- ities (location, cost, priority); classification of needs in terms of (a) requests submitted, (b) audit results, (c) the envelope available at the conclusion of the financial audit, and (d) categories of projects eligi- ble for financing under the project; Priority Investment Program and maintenance program; execution schedule. * Project sheets on priority inivestments: includes their econornic justi- fication and the social and environmental impacts of the invest- ment. IMPLEMENTATION TOOLS 143 PLANS. The urban sketches provide the basis for the plans. The docu- ments are prepared on computer, if possible, to make it easier to construct a database. Following is a list of the plans, though selection may be restricted to the most important ones. * Municipal boundaries and division into neighborhoods (or Infrastructure and Services Programming Inventory zones); place names identifying the neighborhoods or major points. * Land occupancy and densities (using the major Infrastructure and Services Programming Inventory categories). * Recent projects, future commitments. * Advantages and constraints of the site; growth trends; Urban Reference Plan. * Roads: classification (primary, secondary), kind (paved, unpaved), condition (good, average, poor); names of major roadways. * Drainage: rivers, marshes, swamps, zones prone to flooding, major outlets, works, and channels. * Drinking water supply: wells, treatment plants, reservoirs, water mains, public standpipes. * Electricity: generating stations, HT/MT lines, distribution points, transformers, streets with public lighting, districts with no LT lines. Sanitation-wastewater, household garbage: treatment plants, transfer points, dumps (including "unauthorized" dumps). Location of collection equipment. - Government and public facilities (with names). * Priority investment projects. TABLES. Along with the urban sketch maps, the following tables form the basis of the urban audit (tables 18-27): * Urban population and land needs * Recent municipal projects and future commitments * Major urban economic activities . Infrastructure and Services Programming Inventory * Priority Investment Program * Priority Investment Program execution schedule * Priority maintenance program * Project fact sheet (for each subproject in the Infrastructure and Services Programming Inventory) * Environmental Impact Assessment * Economic analysis framework. 144 THE FUTURE OF AFRICAN CITIES Table 18. Urban population and land needs Year Rate Year Item RGP I RGP 2 of growth n n+5 n+10 n+15 City population ... ... ... ... ... ... ... Needs (in hectares) ... ... ... ... ... ... Table 19. Recent municipal projects and future commitments Financing Project year Designation Amotent Soeurce Recent projects (in progress)a ... ... ... Amount Commitmentb Solrce Projects in pipeline a. Recent projects: past three years. b. Commitment status: financing secured, under negotiation, sought. Table 20. Major urban economic activities Sector Designation Natutre of activity Number of jobs Industry Commerce Administration Note: For medium-size and smaller cities, show the 10 most important activities. Table 21. Infrastructure and Services Programming Inventory Neighborhoods A B C Inventory ... ... ... Indicators ... ... ... Scores, by indicator and neighborhood ... ... ... Note: See section on Infrastructure and Services Programming Inventory, earlier in this chapter. IMPLEMENTATION TOOLS 145 Table 22. Priority Investment Program Order of Amont (estimated) Type offacility priority New works Rehabilitation Total 1. Infrastructure ... ... Roads ...... ... Drainage ... Public lighting ... ... ... ... ... ... . ..... ... 2. Education, health facilities .. ... .. 3. Community facilities ... 4. Administrative and technical facilites ... 5. Commercial facilities ... ... .... . . 6. Environmental facilities 7. Historic/heritage =Iotal........ Studies, control, and follow-up ... ... ... Grand total ... ... ... ... 146 THE FUTURE OF AFRICAN CITIES Table 23. Priority Investment Program execution schedule Type offacility Year 1 Year 2 Year 3 Year 4 Year 5 1. Infrastructure ... ... Roads ... ... ... ... ... Drainage ... ... ... ... ... Public lighting ... ...... ... 2. Education, health facilities ... ... ... ... ... 3. Community facilities ... ... 4. Administrative and technical facilities 5. Commercial facilities 6. Environmental facilities 7. Historic/heritage ... l'otal Studies, control, and follow-up.. .. Grand total ... ... Table 24. Priority maintenance program TVpe offacility Year 1 Year 2 Year 3 Year 4 Year 5 1. Infrastructure ... ... ..... 2. Education, health facilities ... ... ... 3. Community facilities ... ... ... ... ... 4. Administrative and technical facilites ... ... ... ... 5. Commercial facilities ... ... ... ... 6. Environmental facilities ... ... ... ... 7. Historic/heritage ... ... ... ... ... Total ... .. ... ... ... IMPLEMENTATION TOOLS 147 Table 25. Project fact sheet, by facility Name offacility 1. Investment categorya 2. Location (neighborhood) ... 3. Description of project ... 4. Beneficiaries 5. Conditions of eligibilityb .. 6. Status of project preparationc ... 7. Costs of facilityd Unit price Quantity Total ... ... ..... ... 8. Conditions for startupe ... ... ... 9. Execution time (months) Studies ... Work ... 10. Priority of facilityf (from I to 3) ... 11. Economic justificationg ... 12. Environmental impacth ... 13. Social impacti ... Notes: (a) Is the planned facility in a category that can be financed under the project? (b) Does the facilitv meet the project's eligibility criteria? (c) Is the facility still in the preliminary stage, or is it ready for tendering? (d) Has a summary cost estimate been prepared? (e) Have the startup conditions been met? For example: operating equipment or furnishings, utility connections, staff recruitment. (f) What rank has the municipality assigned this facility among its investment priorities? (g) What are the results of the economic analysis? (See tables below.) (h) What are the results of the environmental analysis: very positive, negative, very negative? (i) Social impact scores are based on the Infrastructure and Services Programming Inventory: 1 means a facility for a well- serviced neighborhood; 2, a facility for a moderately well-serviced neighborhood; 3, a facility for an underserviced neighborhood. Table 26. Environmental Impact Assessment Applicable score Results Headings ... ... Results ... ... Note: See section on environmental impact assessment, including table 13, earlier in this chapter. 148 THE FUTURE OF AFRICAN CITIES Table 27. Economic analysis framework COMMUNITY FACILITIES PROJECTS (for example, health station) Designation of project ..... Municipality ..... Region ..... Beneficiary population ..... Yes No Observations Identification of project within the Priority Investments Program ... ... ..... Current status of health facilities Inadequate Poor condition ... ... ..... Can the facility meet future needs (five years)? Totally ... ... ..... Partially ... ... ..... Management and maintenance of the facility Steps taken to provide staffing? ... ... ..... Steps taken to cover maintenance costs? ... ... ..... Scale of the facility Does it meet government standards? ... ... ..... Does it meet other recognized criteria? ... ... ..... If so, which ones? ..... If not, how does it compare with similar facilities? ..... COMMERCIAL FACILITIES PROJECTS: FINANCIAL ANALYSIS (for example, bus depot) Designation of project ..... Municipality ..... Region ..... Beneficiary population ..... Yes No Observations Identification of project within the Priority Investments Program Current shortcomings No facilities exist Facilities are in poor condition Scale of facility does not meet current demand Scale of the facility Can meet estimated five-year demand Will include related commercial facilities Planned operating and management mode Main facility Managed directly by municipality Delegated management (if yes, show mode) Related commercial facilities Managed directly by municipality Delegated management (if yes, show mode) IMPLEMENTATION TOOLS 149 Table 27. (continued) Financial viability of project Internal rate of return (financial) greater than 15 percent ... ... ..... ROAD PROJECTS Designation of project .... Municipality Region ..... Beneficiary population ..... Yes No Observations * Project cost between CFAF 10 and 30 million Qualitative evaluation Identification of project within the Priority Investments Program ... . Is the project part of the main roads network? ... Current condition of road (very poor, poor) ... . Rehabilitation To same level ... . To higher level Proposed surfacing (dirt, asphalt) ... . Traffic class 50 to 100 vehicles a day ... . 100 to 200 vehicles a day ... 200 to 300 vehicles a day ... . 300 to 500 vehicles a day ... . Does it serve central or local facilities? ... . * Project cost between CFAF 30 and CFAF 200 million Simplified quantitative evaluation Identification of project within the Priority Investments Program ... . Is the project part of the main roads network? ... . Current condition of road (very poor, poor) ... . Rehabilitation To same level ... . To higher level ... . Proposed surfacing (dirt, asphalt) ... . Traffic class 50 to 100 vehicles a day ... . 100 to 200 vehicles a day ... . 200 to 300 vehicles a day ... . 300 to 500 vehicles a day ... . > 500 vehicles a day ... . Does the road design provide for proper drainage protection? ... . 150 THE FUTURE OF AFRICAN CITIES Table 27. (continued) Does it serve central or local facilities? ... ... ..... Internal rate of return greater than 12 percent ... ... ..... * Project cost greater than CFAF 200 million Detailed quantitative evaluation Identification of project within the Priority Investments Program Is the project part of the main roads network? ... ... ..... Current condition of road (very poor, poor) ... ... ..... Rehabilitation To same level ... ... ..... To higher level ... ... ..... Traffic class 300 to 500 vehicles a day 500 to 1000 vehicles a day ... ... ..... > 1000 vehicles a day ... ... ..... Does the road design provide for proper drainage protection? .... Internal rate of return greater than 12 percent ... ... ..... IMPLEMENTATION TOOLS 151 The Municipal Financial Audit Framework The municipal financial audit is performed using the framework described below. The tables cover the major points of analysis and expected results, but other operations can be used to complement this framework, if desired. A brief commentary accompanies each table. The audit covers 10 areas of concern: the municipality's financial situation, revenues and expenditures, arrears and risks, monthly cash flow, investments in past years, dimensioning of the Priority Investment Program, projection test, financial equilibrium, perfor- mance indicators, and annexes. Financial Situation of the Municipality FINANCIAL EQUILIBRIUM AND FINANCIAL RATIOS (tables 28 and 29). This involves examining the municipality's financial equilibrium (table 28) and calculating 10 reference ratios (table 29). The two tables are based on records for the past three years: for example, status of bud- get execution for 1995 and 1996 and the budget for 1997. Major Revenues and Expenditures REVENUES AND EXPENDITURES (tables 30 and 31). This involves identify- ing, in particular, the major activities capable of yielding tax revenues: large businesses, dominant economic sectors, commercial activities (which are important if the Priority Investment Program includes mea- sures to upgrade or rehabilitate commercial facilities). The comments will provide, in particular, details on nonrecurring revenues, including their composition. Outstanding Obligations and Risks The purpose is to supplement the above accounting data with non- budgetary items that may have a significant impact on the scale of the project and on its financial results. 152 THE FUTURE OF AFRICAN CITIES Table 28. Financial equilibrium (thoutsands of CFAF) Change Buidget item 1995a 1996a 1997b 1996-9, 1997-98 1. Total current revenues ... ... ... ... ... 2. Carried forward ... ... .. ... ... 3. Current revenues for year n (1-2) ... ... ... ... ... 4. Administrative expense ... ... ... ... ... 5. Gross savings (1 - 4) ... ... ... ... ... 6. Debt repayment ... ... ... ... ... 7. Net savings (5 - 6) ... ... ... ... ... 8. Nonrecurring expenses (excluding debt) ... ... ... ... ... 9. Financing needs (6 - 7) ... ... ... ... ... 10. Municipal fund ... ... ... ... ... 11. Investment revenues ... ... ... ... ... 12. Surplus carried forward ... ... ... ... ... 13. Closing investment balance [9 - (10 + II)] ... ... ... ... ... 14. Overall closing balance [(1+11+12)-(4+6+8)] ... ... ... ... ... a. Actual. b. Projected. Comments: . Table 29. Financial ratios (CFAF and percentage) Average Budget item 1995a 1996a 1997b level 1996 Population (percentage growth) ... ... ... 1. Total budgetary revenues (per capita) ... ... ... 2. Total current revenues (per capita) ... ... ... ... 3. Current revenues for year n (per capita) ... ... ... ... 4. Administrative expense (services provided) (per capita) ... ... ... ... 5. Gross savings (as a percentage of total cuirrent revenutes) ... ... ... 6. Debt repayment (per capita) ... ... ... 7. Net savings (as a percentage of total current revenutes) ... ... ... 8. Facilities expenditure (per capita) ... ... ... ... 9. Municipal fund (per capita) ... ... ... ... 10. Other investment revenues (per capita) ... ... ... ... a. Actual. b. Projected. Comments: ...... IMPLEMENTATION TOOLS 153 Table 30. Major revenue items Share of current Average revenues level Revenue source 1995a 1996a 1997b 1996 (%) 1996 Current revenues for year n ... ... ... ... ... Property taxes ... ... ... ... ... Business license fees ... ... ... ... Household garbage tax ... ... ... ... .. Water and electricity taxes ... ... ... ... ... Location and rental fees ... ... ... ... ... Exit taxes (bus/truck depots) ... ... Other Nonrecurring revenues ... ... ... ... ... Disposal of property (details) .. ... ... ... ... Municipal funds Current fund ... ... ... ... ... Special fund ... ... ... ... ... Loan ... ... ... ... ... Other ... ... a. Actual. b. Projected. Comments: ...... Table 31. Major municipal expenditure items Share of current Average expenditure level Revenute souirce 1995a 1996a 1997b 1996 (%) 1996 Current expenditure for year n ... ... ... ... ... Personal costs (including social security and miscellaneous costs) ... ... Water consumption ... ... ... ... ... Electricity consumption ... ... ... ... ... Gas consumption ... ... ... ... ... Other Nonrecurring expenditures for year n ... ... ... ... (specify nature of principal works or purchases) ... ... ... ... ... a. Actual. b. Projected. Comments: ...... 154 THE FUTURE OF AFRICAN CITIES OUTSTANDING OBLIGATIONS (tables 32-34): * Note any unpaid bills for water, electricity, and telecommunications as of December 31 for the past two years. Attach a detailed table: mention any other major outstanding items (for example, debts to banks and wholesale suppliers). * Evaluate the annual cost of water, electricity, and telecornmunica- tions consumption. * Specify reforms taken by the municipality to improve its accounts management, for the current and future years. RISKS (tables 35 and 36): * To revenues. Identify and assess any exceptional revenues, including disposal of property (sale of lands), access fees and security deposits for commercial facilities, regularization of tax accounts. * To expenditures. Mention any loans contracted (yearly payrnents, first and last year of repayment), recurrent costs relating to major opera- tions, municipal policing costs, and so on. * Possible offsets for transferred responsibilities. Mention expected grants and the volume of new liabilities (essentially, for lhealth and education). NONRECURRING REVENUES (table 35). The purpose is to identify rev- enues of a nonrecurring nature for the past three years that must be duly discounted in making future revenue forecasts. DECENTRALIZATION (table 36). The decentralization process may have entailed new rules that could have an impact on the municipality's finances: • Show expected grant funds and likely changes over time. * Show new operating expenses as a result of transfers of r esponsibil- ities, whether offset or not. * Specify cases where Priority Investment Program-related nmanagement expenses might be covered fully or in part by the grant fund. Monthly Cash Flow The purpose is to assess the municipality's capacity to rnake a con- tribution to project expenses (monthly in the case of PAC in Senegal) (table 37): IMPLEMENTATION TOOLS 155 Table 32. Outstanding obligations (thousands of CFAF) Share of Share of Ctumulative data cutrrent current End- End- End- revenue revenue Item 1995 1996 1997 1996 (%) 1997 (%) Electricity bills ... ... ... ... ... Water bills ... ... ... ... Telecommunications bills ... ... ... ... Banks and other lenders ... ... ... ... ... Others ... ... ... Comments: ...... Table 33. Annual consumption of water, electricity, and debt Share of current revenues Item (%) 1995 1996 1997 Electricity Paid ... ... ... ... Actual ... ... Water Paid ... ... Actual ... ... ... ... Telecommunications Paid ... ... Actual ... ... Banks debts (yearly payment) Paid ..... ... ... Actual ... ... ... ... Others debts (yearly payment) Paid ... ... ... Actual ... ... ... Total ... ... ... Comments: ...... Table 34. Impact of municipal reformn measures Category Measture taken 1997 1998 1999 Payment of overdue accounts Electricity ... ... ... .. Water ... ... ... ... Reduction of annual consumption Electricity ... ... ... ... Water ... ... ... ... Telecommunications ... ... ... ... Total ... ... ... ... Comments:...... 156 THE FUTURE OF AFRICAN CITIES Table 35. Nonrecurring revenues Accouinting reference 1995a 1996a 1997b Projected Current revenues ... ... ... . ..... ... Total ... ... ... ... Nonrecurring revenues Total a. Actual. b. Projected. Comments: ..... Table 36. Impact of decentralization and the grant fund Item Accouinting reference 1997 1998 1999 New expenses Total ... Grant fund Total ... ... ... ... Balance ... ... ... ... Comments: ...... Table 37. Monthly cash position for the past two years and the current year (thousands of CFAF) Curn- Cuemul- Clumutl- utlative Personnel Year= Receipts ative Outlays ative Balance balance costs 1. January ... ... ... ... ... ... 2. February ... ... ... ... ... 3. March ... ... ... ... ... 4. April ... ... ... ... ... 5. May ... ... ... ... ... ... 6. June ... ... ... ... ... ... ... 7. July ... ... ... ... ... ... ... 8. August ... ... ... ... ... ... ... 9. September ... ... ... ... ... ... 10. October ... ... ... ... ... .. .. 11. November ... ... ... .. .. .. .. 12. December ... ... ... ... ... ... ... Total ... ... ... ... ... ..... Note: Prepare a table for the past two or three years and for the current year. Comments:. IMPLEMENTATION TOOLS 157 Assess capacity on the basis of monthly budget execution reports for the past two or three years. * Show cash receipts, disbursements, and balances. * Specify monthly wage costs. * In the comments section, mention the major variance factors and explain briefly the municipality's cash position, as recorded by the computer and by the accountant, respectively. Capital Spendingfor the Past Three Years The purpose is to highlight major municipal investment expenditures against the financing plan (table 38): * Investments financed wholly from the municipal budget. * Investments cofinanced by the municipality with contributions from the Agetip or other agencies. * Operations funded entirely by other agencies. Dimensioning the Municipal Priority Investment Program A preliminary simulation of all municipal Priority Investment Programs is undertaken at the outset of the project, giving a first estimate of the envelope available, for each municipality. The audit team updates this estimate based on findings from its work with the municipality. The elements for the dimensioning calculations are drawn from the project itself, for which "rules of the game" have been set. By way Table 38. Capital spending for the past three years Type of Project Total Self- Municipal Loan External Expenditure operation (1) cost financing fuind (2) funds (3) Tota ........ ... ... ... ... ... ... Share of total (%) ... ... 100 ... ... ... Note: Prepare a table for each of the past three years. 1. Cite the name of the project under which the operation may fall. 2. Cite the name of the lending agency and terms of the loan, the amount of the annual payments; the loan repayment schedule should be included in the annex. 3. Cite the origin of these funds: IDA, EU, CFD, GTZ, CIDA, and so on. Comments: ...... 158 THE FUTURE OF AFRICAN CITIES of illustration, we describe below an investment program to be financed from two 'windows" and a 'maintenance counterpart" portion (tables 39-42). INVESTMENT PROGRAM: * Window 1: block grant based on size of municipal population (with a floor set at ... ). * Window 2: capital grant based on municipality's financial capacity; monthly amount must not exceed x percent of average monthly cur- rent revenues (with absolute ceiling per capita set at ... Table 39. Basic data for dimensioning the Priority Investment Program Preliminary estimates Data as corrected from urban project after audit 1. Basic data ... 2. Population 3. Current revenues (projected) for year n .. 4. Current revenues (actual) for n-i 5. Average of current revenues (three years) Comments: ..... Explain any significant variances noted. Table 40. Dimensioning the Priority Investment Prograrm Revised index hypothesis 1 2 3 4 On projected On average On revenues revenuesfor revenues for year n-I year n (three years) Compromise 1. Investment program (financial estimates) ... ... ... ... 2. Window ... ... ... ... 3. Window 2 ... ... ... ... 4. Grant portion ... ... ... ... 5. Loan portion ... ... ... ... 6. Self-financed portion ... ... ... ... 7. Monthly payment ... ... ... ... 8. Maintenance share ... ... ... ... (for life of contract: three years) Comments: ..... Explain each hypothesis clearly. IMPLEMENTATION TOOLS 159 Table 41. Priority Investment Program execution schedule Priority operation Cost 1997 1998 1999 2000 2001 1. ... ... ... ... ... ... 2. ... ... ... ... ... 3. ... ... ... ... ... ... 4. ... ... ..... ... .. 5. ... ... ... ... ..... 6. ... ... ... ... ..... 7. ... ... ... ..... .. 8. ... ... ... ... ..... 9. ..... ... ... ... ... 10. ... ... ..... ... ... Total ... ... ... ... ... .. Dimensioning total ... ... ... ... ... ... Municipal contract 1 ... ... ... ... ... -. Note: Operations are shown in priority order, as determined through the urban audit and discussions with the municipal authorities. The value of priority operations may exceed (by x percent) the value resulting from the financial dimensioning. Comments: ...... Table 42. Priority Investment Program schedule for the first municipal contract Operation Cost 1997 1998 1999 Priority investment operations 1. 2. 3. 4. 5. Total investment Maintenance operations ... ... 1. 2. 3. Total maintenance ... ... ... (x percent of current revenues) ... ... ... Comments: ...... 160 THE FUTURE OF AFRICAN CITIES MAINTENANCE COUNTERPART: * This counterpart contribution will not exceed, for example, x percent of total current revenues and will be used to finance maintenance costs for the undertaking. The Priority Investment Program is calculated for five years, but may be implemented in two tranches: the first tranche might represent, for example, 70 percent of the total Priority Investment Program amount; the second tranche (30 percent) is then contracted as a supple- ment to the municipal contract, or through a new municipal contract. Projection Test This test is conducted on the basis of tables that outline hypotheses for expenditure and revenue and for financial equilibrium. EXPENDITURE AND REVENUE HYPOTHESES (table 43): - Mention the main hypotheses used to explain changes in expendi- ture and revenues. * Define the recommended measures and their financial impact on expenditures and revenues. * Insert these measures under the headings provided in the table. FINANCIAL EQUILIBRIUM (table 44): * Mention the impact of the principal measures taken by the raunicipality. * Enter the financial contribution to the project under current revenues. * Enter the maintenance contribution under administraticn expenses. * Test various forecasts in terms of the hypotheses mentioned in table 40 and propose an equilibrium hypothesis. Performance Indicators Starting from the equilibrium hypothesis, recommend at most five indicators of financial performance. These indicators represent the objectives to be proposed to the municipality for its financial man- IMPLEMENTATION TOOLS 161 agement. They will be mentioned as such in the annex to the munic- ipal contract. (Performance indicators are based on table 43.) Failure to make monthly payments would alone be cause to suspend Priority Investment Program execution during the course of the year (annual program estimate). Failure to comply with the maintenance program may lead to revision of the program estimate for year n+1. Definition and Dimensioning of Reform Measures The reform measures to be undertaken by the municipality under the municipal contract may be selected from a catalogue of appropriate mea- sures, analogous to that proposed for investments. At the conclusion of Table 43. Hypotheses about expenditures and revenues Accounting Date of Financial impact Headitngs entnr decision 1997 1998 1999 2000 2001 Revenues ... ... ... ... ... Changes in rates 1. ... ... ... ... ... ... ... 2. ... ... ... ... ... .. .. Improved collections 1. ... ... ... ... ... ... ... 2. ... ... .. ... ... ... .. Creation of new revenues 1. ... ... ... ... ... ... ... 2. ... ... ... ... ... ... ... Reduction or loss of certain revenues i. ..... .. .... 2. ..... .. .. .. .. .. Expenditures Increase in certain items 2. ..... .. .. .. .. .. Reduction in certain areas 1. ..... .. .. .. .. .. 2. ..... .. .. .. .. Settlement of arrears 1. ...C..m 2. ....... .. .. Comments: ... ... 162 THE FUTURE OF AFRICAN CITIES Table 44. Financial equilibrium (Forecast) Hypotheses Index 1997 1998 1999 2000 2001 1. Current revenues ... ... ... .. . .. 2. of which: 3. ... ... ... ... ... ... 4. ... ... ... ... ... ... 5. Administrative expenses ... ... ... ... ... ... 6. of which: 7. ... ... ... ... ... ... 8. ... ... ... ... ... ... 9. Balance ... ... ... ... ... ... 10. Debt ... .. ... ... ... ... 11. Excluding project ... ... ... ... ... ... 12. Project (cumulative monthly payments) ... ... ... ... 13. Balance ... ... ... ... ... ... 14. Grants from Municipal Fund ... ... ... ... ... ... 15. Other investment revenues ... ... ... ... ... ... 16. Investment expenses excluding project ... ... ... ... 17. Overall balance ... ... ... ... ... ... For reference purposes ... ... ... ... ... ... 18. Investment expenses-project ... ... ... .. ... ... Comments:. the audit, a project fact sheet will be prepared for each of theEe measures, showing cost, officials involved, implementation methods, and timetable. Annexes The annexes will include the following items: * A comprehensive database of budgets and budget execution reports for the past three years. * A detailed table of arrears to utility concessionaires. * The repayment schedule for loans already contracted by the municipality. IMPLEMENTATION TOOLS 163 Municipal Contract: Contrat de ville Objectives and Content The objective is to give the municipality greater responsibility in the selection and financing of project activities, by putting its role on a contractual footing. A contrat de ville, or municipal contract, is signed between the municipality and the state or its representative, setting out clearly the commitments of each party (box 15). This contract deals both with the reform of municipal government and with the financing of municipal services and facilities. It may cover all the various communes or local governments involved in the project, but, on a strictly voluntary basis, they are free to sign the con- tract, but financing will be conditional on their agreement to accept the reform component. Implementation This procedure has been adopted in several recent projects (Mali, Mauritania, Senegal). Below, we describe two possible models of the contract, which must be adapted to specific circumstances. The signa- tory representing the state may differ from country to country: it may be the municipal affairs department, a specialized agency, or a munici- pal support unit of some kind. The contract also envisages the use of an Agetip as delegated contract manager. Output The contract sets out the commitments of the municipality and the state, and the ways in which they are to be executed. It is accompanied by a series of annexes, covering such things as loan conditionality pro- visions, financial reform, the organizational and structural reform plan, audit recommendations, and annual work programs. 164 THE FUTURE OF AFRICAN CITIES Box 15. Municipal contract for large municipalities The municipality of _ , represented by its mayor, _ , and the authorized representative of the state, represented by its general clirector, , agree as follows: TITLE 1. OBJECT OF THE CONTRACT Article 1. Object The object of this contract is to permit the municipality of to assume the following priority responsibilities: * Undertake reforms that will allow local govemment to act rnore effi- ciently and expeditiously. • Enhance its management capacity. * Facilitate the mobilization of resources. * Carry out a municipal investment program with appropriate financing. TITLE 2. COMMITMENTS OF THE MUNICIPALITY Article 2. Mutnicipal reform plans The municipality agrees to carry out, within three years, a ,eries of reforms consisting of a financial plan and an organizational ancL restruc- turing plan. The commitment to financial reform (annex 2) consists of: * Augmenting municipal nontax revenue collection by _ percent each year. Keeping current with all water and electricity billings; tak- ing steps to recover accounts in arrears. * Setting aside percent of each year's revenues in a savings account."1 The commitment to structural reform (annex 3) consists of conducting management audits to enable the municipality to create an appropriate structure for the performance of municipal duties. Article 3. Implementation of management recommendations The municipality agrees to be guided by the recommendations resulting from these audits (annex 4). Article 4. Monitoring and evaluiation The municipality agrees to accept monitoring and evaluation by the authorized state representative throughout the term of this corLtract, and to provide all the information noted herein. TITLE 3. UNDERTAKINGS OF THE AUTHORIZED REPRESENTATIVE Article 5. Administrative, technical, andfinancial assistance: The authorized state representative undertakes to provide the following assistance, within the limits of its mandate and powers, and consistent with the areas of activity to which this contract refers: * Administrative assistance in all relations with the central supervisory authorities. * Technical assistance, through the services of a part-time task manager to advise on the implementation of refortn recommendaticns and the execution of investment projects. IMPLEMENTATION TOOLS 165 * Financial assistance, in the amount of CFAF , for improving man- agement capacities. The general conditions governing this assistance are defined in Article 6. Programming and financing investment projects The authorized state representative undertakes to finance the investment program in two phases, in accordance with the proposed execution and financing schedule (annex 6). The first phase is unconditional and covers the projects contained in the first subprogram, as listed below. The sec- ond phase is contingent and will only be confirmed after the results of the second year of the reform plan have been assessed. It covers the projects contained in the second subprogram, as listed below: Article 7. Conditions offinancing Financing will be provided in accordance with the terms and conditions contained in the manual of the authorized state representative and will take into account the type of investment to be financed and the current and anticipated financial capacity of the municipality. TITLE 4. CONTRACT EXECUTION Article 8. Use offunds The authorized state representative undertakes to earmark funds for the project, to be released for each investment subject to the following conditions: * Prior confirmation agreement. * Notification of deposit of a grant, up to the pre-established limit, in a special account with the project bank. • Loan agreement for funds deposited, up to the pre-established amount, in a special account with the project bank. These deposits shall be made only after the municipality has deposited any agreed counterpart funds in a special account with the project bank. Article 9. Procufrement procedutres and delegated project management Calls for bids and contract awards to suppliers shall be effected accord- ing to the conditions stipulated in the Agetip procedures manual. Article 10. Disbuirsements Disbursements shall be made by debiting the three accounts held in the municipality's name at the project bank, upon submission of a request for funds from the contractor. TITLE 5. DURATION, CANCELLATION, REVISION Article 11. Duration This contract shall be valid for - years. This period covers the fol- lowing phases: * Structural reform. * First investment financing. * Contingent investment financing. 166 THE FUTURE OF AFRICAN CITIES Box 15. (continued) Article 12. Cancellation Where it is duly established that the municipality has failed to honor its commitments, the authorized state representative may suspend the con- tract, in accordance with the provisions in its manual and after giving substantiated notice to the chair of the General Assembly. Article 13. Revision and amendments This contract may be revised and amended in accordance with _ and the authorized state representative's procedures manual. Done at: For the mutnicipality: For the autthorized state representative: (Approved by the delegated contract manager, ANNEX 1. CONDITIONALITY PROVISIONS OF THE LOAN AGREEIAENT (example) 1. The authorized state representative is responsible for identifying, preparing, and monitoring municipal contracts under the project. For purposes of contract monitoring, its mandate includes supervising the commitments of the contracting parties. 2. The content of municipal contracts is defined by the model contract annexed to the authorized state representative manual. Modes of financ- ing are defined in accordance with the authorized state representative manual. Recommendations based on analyses performed pricr to signa- ture of the contract, and in particular on any audits perfcrmed, are annexed to the contract. 3. The authorized state representative will contribute to the execution of the multiyear municipal investment program, as follows: * It will work with the municipality to identify prospective investments. * It will propose an execution schedule over the life of the contract. * It will prepare a financing plan to include the necessary level of self- financing and amounts to be provided from other sources. * It will assist the municipalities in preparing projects, or it may arrange for preinvestment studies. 4. Assistance from the authorized state representative for these various tasks may be provided on one of the following bases: * Free of charge to the municipalities, with respect to the following man- dates (reform plan, assistance and monitoring, and so on): * Against payment of a commission of 1.5 percent of the value of the investment financing provided. IMPLEMENTATION TOOLS 167 ANNEX 2. CONDITIONS OF THE FINANCIAL ADJUSTMENT PROGRAM (example) The following table sets out the conditions pertaining to the financial reform plan. The municipality agrees to honor these conditions and to allow the authorized state representative to conduct semiannual inspec- tions of progress under the plan, in accordance with the monitoring schedules contained in its manual. TABLE Savings, nontax revenue, and _ (other components of the financial reform plan) are defined as follows: ANNEX 3. CONDITIONS OF THE ORGANIZATIONAL AND STRUCTURAL ADJUSTMENT PROGRAM (example) The conditions of the organizational and structural reform plan will be determined as a result of audits undertaken during preparation of the municipal contract. They will relate specifically to: * Recruitment: * The following organizational changes: __ * Training for persons. ANNEX 4. AUDIT RECOMMENDATIONS Recommendations arising from the audits refer to the following (provide details): * Municipal councils, possible delegation of signing authority. * Staff organizational aspects. * Personnel management (redeployment).1" * Financial activities (mobilization of resources and expenditure man- agement). ANNEX 5. ACCESS TO INFORMATION The municipality undertakes to provide any information the authorized state representative may request during the life of the contract, and all information stipulated in the procedures manual of the delegated con- tract manager. ANNEX 6. CONDITIONS OF INVESTMENT PROJECT FINANCING Table 168 THE FUTURE OF AFWiCAN CITIES Box 15. (continued) Municipal Contract: Simplified Model The municipality of - represented by its mayor, _, and the autho- rized representative of the state, represented by its director general, agree as follows: TITLE 1. OBJECT OF THE CONTRACT Article 1. Object This contract concerns the financing and implementation of an action pro- gram under project _ in the municipality of _ , the content of which is described in Title 3 of this contract. This contract shall be approved by the Municipal Council before it comes into effect. It is accompanied by an annual work program that lists the tasks to be performed each year (annex 1). TITLE 2. COMMITMENTS OF THE MUNICIPALITY Article 2. Performance criteria The municipality agrees to make its best effort to fulfill such performance criteria as may be established with its participation, and which are listed below (annex 2). Should it fail to attain these criteria, - percent of the investment program budget maybe suspended, at the discretion of__ Article 3. Financial participation The municipality agrees to repay all credits obtained under the project for the funding of cost recovery operations, in accordance with the provi- sions annexed to this contract. Such repayment shall be the s-abject of a specific agreement (with an amortization schedule) to be established before any work is commenced. The municipality undertakes to pay its annual contribution to the maintenance budget for the facilities completed under this co-ntract. The amount of such contribution shall be proportionate to the cost of the facil- ities and shall be specified in the annual work program. This amount shall not exceed - percent of the municipality's financial capacity. The municipality undertakes to deposit the equivalent of this amount in _ annual installments, in special account number - opened in its name at_. TITLE 3. CONTENT AND EXTERNAL FINANCING Article 4. Investment program The Supervisory Commnittee agrees to execute the provisional investment program described below, subject to the conditions of article 2, title 2, above. The following projects will be undertaken Article 5. Technical and administrative support program The authorized state representative agrees to provide administrative and technical support to the municipality. The projected action program includes the following: IMPLEMENTATION TOOLS 169 TITLE 4. EXECUTION Article 6. Work Program This municipal contract shall be executed on the basis of annual work programs. These work programs are to be signed by the municipality's representative and the director of the authorized state representative. Article 7. Delegated contract management and procutrement procediures The investment program under this municipal contract shall be executed under a delegated contract management agreement to be signed with the Agetip. Calls for bids and contract awards to suppliers shall be effected in accordance with the terms and conditions stipulated in the Agetip's procedures manual. Article 9. Disbuirsements Disbursements shall be made by debiting the account opened in the municipality's name in the project bank, upon submission of a request for funds from the delegated contract manager. The municipality shall receive quarterly reports from the authorized state representative on the status of these withdrawals. TITLE 5. DURATION, CANCELLATION, REVISION Article 11. Duration This contract shall be valid for a period of - years. Article 12. Cancellation Done at: For the municipality: For the authorized state representative: (Approved by the delegated contract manager, ANNEX 1. WORK PROGRAM Municipal contract procedures call for the preparation of a municipal work program detailing project activities to be undertaken each year in the municipality. The work program shall list all project operations and their respective estimated costs. These work programs are to be signed by the municipal representative and the director of the authorized state rep- resentative. Operations will be noted as memorandum items or annexed to the general municipal budget as they are financed, in order to keep the municipal contract operating procedures as simple as possible. ANNEX 2. MUNICIPAL PERFORMANCE CRITERIA These criteria are included in the execution procedures for "infrastructure and facilities" in order to provide readily verifiable indicators for measur- ing the municipality's commitment to the undertaking. They therefore rep- resent an important element in municipal contract procedures. 170 THE FUTURE OF AFRICAN CITIES Box 15. (continuied) The use of such criteria helps encourage the active involvement of municipal teams in preparing and executing local investments. The objec- tive is to develop sound "management reflexes" and to help sustain these capabilities over time: for example, municipalities that attain certain per- formance standards can be awarded a bonus in the form of acditional investments. Criteria are selected on the basis of the following principles: * They should relate directly to the role the municipality is expected to play in project execution. * They should be both dynamic (evolving in light of results) and easily verifiable. Criteria Scoring 1. Rate of progress achieved in each year's work program Percentage completed 2. Contribution to upkeep/maintenance Contribution to special account /planned contribution 3. Mobilization of fiscal potential Revenues year n/revenues n-1. 4. Success in putting facilities into service * Meeting startup deadlines Good/average/unsa tisfactory • Management methods adopted Good/average/unsatisfactory 5. Task manager's assessment • Involvement of municipal team Good/average/unsatisfactory * Mobilization of technical services Good/average/unsatisfactory * Management of facilities Good/average/unsatisfactory Notes l. The high cost of aerial photography reflects in part the specifications required. Satellite imagery is one way of dealing with this problem, but while it may provide sufficient indications for large urban areas, it still cannot match the quality of urban detail obtained with aerial photography. Moreover, work- ing with satellite images requires specialists, whereas many African planners are familiar with aerial photography. 2. The base map may be produced to a scale of 1:10,000 for the larger cities. 3. Geographic Information Systems would clearly be useful for the simul- taneous collection of data for maps and inventory tables. For the time being, however, we are trying to find a solution more commensurate with the existing capacities of the major municipalities. In any case, scoring is an :mportant ele- ment of the system and can be difficult to accomplish with some Geographic Information System tools. IMPLEMENTATION TOOLS 171 4, This levy is called a "residence tax" in Burkina Faso, an "urban tax" in Cameroon, and an "urban contribution" in the Central African Republic. Burkina Faso has made the greatest progress with this type of tax (UDP 2 and 3). 5. Property in the form of land and buildings can be taxed in several ways. The levy can be imposed on (a) ownership of property, (b) increase in its capi- tal value, (c) transfer of the property through change of ownership, or (d) use of property. 6. Avoid trying to measure the surface area of the plot: cadastral-type land surveys are a time-consuming undertaking. It should be enough to measure the property frontage, but even this can be a lengthy process. 7. This indicator should be sufficient by itself: various surveys (Burkina Faso, for example) have shown that the quality of construction is closely corre- lated with the level of water and electricity consumption. High electricity con- sumption suggests the presence of one or more air conditioners: all surveys show that in this case the dwelling can be considered a permanent, well- equipped structure. In contrast, they also show that where power consumption is very low, or where there is no power connection at all, the dwelling is a mod- est one. The companies may be encouraged to cooperate as part of a two-way exchange of favors: utility companies have a direct interest in address systems, which will help them identify their clients and improve their billing and col- lection procedures. 8. "Urbadresse" was created on 4th Dimension Software (Mac/PC). 9. For example, promote more effective tax collection by (a) providing each collection agent with a vehicle and fuel allowance, (b) financing an address sys- tem, (c) assigning officers to set up a simplified tax registry within one year. 10. For example: 10 percent, or CFAF x M in year 1, CFAF y M in year 2, and CFAF z M in year 3. 11. For example: The municipal government undertakes to reduce its staff by - persons with the support of - which will contribute CFAF _ each year for two years. References 174 THE FUTURE OP AFRICAN CITIES Anizon, A.1990. "Gestion financiere municipale en Afrique." World Bank, Economic Development Institute, Washington, D.C. Bamberger, M. 1982. Planning the Evaluation of Urban Shelter Programs: K