URBAN DEVELOPMENT POLICY INCEPTION REPORT 

Introduction 

1. The Rationale for the Formulation of a Comprehensive Urban Development policy in Ethiopia

1.1 General introduction 

1.2 The impact of radical reforms implemented during the military regime

1.3 A generally low level of urbanization but a very fast urban growth 

1.4 Balanced urban development as sin qua non for sustainable rural development  

1.5 The need to follow a holistic approach in policy formulation 

1.6 Well articulated policies enhance the efficacy of urban interventions 

1.7 Institutional gaps for urban policy analysis

1.8 The way forward

1.9 Key Organizing Principles for the Process of Policy Formulation

2. Objectives, Scope and Coverage of the Study and Methodological issues 

2.1 Objectives of the policy design process 

2.2 Scope and coverage of the overall study 

2.3 Strategic considerations in the policy Design Process 

2.4 Methodological and procedural issues

3. Preparatory Activities carried out by the Project Office

3.1 Grouping and re-grouping of tasks

3.2 Phasing of the study

3.3 Major Activities to be Accomplished

3.4 Work plan for the Urban Development Policy Design Process

3.5 Institutional arrangement 

3.6 Mobilization and assignment of resource persons

3.7 Urban Development Policy Design Project Professional Profiles

3.8 Assumptions and Risks

Annex One: The Institutional Profile of the National Urban Planning Institute (NUPI)

Introduction

The National Urban Planning Institute from the outset had the interest and commitment to contribute to the design and development of a national urban development policy, and is grateful for the opportunity given to it by the Ministry of Federal Affairs to play a key role as the consultant for its drafting. In fact, NUPI would like to seize this opportunity to reiterate that the design and development of a critical policy instrument such as the Urban Development Policy represents a serious challenge, for its absence had remained a missing link in the attempts to achieve sustainable urban development. Accordingly, as an institution that has evolved within a dynamic national urban development process, NUPI has been a keen observer of these developments and will try its level best to harness its technical and institutional resources as well as its institutional memory to successfully meet the requirements of the policy design and drafting process.

This inception report is prepared as per articles 7.5 and 10.1 of the contract agreement for the execution of a national urban development policy that was concluded between the Ministry and the NUPI on the 26^th of March 2003, and it comprises three main parts. Accordingly, this part of the report outlines the need and rationale for formulating a Comprehensive National Urban Development Policy in which it enunciates how lack of an urban development policy has negatively impacted on the growth and development of the national urban system.  The various issues raised on this part of the report are believed to help achieve clarity of purpose for the task at hand, and it is against this backdrop that a list of organizing principles for the study are extracted. 

The second part of the report outlines the tentative objectives of the policy to be formulated, the scope and coverage of the study and methodological issues. It is worth noting at this juncture that the project office subscribes to the points outlined in the ToR, and it will give utmost consideration to the broad policy directions for the urban development sector, particularly during the formulation of the urban development policy. 

The third part of the inception report summarizes the various preparatory activities carried out by the project office formed by NUPI. One of the first tasks accomplished by the Office is the breaking down of the overall task into logical parts, whereby three main tasks are identified, in due consideration of the major relationship between issues to be addressed and the major professional inputs required to tackle them. The latter, in particular, is a key point considered in the assignment of task coordinators, resource persons and team leaders for each sub-task.  The Project Office envisages mobilizing at least 38 professionals that have relevant academic background and immense experience in the urban development sector.

It is interesting to note that the various activities to be accomplished during the whole time span of the project are grouped under two phases and the project office has prepared a work plan that summarizes the list of major activities to be accomplished and the corresponding time schedule for their execution. Two national workshops will be organized at the end of the two phases, which are meant to create the forum where by the findings and conclusions of the various studies would be enriched by the learned comments of a diverse group of stakeholders. The assumptions taken by the Project Office and the corresponding risks involved are also outlined towards the end of part three.  The institutional profile of NUPI is annexed at the end of the report.  

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1.  THE RATIONALE FOR THE FORMULATION OF A COMPREHENSIVE 
     URBAN DEVELOPMENT POLICY IN ETHIOPIA

 1.1     General introduction

 A notorious characterization of Ethiopian urban centers is their spontaneous growth and haphazard development, which has in the main taken place outside the purview of conscious urban planning intervention. Nevertheless, the lack of clearly-stated policies should be seen as another factor that have had a bearing on their growth and development in addition to the absence of urban planning instruments, processes and capacities.

This is more so as the performance of even those urban centers for which a series of plans have been prepared is stifled due to the absence of an integrated urban development policy that will otherwise facilitate the implementation of these plans. After all, the process of urban development in Ethiopia from its outset was not backed by any policy intervention.

1.2     The impact of radical reforms implemented during the military regime

The national urban growth rate of Ethiopia showed a decline from 6.6 per cent in the late 1960's to about 3.5 per cent in the late 1970's and from 6.5 per cent in the early 1970's to 3.7 per cent by mid 1980s. The main explanations given to this decline are related to the perceived impacts of the urban and rural reforms that were implemented by the military government since the mid 1970's. These policies are reckoned to have contributed to specific developments in terms of push factors (in rural areas) and pull factors in urban areas.

In particular, the major urban reforms included: the nationalization of major industrial and financial institutions, wholesale, import and export trade establishments as well as the nationalization of urban land and extra houses. It is interesting to note that a centralized form of urban dweller's associations (UDAs), organized at the Kebele, Keftegna and city-wide levels with the then MUDH at the top, were established that served as important vehicles in the implementation of these urban reforms. These set of measures have had direct implications on the magnitude of urban-based investment by the then officially discouraged private sector, which eventually resorted to rent-seeking activities.

These ideologically motivated measures, which envisaged to "socialize the overall economy" and to make the public sector the prime-mover of national socio-economic development, have resulted in the stagnation of the overall economy in general and that of urban centers in particular, albeit some administratively important urban centres exhibited significant growth. In fact, the "fortune" of most Ethiopian urban centres has its roots in public investments that follow their designation as administrative centres, than their economic dynamism in terms of exploiting and/or adding value to the natural resources endowments of their hinterlands.

On the other hand, the radical rural land reform gave use-rights to peasants, thus prohibiting its transfer by sale, lease, mortgage or similar arrangements. Some studies carried out on the subject have documented that this state of affairs had discouraged rural-urban migration, for peasant families had a fear not to loose their use rights over the cropping, grazing and forestlands they temporarily possess. Moreover, the hiring of labour in rural areas was officially banned which had hampered rural-rural migration for seasonal employment in agriculture, hence limited the role of small towns as alternative options for off-farm employment.

Service cooperatives (SCs) which were established in the rural areas served as the sole official channels for the distribution of basic consumer items and agricultural inputs to rural families as well as for the collection of marketable agricultural products from the rural areas, which were handled by the then very powerful parastatal trading enterprises such as EDDC and AMC. These parastatal organizations had an almost direct contact with SCs, which is reckoned to have militated against the development of small urban centres. As a matter of fact, small urban centres have exhibited dramatic growth following the liberalization of trade and administrative decentralization that were set into motion after the change of government in 1991.

The economic policy of the transitional period (1991) that was issued after the demise of the military regime stipulates that the then dominant role of the state in urban-based activities such as trade, services, transport and tourism would change, i.e., in favour of enhanced private sector involvement in the various sectors of the economy, whether this entails new investment by private businessmen or divesture of state-owned enterprises.

The policy also stipulated that the major role of the state in housing and construction sector (which were within the mandates of the then Ministry of Works and Urban Development) would focus on creating enabling environment for the participation of businessmen in these sectors. The policy also provided for the sell of nationalised houses and payment of compensation for those entitled based on a thorough study. Moreover, the policy provided for the encouragement of the private sector to participate in real estate development in general and the construction of residential houses for rent in particular, whereby access to urban land was to be facilitated by municipalities.

In addition, state owned construction enterprises were to be reorganised in such a way that they could operate in a competitive environment. The government issued a market-based urban land lease holding proclamation in 1994, for which regional governments were expected to issue regulations that will facilitate its implementation.

If the implementation of misguided policies could be taken as the major reason for the unsatisfactory performance of urban centers through out most of the 1970s and the 1980s, the major reason for its persistence even after the change of government is reckoned to be the policy inaction, notwithstanding the issuance of several macro policies that include administrative decentralization, market liberalization and political democratization, which are taken into account in the elaboration of sectoral policies and/or strategies and that have had a varying impact on the urban development. As a matter of fact, well-focused efforts directed at evolving explicit and comprehensive urban development policies have not been made so far, and those directed at evaluating the spatial impacts of the various policies and strategies of urban development are reckoned to be inadequate.

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1.3     A generally low level of urbanization but a very fast urban growth

It is estimated that about 16 per cent of the total population of Ethiopia currently lives in urban areas, which has rendered it as one of the least urbanized countries in sub-Saharan Africa. Despite this low level of urbanization, however, the country has one of the highest rates of urbanization even by the standards of developing countries, which is estimated at 5.4 per cent during the inter census period (1984-1994). This is also much higher than the average growth rate of the total national population, which is estimated at 3 per cent.

Of the three components of total urban population growth (i.e., natural growth rate, net-migration and reclassification), net migration is reckoned to be the major factor for the generally high rate of urbanization, which is fuelled by a high level of rural-urban migration, for which a host of push and pull factors are at work. The push factors are basically poverty-driven and have their roots in the deterioration of the population resource balance in the rural areas, and hence in the dwindling of the per capita ownership of cropping and grazing land as well as livestock. The pull factors, on the other hand, relate to the fact that urban areas are in general relatively better off than their rural counterparts in terms of the availability of job opportunities and social services.

The Ethiopian economy has remained basically agrarian, and the share of secondary and tertiary sectors in the GDP is limited. As a result, the level of urbanization has been very low, which only got momentum during the post WW II period associated with the introduction and consolidation of modern government bureaucracy, transport systems, public services, etc. The level of urbanization was only 3 per cent at the end of WW II, which increased to 6 per cent in 1960, 11 per cent in 1994 and 14 per cent in 1994, which is estimated to have already reached 16 per cent in 2003 and projected to account for 20 per cent of the total population in the year 2020.

Needless to mention this gradual increase in the level of urbanization was accompanied by corresponding increases in the absolute number of urban residents. Accordingly, the sheer number of persons residing in urban areas has increased from 4.3 million in 1984 to 7.4 million in 1994, which is estimated to have already reached 10.6 million in the year 2003 and projected to reach 20.0 million by the year 2020.

This is of important import to the formulation of a comprehensive urban development policy, as the ever-increasing number of urban residents should be supplied, among others with adequate jobs, food and services. As a matter of fact, these state of affairs suggest that, the opportunities and challenges of development will be increasingly concentrated in urban areas, which are considered as engines of development both at the national, sub-national and local levels.

It is worth noting at this juncture that the relative success to be achieved in terms of exploiting the potentials offered by urban centres as motors of socio-economic development depends, among others, on the presence of a well-articulated urban development policy, which nevertheless is currently lacking in Ethiopia. This has remained a major bottleneck for the proper guidance of and coordination between the various activities to be carried out within the urban setting by the various development actors (i.e., governmental, non- governmental and community based organizations, the business community, etc.).

On the other hand, unprecedented urban growth rate has manifested it self in terms of the proliferation of a host of urbanization-related problems. Taking the risk of oversimplification, the major problems besetting Ethiopian urban centres include: poor housing and neighbourhood quality; already weak and fragile local economic basis; high rate of unemployment and ever-increasing level of poverty; a host of social problems including crime and juvenile delinquency; an ever deteriorating environmental conditions; serious shortage and limited coverage of basic infrastructure and services; and weak institutional and financial capacity to deal with these problems. In particular, the high rate of urbanization has created intense pressure on the already weak capacity of urban centres to offer job opportunities and basic infrastructure and services.

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1.4     Balanced urban development as sin qua non for sustainable rural  development

It has been long since both academicians and practitioners in the filed of urban development have noted the interdependence between urban and rural development. One of the major reasons for the difficulty to achieve sustainable rural development in the country is the absence of a well-functioning system of urban centres that would otherwise contribute to rural transformation, which is in fact the result of misguided policies and policy inaction that are mentioned elsewhere. Previous research conducted on the subject found out that the absence of clearly articulated and comprehensive urban development policy has perpetuated a primate city dominated urban system and is also responsible for the continued inadequacy of urban centres as development factors.

A simple glance at the size-class distribution of Ethiopian urban centres suggests a lopsided urban development, which is dominated by the primate city. There are also wide discrepancies in terms of the level of urbanization and the size-class distribution of urban centres across regions and between zones within a given region. Moreover, urban centres in the various size-classes are not functionally integrated and, as a result, the complementary relationships that exist among them are far from being satisfactory.

There is evidence of hyper-urbanization whereby the largest urban enter (Addis Ababa) is about 14 times bigger that the next largest urban centre (Dire Dawa). This dismal picture is also replicated in the regional states and their respective zonal administrations, whereby regional and zonal capitals are emerging as dominant urban centres within their respective regions and zones.

The functional specialization of the country's urban centres is at an infant stage and only few of them can be categorized as medium-sized that can offer a possibility to support the development of manufacturing and related activities. As a matter of fact, the economic base of most urban centres is dominated by public administration and a variety of service related activities. Thus, they serve in the main as vehicles for almost one way flow of resources from rural to urban areas.

Moreover, many rural areas, particularly the boarder regions that are predominantly inhabited by pastoral populations, are out of the purview of urban influence due to the near absence of urban centres. On the other hand, the resource potential of many regions could not be exploited due to the absence of the requisite urban-based socio-economic infrastructure and services. In summary, the country lacks adequate number of urban centres that can generate meaningful development impulses to their hinterlands.

The rural-centred national economic development policy has been implemented with a strong emphasis towards rural development that must have, by default, resulted in the rather limited attention given to urban development. Paradoxically, however, the measures designed and the resources channelled to realize the objective of rural-centred development, hence the basic rural-orientated infrastructure and services (such as education and health) which are meant to cater for the rural population, were invariably targeted to a network of urban centres designated as regional, zonal and woreda centres, which served as the locus of public administration and service delivery.

Yet, the rural bias was reflected in the form of inaction in the areas of horizontal and vertical coordination of urban-based activities in general and half-hearted efforts to attract commercial and industrial development by way of strengthening their economic basis. Thus, despite the pronouncement of enhanced participation of the private sector in the overall economy in general and in urban development in particular, the majority of urban centres could not boast of the actual level of investment they could attract. This is in the main associated with a rather hostile investment climate at the local level, one of the most important constraints being faced by potential investors is the difficulty they face to get access to developed land (i.e., serviced land) at affordable cost.

Accordingly, the government has given a more explicit concern for urban development is to be in the second Five Year Development Program (1993-1997 E.C.), wherein the objectives of urban development was stated as "to enhance the role and contribution of urban centres towards economic development and therefore to improve the living conditions of their residents”.

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1.5     The need to follow a holistic approach in policy formulation

Hence, well-thought and articulated urban development policies should be formulated and implemented if one is to effectively harness the potentials offered and mitigate the constraints faced by urban centres.

As elaborated in the environmental policy of Ethiopia, policies are "essentially selected options to be used as instruments for achieving intended goals and objectives and ... will serve only as a general and directive principle in a wider scope and therefore (do) not consist of an elaborated action plan. Consequently, it is essential to immediately adopt development strategies, policy implementation methodologies and pertinent action plans to translate the policy into practice...."

Once a set of urban development policies are put in place, these broad courses of action are to be implemented via well-thought strategies which might include, among others, regulations, budgetary allocations, establishments of institution with specific mandates, etc. As the circumstances in each urban centre may show considerable variation the formulation of urban development policies and strategies should give a heed to the unique contexts in which they would be implemented.

The word "urban development policy" can thus be taken to denote the broad approach and direction to be officially followed by the government toward a host of crosscutting urban development issues. As a matter of fact, it is a "national urban development policy "which makes explicit those desirable intentions and objectives that direct and coordinate all actions and interventions as well as the focus of operation of urban management institutions".

It was a recent experience to observe that both MWUD and RBWUDs prepared their respective Second Five Year Development Programs by their own, with little proactive effort to synchronize the two sets of programs. It was learnt that one of the key constraints for these planning exercises had been the absence of clearly articulated national urban development policies and strategies, which would have served as guiding frameworks for the formulation of the development programs with out necessarily resorting to a top-down approach.

A national framework for urban development, which shall serve as a guideline for implementation of appropriate urban development strategies at the sub-national and local levels, should be outlined based on a "holistic, urban approach" that will give explicit attention to urban development. This is qualitatively different from the issuance of "mono-sectoral and spatially ungrounded" policies the implementation of which might result in terms of uncoordinated results at the urban level.

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1.6     Well articulated policies enhance the efficacy of urban interventions

There have always been some form of government institutions established both at the federal and regional levels which are mandated to coordinate urban development issues. At the federal level, the then MWUD, the precursor of MFAs, was providing a variety of support services to regions and municipalities through its specialized agencies: it had rendered valuable support in the area of urban planning and implementation through NUPI; and it had provided various forms of support in the implementation of donor-financed projects through the then UDSS (now UDCBO).

Despite the redefinition of the roles of urban centres in the national economy, most municipalities continued to operate as per regulations that were promulgated during the centralized regimes of the past, notwithstanding the establishment of decentralized offices for works and urban development at the regional and zonal levels.

The Regional Bureaus and Zonal Departments for works and urban development were active in the provision to urban centres under their jurisdiction of direct technical support in the areas of preparation and/or approval physical plans and budgets as well as follow-up of their implementation, and personnel administration and financial administration. More importantly, however, these offices were devoting much of their time and resources in the follow-up of the implementation of capital projects financed by budgets assigned by federal and regional governments.  

RBWUDs of the bigger regions (Amhara, Oromia, SNNPRS and Tigrai) also made sporadic efforts on their own to develop a grading system and designate municipal status to the urban centres under their jurisdiction, revise municipal tariffs and rates, define new organizational structures and staffing plan for municipalities, introduce computerized land information systems (LIS), etc.

The bigger regions have taken their own initiatives to prepare and implement policies and strategies with financial and technical assistance they obtained from donors like the GTZ. The Amhara Region, for example, pioneered a municipal reform program that was to serve as a framework for municipal level interventions, which was later emulated by Tigrai, Southern and Oromia regions.

It is reckoned that the effectiveness of these efforts exerted by federal and regional agencies could have been enhanced if explicit policies and strategies that pertain to urban development were put in place. This is more so as the presence of clear policies would serve as a more objective basis in the setting of priorities for interventions to be made by the various level of government, hence in the achievement of more tangible and sustainable impact.

It seems that the series of workshops, seminars and panel discussions organized over the past several years by the Ministry, UDSS and NUPI as well as the RBWUDs concerning various urban development issues are reckoned to have contributed to the development of sufficient awareness about the importance of comprehensive and well articulated urban development policies and strategies.

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1.7     Institutional gaps for urban policy analysis

A cursory review of the institutional evolution of the urban development sector shows that, the relevant ministries (the then MUDH and MWUD as well as MFAs) were operating in the absence of clearly stated urban development policy. Unfortunately, there have never been a specialized unit within the relevant ministry that will formulate, evaluate and update policies and strategies.

As per the organizational structure of the MFAs that is currently in place, a specialized unit dedicated to policy analysis does not exist, albeit there is a plan to establish a research department that might be expected to surrogate the unit. Once such a specialised unit would be established, however, it can be expected that existing gaps in the formulation, evaluation and updating of policies and strategies would be filled.

This state of affairs is also considered as one of the factors that are held responsible for the fact that the housing sector study, which was commissioned in the mid 1990's with the main aim of developing a comprehensive housing policy, could not bear the desired results. This institutional vacuum is also considered as the major reason for the absence of institutionalized efforts to carry out empirical research to evaluate the efficacy of the urban land lease holding policy.

As a matter of fact, the various regions have made series of unilateral efforts to modify the regulations they issued for its implementation in their respective regions, albeit some modification was incorporated in the national proclamation in recent years in connection with a study commissioned on the subject by the Addis Ababa City Administration.

On the other hand, what ever type of institutionalized support was rendered within the urban development sector, it invariably took the form of direct relationships between the different tiers of government - federal, regional, zonal and municipal - hence resulted in the wholesale neglect of the private sector, CBOs, NGOs, which are the major stake-holders of urban development, particularly at the grassroots level.

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1.8     The way forward

Certain basically urban polices (such as the urban land lease holding policy) already exist and the problem does not seem to be their complete absence, but rather the lack of well-articulated and comprehensive urban development policy that has rendered efforts exerted by different stake-holders fragmented and uncoordinated.

Apart from the urban development policy which is the main focus of the present report, the MFAs has currently embarked upon a number of policy-related studies that pertain: urban planning (studies on urban planning manual, the federal planning law, and the participation of the private sector in the preparation of urban plans); a national grading system for Ethiopian urban centres; and national perspective for municipal reform that aims at defining the legal status, roles and relationships of municipalities. In addition, it is learnt that the MFAs has finalized the necessary preparations to commission a study on housing policy.

The formulation of a comprehensive urban development policy is therefore expected to enhance the efficacy and impact of these policies and strategies, which will otherwise be conceived and implemented on a piecemeal and incremental manner. The challenge ahead is therefore re-orienting existing urban oriented policies and drafting new ones for issues of urban development which existing policies do not address.

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1.9     Key Organizing Principles for the Process of Policy Formulation

The following points which are in the main extracted from the above review are listed out as key 
points to which the envisaged study should consider as key organizing principles:

·        The need to see UDP as an expression of the commitment of the government towards 
the realization of sustainable urban-rural integrated development in a multi-sector and 

      multi-actor environment;

·        The need to clearly delimit the scope of the study vis-à-vis the policy- strategy – 

     program - project continuum;

·        The need to understand the special features of urban development policy (UDP) as a 

      cross-cutting issue(=>coordination, at the spatial level, of multi-sectoral and 
cross-sectoral issues);

·        The need to follow a strategic approach in urban policy analysis 
(=>prioritisation of policy-related problems and phased-approach).

·        The need to consider the achievement of a sustainable urban development as
 the main goal of UDP (=> the physical, economic and social pillars of UDP);

·        The need to view the urbanization process as a potential for development 

      (not a threat), to be harnessed by enabling policies;

·        The need to see policy formulation as a continuous and iterative processes, 

      not a static and  one-go activity;

·        The need to give a heed to existing institutional gaps in urban policy formulation

    , implementation  and evaluation (=>capacity building for urban policy analysis); and

·        The need to understand the special features of urban policy analysis under a federal 

      arrangement (=> policy issues to be addressed at the federal, regional, metropolitan 

    and municipal levels).  

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2. Objectives, Scope and Coverage of the Study and Methodological Issues

2.1     Objectives of the policy design process

 General objectives:

As outlined in the TOR of the study, the broad objectives of the policy are directed at facilitating and enhancing the role and contributions of urban centers in national socio-economic development that would enable improvement of the living condition of urban residents.

Specific objectives:

Specific objectives of the policy could be tentatively outlined to include the following: 

• To bring about sustainable and spatially balanced urban development;
• To mitigate deep rooted and multifaceted urban problems;
• To improve the income and living standards of urban residents.
• To narrow gaps in development between urban and rural areas;
• To strengthen the contribution of urban centers to rural development;
• To promote the growth and development of livable urban centers;
• To strengthen the economic base of urban centers;
• To ensure efficient delivery of urban infrastructure and services;
• To enhance urban productivity and competitiveness;
• To promote good governance in urban areas;
• To ensure the vertical and/or horizontal coordination of urban based activities;
• To uplift the urban management capacity of municipalities; and
• To ameliorate the institutional arrangement for urban development.

   
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 2.2     Scope and coverage of the overall study

As urban development has multifaceted dimensions, the scope and coverage of the policy design exercise is expected to encompass various issues that are central to overall socio-economic development. Policy issues dealing with the question of urban development are therefore anticipated to touch various variables.

Needless to mention, the formulation of a given policy is justified by the need to intervene in the status quo. Accordingly, in order to streamline the policy design in its proper perspective, the study will mainly focus on assessing the baseline conditions on a multitude of cross-sectoral variables that will have both direct and indirect influences on national development, while focusing its rigor of review and analysis to existing policy frameworks at the international, federal, regional and local levels. Given the urgency to develop an integrated policy instrument that would guide national urban development and heeding to the fact that the policy design process is a dynamic and iterative process, rapid appraisal methodologies will be extensively employed in the collection of relevant data and information from different sources.

   
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2.3     Strategic considerations in the Policy Design Process

The urban development policy to be formulated is expected to be both comprehensive and at the same time focus on key issues, so that the study would meet its stated objectives. In this regard it will be imperative to take in to account the following broad policy perspectives outlined by the Federal Government concerning the urban development sector.  

1. Ensuring the legal personality of cities which constitutes the recognition of cities as legitimate and legally empowered entities with independent organizational and self administration status, decentralized and sustainable management that aim at ensuring autonomy to manage local revenue and expenditures, personnel and services with subsequent local capacity building within their jurisdiction. Recognizing cities as entities accountable to their constituents/electorate and also accountable to the federal and regional bodies on matters related to policies and legal issues. And finally recognizing cities as entities that aim at ensuring transparency, accountability and participation.

2. Ensuring planned urban development which constitute the recognition of cities as entities that strive to harmonize physical planning with development planning along with legitimate and efficient implementing capacity which is process based and iterative (i.e., subject to regular review and revision).  

3. Ensuring plan based administration of urban land under the leasehold system, which constitutes the recognition of cities as entities that strive towards achieving effective urban land valuation systems based on land use plans that also aim at accelerating development and living standards of the population.

4. Ensuring a sustained improvement in the quality and coverage of infrastructure facilities Along with government's key role, cities should strive to maximize the participation of the private sector and the community to shoulder their respective roles. They should also strive to establish an urban development fund. They should also strive to attain a strong coordinating role without compromising the roles of other institutions involved in infrastructure provision.

5. Ensuring a sustained improvement in the quality and coverage of service provision which constitute the recognition of government as a key player and cities as entities that strive to adopt implementation principles of cost recovery, cost sharing and matching funds, boost the participation of the private sector through the provision of policy support as well as incentives in tax and supply of infrastructure, adapt to the principles of transparency, accountability, efficiency and effectiveness in service delivery, and ensure full service coverage of inhabitants.

6. Ensuring housing supply which constitute enhancing the enabling role of the government and cities to promote residential development for residents to own or rent residential houses by raising /improving their income through accelerated and equitable development, promote the private sector to participate and play a key role in the housing delivery process, enhancing the role of the public in the supply of low cost housing for the poor at affordable rentals or provide house ownership through long-term mortgage. Cities should also strive to develop and adapt building, codes and implementation regulations comprising standards and norms for the design of houses ensure its proper observance to maximize the quality and safety standards and concurrently creating the capacity of private and the public actors in the housing delivery process, design strategies that promote the participation of housing coop's in the housing development process, allocating funds for the union of housing coops.

7. Reducing unemployment and poverty which constitute the recognition of cities as entities that should strive to speed up integrated urban rural development, strengthen the role of the private sector, promote and expand labor intensive manufacturing and service industries, expand the provision of educational and vocational training, promote credit facilities for the young and the poor (low income families), and promote and expand small and micro enterprises.

8. Ensuring sustainable environmental management which constitutes the recognition of cities as entities that strive to work towards the reduction of poverty and promotion of environmental awareness, towards minimizing serious causes and consequences that endanger the environment, towards the promotion of education for the development of science and technology, towards designing and developing environmental friendly development projects, towards reducing environmental hazards through effective environmental regulation, to the promotion of an environmental regulatory framework and provision of support to technical and institutional/organizational requisites and developing environmental awareness and culture, towards ensuring that an exemplary and leading role is played by the government and ensuring the participation of the private sector in environmental protection, selecting and adapting best practices, experiences and technologies suitable for environmental protection);

9. Ensuring the promotion of an effective financial management system that constitutes the recognition of cities as entities that work to develop rules and practices that promote and facilitate broad based, modern and democratic practices for generating and collecting revenues; strive to accelerate existing development processes; capacitate and enable them to finance their local development activities from local resources, enable them to make effective use of local budgets following established policies and strategies; strive to work and follow the principles and directions of prioritization and cost effectiveness; strive towards ensuring a democratic budget allocation on the basis of cost effectiveness and sustainable/accelerated development; to enable cities to independently administer their local revenue and expenditure based on  their financial performance; entitling them to get loans and subsidies; and to develop a system of collective resource utilization systems that facilitates mutual support among cities and support to cities from federal and regional states.

10. Ensuring effective rural urban linkages which constitutes the promotion of the development of cities as market and exchange centers, industrial and service centers, as centers of supply and exchange for necessary agricultural goods and services to their rural counterparts, centers for job opportunities and trained personnel that enables them to play their role in speeding up the over all national and regional development process; to follow directions that facilitate the comparative advantage of towns in securing basic agricultural inputs for their industries the production of which demands the creation of possibilities for increasing the income of rural farming households that stimulates the creation of  a wider demand for marketing urban industrial goods and services; Mitigating in migration of rural population in to urban areas by measures that allow a fast and sustained  increase in rural incomes, expansion and improvement of rural infrastructure services, expansion of off-farm activities in rural areas, and concurrently cities should develop proactive mechanisms that promotes a sustained infrastructure development, housing supply and job opportunities and skills development and training to accommodate the inevitable process of in migration in to urban areas.

11. Ensuring the creation of an effective coordination of the roles of different actors in urban development, which constitutes the recognition of cities as entities that strive to design and develop a strategy that allows a distinct definition of roles for different urban development actors to realize effective coordination of urban development programs and projects.

12. Ensuring a stable, peaceful and safe urban life which constitutes the recognition of cities as entities that strive to work towards a sustained poverty reduction which helps to bring about a stable and peaceful urban life, towards the creating and multiplying job opportunities, and towards promotion of democracy and the rule of law and crime prevention activities.

   
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2.4     Methodological and procedural issues

Key urban development issues that warrant policy interventions are to be identified by:

·        Conducting desk review of secondary materials from public and private sources that document the multitude of problems besetting the urban development sector and/or deal with local and international experiences and practices;

·        Arranging consultation forums with major stakeholders and policy dialogues with professionals of immense policy design background and experience; and

·        Launching rapid appraisal missions to selected regional states to collect critical views on the policy design process.

Accordingly, maximum effort will be exerted to ensure coordination and integration of project activities with other ongoing studies as well as the various policies, rules, regulations, and laws that are currently in use. In particular, maximum attention will be given to ensure the integration between the present study and other studies commissioned by the MFAs such as:  

·        The National Policy Framework for Grading and Defining Urban Centers (awaiting formal endorsement by the Federal Government);

·        The Federal Urban Planning Law and Building Code (about to be completed);

·        The Federal Housing Policy (preparatory activities are finalized to commission the study);

·        The Federal Urban Planning Manual/Guideline (ongoing); 

·        The Federal Urban Land Lease Policy (under implementation, and recently modified); and

·        The Federal Urban Capacity Building Strategies (in practice).  

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3.5 Work Plan for the Urban Development Policy Design Process

3.6     Institutional arrangement

The National Urban Planning Institute (the Consultant) has established a separate Project Office – Urban Development Policy Design Project Office (UDPDP) - and appointed a Project Coordinator. The project office anticipates mobilizing not less than thirty-eight senior experts from NUPI and other partner institutions like AAU, the Addis Ababa City Government, the Ministry of Finance and Economic Development, and other relevant institutions as well as freelance consultants. The office has also already identified the needed logistical support for the project such as office space, vehicles and computing facilities. In addition, a request is already placed to the competent authorities to establish a website which is expected to go a long way interms of making the policy design process both transparent and interactive.

Key officials of the institute including the Project Coordinator will be responsible for the overall coordination of the various project activities, and an Internal Policy Review Team (IPRT) will be designated for the second phase of the project. The IPRT will be entrusted with the responsibilities of reviewing the substantive aspects of the various studies to be completed during Phase I, with the view of integrating and consolidating their findings and conclusions (the overall process) as per the organizing principles outlined above. In addition, the IPRT will be responsible for organizing and staging consultative meetings and workshops. It will also be responsible for reporting in meetings to be organized by the Client (i.e., with steering and/or technical committees to be established by the Ministry) representing the project, and will take full responsibility for the drafting of a comprehensive urban development policy. The members of this team are tentatively suggested to comprise the General and Deputy General Managers of the National Urban Planning Institute, the Policy Design Project Coordinator and four other senior experts who will be involved in the policy design process.

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3.7     Mobilization and assignment of resource persons

The project office has worked out a temporary assignment of specialists (both internal and external) as per the regrouping of tasks mentioned under 3.1 above and based on assessment of the academic and research background of the respective specialists. The project office has taken measures to ensure that the various specialists are well acquainted with the contents of the TOR, hence the task at hand, whereby the Minster for Federal Affairs has given directives on major issues to which the consultant should give a heed. The project office is also laying the necessary ground for the possibility of enlisting the services of additional specialists who had played key roles in the formulation of the various sectoral policies and strategies as well as to work with key personnel of the Ministry of Federal Affairs as a built-in strategy to contribute to the capacity building in the area of urban policy analysis.