A startup city in Kenya tries to tackle Africa’s problem of urbanizing while poor

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KIAMBO, Kenya (AP) — When you turn into Tatu City on the outskirts of Kenya’s capital, Nairobi, you’ll feel like you’re entering a different world.

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Even the country’s most reckless drivers are taking turns, slowing to a crawl and not throwing rubbish out the window – thanks to CCTV cameras and tough penalties for speeding and littering.

For the 5,000 people who have moved to Tatu, a “start-up city” that welcomed its first residents four years ago, strict adherence to such rules makes the place attractive.

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“Tatu has more law and order than other places,” said Valerie Akoko, a digital content creator who moved here two years ago. “I’ve never seen such a dirty Tatu City.”

Located on 5,000 acres, Tatu City aspires to be what its name suggests: a privately owned city, with a population that its designers hope will eventually reach 250,000. It is already home to 88 companies employing 15,000 people. These companies include CCI Global, which operates a 5,000-seat call center, and Zhende Medical, a Chinese manufacturer of medical supplies.

There are similar projects all over the world. But in sub-Saharan Africa, proponents hope that new city developments can address the continent’s urbanization conundrum: while the growth of cities has led to a decline in poverty elsewhere, the region has largely been an exception.

History suggests that as people move to cities, productivity increases, wages rise, exports grow, and a country becomes richer. But in Africa, urbanization has rarely unleashed such an economic transformation.

In theory, Africa should prosper. The continent’s urban population is expected to grow by 900 million by 2050, according to the United Nations, more than the current urban population of Europe and North America combined.

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But Sub-Saharan Africa is urbanizing even though it remains poor.

“Towns and cities in Africa today simply lack the tax base necessary to invest in the urban infrastructure needed to accommodate the tsunami of people being added to their ranks in a short period of time,” said Curtis Lockhart, director of the Africa Urban Lab. Research center at the African School of Economics in Zanzibar.

Weak property rights and political tensions can exacerbate the problem.

Even Tatu City has battled with politically connected Kenyan politicians and businessmen. In 2018, the London Court of International Arbitration ruled in favor of the multinational owner of the project, Rendevour, in a dispute with its former Kenyan partners, including the former central bank governor. The dispute delayed the project’s development for several years.

Last year, the president of the city of Tatu in Kenya, Preston Mendenhall, took the unusual step of accusing the governor of the county where the project is located of extortion, saying he demanded $33 million worth of land in exchange for approval of its updated master plan. The governor denied this and sued the city of Tatu and Mendenhall for defamation. No ruling has been made.

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However, the case for building new cities, complete with new infrastructure, remains compelling for some. The Charter Cities Institute, a Washington-based nonprofit, says such projects, if done right, could drive growth, create jobs, and “lift tens of millions of people out of poverty.” The institute views Tatu City as a model.

However, building new cities is difficult. Africa is full of failed projects.

The handful have shown promise. The Angolan city of Quilamba, whose construction began in 2002, is arguably the most successful, with a population of more than 130,000. It was built by CITIC, a Chinese state-owned company, but owned by the Angolan government.

Experts believe there are about a dozen new city projects – from Zanzibar to Zambia – underway in Africa, which have a chance of emulating Quillamba. Of these, Tatu is the furthest away, with 26,400 people already living, working or studying there.

Experts agree that the private sector must play a role in urbanization in Africa, saying that African countries are too financially constrained to fill the investment gap on their own. Rendeavour, a private company with a multibillion-dollar balance sheet, has enough resources to make a difference.

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But leaving the task of building cities to the private sector alone can cause problems, for example by exacerbating inequality. The average price of property in Eko Atlantic, a new city development on the outskirts of Lagos, is $415,000, far beyond the means of most Nigerians.

“Emerging cities can serve as centers of innovation and relieve pressure on congested urban centres,” said Anacladia Rosbach, Executive Director of the United Nations Human Settlements Programme, or UN-Habitat. “However, to be impactful, it must prioritize inclusivity, affordability and integration with existing urban areas, ensuring that they serve all socio-economic groups rather than becoming isolated enclaves for elites.”

A one-bedroom apartment in Tatu City sells for $45,500, an amount still beyond the means of most Kenyans, but within the reach of some in the emerging middle class. Kenya’s GDP per capita will reach $1,961 in 2023, according to the World Bank.

The development is cooperating with the Kenyan government, which has designated Tatu City as a special economic zone. Experts say this means that companies that set up there are eligible for tax benefits and other incentives, making it a model of public-private partnership.

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Tatu City also attracts businesses and residents thanks to its transparent governance structure and services that are often lacking elsewhere in Kenya, including its own water and power supply network. It is subject to national law, but can set its own rules on matters such as traffic and the type of homes that can be built, with all plans requiring Tatu administration approval.

“If you look at the infrastructure, if you look at the facilities, if you look at the controls, if you look at the security, it’s one of the best places,” said Sylvester Njuguna, who lives and owns a restaurant there.

Unlike many emerging cities built far from urban centers, Tatu City is located 12 miles (19 kilometers) north of Nairobi, close enough to join its labor markets.

According to Lockhart of the Africa Urban Lab, new city projects usually succeed if they are close enough to a major urban center and include a high-quality anchor tenant — CCI Global in the case of Tattoo City — and good schools. It should operate under effective management and respond to market demand.

Tatu City meets these criteria, and unlike many African city projects that are lavishly designed, it has grown organically like Rendevor’s other city projects in Ghana, Nigeria, Zambia and Congo, according to Mendenhall.

“We build what the market needs,” he added. “We don’t put all the infrastructure in place on day one.”

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