I 2020

POLICY BRIEF Developing District Findings from a Multidimensional Analysis

SUMMARY

Secondary cities matter a lot in the provision of a more balanced sustainable urban growth for the country. Stimulating urbanisation through the secondary city agenda is expected to create jobs and reduce poverty. These cities have the potential to act as poles of growth and relieve the pressure on , which currently dominates the Rwandan economy. With an eye on government target to achieve an urbanisation rate of 35% by 2024, IPAR- has conducted an in-depth analysis of the opportunities and challenges which are faced by secondary cities. This policy brief aims at providing information and guiding deliberations on the development and strengthening of Muhanga, a district of 318,965 inhabitants, located in the Southern Province. It sets out an approach of workforce development, strategic planning and investments to create bottom-up growth and support for opportunity sectors to achieve this goal. Urbanised at a rate of 16% but with a high reliance on agriculture and service sectors, economic policy and infrastructure planning needs to be tailored to the urge to increase the market size of Muhanga. This can be done through rural-urban linkages and promoting urban density building on its strategic position as a hub for Kigali and the province and developing latent extractive and light manufacturing industries. Policy Brief 1 B. About Muhanga AboutMuhanga B. cities The visionfor secondary A. Introduction: IPAR -2020 6 5 4 3 2 1 age) (working the of 87% district, Muhanga In to increase by 38%to reach 286,000in2031. 2014 to 175,000 in 2017 (EICV5) and it is projected in units 15,000 from increased has Employment productivity. low experiencing sector the of part 81% of its population rely on agriculture, with a big that fact the to due are rates high These district. 33% and 13% is center urban its in density of 647.7 people per Km². The poverty rate 318,965 at estimated is Southern the population Its Kigali. in from km 50 only at Province located district a is Muhanga geography of the country, but also to reduce the reduce to also country, but the of geography cities secondary were six selected not only to transform the economic These urbanisation. accelerate and their promote to order in Muhanga, and Nyagatare, Rusizi, Huye, Musanze, Rubavu, namely cities, secondary six for plan master new a of development the others, among comprise, These place. in put been have urbanisation guide to pillars key development, sustainable towards 2024 (NST-1), which is the national leading strategy 2017- programme Government years 7 the From human and areas urban settlements for local economic growth of through reinforcement whilst development a resources sustainable natural promoting its and of use efficient tomanagement lead to expected also activities is asIt off-farm such sectors productive of the local residents through the creation of more conditions socio-economic increase to expected 18%. current the from by 2024, 35% its reach to set target urbanisation has country the end, this To future. the for urbanisation its master and plan to measures The Government of Rwanda has put in place strong EICV5,authors calculations. http://muhanga.gov.rw/index.php?id=72. National Strategy for Transformation, Government of Rwanda. TheWorld Bank,Future Drivers ofGrowth, Summary. 2019P.31. Republic ofRwanda, 2017. 7Years Government Programme: National Strategy for Transformation (NST 1),2017– 2024. Data presented inthisbrief iscoming from IPAR-Rwanda survey conducted March-April in specified. 2019,unlessotherwise 2 This urbanisation trajectory is trajectory urbanisation This 5 people with population with people 6 in the overall the in 4 . 3 . offers opportunities for it to act as a logistics hub, a logistics offers as act to it opportunities for centre of the country and close proximity to Kigali in employment the of in location strategic However,its proportion agriculture. high a and size to consider the reality of its relatively small market needs Muhanga of development the for Planning to create more jobs. need an urgent is there 2031, by its population doubling potentially grow, to continues city the As (EICV5). traansport in 3% and construction and distributed in 3% trade, in 7% agriculture, in 76% follows in employment as is population secondary cities, Section B provides general B provides Section cities, secondary for vison Government’s the described briefly A Section sections: five up made is brief policy This and itsspecificopportunities. need to be tailored to each city’s economic reality investments these grow, to city secondary each fororder In region. the in marketsRwandaand in local with connections developing and linkages rural-urban strengthening mobility, and density increasing market access through improving urban and attract foreign direct investment (FDI) and (iii) environmentenabling to local support businesses services an creating (ii) force, work productive more health a for and education through capital human developing (i) growth: cities’ secondary IPAR-Rwanda has identified three key priorities for In order to unlock the potential of secondary cities, pressure onKigali, thecountry’s economic hub. policy recommendations for each category of category challenges. each for recommendations policy provides E Section and city the categories for challenges of three D presents Section study, the for information the of Cisabout sources and methodology Section Muhanga, of characteristics 1

Policy Brief 2 D. Methodology C. IPAR -2020 Challenges faced by Muhangadistrict and sources ofinformation hs oiy re bid o te nlss of analysis by the data collected on quantitative builds and qualitative brief policy This and mining in working population of 1% under sectors. 12 with underexploited,However,currently of are they out 11 in found cassiterite are laterite, wolfram, and as such resources natural and soil clay sand, particular naturalresources,in Furthermore, centre. manufacturing a time, over building on employment growth in the sector and, eety te itit eitrd ucs in all levels at success attainment registered educational increasing District the Recently, labour aspoororvery poor. very poor and 47% of them also reported talented businesses of or poor as skills management identified 55% surveyed businesses: by recognized addition in value well are obstacles These manufacturing. and through extractives the sectors as in such investment workforce larger-scale productive for the needed form and business These own their sustain and start the others. to workers of ability reduce the problems educational than longer-term better performing sector Nyamabuye Disparities with district the deficit. within exist skills large a which demonstrates school, have primary heads completed maximum household at the of 66% Currently, Human capital future drivers ofdevelopment inthedistrict. key onthe of views people business the and citizens (iii) informants, and, from district of businesses the over a set all of expectations and characteristics current different (ii) district, the the of sectors from households representative of set a socio- of preferences the current and status the economic (i) aspects: three outline to cities secondary for process planning master the of part as commissioned was analysis This 2019. March in District Muhanga across IPAR-Rwanda 2012, and a number of other research works on works research other of number a and 2012, of census housing and population national fourth the and survey EICV5 from (DDS: datasets 2018-2024), Strategy Development District Muhanga documents Different policy, urbanisation national the reviewed: others. were among owners business high-profile and representatives society Federation (PSF) members, technical sector directors, private civil leaders, district include latter The businesses interviewed. 201 informants key and and surveyed were households 990 total, In with logistics andmanufacturing. linkages strengthen and foreign (FDI), investmentand attract direct sector mining artisanal the to develop opportunity an offers which quarry, posts, with 93% of the population living within 10km from a health center. living However, population some health the of 93% health with 19 posts, and sectors 12 the in centers 16 health Hospital), the (including hospitals from 4 has benefitted has now district the and infrastructure in investment sector health The schools according to the2018district report. primary in 7.2% was which rate dropout school the of rain.rise the to contributed have factors heavy These during impossible learning making classrooms old and learning, and teaching in ICT as the lack of electricity, which hampers the use of such schools some in infrastructure poor and 54) (1: pupil to teacher of ratio low a include These district. the across challenges faces still provision However, education institution. learning higher a Kabgayi, Catholique Institut and colleges TVET 19 from primary to tertiary levels with the creation of urbanisation. Policy Brief 3 IPAR -2020 n h ct cne i dme i a unmanaged an in dumped is center city the in central sewerage system: the waste or thatsite disposal wasteis solid collected no is Currently,there the traditional stretcher, whichisnot efficient. is sectors Rongi and Nyabinoni in patients carry to used transport of mode common the Finally, town. Muhanga in services health seek to ways which sectors, both for km travel50 mountainous,over very are from Rongi people and of Kabacuzi 0.6% Nyabinoni, that found analysis The Kabgayi.transferredof hospitalwhen main the to treatment medical seeking distances long travel people addition, In buildings. own their have not do they since offices cell from working are posts A high production cost is another challenge that challenge another is cost production high A the and process Special Economic Zone (SEZ) hasbeenset up. this improved currently has introduction of new systems for awarding permits However,the expensive. and lengthy is investors and landowners between transactions direct or expropriation government through either land, ofland ease being poor or very poor). The process to purchase as (ranked identified issues main the of one firms as acquisition of 72% environmental need, business the to reference With jobs andincrease income. create to potential their back holding expanding, in challenges Such from firms domestic prevents financing accessing capital. finance to source primary the as savings household using reported Credit and Cooperatives - SACCO), and Saving 33% of the businesses for 24% to up (rising 18%, to primary the as source loans of capital, incurring interest rates from bank 17% commercial using reported businesses these of (41%) percent one to access Forty- growth. greatestto obstacle the identified as finance surveyed businesses The Business environment straining theexisting the infrastructure. as increase will population increases, particularly in risk Muhanga city, This businesses. and infrastructure residents of prospective to city the attractiveness of the lack undermines and risk health This public a creates away. 10km site create an urban sprawl. This is particularly the particularly is This sprawl. urban an create to potential a and power purchasing individuals’ for job creation. Unaffordable housing also affects opportunities creating supply, labour and power purchasingconcentrated from benefit businesses which create agglomeration effects through which environments urban dense promoting of process the undermines In housing businesses. unaffordable of 67% addition, by poor very or poor as ratedwas It small. is Muhanga marketof sizeThe Market accessandMarket size respectively withinMuhanga District. for electricity and water are 2636 Frw and 815 Frw household per cost average monthly the Overall, bills. water of increase an implies which volume, same the for Frw 9,000 paying currently are they water consumption within a for range of 0 to Frw 3m3 but 3,000 pay to used people was that it reported instance, For high. too as electricity for water and the cost/prices estimating utilities of cost the with satisfaction of level low a to points survey The District. Muhanga in investors affects services. services. turn lowers purchasing power for other goods and market,incomehindering hence growth, in which and time. This situation holds back the size of local labour of cost the cover cannot which prices low sold at are they where markets to and commodities goods their of transportation the on much spend citizens situation, this to Due areas. rural in particularly goods, marketstheir forthe to and employment to access limited have people that rapid of mode transport within primary the city currently The is motorcycles. work. This means to walk is 85% and it use surveyed transport people 2% only inadequate: public Furthermore, purchasing their drains power. and city of periphery the in settlements informal This into saving. people of pushes levels current their given years 86 them take would house a buying their and income of 57% swallows Rent month. per up toRWF 40,000 earning city Muhanga in population of the 60% constitute who poorest the for case Policy Brief 4 E. Policy IPAR -2020 recommendations 1. are expected to unlockMuhanga’s potential: central local Thelevels. of at three of recommendationsresponsibilities delineation and following sets as clear as well government across prioritization require These instruments. financial and structures Developing secondary cities involves a number of stakeholders and has implications for the governance opportunities ofMuhanga district. and challenges to unique the with accordance in challenges needs createa these addressing to approach holistic Governmenttake a capital, The human markets. the ready toimprove access to promote need and is a environment business conducive there in Muhanga growth stimulate to order In o norg te eeomn o dne and dense facilitative a require will of This housing. affordable development the encourage to stimulate measures taking should through effects agglomeration Government the Secondly, ii. i. in thedistrict, theGovernment should: and international businesses. Firstly, domestic given the reliance on for agriculture investment unlock opportunities to expected bottom- is a approach throughup size market the Increasing 2. construction materials. agro- in particularly processingprocessing and localextractives of and mining manufacturing, storage, light and and logistics include Opportunity sectors investment. private include which could services, and industry in on sectors growth focused funding increased through offered The FDI. centres/schools as well as vocational programmes and growth order TVET of number the increase Governmentshould business in stimulate to productivity to needs and Government entrepreneurship the increase to training skills in investment district, prioritise workforce the the of in deficit skills large the Given Enhancing technical, vocational and vocational technical, Enhancing n Kyma hc ae h fast-growing the are trading centers. which Kiyumba and tradingthe in Centresalso but city Kibangu of through Muhanga in just not facilities, market as well linkages as transport, public and roads in investment urban-rural Develop to, inputs, access timely and affordable, promoting and services extension strengthening irrigation, Increase agricultural productivity by improving Increasing Muhanga market size training programs Thirdly, Muhanga is strategically placed to act as act to placed strategically is MuhangaThirdly, for infrastructure households to develop. essential low-cost with land or credit subsidies for poor income groups, and/or creating providing investment, incentivizing sector locally-produced timber, private other steps: local for as including market materials, the as well developing and dense housing incentivizes affordable that regime planning o ped h rs truh public-private through risk the partnerships. spread opportunities to the extractives The explore infrastructure. should as sewerage Government and well landfill as and assets, warehousing further in Government investments strategic explore the should viable, commercially Where supply ofbetter energy power. in zone terms economic of infrastructure development special and, possibly, the of the expeditedevelopment would This credit. and access permits facilitate to incentives as well tax as sectors, strategic offer in should Government local The of processing extractives and and construction particularly materials. agro-processing, manufacturing, in light and storage, mining and logistics in sectors opportunity to policies industrial tailor should Government The 3. the manufacturing sector inthelonger-term. storage and sector,logistics the as for well hub as investment to strengthen Muhanga’s position as a road plan should Government the roads, feeder Alongside (DRC). Congo of Republic Democratic Kigali, regarding markets access in Burundi and and the province Southern the for hub economic an Promoting investment in opportunity sectors investment Promoting Kimihurura, KG 627 St, Building No.4 P.O Box 6005 Kigali-Rwanda Tel: (+250) 789099704