Rise in urban population a good sign, say experts

The number of Kenyans living in urban areas has increased by 26 per cent from 9.9 million in 1999 to 12.5 million in 2009, a trend economists say is inevitable but not ominous.

Although the number of people living in urban areas has gone up, the urban population as a percentage of the country total has declined from 34.5 per cent a decade ago to 32.4 per cent in 2009.

There were 38.6 million people counted in last year’s Population and Housing Census, representing a 35 per cent increase from (28.7 million) in the 1999 census.

Although the urban population of the capital Nairobi and Mombasa, the second largest town, has been on the decline over the last three decades, the numbers rose over the last decade.

While both cities accounted for 70 per cent of the entire urban population in 1969, their combined proportionate share dropped to 29 per cent in 1999 but rose to 32 per cent in 2009.

Granted that urbanisation is inevitable, the main challenge at present is not to slow the in-migration down but to learn how to deal with rapid growth, according to UN-Habitat.

The lead World Bank economist in Nairobi Wolfgang Fengler said that population growth and urbanisation go together, noting that economic development is closely correlated to urbanisation.

“No country has ever reached high income levels with low urbanisation,” said Mr Fengler. “Population growth increases density and, together with rural-urban migration, creates higher urban agglomeration.”

And this is critical to achieving sustained growth because large urban centres allow for innovation and increased economies of scale. Companies can produce goods in larger numbers and more cheaply, serving a larger number of low-income customers, he said.

Bottom of the pyramid

Mr Fengler said there are companies in Kenya that have been benefiting from increasing population growth and density by targeting the large numbers of lower and lower-middle income groups - the “bottom of the pyramid”.

“Their business model is viable because they can serve a multi-million customer base which has increased by 25 per cent over the last 10 years and which continues to grow rapidly,” he said.

University of Nairobi economics lecturer Gerishon Ikiara said physical growth of urban areas is good for the economy because it could resolve concerns such as subdivision of agricultural land and large family sizes.

“Even the issue of land subdivision we are so much concerned about would be solved by urbanisation,” he told Sunday Nation.

“In Europe, with urbanisation people moved away from agriculture, and their shambas became bigger. Even for us the shamba size will start increasing if we grow manufacturing and service sectors.”