kigali- a policy narrative - world bank...kigali: a policy narrative abstract: in this policy...

Authored by:

Patricia Jones Lino Ferreira

University of Oxford

Sally Murray IGC, Rwanda

March 2016

Copyright © World Bank, 2016

Kigali- A Policy Narrative

Multi Donor Trust Fund for Sustainable Urban Development

KIGALI:

A POLICY NARRATIVE

ABSTRACT:

In this policy narrative, we examine the urban development of Kigali from its pre-colonial past to the present day. Our analysis covers both the spatial development of the city as well as its economic development. Special emphasis is given to the historical development of the city’s structure of governance as well as it land and housing markets. To carry out this analysis, we use a wide range of sources including satellite data, census data, and geo-referenced firm data.

*This paper is a part of a Global Research Program on Spatial Development of Cities, funded by the Multi Donor Trust Fund on Sustainable Urbanization of the World Bank and supported by the UK Department for International Development.

Patricia Jones

Lino Ferreira

University of Oxford

Sally Murray

IGC, Rwanda

March 2016

1

Contents

Kigali at a Glance ................................................................................................................................... 2

Pace and Magnitude of Urbanization .................................................................................... 2

City Layout ...................................................................................................................................... 3

Industrial and residential areas .............................................................................................. 5

Population and population density ....................................................................................... 5

Population Density ....................................................................................................................... 8

Why Cities Matter ......................................................................................................................... 8

Structure of the Urban Economy .......................................................................................... 10

The Benefits of Agglomeration .............................................................................................. 11

Regional concentration of industries .................................................................................. 14

References .................................................................................................................................................. 17

Governance ........................................................................................................................................... 19

2.1 Brief History ................................................................................................................................. 19

2.2 Centralized Governance ........................................................................................................... 23

References .................................................................................................................................................. 23

Land ......................................................................................................................................................... 24

3.1 Land Ownership .......................................................................................................................... 24

3.2 Land Disputes .............................................................................................................................. 24

3.3 Land Transfer ............................................................................................................................... 25

3.4 Land Regulations and Zoning ................................................................................................ 26

3.5 Mortgage Markets ...................................................................................................................... 26

3.6 Tenure Security ........................................................................................................................... 26

References .................................................................................................................................................. 29

Housing Markets ................................................................................................................................. 31

4.1 Informal Settlements ................................................................................................................. 31

4.2 Government Housing Schemes ............................................................................................. 31

References .................................................................................................................................................. 32

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Kigali at a Glance

Pace and Magnitude of Urbanization

Kigali is urbanizing fast. Between 1990 and 2010, its population increased more than

five-fold, growing from 219,000 to 1.2 million inhabitants (UN Population Division,

2015). As its population has increased, so has its spatial footprint (Figure 1-1). Satellite

imagery reveals that much of the city’s recent growth has taken place near the city’s

central business district (CBD) and airport area which lies to the east of the CBD.

FIGURE 1-1: GROWTH OF BUILT-UP LAND IN KIGAI SOURCE: BARUAH, 2016. While Kigali is growing fast, Rwanda is only about one-third of the way through its

urbanization process. This gives policy makers a window of opportunity to design new

policies which avoid the mistakes of the past. From global experience, we know that

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urbanization can bring large benefits to both workers and firms through productivity

gains associated with agglomeration economies. To date, however, the evidence suggests

that Nairobi is not taking full advantage of these benefits.

In this policy narrative, we examine the major policies which have influenced Rwanda’s

economic and spatial development. Special emphasis is given to the historical

development of the city’s governance structure as well as its land and housing markets.

City Layout

Kigali is comprised of three districts: Gasabo in the north, Nyarugenge in the south-west

and Kicukiro in the south-east. Districts are divided into sectors (there are 35 sectors in

total) which in turn are divided into cells (161 in total). Cells are divided into 1,061

villages, the lowest administrative level.1 Figure 1-2 shows the districts and sectors of the

city.

1 These numbers were obtained from the website of the City of Kigali.

FIGURE 1-2: DISTRICTS, SECTORS, & THE CBD IN KIGALI

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In Figure 1-2, the Central Business District (CBD) is identified by a star. It is located in the

Nyarugenge district, close to the frontier of this district with the Gasabo and Kicukiro

districts.2

Kigali is a monocentric city centred around the CBD. Figure 1-3 shows the population

density (total population divided by area in square kilometers) for the different cells of

the city. The cells with the highest population density are located immediately around the

CBD in Kiyovu.3 Density then decreases as we move away from the CBD.

2 For the purpose of this analysis we defined the CBD as the downtown area where administrative buildings such as the Ministry of Finance and Economic Planning or the National Bank of Rwanda are located. The CBD is treated as the city centre in the analysis of distance to the centre developed below. 3 Data on density, as well as all other figures and maps included in this document unless otherwise stated, were obtained from a dataset containing information from the 2012 Population and Housing Census which was kindly provided by the National Institute of Statistics of Rwanda.

FIGURE 1-3: POPULATION DENSITY IN DIFFERENT CELLS IN KIGALI

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The CBD is the most important commercial node in the city. Commercial activities extend

eastwards from the city center towards the Kigali International Airport along the

Boulevard de L’Umuganda. There are commercial clusters around the roundabout in the

CBD, Gishushu, Gisimenti and the airport west junction. There are other commercial

nodes in residential areas (City of Kigali, 2016).

Industrial and residential areas

The largest industrial node in the city is located in Gikondo, between the CBD and the

airport. The City of Kigali, the administrative organ of the city, is currently in the process

of relocating some industries to the Kigali Free Trade Zone, an area which lies to the north

of the airport (City of Kigali, 2016).

Residential areas are located in 17 different sectors. Most of the residential nodes are

located around the CBD and constitute unplanned, high-density areas. There are also

planned residential areas with lower densities, some of which are located in the Gasabo

district along the east-west regional road (City of Kigali, 2016).

Population and population density

In 2014, Kigali had a population of approximately 1.223 million people, making up 10.8%

of Rwanda’s total population (NISR, 2014). This marks an increase of almost 8% from

2012, when its population was estimated at 1,132,686 according to the most recent

Population and Housing Census. Between 2002 and 2012, the city’s average annual

growth rate was 4%, making it one of the fastest growing cities in Africa (NISR, 2014).

The average population density across the city is 1,433 people/km2. Of the three districts,

Nyarugenge, where the CBD is located, has the highest density with 1,942 people/km2. It

is followed by Kicukiro with 1,812 and Gasabo with 1,129. The median village has a

population density of 2,611 people/km2. As noted above, popualation density is is

highest in the areas that surround the CBD. Figure 1-4 below shows the centre of the city

at a larger scale, now with village rather than cell boundaries. We can observe the same

pattern as in Figure 1-3 that the areas with the highest population density are located

mainly to the west and south of the CBD. Similarly, population density declines gradually

as we move away from the CBD.

The village with the highest density is Inyamibwa in the Kimihurura sector in Gasabo.

This village is visible in the map above and has a density of 61,334 people/km2. Among

the sectors, Gitega, immediately to the west of Nyarugenge, has the highest density with

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23,996 people/km2. Nyarugenge (where the CBD is located) has a density of 4,844

people/km2 while Muhima, just north of Nyarugenge, has a density of 8,594 people/km2.

Figure 1-5 below shows the density gradient relative to the city centre (which we equate

to the CBD) for Kigali. The gradient is in line with the density maps shown above: density

is highest—not at the CBD itself— but a relatively short distance (around 2km) from it.

At 0.5km from the centre, population density is 1,052 people/km2. This increases to 4,679

at 1km, then to 10,177 at 1.5km, and peaks at 10,635 at 2km from the centre. It then

decreases more or less uniformly as distance from the centre increases, although there

are several local peaks. The most pronounced of these peaks occurs at 4.5km, where the

density is 5,448 people/km2.

FIGURE 1-4: POPULATION DENSITY AT THE VILLAGE LEVEL IN THE CENTRE OF KIGALI

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Table 1-1 below contains similar information. It shows the percentage of Kigali’s

population living further than a certain distance from the city centre (considered to

correspond to the CBD). In line with the graph above, which shows that the city centre is

sparsely populated, the great majority of people (99.03%) live further than 1km from the

centre. 76.12% live further than 3km, while more than 55% live further than 5km from

the CBD. Almost one quarter of the population (23.3%) live more than 10km away from

the centre. Finally, 10.78% live further than 15km and only a very small percentage

(1.64%) lives more than 20km away from the centre.4

TABLE 1-1: PERCENTAGE OF KIGALI’S POPULATION LIVING AT DIFFERENT DISTANCES FROM THE CBD

Percentage living further than…

Percentage

1km from the centre 99.03%






4 The village in the data which is furthest away from the centre (Gakenyeri in the Rusororo sector in the Gasabo district) is located at approximately 23.1km from it.

FIGURE 1-5: DENSITY GRADIENT RELATIVE TO THE CITY CENTRE (CBD) FOR KIGALI

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Population Density

Compared to Asian cities at comparable levels of economic development, Kigali is not a

dense city. As illustrated by Figure 1-6, its population density is about 9,800 people per

square kilometer (Demographia World Atlas, 2015) as compared to 15,300 in Manila and

32,400 in Mumbai (Demographia World Atlas, 2015). While recent research reveals that

larger cities have higher population density than smaller cities (Angel et al., 2011), Kigali

is actually smaller than most of its East African neighbors—like Nairobi, Dar es Salaam,

and Kampala— which have lower population density.

FIGURE 1-6: POPULATION DENSITY IN CITIES ACROSS THE WORLD SOURCE: DEMOGRAPHIA WORLD URBAN ATLAS (2015). NOTES: THE ESTIMATED POPULATION DENSITY FOR RWANDA IS SLIGHTLY HIGHER THAN OUR ESTIMATES RESULTING FROM A DIFFERENT DEFINITION OF THE URBAN EXTENT.

Why Cities Matter

Evidence from today’s developed countries and rapidly emerging economies shows that

urbanization is a source of dynamism that can lead to enhanced productivity and

increased economic integration. In fact, no country in the industrial age has achieved high

income status without urbanization, and there exists a strong association between per

700

3,800

3,900

4,100

4,300

4,400

5,500

5,900

6,000

6,100

6,300

6,600

7,400

7,500

7,700

8,500

9,800

9,800

11,800

12,300

14,800

15,300

18,100

18,300

19,900

32,400

43,500

Atlanta

Paris

Kampala

Durban

Accra

Jakarta

Khartoum

London

Ho Chi Minh City

Shanghai

Maputo

Luanda

Dar es Salaam

Sao Paulo

Addis Ababa

Nairobi

Colombo

Kigali

Casablanca

Lusaka

Abidjan

Manila

Dakar

Bogota

Kinshasa

Mumbai

Dhaka

Average Population Density (population/km2) in Selected Cities

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capita income and urbanization (Figure 1-7) and per capita income and export shares

(Figure 1-8). Well managed cities can “open the doors” to global markets in two ways: 1)

by creating productive environments which attract international investment and

increase economic efficiency; and 2) by creating livable environments which keep in

check rising urban costs that arise from increased densification.

FIGURE 1-7: URBANIZATION & DEVELOPMENT

SOURCE: AUTHORS’ CALCULATION BASED ON WDI DATA.

FIGURE 1-8: EXPORTS & DEVELOPMENT

History shows that the industrial development of modern economies almost always

begins in cities. The benefits of being around other people and other businesses are

typically labelled ‘agglomeration economies’ which is the starting point for

understanding how cities enhance productivity. The most basic agglomeration economy

is the reduction of transport costs for goods. If a supplier locates near customers, the costs

of shipping decline. In the early 1900s, New York and London were manufacturing

powerhouses, places where factories located to be close to customers and transport

infrastructure. And, in the late nineteenth century, four fifths of Chicago’s jobs were

compactly located within four miles of State and Maddison streets, close to where people

lived and infrastructure was located (Grover and Lall, 2015). Many of these benefits

increase with scale: towns and small cities cannot generate the same productive

advantages as larger cities. International evidence reveals that the elasticity of income

with respect to city population is between 3% and 8% (Rosenthal and Strange, 2004).

Each doubling of city size increases productivity by 5%.

Productivity gains are closely linked to urbanization through their ties to structural

transformation and industrialization. As countries urbanize, workers move from rural

areas to urban areas in search of higher paying and more productive jobs. Similarly,

entrepreneurs choose to locate their firms in cities where agglomeration economies

increase their productivity. Close spatial proximity has many benefits. Certain public

goods—like infrastructure and basic services—are cheaper to provide when populations

are large and densely packed together. Firms that are located near each other can share

suppliers which lower input costs. Thick labor markets reduce search costs as firms have

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a larger pool of workers to choose from whenever they need to hire additional labor. And

spatial proximity makes it easier for workers to share information and learn from each

other. International evidence shows that knowledge spillovers play a key role in

determining the productivity of successful cities. In US cities, for example, a 10% rise in

the percentage of workers with a college degree leads to a 22% rise in per capita

metropolitan product (Glaeser, 2011).

Structure of the Urban Economy

Africa’s failure to industrialize is a cause for concern because much of the growth in

developing countries since the 1980s has been linked to the expansion of industrial

production and high-technology exports (Nallari et al, 2012). All else equal, countries are

better off when they export goods that rich countries export (Hausman, Hwang, and

Rodrik, 2006). Fast growing countries, like China, have switched from exporting mainly

resource and agro-based products to exporting high-technology products like optical

devices, transport equipment, and white goods. As noted by Nallari et al (2012): the big

gainers in China “were exports of electronic and telecommunications products and office

equipment, the shares of which grew from 5.4 percent in 1985 to more than one-third in

2006.” Other Southeast Asian countries experienced a very similar transition in their

export-mix during the last decade (Table 1-2). By contrast, the exports of Rwanda—like

most other African countries—remain largely resource and agro-based (Table 1-3).

TABLE 1- 2: TOP TEN COMMODITIES EXPORTED BY ASIA IN TERMS OF VALUE, 2000-2010

Commodity Trade value, billion USD Electrical, electronic equipment 7412.3 Nuclear reactors, boilers, machinery, etc. 5049.8 Vehicles other than railway, tramway 2179.4 Mineral fuels, oils, distillation products, etc. 2059.4 Optical, photo, technical, medical, etc. apparatus 1088.0 Plastics 905.3 Articles of apparel, accessories, knit or crochet 800.7 Articles of apparel, accessories, not knit or crochet 782.6 Pearls, precious stones, metals, coins, etc. 773.0 Iron and steel 746.0

Source: Author’s calculations based on UN Comtrade Database. Note: Asia includes East Asia, South Asia and Oceania. Missing values in the original data were imputed through linear interpolation and constrained to be non-negative.

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TABLE 1-3: TOP TEN COMMODITIES EXPORTED BY RWANDA IN TERMS OF VALUE, 2001-2010

Commodity Trade value, million USD Coffee, tea, mate and spices 718.1 Ores, slag and ash 569.2 Mineral fuels, oils, distillation products, etc. 148.3 Vehicles other than railway, tramway 56.4 Optical, photo, technical, medical, etc. apparatus 43.2 Beverages, spirits and vinegar 39.9 Raw hides and skins (other than furskins) and leather 28.9 Nuclear reactors, boilers, machinery, etc. 25.8 Electrical, electronic equipment 20.7 Edible vegetables and certain roots and tubers 19.6

Source: Author’s calculations based on UN Comtrade Database. Note: Data for the year 2000 were not available. Missing values in the original data were imputed through linear interpolation and constrained to be non-negative.

The Benefits of Agglomeration

Paul Krugman’s New Economic Geography theories explain how economies of scale in

production combined with reduced transport costs can lead to increased geographic

concentration of people and economic activities (Krugman, 1991). There are many well-

known examples of industrial clustering: the Silicon Valley and Bangalore technology

hubs, the automobile industry in Detroit, the diamond industry in Antwerp, or the wine

industry in Mendoza.

When firms cluster together, spatial proximity is beneficial to firms. Localization

economies arise when firms within the same industry benefit from locating near each

other. Increased efficiency can result from labor market pooling, sharing inputs,

specialization in the course of production, and/or the exchange of information and

knowledge (Marshall 1920; Duranton and Puga 2004; Rosenthal and Strange 2004; WDR

2009). In locations characterized by a high concentration of economic activity,

investment in infrastructure is likely to generate high returns and attract additional

investment, provided such investment relieves the congestion costs associated with a

greater number of firms (Lall, Schroeder and Schmidt 2008)

In addition, proximity can also act as a disciplining mechanism. Less efficient firms find it

difficult to remain in business when nearby firms are able produce output at a lower cost.

“If consumers were unencumbered by substitution barriers, production would be

reallocated to a select few, highly productive plants.” (Syverson, 2004). In reality, large

barriers to substitution exist across producers (caused by product differentiation,

physical barriers, or high transport costs) which enable inefficient firms to survive, even

in the long-run. Lower prices benefit consumers. Firm clustering makes it easier for

consumers to switch between suppliers and buy from the firm with the cheapest goods

or services. In addition, consumers like variety and prefer to shop where there are many

sellers located near each other. Spatial proximity can also benefit firms that are not in the

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same industry. For example, a management consulting company might benefit from

locating near business schools, financial service providers, and manufacturers.

In the presence of agglomeration effects, concentration has been shown to be stable over

time: old plants are replaced by new plants. Historical accidents therefore lock mobile

firms in existing areas and/or inefficient patterns (Arthur, 1986; Krugman, 1991). The

effects of infrastructure policies are likely to be insignificant unless coordination allows

the gains from relocation to exceed the gains from staying (Lall, Schroeder and Schmidt,

2008).

Why firms cluster is an important policy question. Are firms constrained in their location

choice by the existence of infrastructure networks, such as roads and electricity? Or are

they exploiting natural advantages and/or physical and intellectual spillovers? (Ellison

and Glaeser, 1997) In the former case, policies aimed at expanding infrastructure in the

periphery such as the establishment of special economic zones or growth poles should be

considered. If well regulated, special economic zones can help promote agglomeration

economies by allowing firms to move outside of cities, where land is cheaper, without

losing access to markets. If on the contrary, natural advantages are more important, these

advantages may soon lose importance relative to the negative effects of increased

congestion costs. This can happen if infrastructure does not improve in congested areas,

which will limit the positive spillovers associated with economic development (Lall,

Schroeder and Schmidt, 2008).

It is important to emphasize that spatial economic concentration does not take place at

the cost of inequality in living standards both within and outside cities. Different policy

instruments are available to encourage spatial efficiency while at the same time

supporting spatial equity (WDR, 2009). Therefore, the biggest challenge lies in identifying

the payoffs and tradeoffs of alternative policy instruments. Such policies should be

realistic and hence depend on the stage of development and the fiscal and institutional

capacities of a country (Lall, 2009).

The average African firm employees 20% fewer workers than comparable firms in other

developing countries (Iacovone, Ramachandran, and Schmidt, 2014). One reason for this

is that firms which specialize in tradable activities are larger than those which specialize

in non-tradable activities—and African cities have smaller tradable sectors than cities in

other regions. Understanding why the tradable sector is so small in African cities is

central to understanding their future growth prospects.

Geo-referenced firm censuses for Kigali and Lusaka allow us to measure the density

gradient as we move away from the Central Business District (CBD). A falling gradient is

consistent with the view that firms cluster near each other when land prices are high (i.e.,

near the CBD) and when there are benefits from agglomeration (e.g. larger markets,

better services, knowledge spillovers, etc.). Firms are willing to pay these high rents

because the benefits they receive from locating near the CBD outweigh the costs of

locating there.

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Source: Rwanda economic censuses

As depicted in Figures 1-9, the share of jobs in the tradable sector tends to decrease with

the distance to the CBD. A similar pattern emerges for formal sector jobs (Figure 1-10).

As expected, the density of formal sector jobs is highest near the CBD. These firms tend

to be larger than informal sector firms and more likely to benefit from agglomeration

economies. Similar to other cities in Africa, informal sector employment is highly

concentrated near the CBD as well.

FIGURE 1-9: KIGALI, THE SHARE OF TRADABLE SECTOR JOBS DECREASES WITH DISTANCE TO THE DOWNTOWN

FIGURE 1-10: KIGALI, THE SHARE OF FORMAL SECTOR JOBS DECREASES WITH DISTANCE TO THE DOWNTOWN

With a high concentration of jobs in the downtown, good access to the city center for a

dispersed population is crucial. This is the case for Kigali where 80% of all city jobs are

located within 5km of the downtown. In African cities, most workers either walk or cycle

to work which means that their access to formal sector jobs is limited by how far they can

travel using these methods of transport. The most accessible job is one that is run from

home. In Kigali, 72% of firms are single-person enterprises (usually run from home), 97%

are informal businesses and within the informal sector, 90% of firms engage in non-

tradable activities. In Lusaka, the share of the small to large firm is larger than in both

Kampala and Kigali (Table 1-4).

TABLE 1-4: SHARE OF FIRMS BY SIZE

Kigali Lusaka Kampala

Self-employed 72.23 50.65 55.5

Micro (2-4) 22.49 28.36 36.03

Small (5-49) 5.05 18.74 6.25

Medium (50-99) 0.14 1.15 0.13

Large (100+) 0.08 1.09 0.09

Total no. firms 123,364 17,117 184,335 Source: Rwanda Establishment Census (2011); Zambia Economic Census (2011); Uganda Census of Business Establishments (2011).

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Regional concentration of industries

Since economic activities are lumpy by nature and spatial organization is likely to be

geographically uneven, a true measure of spatial concentration should be able to identify

if clustering is taking place above and beyond what we would be observed if firms simply

chose their locations randomly. Such a measure should control for the size distribution

of establishments among industries so that industries with only a handful of firms do not

appear to be unusually clustered. The Ellison Glaeser (EG) index (Ellison and Glaeser,

1997) accounts for these issues and helps us identify if economic activities within a city

are clustered in a particular place, fostering agglomeration economies. This measure

takes a value close to zero when the distribution of firm locations is similar to what would

have occurred if locations were chosen randomly. Therefore, a nonzero, positive value

implies agglomeration or clustering above and beyond what would have been observed

if the plant’s location were randomly selected. Results from the United States show that

an industry is highly concentrated if the EG index is larger than 0.05, moderately

concentrated if it is between 0.02 and 0.05, and not concentrated if under 0.02.

During the early stages of industrialization, most industrial activity is clustered around large cities and along transport corridors (Lall, Schroeder and Schmidt, 2008). Mapping firms in the tradable sector in Kigali (Figure 1-11) onto the city roads network shows the same pattern. By contrast, in the retail sector, a lion’s share of firms are spread out across the city in areas where population density is the highest (east of the CBD).

TRADABLE SECTOR FIRMS NON-TRADABLE SECTOR FIRMS FIGURE 1-11: FIRM CLUSTERING

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FIGURE 1-12: KERNEL DENSITY OF RETAIL AND MANUFACTURING FIRMS IN KIGALI

Across Africa, the retail trade industry employs the most number of workers. Downtown

Kigali is dominated by such retail firms. Among the 37% of workers employed in this

sector, the majority work in non-specialized stores of food and beverages, which account

for 9% of the total labor force in Kigali. The top 10% most concentrated sub-sectors in

both cities are presented in Table 1-5. Firms in these sub-sectors are mostly involved in

tradable activities such as manufacture, quarrying and agriculture, as well as some

tradable services such as printing. But the tradable sector firms account only for 14% of

firms in Kigali. These few firms, however, employ 32% in Kigali. The ratio of firms to

employment is therefore much higher in the tradable sector, which African cities should

support to create jobs.

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TABLE 1-5: MOST CONCENTRATED INDUSTRIES IN KIGALI

Four-digit industry code Share of firms

Share of labor

EG index

Manufacture of other transport equipment n.e.c. 0.01% 0.03% 1.01

Sawmilling and planting of wood 0.39% 0.45% 0.64

Administration of financial markets 0.01% 0.00% 0.62

Residential care activities for the elderly and disabled 0.01% 0.03% 0.58 Forging, pressing, stamping and roll-forming of metal; powder metallurgy 0.04% 0.28% 0.54

Activities of extraterritorial organizations and bodies 0.04% 0.34% 0.48

Retail sale of tobacco products in specialized stores 0.01% 0.01% 0.42

Cultural education 0.03% 0.07% 0.41

Security and commodity contracts brokerage 0.18% 0.27% 0.40

Wholesale of agricultural raw materials and live animals 0.01% 0.00% 0.36

Finishing of textiles 0.02% 0.67% 0.35

Retail sale of textiles in specialized stores 1.21% 0.59% 0.34

Manufacture of articles of concrete, cement and plaster 0.02% 0.04% 0.30

Manufacture of other food products n.e.c. 0.03% 0.44% 0.27 Renting and leasing of other personal and household goods 0.30% 0.17% 0.27

Operation of sports facilities 0.02% 0.01% 0.25 Retail sale of books, newspapers and stationary in specialized stores 0.75% 0.63% 0.25 Social work activities without accommodation for the elderly 0.01% 0.05% 0.24

Wholesale of textiles, clothing and footwear 0.14% 0.12% 0.22

Non-specialized wholesale trade 0.01% 0.02% 0.22 Accounting, bookkeeping and auditing activities tax consultant 0.47% 1.02% 0.22

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Census, Rwanda, 2012: Final Results: Main Indicators Report.

Rosenthal, S. and W. Strange. 2004. “Evidence on the Nature and Sources of

Agglomeration Economies”. ch. 49, p. 2119-2171 in Henderson, J. V. and Thisse, J.

F. eds., Handbook of Regional and Urban Economics, vol. 4, Amsterdam: Elsevier.

Syverson, Chad. 2004. "Market Structure and Productivity: A Concrete Example". Journal

of Political Economy 112 (6): 1181-1222.

United Nations United Nations Commodity Trade (UN Comtrade). 2015. Statistics

Database. http://comtrade.un.org/db/.

United Nations, Department of Economic and Social Affairs, Population Division. 2015

World Population Prospects: The 2015 Revision, New York.

Venables, A. 2015. “The Developing City: Urban Form and Function,” Unpublished paper,

University of Oxford.

World Development Report 2010. 2009. Washington, D.C.: World Bank.

19

Governance

2.1 Brief History

Modern Rwandese history is generally structured around four major time periods: 1) pre-

colonialism; 2) the colonial period from 1897 to 1959; 3) the 1959 revolution up to the

1994 genocide; and 4) 1994 to the present day. Important historical events occurred

during each of these periods which affected how land rights evolved in Rwanda.

Examples of such historical events include the transition (of most of the country) from an

inheritance-based land rights system to one based on land allocation by the king; the

transition from German to Belgian colonial rule; the 1973 coup d’état by Habyarimana;

the civil war beginning in 1990; and the arguable transition from a post-conflict state to

a developmental state around 1997.

During pre-colonial times, Rwanda was ruled by a Mwami (king), who was officially

regarded as a divine ruler. The (Tutsi) Mwami was head of the royal court. Most Bahutu5

and Batwa6 were peasant farmers and hunter-gatherers, respectively.

In the earlier days of the Mwami, the power structure below the king was relatively

balanced between Batutsi 7 and Bahutu chiefs and nobles. Until the late eighteenth

century, a system of land ownership based on inheritance (ubukonde) meant that (thanks

to their greater number and earlier arrival in Rwanda) many landed chiefs were Bahutu,

and semi-independent. The Mwami’s court of advisors (abiiru) were also exclusively

Bahutu and had considerable influence until the mid-18th century after which they

became gradually side-lined.

The trend was towards a centralisation of power with the (Tutsi) Mwami and his

favoured Batutsi nobles. In Southern, Eastern, and Central Rwanda, the ubukonde

inheritance-based system transitioned to a system of land ownership and assignment by

the King directly (igikingi) (Mamdani, 2002, p. 66). This transition was initiated by

Mwami Yuki Gahindiro (1746-1802) and implemented progressively until colonial times,

although the ubukonde system remained entrenched in the North and North West.

Igikingi land tended to be large tracts of grazing land, allocated to nobles or war heroes

deemed loyal to the Mwami (Burnett, J.E., 2016).

Under igikingi, Bahutu peasants were granted access to their former land only in return

for significant corvée (forced) labour (uburetwa) for one to three days out of every six,

and/or large portions of their grain harvests. Many ‘petit Tutsi’ were also peasants in

precolonial times, although they were exempt from this uburetwa.

Recipients of igikingi land were not entirely secure in their land rights. The Rwanda

Institute for Sustainable Development (RISD) report that: “If the holder of an igikingi lost

5 The plural form of hutu. 6 The plural form of Twa. 7 Plural of Tutsi.

20

favour with the chief or lost his cattle through disease, mismanagement, or raiding, the

chief seized his igikingi from him and gave it to someone else who had cattle. The

recipient of an igikingi was expected to make regular gifts to the chief or mwami who had

bestowed the igikingi on him.” (Burnett, J.E., 2016).

Rwanda was a German territory from 1885 until 1922. The Germans’ colonial

involvement was relatively light, and traditional power structures were mainly upheld.

In 1916, a League of Nations mandate requested Belgium to govern the modern

territories of Rwanda and Burundi as Ruanda-Urundi, in addition to its existing colony

the Belgian Congo (which would later become the Democratic Republic of the Congo).

From 1922 to 1945, Rwanda was ruled by Belgium under a much more involved style of

colonialism, which nonetheless upheld the preceding rule of the Mwami and many

Batutsi. The Belgian colonisers in fact severely increased the exploitation of Bahutu,

intensifying the demands of uburetwa forced labour, and forcing people to formally

identify as Tutsi, Hutu, or Twa on National Identification cards. The Belgians also sought

to increase the local production of staple foods, introducing cassava, maize, and Irish

potatoes, but nevertheless, Rwanda suffered two major famines under Beligan rule: once

in 1928-29, and again in 1943-44. In the latter, one fifth to one third of the population

died, and large proportions of the population migrated to the Belgium Congo (Burnett,

J.E., 2016).

Under colonial times, a system of formal land titles was introduced, but these titles were

only accessible to white settlers and Africans who met the colonists’ criteria of being

‘civilised’ which was mostly restricted to a few traders who originated from outside of

Rwanda (even the Mwami did not qualify as ‘civilised’) (Burnett, J.E., 2016). Meanwhile,

with military backing from the German and then Belgian colonisers, the Mwamis began

to take greater control of the Northwest, and, during the 1930s, Mwami Yuhi Musinga

declared that igikingi inheritance would also apply in those regions. Following this

proclamation, he assigned much of the former ubukonde land there to chiefs from the

central royal court. During the early 1950s, Mwami Mutara Rudahigwa abolished the

ubukonde inheritance system completely, and forced all former ubukonde chiefs to share

their land with those who had been using it. The (majority) igikingi land was not affected

although ubuhake – a system whereby Bahutu peasants used Batutsi cows in return for

service—was abolished.

Over the course of the 1950s to 1960s, some areas also implemented a new “paysannat”

system, whereby sparsely populated land was allocated to peasants who lived in row

housing along a road, near to a contiguous piece of farmland. Paysannat land usually

included individual plots but sometimes communal land as well. Recipients faced certain

requirements in order to keep their land. For example, they were required to cultivate

coffee and not subdivide the land. However, these conditions were not often upheld.

Paysannat was only implemented in selected areas, due to its high costs (financed initially

by the Belgian government), and the need for low population density. Indeed, during the

same period, and increasingly into the 1980s, population growth was putting

21

considerable pressure on land prices, enough that many people moved from the fertile

West and North to the East where soil quality - but also land prices and population density

– were lower.

The abolition of ubuhake and implementation of paysannat took place in an environment

where colonial authorities and the Catholic Church were becoming increasingly more

sympathetic to the Bahutu people. Towards the end of the colonial period, the Church

begin to advocate on their behalf for greater economic and social welfare and, perhaps

most important, for their political empowerment. A Bahutu elite slowly began to form.

This elite—which was led by Grégoire Kayibanda who would later become Rwanda’s first

elected President—began demanding more power. While some Batutsi rulers were

sympathetic to these calls and ready to integrate Bahutu, many were not. Those opposed

to their integration, wanted to ensure that Rwanda’s political institutions kept them

excluded from positions of power. The result was two increasingly opposing factions: 1)

the Bahutu (both moderate and militarised) and Batutsi (moderate) factions who

favoured increased or total Hutu political power; and 2), those who wished to retain the

existing power structures in which Batutsi dominated. The first faction—those who

supported an increase in Hutu political power— received considerable support from the

Belgian colonial rulers.

These tensions culminated in the anti-Tutsi ethnic violence and intimidation which took

place in Rwanda during 1959 to 1962. During this time, Batutsi were beaten, had their

homes burned and, in some cases, were massacred. The spark that lit the fire of ethnic

violence was the beating of Dominique Mbonyumutwa, a popular Hutu Major, by a group

of Batutsi youth in the Southern Province. It is estimated that 20,000 to 100,000 Batutsi

were killed following his death, and approximately 150,000 (including the Mwami) fled

to Uganda and, to a lesser extent, South Kivu province of the Belgian Congo during the

violence.

The Bahutu who held land in the Northwest under ubukonde used the unrest to take back

land from the Batutsi chiefs who had been installed by Mwami Yuhi Musinga. In 1960, an

administrative decree declared the end of the igikingi system of land tenure. A year later,

the ubukonde system was also abolished under a ruling that gave former clients rights of

ownership to the land they worked. In practice, clients still needed to pay annual rents to

the former landowner but their rights to the land were now more secure.

Those Batutsi who remained after the ethnic violence were largely excluded from power.

In 1960, Belgian colonisers oversaw elections that returned a new generation of Bahutu

representatives (owing to the now overwhelmingly Bahutu population). A 1961

referendum abolished the monarchy, and Dominique Mbonyumutwa was selected by the

new ruling (pro-Hutu) party to act as provisional President until October, at which point

Grégoire Kayibanda was elected.

The underlying sentiment was that the majority populace of Bahutu should have greater,

or complete, self-rule. This culminated in not only anti-Tutsi sentiments but also anti-

22

colonial sentiments. In 1961, following a referendum, Belgian granted Rwanda its

independence.

Grégoire Kayibanda’s rule continued to exclude Batutsi from positions of power, and also

introduced ethnic quotas for workplaces and schools, which had previously encompassed

more Batutsi relative to their proportion of the population as a whole. This led to

thousands of Batutsi children being excluded from schools, and Batutsi adults losing their

jobs and becoming trapped in unemployment.

In 1973, Gregoire Kayibanda was overthrown by Juvenil Habyarimana in a coup d’etat.

Habyarimana remained President (through rigged elections) until 1994. Habyarimana

founded the Mouvement National Révoluntionaire pour la Développment, which he

established as Rwanda’s only legal party until 1990.

President Habyarimana faced the difficult question of whether and how to reintegrate the

refugees who had fled the country back into Rwanda. He used land scarcity as an excuse

for not doing so, arguing that many of the plots they had left behind were now being used

by others. In 1990, the Rwandan Patriotric Front (RPF)— an army of Batutsi refugees

who had been residing in Uganda since they fled Rwanda during 1959 to 1962) invaded

Rwanda to claim back their land and country.

The war continued until 1993, when the RPF and Rwanda’s existing ruling elite signed

the Arusha Accords in which both parties agreed to power sharing. In practice, this power

sharing agreement was not realistic as there were many hard line members of the existing

elite who were not ready to rule alongside the RPF. In 1994, the genocide against the

Batutsi began and lasted 100 days, until the RPF took control of Kigali.

The war and genocide had important implications for land allocation. Firstly, after the

RPF’s victory, two million Rwandese fled Rwanda to refugee camps in Tanzania and the

Democratic Republic of Congo (DRC). The RPF announced in 1994 that all Rwandese

people living outside of Rwanda should return, leading to an estimated return of 800,000

refugees between 1994 and 1996. In 1996-7, another 1.2 million refugees returned from

camps in Tanzania and the DRC. These outflows and influxes of people created large

uncertainties over land allocation.

It was at this point that the government and donor community began to advocate

imidugudu—that is, grouped rural settlements— in order to densify the use of rural land.

By 1996, the government had ruled that imidugudu was the only permissible form of rural

settlement although this was never enforced. Grouping rural settlements is still an aim of

the government today, and some progress, but not much, has been made toward this end.

Today the government plays a central role in land allocation through a variety of

mechanisms including the creation of zoning regulations, master plans, and building

codes and by overseeing land titling, the land registry, and any land disputes which arise.

23

2.2 Centralized Governance

Historically, power in Rwanda has tended to be concentrated with the President (or

Mwami) although the country has a long history of village-level governance as well.

During colonial times, the colonial rulers recognised Rwanda’s strong government, and

opted to use it rather than replace it. Colonists encouraged an intensification of

centralization, seen through examples like the issuing of identity cards, the significant

increase in the demand of uburetwa labour, and military support to the Mwami.

This pattern of centralized rule continues to the present day. A recent example is the

government’s decision in 2014-15 to centralize the collection of local revenues at the

national Rwanda Revenue Authority (RRA) rather than have districts collect their own

revenues. While the revenues still ‘belong’ to the districts from which they were

collected, it is hoped that this move will increase efficiency, thereby increasing the

amount of resources which districts have at their disposal. Districts remain responsible

for spending these revenues on local public goods. In addition, districts can take out loans.

References

Burnet, J.E. 2016. “Women’s Land Rights in Rwanda,” Rwanda Institute for Sustainable

Development (RISD), online article, http://risdrwanda.org/spip.php?article74.

Mamdani, M. 2002. “When Victims become Killlers: Colonialism, Nativism, and Genocide

in Rwanda,” Princeton: Princeton University Press.

http://risdrwanda.org/spip.php?article74

24

Land

3.1 Land Ownership

Following a major land registration and titling effort begun in 2010, the majority of land

in Rwanda is now owned privately and formally. In addition to private land, the

government owns public land which is used for government activities (e.g., ministries,

the National Convention Centre, District offices, schools, hospitals, etc). It also owns any

confiscated land that exists, and the country’s wetlands which represent about 11% of all

land in Rwanda) (USAID, 2015a). Citizens are entitled to use government land through

land lease agreements, such as the cooperatives who farm rice in government-owned

valley bottoms.

For those who hold land in the private domain, it is possible to co-own plots of land as

the title identifies the percentage of land which is held by each party. A subdivision law,

however, forbids the subdivision of large parcels of land and, as a result, the number of

names on a land title can be multiple.

3.2 Land Disputes

Article 159 of the Constitution of Rwanda, which was adopted 26 May 2003, demands

that local mediation committees be established for pre-court resolutions of disputes, and

their foundations have been subsequently established in an Organic Law 17/2004 of

4/05/2004. Changes were made to the regulation of the abunzi in 2006, 2010, and 2015

(Government of Rwanda, 2006, 2010, 2015).

Disputes over land ownership (which cannot be settled through informal means) are

initially brought to the village leader. If the village leader is unable to settle the issue, the

case is then taken to the village’s mediation committee, called the “abunzi,” which is a 12-

person committee elected by villagers. While members of the “abunzi are not paid, their

rulings are enforced by local authorities.8 Three abunzi, who are selected by the disputing

parties, hear each case. The majority vote of the abunzi is the final ruling. A disputant may

appeal this ruling by taking his or her case to the sector-level abunzi (Government of

Rwanda, Ministry of Justice, 2016). If the decision of the sector-level abunzi is also

contested, the disputant may take it to a formal court as long as he or she files a request

within one month of the ruling. The vast majority of cases taken to abunzi mediators

involve land. However, this system of mediation is quite effective as only about 10% of

cases go on to the formal court system (Government of Rwanda. 2014).

8 Cases which are between people from different districts go straight to the courts.

25

3.3 Land Transfer

The current procedures for registering and transferring land were encoded in Ministerial

Order Number 002/2008 of 01/4/2008, Section II. To purchase land, the buyer and seller

must visit their sector land office, with at least one witness for each party, and present

several documents including the current land title (and copies), a written contract, a

statement from the Revenue Authority that all property taxes are paid to date, their

Identification documents (and copies), and a handover form (provided by the land office).

In addition, some offices require the parties to complete the form on a computer rather

than by hand and 27,000 francs for administrative fees. In theory, the land title is then

transferred in one to two weeks although there has yet to be a robust study on the waiting

times in practice. These procedures are published, or can be explained in person, at each

sector land office.

All formal land titles are recorded in the national land registry. For each registered plot,

this database includes a Unique Property Identification (UPI) number, a map of the

boundaries, and basic details about the owner (usually their Tax Identification Number

and phone number). The land registry can be publically viewed at the sector land office.

In recent years, the government has made considerable efforts to communicate land laws

and procedures clearly to the population. It has held two “Land Weeks” in order to explain

the current land laws and procedures in more than 100 sectors which were visited in

both 2014 and 2015 ("RNRA News Details" 2016). Monthly announcements have been

made at umuganda meetings that are held in all villages in Rwanda and which all villagers

must attend. In addition, sector land managers receive considerable training and

encouragement to educate people in their sector about land laws and procedures.

However, there is ample evidence that many citizens still do not fully understand the

laws, and/or simply do not take the steps necessary to protect their land rights. The

Rwanda Natural Resources Authority (RNRA)’s Department of Lands and Mapping, for

example, reports that in 2014, 75,353 land transactions were recorded in their database

(and hence properly registered), but estimate that this is approximately one third of the

total transactions carried out in that year ("RNRA News Details" 2016).

For many low income citizens, the 27,000 fee, plus the fees needed to pay for document

photocopies, and witnesses9 are prohibitive. It is likely that many lower income citizens

do not fully understand their property tax obligations, and may struggle to obtain a tax

clearance form due to transport costs, tax costs, and a poor understanding of the

importance of a property title. Although there has been no formal survey, it is believed

that many land parcels are transferred without changing ownership in the land registries.

9 It is not unusual for buyers and sellers to pay the transportation costs to the land registry and a small fee to their witnesses.

26

3.4 Land Regulations and Zoning

Currently, there are only three inspectors employed by Kigali City to police land use,

making effective monitoring impossible. While each sector has a land office, there have

been reports that some bribing of land officers occurs. Ambitious land use plans and

building codes often don’t match people’s incomes and market signals, which further

increase noncompliance.

Several institutions are involved in deciding how land is used. Municipal governments

(like the City of Kigali) are responsible for creating city-level Master Plans and zoning,

issuing permits, and policing land use. The Rwanda National Resources Authority is

responsible for creating Land Use Plans for every city, outlining how each area is to be

developed and managed. The Ministry of Infrastructure plans infrastructure (including

setting standards), and also establishes building codes (through its sub-agency the

Rwanda Housing Authority). At present, coordination and coherence between these

respective plans and policies is not strong. Currently, there are plans by the government

to review all land regulations and redraft them to improve consistency, as well as

responsiveness to market signals.

3.5 Mortgage Markets

Commercial banks offer loans, but only for customers with higher-value land or

properties. There are many barriers to obtaining a mortgage including relatively high

interest rates (set at approximately 17% between 2012 and 2015) (National Bank of

Rwanda, 2015), large deposit requirements, and 10 to 15 year payback periods. As a

result, mortgages are inaccessible for the bulk of the population. Just 8% of Rwandans

have any outstanding loans from a commercial bank (NISR, 2015).

Similarly, just 8% of households have accessed loans using land as collateral. While it was

hoped that the 2010-12 land tenure regularisation drive would increase poor families’

abilities to access loans, there is little evidence that this has happened. Low uptake may

be due to the fact that few commercial loans are tailored for low income clients and few

microfinance banks have designed housing loans. One microfinance bank, Urwego

Opportunity Bank (UOB), began offering housing loans to business clients in January

2015, but this product has not yet been taken up en masse. So far, there is no nationally

representative data available on the proportion of households using land as collateral

since regularization was completed in 2012. It should be noted that a formal land title is

not always required in order to access housing finance as several other types of finance

are available without the use of a land title as collateral. The most common form of

finance is obtained through informal networks where a title is less important.

3.6 Tenure Security

Once land is titled, it may be seized legally only by the government, and only “in the public

interest and with prior and just compensation.” The law on expropriation (Law Number

27

18/2007 of 19/04/2007 Relating to Expropriation in the Public Interest) states that

compensation should be paid within 120 days of the agreement of the price (Article 24).

If payment is delayed, the expropriator must add 5% interest for every year (which must

not exceed two years) (Article 28). The law also states that land and buildings shall be

reimbursed at market rates (Article 22) but does not state how the valuation is to be

carried out.

A recent USAID study finds that, until 2009, officials “calculate[d] the price to be paid by

making an average of comparable sales” (USAID, 2015b). Such sales data, however, were

likely to be unrepresentative of the market value of confiscated land as records at the

time were not kept centrally and digitally. The study reports that the prices paid under

this system were deemed too high by the government.

In 2009 (and then 2010 for areas outside Kigali), a Ministerial Order established prices

which were to be applied for land in cases of expropriation. Many believe that these prices

are now out of date and too low, given the rapid rise in land and housing prices in Kigali.

The law, however, fixed prices for an indefinite periods and, as yet, there has been no

provision for updating prices.

In 2010, a professional institution for property valuers (the Institute of Real Property

Valuers of Rwanda- IRPV) was established by law (Law 17/2010 of 12/05/2010

Establishing and Organising the Real Property Valuation Profession in Rwanda). All

property valuers must register with this institution, and the institution’s Council

(comprised mostly of government representatives from other institutions involved with

land) must approve all valuation laws and policies, as well as accepting or rejecting

applications for membership of IRPV (Republic of Rwanda, 2010). Although the 2009/10

Ministerial Orders establishing land and property prices were never repealed, the same

USAID study reports that most expropriating entities now hire a professional valuer from

IRPV, under a process of competitive bidding.

Evidence suggests that the same is not true at the district level where valuation continues

to be undertaken by different entities. According to the same USAID (2015b) report,

district officials told researchers that for district-initiated projects, some districts employ

independent valuers, others use District land/infrastructure/agronomist officers, and

others set their own land prices through the District Advisory Council. Some districts also

combine approaches, especially using “independent valuers on large projects and District

staff on small projects”. In Districts that set their own land prices, “even when

professional valuers are hired, they are required to base their valuations on these locally-

set prices.” USAID’s findings about the proportion of properties valued under different

methods, by year, according to reports of the former property-owners, are reproduced

below:

28

FIGURE 3-1: PROPERTY VALUATION IN RWANDA Source: USAID, 2015b.

USAID also cited “pressure… from expropriating entities which seems to have led some

valuers to match the prices with the wishes of the expropriating entity” (USAID, 2015b).

The study found the final amount paid to expropriated property owners varied

considerably based on the expropriating entity and the purpose of the expropriation.

Their findings regarding mean expropriation per square metre, by expropriating entity

and purpose of expropriation, are shown below:

FIGURE 3-2: PROPERTY COMPENSATION IN RWANDA

Source: USAID, 2015b.

29

The 2007 expropriation law also states (Article 26) that “if the expropriated person is not

happy with the value determined for compensation, he or she can pay for an alternative

valuation to be made,” although the cost of these valuations may be prohibitive, and it’s

not clear in which circumstances, if any, their findings would be binding for the

government.

USAID’s team interviewed over one thousand people whose land had been expropriated

or was about to be expropriated. They found that around one quarter to half were not

informed about how their properties would be valued before work was begun, and that

the likelihood of receiving this notice varied a lot by the type of project implemented.

Their summary table is reproduced below (USAID, 2015b).

FIGURE 3-3: INFORMATION SOURCES IN THE VALUATION PROCESS Source: USAID, 2009.

References

Government of Rwanda. 2006. Organic Law No. 30/2006 of 14/08/2006 Modifying and

Complementing Organic Law No. 14/2004 of 26/04/2004 Establishing General

Provisions Governing Public Institutions to date, accessed from

http://ombudsman.gov.rw/Documents/16.08.06%20itegeko%20rigenga%20Ko

mite%20z'abunzi.pdf

Government of Rwanda. 2010. Organic Law No. 02/2002/OL of 09/06/2010 Modifying

and Complementing Organic Law No. 14/2004 of 26/04/2004 On Organisation,

http://ombudsman.gov.rw/Documents/16.08.06%20itegeko%20rigenga%20Komite%20z'abunzi.pdfhttp://ombudsman.gov.rw/Documents/16.08.06%20itegeko%20rigenga%20Komite%20z'abunzi.pdf

30

Jurisdiction, Competence, and Functioning of the Mediation Committee, accessed

from

http://www.minijust.gov.rw/fileadmin/Law_and_Regulations/Itegeko_ngenga_a

bunzi_2010.pdf

Government of Rwanda. 2014. “President Kigame Joins Abunzi to mark ten-year

Anniversary of Mediation and Justice,” 17 October 2014, online article accessed

at

http://www.gov.rw/newsdetails2/?tx_ttnews%5Btt_news%5D=236&cHash=8b

a2f74cb8a660305989d35007718596

Government of Rwanda. 2015. Organic Law No. 02/2015/OL of 16/07/2015 Modifying

and Complementing Organic Law No. 02/2002/OL of 09/06/2010 On Organisation,

Jurisdiction, Competence, and Functioning of the Mediation Committee, accessed

from

http://www.minijust.gov.rw/fileadmin/Laws_and_Regulations/ABUNZI_NEW_L

AWS.pdf

Government of Rwanda. 2016. Ministry of Justice. “Mediation Committee,” online article

accessed at http://www.minijust.gov.rw/services/abunzi/

National Bank of Rwanda. 2015. Lending Interest Rate By Bank From 8Th December

2014-11Th January 2015 Final. 2015. PDF.

http://www.bnr.rw/index.php?id=329

National Institute of Statistics of Rwanda (NISR). 2015. Rwanda Poverty Profile Report -

Results of the Integrated Household Living Conditions Survey (EICV4)

http://statistics.gov.rw/file/4135/download?token=cylGgLRl#

Republic of Rwanda. 2010. Official Gazette N° 20 Of 17/05/2010.

http://www.minirena.gov.rw/fileadmin/Land_Subsector/Laws__Policies_and_Pr

ogrammes/Laws/Valuation_law_Gazetted_on_17.05.2010.pdf

Rwanda Natural Resources Authority. 2016. "RNRA News Details".. Rwanda Natural

Resources Authority.

http://rnra.rw/index.php?id=51&tx_ttnews%5Btt_news%5D=255&cHash=f3c7

71eca93907ab32a284a91a48209a

USAID. 2015a. Land Project Quarterly Newsletter, October 8, 2015, Volume Four, Issue

One, accessed from http://www.rwandaland.org/en/usaid-land-project/latest-

quaterly-

newsletter/item/download/148_0fe57b09c38c571e249fc2678c50312c

USAID. 2015b. “Implementation of Rwanda’s Expropriation Law and Outcome on the Population”. USAID

http://www.minijust.gov.rw/fileadmin/Law_and_Regulations/Itegeko_ngenga_abunzi_2010.pdfhttp://www.minijust.gov.rw/fileadmin/Law_and_Regulations/Itegeko_ngenga_abunzi_2010.pdfhttp://www.gov.rw/newsdetails2/?tx_ttnews%5Btt_news%5D=236&cHash=8ba2f74cb8a660305989d35007718596http://www.gov.rw/newsdetails2/?tx_ttnews%5Btt_news%5D=236&cHash=8ba2f74cb8a660305989d35007718596http://www.minijust.gov.rw/fileadmin/Laws_and_Regulations/ABUNZI_NEW_LAWS.pdfhttp://www.minijust.gov.rw/fileadmin/Laws_and_Regulations/ABUNZI_NEW_LAWS.pdfhttp://www.bnr.rw/index.php?id=329http://statistics.gov.rw/file/4135/download?token=cylGgLRlhttp://www.minirena.gov.rw/fileadmin/Land_Subsector/Laws__Policies_and_Programmes/Laws/Valuation_law_Gazetted_on_17.05.2010.pdfhttp://www.minirena.gov.rw/fileadmin/Land_Subsector/Laws__Policies_and_Programmes/Laws/Valuation_law_Gazetted_on_17.05.2010.pdfhttp://rnra.rw/index.php?id=51&tx_ttnews%5Btt_news%5D=255&cHash=f3c771eca93907ab32a284a91a48209ahttp://rnra.rw/index.php?id=51&tx_ttnews%5Btt_news%5D=255&cHash=f3c771eca93907ab32a284a91a48209ahttp://www.rwandaland.org/en/usaid-land-project/latest-quaterly-newsletter/item/download/148_0fe57b09c38c571e249fc2678c50312chttp://www.rwandaland.org/en/usaid-land-project/latest-quaterly-newsletter/item/download/148_0fe57b09c38c571e249fc2678c50312chttp://www.rwandaland.org/en/usaid-land-project/latest-quaterly-newsletter/item/download/148_0fe57b09c38c571e249fc2678c50312c

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Housing Markets

4.1 Informal Settlements

Because most land in Rwanda is now formally titled, settlements are informal only to the

extent that structures do not comply with building or zoning regulations. The

government’s new Housing Policy (2015) states that the government’s aim is to upgrade

existing settlements by providing infrastructure and support for housing improvements,

and by supporting the market to build tens of thousands of more formal, affordable

houses.

This is not to suggest that slum clearing does not occur. Recently, a small, centrally

located, informal settlement was cleared, and residents were offered subsidized houses

in a more peripheral area of Kigali (“Batsinda 1”). The houses to which they moved cost

approximately 8 million Rwandese francs to construct, but were heavily subsidized as

they were sold to residents at 4 million francs. The cleared area is now also being serviced

with a modern tarmac road.

In addition, a series of low income settlements near Kigali International Airport were

recently cleared to make way for more formal, affordable housing, as well as the

expansion of the airport. In this case, the government expropriated residents’ land,

paying them fees according to the expropriation law.

Recently, the government has stressed that it will adopt settlement upgrading as a

priority for informal settlements. In line with its plans, the World Bank is financing a pilot

upgrading programme in Kigali, which is intended to inform settlement upgrading in the

rest of the country. The programme will focus on improving basic infrastructure in the

target neighbourhood.

4.2 Government Housing Schemes

The government has supported dwellers to upgrade informal houses, in particular by

providing subsidised metals roofs after grass thatch rooves were outlawed.10 To date,

relatively little housing has been ‘built’ or financed by central or local government.

Exceptions are a fairly low-scale pilot ‘Batsinda’ project (targeted at residents who were

resettled following a slum clearance) and some clusters of police housing (both in Kigali).

The government’s construction of the Batsinda houses was financed by the state, with the

houses being purchased at subsidy once they were completed.

In addition, the government has made some efforts to support home purchases. The

Development Bank of Rwanda (BRD) –the Government of Rwanda’s formal investment

arm – offers housing loans with favourable terms (16% interest rates, 20 year period, and

10 The “Goodbye Nyakatsi” campaign.

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10% minimum contribution) for customers with adequate and formal salaries.

Customers of BRD’s “Gira Icumbi” savings account receive further discounted loans (the

lowest rate being 14.5% for those saving in an account for three years or more and whose

deposits equal at least 10% of the value of the loan) (BRD, 2015).

As well as constructing some houses directly, the government provides a broader array

of support through the Rwanda Housing Authority which has acquired land for affordable

housing and has conducted pilot housing construction projects.

The government is also beginning to offer incentives for firms investing in the production

of low-income housing, by fully subsidising the infrastructure in neighborhoods that

satisfy certain affordability criteria. This has already been agreed for a lower-middle-

income housing project being dubbed “Batsinda II”.

Although these construction projects have been small, the state is involved deeply in the

housing and construction market through several avenues. First, the Rwandan pension

fund (Rwanda Social Security Board- RSSB) is one of the largest land-holders in Kigali,

and has invested in the construction of several high end, housing neighborhoods. Second,

there are several construction firms which were established by the government or are

strongly affiliated with the government or ruling party entities. Ultimate Developers

Limited (UDL), for example, is a construction firm in which RSSB is the sole shareholder,

and has undertaken many large projects for the development of high-end, housing

neighborhoods. UDL was previously co-owned by RSSB and an RPF-affiliated holding

company, Crystal Ventures, but RSSB has been the sole shareholder since 2003.

Crystal Ventures is one of the major holding companies in Rwanda, and several of its firms

are main players in the construction market. Crystal is connected to the government both

through a flow of funds to the ruling party, and through more informal collaborations

such as social and collegial ties, and jointly-established missions. Construction firms

within the Crystal ventures holding group include: NPD Ltd, “Rwanda’s leading provider

of civil engineering services, construction products, and construction equipment leases”,

Ruliba Clays, “the largest producer of clay building materials in Rwanda”, Real

Contractors, which deals in construction, engineering and infrastructure.

Another large player in the construction field, Horizon Construction, is part of Horizon

Group, a private firm established by the Ministry of Defence in 2007 and co-owned by a

microfinance cooperative for members of the army and policy (ZIGAMA CSS) and the

Military Medical Insurance Company (MMI). Horizon Construction focuses on roads and

large infrastructure projects, as well as some buildings (such as the Kigali public library).

References

Development Bank of Rwanda (BRD). 2015. “BRD Gira Icumbi Account”. Development

Bank of Rwanda. https://www.brd.rw/?BRD-Gira-Icumbi-Account

https://www.brd.rw/?BRD-Gira-Icumbi-Account

Output Cover PageKigali- A Policy Narrative