Kenya to establish National Urban Development Fund to support city growth

The State Department for Housing and Urban Development, in collaboration with the National Treasury, is formulating a National Urban Development Fund aimed at financing cities and municipalities to support sustainable urbanization.

According to Urban Development Director Ms. Lillian Kieni, the creation of the fund is one of the 13 key resolutions adopted during the inaugural Kenya Urban Forum (KUF) held in 2023.

“At the 2023 forum, we identified flaws, gaps, and conflicting provisions in the laws governing urbanization. We are now working closely with relevant entities to harmonize these laws to support the development of safe, inclusive, and sustainable cities and municipalities,” said Ms. Kieni.

She made the remarks as preparations intensified for the second Kenya Urban Forum (KUF 2), scheduled to take place from June 17 to 19, 2025, in Naivasha, Nakuru County. The forum will be held under the theme: “The Future is Urban: Driving Kenya’s Urban Transformation.”

Ms. Kieni noted that Kenya’s urbanization rate currently stands at approximately 4%, and it is projected that by 2050, half of the country's population will reside in urban areas.

She emphasized the need for increased investment in urban development, stating, “The government continues to support urbanization by constructing affordable housing and providing essential infrastructure. This not only ensures decent housing for Kenyans but also creates employment for the youth and stimulates demand in the informal (jua kali) and manufacturing sectors.”

She further urged stakeholders to collaborate in addressing persistent urban challenges such as waste management, inadequate transport systems, and poor drainage infrastructure, asserting that urban centers must be transformed into hubs of innovation.

Assistant Director of Urban Development, Ms. Mercy Kimani, stated that KUF 2025 will focus on five thematic areas: urban infrastructure and service delivery, urban planning and governance, sustainable development and climate resilience, economic growth and job creation, and inclusive urbanization and forced displacement.

She underscored the forum’s goal of creating livable cities across the country by empowering local communities. Ms. Kimani also challenged county governments to establish independent revenue streams to support urban growth and resilience.

Carlos Mejia, a senior urban economist with the World Bank, emphasized the critical role that livable cities play as engines of economic growth. He reaffirmed the World Bank’s commitment to supporting KUF 2 and financing investments that improve living conditions in cities and municipalities across Kenya.