In the early morning, the sounds of life pulse through the narrow lanes of Kasonkoso, five kilometres from the centre of Kampala. Pedestrians weave between tin-roofed houses, vendors set up makeshift stalls and the scent of charcoal mingles with hope and hustle. Beneath this energy lies a stark reality. Water must be carried from communal taps, rubbish piles up for lack of collection and the threat of eviction shadows every lease.
Kasonkoso, like thousands of informal settlements across Africa, is teeming with ingenuity and resilience; but also risk—lacking the basic services and security that most city dwellers take for granted. As traditional development funding plateaus or declines, African cities are under growing pressure to find new and innovative ways to finance the infrastructure and services required by their expanding populations. Cities across sub Saharan Africa are under pressure to show own source revenue can be made viable within 3 to 5 years submits Nairobi, Kenya based Azim Manji, an Urban Development and Land Value Capture Specialist with UK Aid.
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Informal settlements are too often seen as symptoms of failure: evidence of runaway urbanization, poverty and the inability of governments to keep pace. These communities, home to more than half of Africa’s urban population, are a powerful, untapped engine for inclusive urban transformation. As Sam Mabala, former Commissioner for Urban Development within Uganda’s Ministry of Lands, Housing and Urban Development (MLHUD) and advisor at Cities Alliance and suggests, the key is how cities approach the upgrade and formalization of these areas.
Cities can utilize land value capture (LVC) to channel the rising value of regularized neighbourhoods into the public investments required for growth, equity and opportunity. Christopher Cripps, a senior physical planner and consultant to the Foreign, Commonwealth & Development Office (FCDO), World Bank and DT Global points out LVC is already a routine practice in many Western countries, where mechanisms such as betterment levies, development charges and special assessments help cities reinvest rising land values into public goods and infrastructure.
Africa’s cities are urbanizing at breakneck speed and the scale of informality is immense. According to a UN-Habitat May 2025 report, over 51 per cent of the continent’s urban residents live in informal settlements, often on land they do not officially own. These neighbourhoods, commonly referred to as slums, lack secure tenure, reliable infrastructure and official recognition in city revenue systems.
The consequences are profound. Residents do not invest in their homes, city governments miss out on revenue from property taxes or service charges and in many ways the informal city remains cut off and isolated. This is a missed opportunity not only for those who live in informal settlements, but for cities as a whole, that lose out on both improved quality of life and much-needed revenue to fund future growth.
When cities invest in informal settlements with the development of roads, sewers, lighting, schools and health centres, the value of the land and homes can rise dramatically. Legal recognition and tenure security alone can multiply property values several times over as households gain the confidence to invest and as markets recognize their rights.
In Kigali, Rwanda, systematic land registration in both formal and informal areas has improved tenure security and sparked new investment and unlocked municipal revenues. A recent study by Jeanne Sorin from the University of Chicago examining impacts associated with of 140 km of road improvements in Kampala between 2017 and 2024 that consulted 548 land owners and 377 real estate brokers reports the value of properties on the side of the upgraded roads also increased by an average of 26 percent. Unless these gains are captured for public benefit, they tend to accrue mainly to a handful of landholders or are lost to the economy of informality warns Christopher Cripps.
Land value capture mechanisms helps to make this transformation sustainable and inclusive. LVC ensures that some portion of the increase in land values, driven by public investment and recognition, returns to the community. When informal settlements are upgraded and formalized, cities can capture part of this value increase through tools such as betterment levies, the inclusion of properties in the local tax net or development charges paid by developers. These revenues can then fund further upgrades, social services and even affordable housing to create a virtuous cycle where rising value pays for continued improvement.
This approach is fair and necessary. Designed inclusively, land value capture can help prevent displacement and channel resources back into communities to generate value. Participatory planning is essential emphasizes Emmanuel Iwong of Welcome2Africa International in Abuja, Nigeria. When residents are involved in designing value capture mechanisms and deciding how funds are spent, trust and transparency grow. The benefits go far beyond bricks and mortar resulting in cleaner environments, safer neighbourhoods and expanded opportunities for all city residents.
Naturally LVC is not without challenges. Residents often fear that formalization will result in eviction or unaffordable taxes. Many African cities lack the administrative and legal tools to value land accurately, set fair charges or manage new revenue streams attests Iwong. Overcoming these challenges demands incremental, transparent approaches starting with pilot projects, clear communication, meaningful engagement and phased implementation that can allow communities to see real benefits before costs rise.
Some cities are already blazing a trail. In Nairobi, the Mukuru Special Planning Area pilot brings together city agencies, NGOs and residents to co-design regularization and value sharing. Kigali’s citywide registration drive has increased municipal revenue and paved the way for urban investments. In Morocco, the Villes Sans Bidonvilles (Cities Without Slums) programme has leveraged land value capture and public-private partnerships to upgrade informal settlements and deliver new housing at scale. African policymakers are not alone. Institutions such as the World Bank, UN-Habitat all advocate these LVC as part of a new urban development paradigm for the continent.
Formalizing informal settlements is not only a social good, but a financial and developmental win for African cities agrees Simbarashe Chereni, Guest Researcher in Environmental Politics and Psychology/Spatial Planning at Delft University of Technology in the Hague, Netherlands. Recognizing and organizing these vibrant communities to capture a share of the value that regularization creates can enable city leaders to fund the roads, schools, clinics and parks that drive lasting prosperity.
City leaders, planners and partners must champion land value capture as the key to unlocking the full potential of Africa’s urban future. In this way they will not only improve lives today, but lay the foundation for generations to come: transforming informal settlements from symbols of challenge into engines of shared opportunity and growth.
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Christopher Burke currently serves as senior advisor at WMC Africa, a communications and advisory agency located in Kampala, Uganda. With almost 30 years of experience, Christopher has worked extensively on social, political and economic development issues focused on governance, the environment, agriculture, public health, extractives, communications, peace-building and international relations in Asia and Africa.
