Building Arusha: One City’s Journey to Better Urban Services, Access and Quality of Life

ARUSHA, August 12, 2014 – With lush green mountains draped by a spectacular blue sky and simple green spaces, Arusha is known for its natural beauty. Now, thanks to a deliberate campaign to further improve the city’s infrastructure, its allure is further enhanced by improved city streets, access to basic services and a better quality of life for its citizens. The ongoing infrastructure development in Arusha is being financed through the Tanzania Strategic Cities Project (TSCP), with funding totalling $213 million by the World Bank Group and $6 million from the Danish government. The program, which started two years ago, targets Tanzania’s growing medium-sized cities, including Arusha and six other local government authorities (LGAs): Tanga, Mwanza, Kigoma, Mbeya, Mtwara and Dodoma. Open Quotes We have focused on improving the central business district streets. We identified 23 dirt roads in the area, totalling just 7.23km and we paved and equipped them with street lighting, pedestrian walkways, and proper drainage, and the overall effect has been amazing. Close Quotes Lamsy Afwilile Engineer for Arusha City Council Saumu Kassim, a taxi driver, said traffic is much better today thanks to the improved roads. “Previously, Father Babu and NHC roads were not usable despite their strategic connection to different places in the city,” he said. “Today however, with the roads in good shape, traffic has been freed up everywhere as more cars can now pass through these key routes. The city altogether looks much better and we also see that property value has appreciated in several areas which were once very dusty. It is appropriate now to use our label ‘the Geneva of East Africa.’” Residents are also relieved with the 800m storm water drainage system which has contained flooding in the city. “Before its construction, it was dangerous to walk in the rain in this part of the city, but this is now a thing of the past,” said James Mshumbushi, a businessman on Bondeni Street, which was once severely affected by flooding. “More people than before now come to shop in this area as the traffic is less congested.” As Tanzania continues urbanizing rapidly – with 27% of the population residing in cities in 2012, up from 5.7% in 1967 – it is estimated that there will be more people living in cities than in rural areas by 2030, increasing pressure on already stretched public services. Against this background, the TSCP aims to improve the quality of and access to basic urban services through the building of core infrastructure and the introduction of innovations for improved urban management. A key innovation has been the integration of the Geographic Information Systems (GIS) with the Local Government Revenue Collection Information System (LGRCIS). The systems work together to ensure that all properties – commercial, residential and others – are mapped and assessed for their tax revenue potential. Equipped with this information, city authorities will have a clearer picture of the tax earnings needed to finance the services to improve the quality of life and business environment. “With the GIS mapping, we have been able to define the commercial buildings in the whole of Arusha,” said Daniel Mruma, the quality assurance team leader for the GIS unit of the City Council. “These are the ones that can generate more revenues for the council, rather than residential buildings.” Full completion of the GIS mapping and evaluation is underway, but several areas have been entered into the LGRCIS system and have been invoiced since December 2013. Once the taxes are paid and a receipt is issued to a proprietor, the electronic revenue collection system automatically changes the code in the computer to show compliance. LGRCIS replaces the old paper and cash-based systems with a more transparent and convenient means of payment. Soon, residents and businesses will be able to pay on-line or through mobile banking. “Supporting cities’ efforts to collect their own source revenues using technology is part of our overall efforts to improve financial sustainability of urbanization in the long run,” said Mehmet Onur Ozlu, senior urban specialist and task team leader for the TSCP. “Arusha’s successful launch of LGRCIS is an example of how this can be done with tangible results.” An operational LGRCIS system has also meant the city is in a better position to keep up with the expectations of the residents who are enjoying the benefits from the upgraded infrastructure. Not only have the new roads drastically reduced traffic congestion and provided motorists with better alternative routes, they are also making it easier to collect taxes as happier residents have become more welcoming of the taxman. “Our experience has been that people always try to avoid paying taxes, but what we have seen here is what has also been documented in studies; tangible developments compel citizens to pay their taxes,” said Bruno Mlacha, revenue accountant for the city council. “The new roads, which are of exceptional quality, have been a great incentive for them to pay up. Whenever we announce that we are visiting an area to check on tax compliance, we find that people from different locations come to our offices on their own volition before we even visit their area. Some call you and say, ‘can you come and pick up your cheque?” The numbers support Mlacha’s account. In the three months between December 2013 and February 2014, the city collected Sh174.5 million, nearly double the amount (Sh89 million) collected in the five months before the LGRCIS became operational. “The computerization has made the tax system more transparent and credible for payers and it gives them confidence that they are paying for something genuine as opposed to concocted,” Mlacha added. The city’s overall revenue outlook looks promising. The city has already generated Sh2.7 billion in property taxes, services levies, hotel levies, business licenses and billboards – nearly double – in just the first three months of the new LGCRIS system. These figures are expected to grow once the property evaluation process is completed and more taxpaying units are harnessed under the new system. “The new revenue enhancement and urban management systems developed in Arusha and the other TSCP cities are best practice – we already see a lot of interest from cities around the world in the work being carried out in Tanzania,” said Andre Bald, World Bank senior urban specialist. “And not only is the new technology improving revenue collection – LGRCIS is a powerful tool to support municipalities with their planning, land management, and operations and maintenance roles.