Case Examples


Example of:

    Upgrading Cost-Effectiveness

    • The Importance of Government Cooperation

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Rabat, Meknes, Kenitra, Morocco

In Morocco, upgrading was not accepted by the government. Believing that squatter settlements were “blemishes on the urban fabric,” the government preferred to build new, “high-standard, highly subsidized” low-income housing. Because of the high cost of such a solution (four times that of upgrading) the government could not afford it and was forced to consider upgrading.
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Demonstrate the feasibility of improved shelter policies in the areas of infrastructure upgrading, low income sites and services, cost recovery, etc., thereby serving as the basis for building a solid urban lending program in Morocco.

Address structural problems in the infrastructure, social service, and employment sectors of Rabat’s 7th Municipal Ward.

  • infrastructure for neighborhood upgrading;
  • development of sites and services plots for residential as well as commercial and industrial use;
  • loans for home improvement and construction and for business development;
  • improvement of municipal services; and
  • related technical assistance.
What worked and why?
Project preparation was very quick. What is needed for this is: a clear objective and support from local authorities. This experience calls for a shift in Bank resources from preparation to supervision.

The physical aspects of the project significantly benefitted the city populations-5.6% in Rabat, 10.1% in Meknes, and 12.3% in Kenitra.

The projects have had a significant impact on their respective cities with regard to the physical environment

  • at one site, the street pattern and some architectural details were maintained when constructing new housing, preserving the old feel of the neighborhood.
  • another site has drawn enough commercial activity to make it the country’s fourth largest commercial center.

There was significant mobilization of private savings to pay for the expansion and improvement of dwelling units at project sites.

What didn't work and why?

Setting up the first plan took too long due to a lack of continuity in Bank staff, the objectives of the government, and technical problems. It was eventually cancelled.

Implementation would have been more rapid had the institutional arrangements for the Rabat Project not been so complex.

There was a divorce between the physical and financial aspects of the program which resulted in poor cost recovery. Obviously the improvement of the financial management is important, but at the same time, the management of the physical portion of the project needs to be improved.

At the outset, it was hoped that this project would convince the Moroccan government that upgrading was preferable to urban renewal. Upon completion it was apparent that perhaps that had not been achieved as the government still maintained its eradication policy. Even though the projects demonstrated an approach that was four times less costly than the traditional urban renewal solutions employed by the government, they were not used as a blueprint for the rest of the nation’s cities.

The new Ministry of Housing was responsible for the project but had inadequate staff and no project budget to control, thus slowing the process. This encouraged conflict among participating agencies each of which had independent authority over its component. In the second project, regional delegations were put in charge instead.


Bank Involvement Tip: The administration fee must cover the perceived risk of lending to many low-income households.

The Moroccan bank in charge of granting construction loans was reluctant because of perceived insecurity due to the beneficiaries’ lack of land title and the insufficiency of a 1% administration fee meant to cover the bank’s costs of managing many very small loans.

Affordability Analysis Tip: In addition to traditional affordability analysis, future operations should review patterns of accumulated wealth, as well as current income, in order to determine the ability of low-income families to participate in financing their own housing.

In Morocco, personal savings in the form of jewelry, livestock and rural property appear to play a significant role in the informal economy.

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