LONDON, (Reuters) - Rapid and chaotic urbanisation is threatening sustainable development in Africa, the head of the U.N. housing agency said on Monday, but taking steps to mitigate climate change could help tackle some of the problems of cities.

The populations of large, fast-expanding cities in Africa, such as Lagos in Nigeria, are set to continue growing at annual rates of around 4 percent according to the United Nations, putting pressure on the provision of housing and basic services.

"We are an urban species now ... but I'm afraid what we have on the ground is rather chaotic and unsustainable," Anna Tibaijuka, executive director of UN-HABITAT, said at a conference on the future of cities at Chatham House in London.

"After HIV and Aids, the biggest threat to sustainable development in Africa is rapid and chaotic urbanisation, because it is a recipe for disaster for increased tensions and pressure."

Tibaijuka said more investment was needed in making urban growth more sustainable, for instance by improving infrastructure and technology.

Decentralising governance from a national to city level would also enable urban problems to be tackled more effectively, she said, acknowledging steps taken by Kenya towards amending its constitution to devolve government to regional counties.

The impact of climate change has exacerbated existing social and economic problems, forcing many farmers away from their villages to become "environmental refugees" in big cities, Tibaijuka said.

But while cities have been part of the problem of climate change, they could also be part of the solution.

"There is a unique opportunity to bridge our global efforts in emissions control with local efforts to improve the quality of life and the productivity of our cities," she said.

"We need to take immediate actions to make our cities more sustainable ... what better measures can we take than to reduce traffic congestion, improve air and water quality, and reduce our ecological footprint."