With over two billion more people in cities by 2050, are smartphones the future of African urban planning?
Optimal decisions and behaviours can be attained in city environments through the use of information and communication technologies.”
Humanity faces the mammoth task of adding over two billion people to the urban population before 2050, the equivalent of creating a city the size of London every month for the next two decades. The impacts of this growth have been compared to the Industrial Revolution, and Africa will confront these challenges more so than any other region.
For African cities and towns today, this represents an opportunity to capture the historical wealth premium associated with urbanisation, or suffer the consequences of urbanisation without growth.
Against the backdrop of what many call the Fourth Industrial Revolution, further catalysed by the disruption brought in by the convergence of digital technologies, what clues do urbanisation trends in mobile money hotspots provide for successful growth strategies, financial inclusion imperatives, and the digital, finance and commerce (DFC) ecosystem?
Africa is not a city
The UN estimates that around half of sub-saharan Africa is urban now, projected to reach 75 per cent by 2050. Going deeper into these broad figures gives a better sense of the last-mile challenge of customer acquisition at scale: As much as half of non-urban Africans live between one and six hours from the nearest city of more than 50,000 inhabitants, while nearly one in five live six hours or more away.
Indeed, despite the attention garnered by Africa’s best-known urban agglomerations like Lagos, Kinshasa or Johannesburg as the darlings of African urbanisation, the majority of new urbanites (of which there will be an additional 187 million by 2050) will be found in cities of less than one million.
Organisations aiming to capture significant market share or make a significant dent in the financial inclusion challenge should brush up on their geography, because it is secondary cities many have never heard of, like Zinder in Niger, that may wind up being the real locus of change and opportunity.
High fertility rates play a significant role in the unparalleled rates of urbanisation observed in Africa, but they are not the only reason. Climate change, though hard to predict at a local level, will speed up urbanisation where it manifests as reduced moisture, as it will particularly across the Sahelien cities of West Africa and certain Southern corridors.
This sub-saharan experience will clearly be felt beyond its borders — already, the issue of illegal immigration to Europe is clearly on the minds of the French, British and German leaders who have visited the continent recently. As African urbanisation also means the addition of Africans to global (particularly European) cities, perhaps we should view the future of the African remittance market through the lens of African cities’ climate resilience, as those with the largest diaspora are also the largest recipients of money sent home.
Urbanisation = Mobility opportunities
Though government has an enormous responsibility in nurturing cities into liveable and productive spaces, the urgency of the demand for solutions to today’s problems has marshalled the private sector to respond.
Uber, for example, operates in more than 15 major African cities, providing income to over 60,000 drivers and increasingly competing with local facsimiles like Little Cab in Kenya or Africa Ride in South Africa — both of which differentiate themselves by accepting payment through local mobile wallets.
Other startups aiming to offer solutions to the challenge of overcrowded cities include Twiga in Kenya, raising $10.3 million last year for their B2B and B2C foodto-doorstep delivery service, and MAX, a Nigerian motorcycle service dedicated to beating Lagos’s notorious congestion. At the heart of these business models, unsurprisingly, lies the ubiquitous mobile device, along with the innovations in geospatial, location and mapping services offered by smartphones.
Smarter phones, smarter cities?
If smartphones offer practical solutions, smart cities offer a vision. Though definitions vary, the “smart city” concept is underpinned by the notion that optimal decisions and behaviours can be attained in city environments through the use of information and communication technologies.
Mckinsey describes the technological base required for building smart city applications in three parts: First, a sensor layer, collecting data through sensors like smart and dumb phones, air and water quality sensors, surveillance cameras, and waste receptacle sensors; second, a robust communications layer, relaying gathered information through broadband, mobile networks, and even Wifi. Third, open data portals to foster innovation and adoption.
The notion that a smart city may be better able to cope with fast rising populations is unlikely to materialise without planning tools that represent a step change up from the status quo. Indeed, even population census data, typically a laborious World Bank-funded exercise, gets completed once every five years — too long to provide actionable insight into some of the fastest-evolving real estate in the world. Mckinsey notes that in Latin America, India and Africa, in particular, installing the sensor layer is both the most critical and the most capital-intensive first step towards reaping the benefits of smart urbanisation.
Given the unwillingness of telecoms firms to release the precious data they control through call records, enterprising cities should seek big data collection and management solutions that address key issues like mobility, security, utility service provision, healthcare and housing. Fortunately, an increasing array of tools are being developed that can lower the capital costs of this sensor layer, for example using crowd-sourced data or remote sensing from satellites and drones.
Waiting for Wakanda
Mobile money operators are well positioned to play a key role at the intersection across these sectors. They also manage one of the deepest networks of digitally fluent merchants in the thousands of settlements, market towns and secondary cities where high birth rates and rural migration are actively swelling tomorrow’s markets. Collecting and publically sharing city data could help mobile money operators better anticipate the challenges of urbanisation.
Urbanisation in Africa, perhaps more than in any other geographies, will bring the contradictions of modern cities — like malnutrition and obesity — side by side. To capture the benefits of an urban premium, as well as play a unique role in shaping new communities, DFC actors need to go to where the people are — and empower them with the tools to shape the new world.
The UN estimates that around half of sub-saharan Africa is currently urban.