AFRICAN CITIES WILL DOU­BLE IN POP­U­LA­TION BY 2050

Africa is not pre­pared for this ur­ban ex­plo­sion. By 2025, there will be 100 African cities with more than one mil­lion in­hab­i­tants each, ac­cord­ing to McKin­sey.

Nomad Africa Magazine - - Focus Africa - Words: ROBERT MUGGAH

africans are mov­ing to the city. Al­ready home to the world’s youngest and fastest­grow­ing pop­u­la­tion, the con­ti­nent is ur­ban­is­ing more rapidly than any other part of the planet. Africa’s 1.1 bil­lion cit­i­zens will likely dou­ble in num­ber by 2050, and more than 80% of that in­crease will oc­cur in cities, es­pe­cially in­for­mal set­tle­ments. The im­pli­ca­tions of this turbo-charged growth are hard to fathom. Con­sider how La­gos - al­ready Africa’s largest city - is pre­dicted to ex­pand by an as­ton­ish­ing 77 peo­ple ev­ery hour be­tween now and 2030. Africa is not pre­pared for this ur­ban ex­plo­sion. By 2025, there will be 100 African cities with more than one mil­lion in­hab­i­tants each, ac­cord­ing to McKin­sey. That's twice as many as in Latin Amer­ica. Run­away ur­ban­i­sa­tion and a growing youth bulge, with most young peo­ple lack­ing mean­ing­ful job prospects, is a time bomb. Al­ready some 70% of Africans are un­der 30. Young­sters ac­count for roughly 20% of the pop­u­la­tion, 40% of the work­force and 60% of the un­em­ployed. Africa is suf­fer­ing from a ma­jor ur­ban in­fra­struc­ture gap. An­nual na­tional pub­lic spend­ing on in­fra­struc­ture is ex­ceed­ingly low: an av­er­age of 2% of GDP in 2009 - 2015, com­pared to 5.2% in In­dia and 8.8% in China. Not sur­pris­ingly, African cities of­ten suc­cumb to fragility. Sixty per­cent of all ur­ban­ites live in over-crowded and un­der-ser­viced in­for­mal set­tle­ments. Around 25-45% walk to work due to lack of af­ford­able trans­port. With turbo-ur­ban­i­sa­tion, these ap­palling con­di­tions could eas­ily de­te­ri­o­rate. An­other loom­ing prob­lem is that African cities are set to ex­pand dur­ing a pe­riod of un­prece­dented cli­mate stress. Africa’s ur­ban ar­eas are likely to suf­fer dis­pro­por­tion­ately from cli­mate change, as the re­gion as a whole is warm­ing up 1.5 times faster than the global av­er­age. The strain on ba­sic ser­vices and nat­u­ral re­source en­dow­ments, as Cape Town’s wa­ter crisis shows, is set to in­crease. If Africa does not find a way to build sus­tain­able cities with greater ac­cess to pri­vate cap­i­tal, then they risk be­com­ing both un­liv­able and in­debted. Make no mis­take - Africa’s fu­ture is ur­ban. But in the next two decades, African cities will need to do much more, with much less. While na­tional gov­ern­ments will need to step up and im­ple­ment reg­u­la­tions to raise pub­lic fi­nance, African may­ors, city res­i­dents and busi­nesses can­not af­ford to wait. A new mind­set is ur­gently re­quired. But this first re­quires fac­ing up to the scale of the chal­lenge.

MIND THE GAPS

The ur­ban in­fra­struc­ture deficits are daunt­ing. Africans need to spend be­tween $130-170 bil­lion an­nu­ally to meet the con­ti­nent’s ba­sic in­fra­struc­ture needs. Yet, the re­gion is al­ready fac­ing fi­nanc­ing short­falls of $68-$108 bil­lion. Roughly two-thirds of the in­vest­ments in ur­ban in­fra­struc­ture needed by 2050 have yet to be made. Com­pli­cat­ing mat­ters, a ma­jor­ity of cur­rent fi­nanc­ing is from the pub­lic sec­tor be­cause in­sta­bil­ity and reg­u­la­tory con­fu­sion de­ter pri­vate cap­i­tal. To­tal cap­i­tal in­vest­ment in Africa be­tween 1980-2011 av­er­aged just 20% of GDP (as com­pared to 40% of GDP in the case of East Asia dur­ing a pe­riod of rapid ur­ban­i­sa­tion). Clos­ing these gaps could in­crease GDP growth per capita by 2.6% per year. It is not just the ur­ban in­fra­struc­ture gap, but the lack of city plan­ning, in­ef­fi­cient land use, reg­u­la­tory block­ages and vested in­ter­ests that are hold­ing African cities back. The re­sult is sprawl­ing, frag­mented and hy­per-in­for­mal cities. Not sur­pris­ingly, African cities are re­mark­ably ex­pen­sive to live in. Ac­cord­ing to the World Bank, African cities are 29% more ex­pen­sive over­all than non-African cities with sim­i­lar in­come lev­els. Lo­cals pay a whop­ping 100% more for trans­port, 55% more for hous­ing, 42% more for trans­port and 35% more for food. All of this slows down busi­ness, cut­ting firm pro­duc­tiv­ity by close to half, while dra­mat­i­cally in­creas­ing the in­put costs of con­sumer goods.

Africa’s in­fra­struc­ture gaps are not there by ac­ci­dent. A key rea­son is that mu­nic­i­pal gov­ern­ments are cash-strapped and strug­gle to gen­er­ate tax rev­enue. City au­thor­i­ties of­ten lack the po­lit­i­cal dis­cre­tion and fi­nan­cial au­ton­omy to take ac­tion. Take the case of Dakar, Sene­gal, which was pre­vented by the cen­tral au­thor­i­ties from sell­ing mu­nic­i­pal bonds to in­vestors back in 2015, re­sult­ing in the loss of $40 mil­lion of cap­i­tal. Now com­pare this to US cities that raised more than $111 bil­lion worth of mu­nic­i­pal bonds for in­fra­struc­ture projects in just two months last year. Cities in Africa raised the equiv­a­lent of 1% of this amount over the past 14 years. The re­gion’s na­tional and mu­nic­i­pal lead­ers have no time to waste. They need to take the right steps to at­tract pri­vate in­vest­ment for ur­ban in­fra­struc­ture. For­eign and do­mes­tic in­vestors want the same thing: po­lit­i­cal and eco­nomic sta­bil­ity, pre­dictable reg­u­la­tory en­vi­ron­ments, stronger prop­erty rights, and cred­i­ble plans and pro­ject pipe­lines. Yet, most of these ba­sic pre­con­di­tions are still in short sup­ply across Africa. Without co­or­di­nat­ing agents - be they for­ward-look­ing firms, large in­vestors or third-party agents that de-risk in­vest­ment - cities are un­likely to take off. BRIDGE THE GAPS The real ques­tion is: how will African cities ab­sorb dou­ble their pop­u­la­tion, while us­ing just half the re­sources over the next 20 years? And how can this be done, while im­prov­ing the over­all qual­ity of life? The good news is that the solutions are po­ten­tially closer at hand than many as­sume. A ma­jor part of the an­swer lies in em­ploy­ing new (and homegrown) tech­nolo­gies, build­ing smarter in­fra­struc­ture and har­ness­ing the dy­namism of the in­for­mal sec­tor. African cities are only just start­ing to reap the div­i­dends of the Fourth In­dus­trial Rev­o­lu­tion. Mo­bile phone pen­e­tra­tion is con­nect­ing all cor­ners of the con­ti­nent, and data gen­er­ated from hun­dreds of mil­lions of de­vices and cheap com­put­ing power can po­ten­tially im­prove ur­ban liv­ing. Tech­no­log­i­cal in­no­va­tions such as so­lar pho­to­voltaic sys­tems, bat­tery stor­age, IoT sen­sors and even satel­lites are rapidly fall­ing down the cost curve. To wit, Kenya just be­came the first sub-Sa­ha­ran African coun­try to launch a satel­lite into space. De­spite their many chal­lenges, or per­haps be­cause of them, African cities are dy­namic and creative. Most ur­ban ser­vices - whether trans­port, en­ergy, wa­ter, waste man­age­ment, tele­coms, hous­ing or pub­lic se­cu­rity - are pro­vided by in­for­mal pri­vate providers. Con­sider pub­lic tran­sit sys­tems: 70-95% of pub­lic tran­sit rides in African cities are sup­plied by in­for­mal, in­de­pen­dent oper­a­tors. They pro­vide a vi­tal, al­beit some­times dan­ger­ous and costly, ser­vice to cit­i­zens. Or con­sider Cam­bridge In­dus­tries in Ad­dis Ababa, which is pre­sid­ing over Africa’s first waste-toen­ergy fa­cil­ity. Work­ing with China’s CNEEC and the Ethiopian Gov­ern­ment, they are sup­ply­ing 30% of the city’s en­ergy needs from 80% of its rub­bish, most of it de­posited by lo­cal waste col­lec­tors. Ur­ban in­for­mal­ity can­not be con­strued as a prob­lem, but rather an as­set and sign of re­silience and agility. When ex­plor­ing in­no­va­tive fi­nanc­ing solutions, the task for city plan­ners and in­vestors is main­tain­ing the virtues of in­for­mal­ity (de­mand re­spon­sive­ness, job creation and self-suf­fi­ciency), while re­duc­ing its vices (un­safe con­di­tions, lowqual­ity ser­vices, un­fair labour prac­tices, and at times in­ef­fi­ciency and high costs for con­sumers). Here are four ways that African cities might start bridg­ing the in­fra­struc­ture gap: Ac­cel­er­ate in­vest­ment in tech­nol­ogy de­ploy­ment for smarter ur­ban in­fra­struc­ture Many com­pelling solutions are poised for scale. A short­list in­cludes Kenya´s Upande, which uses IoT to man­age wa­ter leak­ages and de­liv­ery; South Africa’s Where is My Tran­sit, which fa­cil­i­tates rout­ing of tran­sit sys­tems across African cities; Nige­ria’s Ren­source, which pro­vides dis­trib­uted so­lar and re­places pol­lut­ing diesel gen­er­a­tors in homes across La­gos; Nairobi’s Taka Taka, which col­lects 30 tonnes of waste ev­ery day and re­cy­cles about 90% of it; Uganda´s CSquared, which is lay­ing fi­bre op­tic ca­ble across Kam­pala, Ac­cra and other African cities; and poa! in­ter­net, which pro­vides af­ford­able pub­lic and home wiFi across ur­ban slums in Kenya. In the US, for ex­am­ple, there are ded­i­cated funds com­mit­ted to scal­ing ur­ban tech­nol­ogy such as Ur­ban.us and Ur­ban In­no­va­tion Fund. There are no equiv­a­lent play­ers in Africa. De­spite the rapid growth of im­pact in­vest­ing in Africa, most fun­ders shy away from com­pa­nies tack­ling ur­ban chal­lenges for fear of gov­ern­ment in­ter­fer­ence and higher cap­i­tal re­quire­ments. De­velop com­pre­hen­sive data an­a­lyt­ics to drive smarter de­ci­sion-mak­ing and in­vest­ments in the fu­ture of African cities The good news is that there are growing reser­voirs of struc­tured and un­struc­tured data avail­able from satel­lites, IoT net­works and in­ter­na­tional and lo­cal agen­cies. But these data are still in­ac­ces­si­ble, frag­mented and messy. Finding a way to weave this in­for­ma­tion to­gether could en­able more ef­fec­tive and ef­fi­cient in­vest­ments, par­tic­u­larly to sup­port the ur­ban poor. Re­frame the de­bate on ur­ban real es­tate devel­op­ment across Africa There are, of course, smart cities pop­ping up across the con­ti­nent: Eko At­lantic in Nige­ria, Tatu City in Kenya and Vi­sion City in Rwanda, to name a few. While of­fer­ing vi­sions of the fu­ture, most of them are fail­ing when it comes to pro­vid­ing af­ford­able and in­clu­sive op­tions for the ma­jor­ity of Africa’s ur­ban res­i­dents. Flag­ship projects that set a new stan­dard for af­ford­abil­ity, ac­count­abil­ity, eco­nomic op­por­tu­nity and sus­tain­abil­ity are re­quired. In­vest in es­sen­tial cut­ting-edge re­search to drive this work for­ward The Uni­ver­sity of Cape Town’s African Cen­tre for Cities (ACC) is a ter­rific ex­am­ple of how lo­cal schol­ar­ship is shap­ing ur­ban plan­ning de­ci­sions. Donors such as DFID and the World Bank are al­ready sup­port­ing re­search, but more is needed. If cities are where the fu­ture hap­pens first, then Africans need to in­vest more in their knowl­edge cap­i­tal to­day. An African Ur­ban­i­sa­tion Fel­lows pro­gramme, at­tract­ing the best tech­nol­o­gists, ur­ban plan­ners and pol­icy-mak­ers, would be a good way to start. An in­te­grated ecosys­tem ap­proach can help con­vert these pro­pos­als into ac­tion. It is prob­a­bly time to es­tab­lish a plat­form for ac­cel­er­at­ing ur­ban in­no­va­tion, a kind of Side­walk Labs for Africa. While Side­walk and others are busily reimag­in­ing city life in North Amer­ica, they are not fo­cus­ing on where to­mor­row’s ur­ban ex­plo­sion is tak­ing place. Africa needs an or­gan­i­sa­tion that can help in­cu­bate lo­cal in­no­va­tions un­der one roof - an in­vest­ment ve­hi­cle, a data plat­form, a real es­tate group and a re­search con­sor­tium that part­ners with mu­nic­i­pal­i­ties to help them reimag­ine their fu­ture. By 2050, more than 1.3 bil­lion Africans will call a city home. If they are to live with dig­nity and seize to­mor­row’s op­por­tu­ni­ties, Africa needs to as­sem­ble the great­est minds in ur­ban plan­ning, tech­nol­ogy and sus­tain­abil­ity to­day.

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