summary:
Cities in sub-Saharan Africa are experiencing rapid population growth. However, their economic growth has not kept pace. why? One factor may be low capital investment, due in part to Africa’s relative poverty. Other regions have high GDP per capita and have reached similar stages of urbanization. But this study reveals a deeper reason why African cities are so closed to the world. Compared to other developing cities, African cities produce fewer goods and services for trade in regional and international markets. To grow economically as African cities expand in size, African cities must open up to the world. They should specialize in manufacturing, along with other regionally and globally tradable goods and services. And to attract global investment in trade goods production, cities must develop economies of scale, which lead to successful urban economic development in other regions. Economies of scale like that can and will happen in Africa if city and country leaders make a concerted effort to create agglomeration effects in urban areas. Today, potential urban investors and entrepreneurs look to Africa and see cities that are crowded, isolated, and expensive. Such cities have lower expectations regarding the scale of urban production and the return on invested capital. How can these cities become economically dense and not just congested? How can they gain efficient connectivity? And how can they have more affordable and livable urban environments, attracting businesses and skilled workers? From a policy perspective, the answer must be to address the structural problems affecting African cities. The most important of these problems are institutional and regulatory constraints that cause misallocation of land and labor, fragmentation of physical development, and limited productivity. As long as African cities lack functioning land markets, regulation, and early and coordinated infrastructure investment, African cities will remain regional, closed to regional and global markets, confined to producing only locally traded goods and services, and with limited economic growth.
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Chapter 1: Capital is not dense, but people are.
Urbanization benefits people and businesses by increasing economic density. Workers in economically dense areas can commute more easily and consume a wider range of products. Companies concentrated in cities have access to a broader market of raw materials and buyers. Economies of scale reduce production costs for companies, which in turn benefits consumers.
Download PDF Chapter 1 – Dense People, But Not Dense Capital |Full Report
Chapter 2: Unconnected lands, people, and work
African cities are crowded with people, but their capital is not densely packed, but physically fragmented and dispersed. They develop as collections of small, scattered neighborhoods. Without proper roads and transportation systems, workers cannot reach jobs in large cities because of the long and expensive commutes. Many people and businesses are cut off from each other and economic opportunity.
Download PDF Chapter 2 – Separated Lands, People and Work | Full Report
Chapter 3: It’s costly for households, and it’s costly for businesses.
Households in Africa face higher costs relative to GDP per capita than households in other regions. A new study of city-level price level indices based on data collected by the International Comparison Program finds that urban households in 39 countries in sub-Saharan Africa collectively pay 20 to 31 percent more than urban households in other countries with similar income levels (nakamura and others 2016). A similar comparison of city prices based on data from 125 cities, including nine in sub-Saharan Africa (Economist Intelligence Unit Global Cost of Living Survey), found that African cities have approximately 31 percent higher costs of living for households than cities in other low- and middle-income countries (Nakamura et al., 2016).
Download PDF Chapter 3 – It’s costly for households, costly for businesses |Full report
Chapter 4: The Trap of Urban Development in Africa
In urban areas that are difficult for commuters and businesses due to fragmented planning, lack of affordable transportation, and unexpectedly high labor costs, it may be a good idea to post “closed” signs. You can also put up “Out of Service” signs on things that look unlivable without decent housing and amenities.
Download PDF Chapter 4 – Africa’s Urban Development Trap | Full Report
Chapter 5 Clarification of property rights and strengthening of urban planning
Over the next two decades, Africa’s urban population growth will drive new demands on infrastructure, housing, other physical structures, and amenities. To meet this new demand, city leaders and planners need adaptable strategies. Planning and regulation must enable the best use of land, but also allow for uses and users to change over time as demand further evolves.
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Chapter 6: Expanding and adjusting investments in physical structures and infrastructure
At the same time as pursuing the recommendations of Chapter 5, African cities have an urgent need to improve two urban structures (physical and infrastructural), given the chronic under-services of urban structures. In fact, infrastructure penetration has declined across several indicators across the region. For example, in 2010, when the urban population was 37 percent, only 34 percent of urban residents had access to running water, down from 43 percent in 1990, when the urbanization rate was 30 percent. In 2006, the African Infrastructure Country Diagnostic (AICD) estimated that addressing the infrastructure backlog would require between $68 and $93 billion annually over the next 30 years, one-third of which would be spent on maintenance.
Download PDF Chapter 6 – Expanding and Coordinating Investments in Physical Structures and Infrastructure | Full Report
