Online course on Urbanization and Inclusive Economic Growth in Africa
Urbanization is a mega-trend with profound implications for Africa’s growth and transformation. While the continent is 40% today, in just another 17 years, half of the population will be living in urban areas. Africa also has the highest urban growth rate globally at 3.4% (compared to Asia- 2.10%; Latin America & the Caribbean – 1.28%). Africa’s urban population doubled between 1995 and 2015 and will double again by 2035 reaching 966 million. Africa’s urban population is likely to triple by 2050, with Africa and Asia accounting for nearly 90 per cent of the world’s urban population growth. The urban transition is also taking place as the continent faces a demographic shift and a burgeoning youth population becoming located in urban areas.
Africa’s rapid urban growth presents considerable demands for employment, services and infrastructure, but creating advantages for economic growth. Both historical and empirical evidence confirm the link between urban agglomerations and economic growth. Cities, through agglomeration economies, make workers and firms productive and drive growth. Agglomeration economies of cities generate higher productivity, making firms and workers in cities more productive than in rural areas and sustaining the productivity differential exhibited in city economies, and, over the long term, skills, knowledge and technology concentrated in cities continue to drive economic growth. Dynamic cities offer a competitive environment for firms to learn and innovate and economic structures to morph and adapt to changing global markets and technology.
While urbanization is necessary for structural transformation, it is not sufficient. The quality of cities can facilitate the growth of productive economic sectors or can constrict it. The quality of cities is based on their institutions, infrastructure and spatial layout. Well-functioning cities in these three areas convey productivity to firms operating there. It therefore becomes critical to plan and manage cities in a manner that optimizes their potential to drive economic growth and transformation in Africa.
Despite the importance of cities for Africa’s inclusive growth agenda, there remain policy disconnects between spatial and economic planning. For instance, the links between urbanization and industrialization have generally been weak or absent in Africa, underlining the urgent need to connect urban and industrial development given their interdependence and growth impacts. In most African countries, the linkages between urbanization and industrialization have been weak or absent. Africa is urbanizing rapidly amidst declining, or at best stagnant industrial or manufacturing output. Yet urbanization offers opportunities to expand domestic manufacturing.
For instance, urban demand could be a driver of industrial development. As Africa’s middle class and urban consumption are on the rise, and as patterns of consumption are changing,
demand for manufactured and processed goods is increasing, presenting a major opportunity for industrialization. The report highlights the automotive industry, an area that demonstrates the ability of African industrial policies to select and support high-growth sectors. The urban demand for food is also rising and changing, with a growing number of urban residents beginning to buy groceries from supermarket chains. Furthermore, African cities are facing large unmet urban housing needs that could also provide opportunities to improve urban living conditions and generate construction and service jobs. Urban development also creates demand for public infrastructure, which could be leveraged through procurement policies and support to domestic firms in the construction industry.
The missing links between urbanization and industrialization are rooted mainly in the context of national institutional and policy frameworks for growth and transformation. Given the multi-dimensional implications of urbanization for industrialization and economic growth, strategic interventions prioritized and implemented under national development planning would benefit urban and industrial development. Rapid urbanization could be a powerful asset for Africa’s economic growth provided it is harnessed through a strategic cross-sectoral policy framework anchored in national development planning.
Currently, African national development plans consider urban issues as a sectoral issue, with a limited role in economic transformation and industrialization. Urban goals in many national development plans of African countries are often expected to deal with poverty and informality, rather than to realize the economic opportunities that cities and urbanization represent. In the same vein, national development plans often place a priority on agriculture and rural development over urban economic productivity, even in countries where the population is approaching 50 per cent urban or beyond and GDP growth is driven by urban economic sectors. This results in urban underinvestment, with significant consequences for the economy in the long term.
Under national development planning, a cross-sectoral and strategic perspective is required to link urbanization and industrialization. Sectoral policies for industrial development need to factor in the implications of Africa’s rapid urbanization, and urban policies have to better integrate job-rich industrial development for sustainable urbanization. In this way, urban and industrial strategies can be explicitly linked to broader national goals such as employment creation, poverty reduction and improving the quality of life in both urban and rural areas.
Cities and local governments would also benefit from aligning their priorities and strategies with national development priorities. For instance, urban productivity could be enhanced by implementing local economic development strategies with an explicit focus on accelerating industrialization, mirroring national industrial policy and national urban policy, factoring in the competitive advantages of certain cities—including knowledge sharing in large, diverse cities and urban–rural linkages for smaller cities. Also, the planning and management of cities needs to be considered beyond service provision, as key foundation for achieving national development targets, and should more often be seen from the perspective of enhancing the productivity of cities particularly in generating jobs in sectors such as manufacturing and modern services.
At the end of the course, participants will have an enhanced understanding of the role of urbanization in Africa’s transformation, in line with Agenda 2063 and the SDGs.
Specifically, participants will be able to:
• Identify the key concepts, trends and conditions of urbanization in Africa and how they impact the continent;
• Identify the challenges and opportunities for Africa in terms of utilizing the continent’s rapid urban growth for accelerating economic transformation;
• Understand the policy measures needed to take advantage of Africa’s rapid urban growth can boost job creation in the manufacturing sector;
• Discuss the main barriers for African cities to be productive, competitive and job-rich and how to address them through deliberate policies and strategies;
• Examine how deliberate planning can result in a balanced system of cities and adequate urban form in a manner that enables industrialization;
• Understand the potential of African cities to boost domestic resource mobilization, if they are well planned and managed;
• Discuss how African countries can strengthen the urban component of national development planning and visioning to harness urban growth for economic transformation;