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Urbanization in Africa: How Today’s Challenges Become Tomorrow’s Opportunities
By admin January 11, 2017

Photo by Scott Webb

In March 2016, the African Development Bank (AfDB), the Organisation for Economic Co-operation and Development (OECD) and the UN’s Development Programme (UNDP) produced a report entitled The African Economic Outlook (AEO) 2016. Following the previous report, this year’s focus was on Sustainable Cities and Structural Transformation through the analysis of the present state of affairs in the continent.

According to this study, over 50 percent of all Africans are going to be living in cities by 2050. As a comparison, Europe’s percentage of the population living in urban areas went from 14 percent in 1800 to 40 percent in 1910. In 1950, 14 percent of all Africans lived in urban areas compared to an estimated 56 percent by 2050.

Another element to take into account is Africa’s impressive demographic. Again, in 1950, Africa’s population represented 10 percent of the world’s population versus an estimated 25 percent by 2050. By then, it’ll have reached twice the population size of Europe. A growing demographic is an economic challenge, as productivity, particularly in the agricultural sector, must increase. Africa could benefit from the demographic dividend with the increased percentage of the population able to work. But again, for this to become an opportunity, paid employment opportunities need to be created.

Nine out of 10 working young people in sub-Saharan Africa are considered poor or near poor and it is estimated that out of the 18 million young adults that enter the workforce every year, 75 percent of them are reported without stable or decent employment. Through proper investments in infrastructure and structural policies, urbanization could potentially drive development. Mario Pezzini, director of the OECD’s development Center argues that development and urbanization are inseparable issues, and policymakers have an important role to play in this interrelation.

Indeed, he says that in order for urbanization to trigger economic development, infrastructures must be created to increase employment rates. Mario Pezzini further explains that urbanization is often paired with transformation in Agglomeration Economies, as concentrating housing, people and firms usually favor development. But in Africa, because of the lack of infrastructural investments, people move from rural to urban areas, but they stay in the same living conditions thus forming slums drawing no benefit from the urbanization process.

The AEO 2016 report establishes that, on average, African countries would need to spend 5-7 percent of their gross domestic product (GDP), on public infrastructure for this trend to become a resource from which to benefit. For Pezzini, multiple sources are to be seen as options to fund the necessary policies. Foreign direct investments, overseas development assistance or tax collections through fiscal reforms are some of the possibilities. Indeed, the report shows that tax collection remains low in Africa.

The potential of these cities to prompt sustainable structural transformation is real as two thirds of investments in urban infrastructure are to be made by 2050. For the urbanization trend in Africa to be seen as a vector for growth, policymakers must insure that it is coupled with inclusive policies that allow every one to benefit from the continuous economic development trend in the continent, thus finding a way to fight urban poverty and inequality. This shows that investments alone do not guarantee sustainable developments; structural policies are just as necessary.

It is important to understand that making cities and human settlements inclusive, safe, and sustainable for all (including offering affordable housing and transport) is one of the Sustainable Development Goals. This comes to show that GDP is not the only relevant measurement for development and that inequalities are a reality for cities in developing countries as well as in developed parts of the world.

 

Read more:

The Guardian’s article on the AEO 2016 report

IRIS

AEO 2016 report


Thanks for sharing !


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