An artist’s impression of Konza City. A new World Bank report says such projects open the door to regional and global investors. [photo: file/standard]
The World Bank has challenged Africa to grow its cities at the pace its population is growing. In a report titled, Africa’s Cities: Opening Doors to the World, the global lender says that Africa’s urban population will double over the next 25 years, reaching one billion people by 2040, up from 472 million people currently.
As cities grow, another 187 million people will be added to urban areas by 2025. That is like adding Nigeria’s population to African cities.
The report says because of insufficient infrastructure, African cities are among the costliest in the world both for business and for households, leaving cities “out of service and closed for business”.
African cities are 29 per cent more expensive than cities in countries at similar income levels. African households face higher costs relative to their per capita GDP than do households in other regions, much of it accounted for by housing, which costs them 55 per cent more than in other regions.
In Dar es Salaam, for example, 28 per cent of residents live at least three people in one a room; in Abidjan, 50 per cent and in Lagos, Nigeria, two out of three people live in slums.
Improving economic conditions for people and businesses in African cities will only be achieved by aggressively investing in infrastructure and reforming land markets which is the key to accelerating economic growth, says the report.
“What Africa needs are more affordable, connected, and livable cities,” said Makhtar Diop, World Bank Vice President for Africa. “Improving the economic and social dividends from urbanisation will be critical as better developed cities could transform Africa’s economies.”
City dwellers pay around 35 per cent more for food in Africa than in low-income and middle-income countries elsewhere. Overall, urban households pay 20-31 per cent more for goods and services in African countries than in other developing countries at similar income levels.
Urban workers in Africa are also forced to pay high commuting costs or they cannot afford to commute by vehicle at all, and the informal minibus systems are far from cost-efficient, leaving many to have to walk to work. The need to walk to work limits these residents’ access to jobs.
The report says that Africa is urbanising at lower incomes than other developing regions with similar urbanisation levels. In 1968, when countries in the Middle East and North Africa became 40 per cent urban, their per capita GDP was $1,800 (Sh180,000). And in 1994, when countries in the East Asia and Pacific surpassed the same threshold, their per capita GDP was $3,600 (Sh360,000).
By contrast, Africa, with 40 per cent urbanisation, today has a per capita GDP of just $1,000 (Sh100,000). This means that every dollar of public investment in cities needs to be done as efficiently as possible.
The report says the need for higher wages to pay higher living costs makes businesses less productive and competitive, keeping them out of tradable sectors. As a result, African cities are avoided by potential regional and global investors and trading partners.
In Kenya, eyes are on developers of projects like Tatu City and Konza City to help seize the opportunity of building efficient and productive cities that become a strong catalyst of economic development for centuries to come.