Five trends in Africa’s rapid urbanization
Africa’s cities are growing fast. But the trend lines and context of that growth vary widely across the continent.
That’s a major theme in the 15th edition of the African Economic Outlook, published recently by the African Development Bank, the Organization for Economic Co-Operation and Development and the United Nations Development Programme. The report includes an entire section devoted to the theme of sustainable cities.
The 400-page publication examines both the challenges and opportunities of rapid urbanization in Africa. It also offers a variety of recommendations to promote sustainable urbanization. Here are five takeaways.
1. The state of urbanization varies widely by country
Africa as a whole is urbanizing rapidly: From 1950 to today, the share of urban residents has increased from 14 percent to 40 percent, and is expected to reach 50 percent by the mid-2030s.
But the pace and shape of that trend looks very different from one country to the next. The report groups countries into five categories based on three indicators: their current level of urbanization, their stage in transitioning to lower fertility rates, and their degree of structural transformation from low-productivity economic activities like traditional farming to higher-productivity ones such as manufacturing.
Those five categories include:
- Diversifiers (such as Egypt, South Africa and Tunisia) are at the most advanced stage of each process
- Agrarians (Chad, Niger and Malawi) are at an early stage in each.
- Early urbanizers (Cote d’Ivoire, Ghana, Senegal), while not showing a lot of progress in their structural transformation, are generally more urbanized and have lower fertility ratios.
- Late urbanizers (Ethiopia, Kenya, Tanzania) have begun urbanizing but are still predominantly rural with high fertility ratios and generally low income levels.
- Natural resources-based countries (Congo, Nigeria, Zimbabwe) are generally more urbanized, particularly around a single prime city. Fertility rates remain generally high and income levels vary widely depending on what natural resources they produce.
According to the report, one of the biggest drivers of urbanization is the growth of towns and intermediate cities. That trend is expected to continue. Meanwhile, a handful of countries, including Cote d’Ivoire, Mali and Zambia, have actually seen drops in the urban share of their populations.
2. Structural transformation is not keeping pace with urbanization
Historically, there’s been a link between urbanization and structural transformation; the emergence of cities brings a rise in incomes and living standards. This appears to not always be the case in Africa, however. “Many countries that are more than 50 percent urbanized still have low income levels,” the report says. In some places, urbanization is becoming synonymous with overcrowded informal settlements, congestion, overloaded infrastructure and high costs of living.
Many states have failed to industrialize as they urbanize, especially within sub-Saharan Africa. This may not be permanent, however. According to the report, cities have the power to promote industrialization because they create demand for products and facilitate innovation. More demand and innovation, in turn, help move the economy towards more productive industries.
The report also cites rising productivity in agriculture, services-led growth and increasing amounts of foreign direct investment as catalysts for increasing structural transformation. For example, foreign direct investment can help develop local businesses and bring knowledge and technology to a region, which can support economic growth.
3. African cities have high rates of poverty and inequality
Poverty is an enormous problem in African cities. According to the report, 62 percent of sub-Saharan Africa’s urban population lives in slums. The urban poor face myriad challenges, such as health risks due to poor living conditions and overcrowding, livelihood risks from vulnerable employment, external shocks from events such as natural disasters that disproportionately affect them, and governance risks as they do not receive adequate policy attention.
Africa also has some of the world’s most unequal cities, such as Johannesburg, South Africa. Inequality not only leads to an unequal provision of services and limited access to opportunities for the urban poor, the report says. It also has contributed to high crime rates and levels of insecurity, particularly within larger cities. This issue has only been compounded by the appearance of gated communities, which promote spatial segregation.
4. The expansion of the middle class drives sustainable economic growth
The majority of Africa’s middle class lives in cities, according to the report, which defines that group as having a consumption worth US$4-20 per day. And while this group is growing in many of those cities, the situation is very different from country to country.
As much as a third of the of the population is considered middle class in diversifier countries such as South Africa. Meanwhile, in late urbanizers such as Kenya and agrarians such as Niger, as little as 5 percent of the population is middle class.
The report cites three main reasons why an emerging middle class can contribute to growth.
First, people with more income are more inclined to pursue entrepreneurial activities that may create employment and productivity growth. Second, those who do not become entrepreneurs can provide labor or investment for those who do. And finally, a growing middle class means a growing demand for consumer goods. That alone could push consumer spending in Africa from about US$860 billion in 2008 to US$1.4 trillion in 2020.
5. Climate change is a major threat
Africa has contributed relatively little to the world’s greenhouse-gas emissions. Nevertheless, its cities will disproportionately feel the impacts of a changing climate. The report says flooding, changing rain patterns and extreme heat waves may leave most African countries poorer in 2100 than they are today.
However, urbanization may be able to positively impact this challenge. From creating green jobs for low-skilled workers to managing waste more sustainably, cities are ripe with opportunities for governments to combat climate change while still promoting economic growth. The report says phasing out energy subsidies could result in at least a 50 percent reduction in deaths from air pollution, exemplifying one of the ways environmental policy can intersect with social welfare.
“Tackling urban environmental challenges is strategic for Africa’s sustainable development,” the report says. “The stakes may be even higher for African than for other world regions.”