By Simon Freemantle, senior political economist, Standard Bank
A decade ago, amidst profound general optimism around Africa’s ‘rise’, we published a series of reports detailing what we believed to be the five structural drivers behind Africa’s renewed and long-term economic promise. These trends looked at demographic (and income) changes; urbanisation; technological leapfrogging; the broadening of financial access and the abundance of the continent’s untapped (and primarily agricultural) resources.
In this report we continue our review of the five trends that we initially outlined almost a decade ago to be behind Africa’s enduring structural potential. Having recently published an update on Africa’s demographic (as well as institutional and income) potential (see here), we turn now to the advantages and risks inherent in the continent’s rapid urbanisation.
Trend 2: Africa’s transformative urban swell
Quite clearly, Africa continues to urbanise at a rapid rate. Today it is estimated that 44% of Africa’s population is urbanised, up from 39% in 2010. This means that, since 2010, Africa’s total urban population has grown from 408 million to 588 million – a quite staggering 44% increase (and a rise of 180 million people). This is by some margin the largest urban swell that Africa has experienced in any ten-year period in its history. Today, Africa has 63 cities with populations of over 1 million people – up from 49 in 2010 and 30 in 2000.
Looking ahead, between 2020 and 2050 Africa’s urban population is expected to increase by around 800 million people. This means that, by 2050, 22% of the world’s urban residents are expected to be based in Africa, up from 14% today. Also, by 2050 it is expected that 11 economies on the continent will have urbanisation rates of over 80%; and a further 20 economies will have urbanisation rates of between 60% and 80%.
A range of clear economic and institutional advantages emerge as a result of this trend. Indeed, a rising body of research has added weight to the suggestion that rapid urbanisation in Africa is delivering some meaningful economic and institutional gains. Survey data shows that urban residents in Africa have substantially lower levels of ‘lived poverty’ than rural residents, as well as greater access to cash income; food; and medical care. Also, around half of Africa’s urban residents have a bank account, compared to around one-fifth of rural residents. Further, urbanisation, in tandem with sweeping demographic changes, continues to support the deepening of political participation across the continent. Urban, youth-led protest has delivered profound political change across Africa over the past decade.
However, the risks presented by Africa’s rapid urban growth are as compelling as the opportunities. Five of these deep impediments are: (1) chronic infrastructure weaknesses; (2) poor urban planning; (3) the mushrooming of urban slums; (4) climate risks; and (5) political instability. Many of these challenges have become more pronounced over the past decade as rates of urban growth across the continent are not met by commensurate improvements in urban planning and infrastructure; as well as in the context of limitations in the creation of new work opportunities for the continent’s urban youth. Further, some of the most rapid urban growth on the continent is taking place in areas that are particularly prone to the kinds of natural disasters that are, as a result of climate change, far more prevalent than before.
In sum, few areas represent the complex blend of opportunity and risk facing African economies as potently as the continent’s rapid urbanisation. Looking ahead, the way that countries harness the potential of their urban nodes will be a key determinant differentiating economic and institutional progress in the decades ahead.