Africa policymakers should manage urban boom as new cities emerge

BY MADUABUCHI EFEGADI

Africa has been witnessing the emergence of new cities, which have been taking up more populations streaming in mainly from the rural areas, but policymakers need to harness this urban boom to raise the continent’s socio-economic development – says a new report by the OECD.

The report, “The economic power of Africa’s cities”, indicates that life is better for city dwellers in the continent. And that big and small African cities were driving growth and development.

According to the report, over 5,000 new cities have emerged in Africa since 1990, empowering millions of people across all socio-economic groups.

But the OECD report raised a critical question of whether African leaders can take advantage of the urban boom to invest in cities: “How can policymakers make the most of the urban boom, spread the benefits to rural areas and empower local governments?

“People in Africa’s cities benefit from higher socio-economic outcomes and standards of living than the countries in which they are located. Urbanisation is an opportunity for Africa, and governments should maximise its benefits by investing in cities of all sizes,” the OECD said.

The report said millions of Africans in the cities have better jobs and improved access to services over several million others in the continent’s rural areas without access to the basic needs such as: electricity, water, healthcare and shelter.

At the 2020 Africa energy media roundtable, in which this newspaper, Business A.M., participated, it emerged from an African Development Bank’s (AfDB) report that Africa, with 540 million, was the worst culprit having countries with populations without access to electricity.

Of this figure, Nigeria, the continent’s most populated country and the largest economy, has a more electricity-deficient population of 77 million people.

Meanwhile, the OECD report indicated several advantages inherent in urbanisation. Should Africa’s policy makers invest in cities – big and small – the continent stands to reap: increased gross domestic product (GDP) per capita. Over the past 20 years (2001–2020), OECD, citing Africa’s Urbanisation Dynamics 2022, said, the continent’s GDP per capita rose by 30 percent due to urbanisation.

“Cities increase GDP. Approximately 30% of Africa’s per capita gross domestic product (GDP) growth in the last 20 years has been due to urbanisation,” the report stated.

Also, the global body said urbanisation drives economic transformation, with more workers in skilled occupations versus the rural areas. Citing the Demographic and Health Surveys (DHS) Programme 2022, the OECD report said, Africa experienced 35.3 percent growth in urban workers against 14.6 percent in the rural areas.

“Cities generate agglomeration economies that increase the productivity of urban firms and workers. Cities drive development. Wages, share of skilled jobs and hours worked are higher in cities than in rural areas. Urban dwellers spend more time in school than their rural counterparts. Urban dwellers and businesses benefit from more and better access to services and infrastructure,” the report added.

The report stated that cities benefit the rural areas. “Rural areas that are close to cities perform better than more remote areas. The development of small and mid-sized cities can benefit surrounding rural areas by bringing infrastructure and services such as markets, modern business services and educational facilities closer.”

Additionally, the OECD said Africa’s education system benefited more from its emerging cities. “Urbanisation increases education,” it said, stating that there were more average years of schooling in the urban areas, with 8.5 years, against rural areas’ 4.5 years, according to data from its respondents aged 18–29 years.

The OECD report explored data from more than four million individuals and firms across 2,600 cities and 32 African countries, which indicated how urbanisation and city size drive economic performance in Africa.