Urbanization in Africa
Dec 13th 2012
Urbanization is growing in both developed and developing countries. The proportion of the world’s urban population is expected to increase to about 57% by 2050 from 47% in 2000. More than 90% of future population growth will be accounted for by the large cities in the developing countries. In the developing world, Africa has experienced the highest urban growth during the last two decades at 3.5% per year and this rate of growth is expected to hold into 2050. Projections also indicate that between 2010 and 2025, some African cities will account for up to 85% of the population. As shown in figure 2, in 2010, the share of the African urban population was about 36% and is projected to increase to 50% and 60% by 2030 and 2050 respectively. This rapid expansion has changed the continent’s demographic landscape. Yet, urbanization in Africa has failed to bring about inclusive growth which, in turn, has resulted in proliferation of slums, urban poverty and rising inequality. Inequality in African cities remains the second highest in the world with an average Gini coefficient of about 0.58, well above the average of 0.4. Rural-urban migration and natural population growth rates in cities are the major causes of the increasing rate of urban growth and slum proliferation in Africa.
Africa’s Urban Challenges
Urbanization in Africa has largely been translated into rising slum establishments, increasing poverty and inequality. However, there are large variations in the patterns of urbanization across African regions. North Africa has a higher proportion of urban population (47.8%) relative to Sub Saharan Africa (SSA) (32.8%). The relatively fewer slums in North African countries is mainly attributed to better urban development strategies, including investment in infrastructure and in upgrading urban settlements. In contrast, SSA has the lowest proportion of urban population (32.8%), but the highest proportion of slum dwellers (65%). Most SSA cities are characterized by insufficient basic infrastructure, particularly in low-income areas. Only 20% of SSA’s population has access to electricity, and in 2010, 3% and 53% of Africans had access to fixed or mobile phones, respectively; 84% of the continent’s urban dwellers have access to potable water while 54% to sanitation (AfDB et al., 2012). More broadly, 60% of African citizens live in places where water supplies and sanitation are inadequate.
As most of the migrants from rural areas are uneducated/unskilled, they end up in informal sector which accounts for 93% of all new jobs and 61% of urban employment in Africa. Since incomes from the informal sector are by their very nature low and intermittent, most migrants naturally seek for shelters or become tenants of slum landlords. As a consequence, many African cities have to deal not only with slum proliferation but also with increasing insecurity and crime. Weak institutions have contributed to poor urban enforcement, resulting in dysfunctional land and housing markets, which in turn has caused mushrooming of informal settlements. Furthermore, African governments have neglected the key drivers of productivity which include small and medium-size enterprises, human resource and skills development, and technological innovation. These factors are essential in advancing predominantly informal, survivalist and basic trading activities to higher value-added work.
Another challenge from Africa’s rapid urbanization is the increasing pressure of urban populations on natural resources and the environment. The expansion of cities is generally at the expense of destruction of forests and other natural environment or ecosystems, and increasing pollution (especially air pollution) with the related diseases.
Policy Responses to the Expansion of Urbanization in Africa
In order to address the challenges of urbanization facing many African cities, some key reforms should be pursued by governments. These include (i) upgrading informal settlements through the provision of integrated infrastructures and services that target the marginalized groups, including the poor, youth, women and elderly people. In addition, governments should act proactively to ensure orderly urban development by defining and implementing clear urban development strategies; (ii) mobilizing urban financing from local and foreign investors. These resources should be efficiently and adequately allocated between central and local governments’ urban projects and should encourage strengthening the role of municipalities; (iii) improving human capital through equal access to education and healthcare services and facilities for all categories of citizens in order to meet labor market needs; (iv) diversification of economic activities through the creation of new economic hubs oriented towards high sustainable and value-added production and exportation. These reforms should be more inclusive to ensure that all categories of citizens, regardless of their age, race, gender, ethnicity, or socio-economic conditions, have equal access to adequate housing, basic infrastructure and services and equal job opportunities.
Professor Mthuli Ncube is the Chief Economist and Vice President of the African Development Bank, and holds a PhD in Mathematical Finance from Cambridge University, UK, on “Pricing Options under Stochastic Volatility”.