Abidjan, Addis Ababa, Paris - 26 April 2022 – Urbanisation in Africa contributes to better economic outcomes and higher standards of living, with cities notably outperforming national averages across most socio‑economic indicators such as education, health and employment, according to a new report.
Produced by the Sahel and West Africa Club (SWAC/OECD) in partnership with the United Nations Economic Commission for Africa (ECA) and the African Development Bank (AfDB), the report Africa’s Development Dynamics 2022 analyses data from four million individuals and firms in 2,600 cities across 34 African countries. It offers the most extensive assessment of the impact of Africa’s cities on social and economic outcomes.
Speaking at the virtual launch, Mr. Ibrahim Assane Mayaki, SWAC Honorary President and CEO of AUDA-NEPAD, said: “Africa’s cities […] have maintained their economic performance despite growing by 500 million people over the last 30 years, providing several hundred million people with better jobs and improved access to services and infrastructure. This in a context of very limited public support and investment is probably one of the most underappreciated achievements of African cities.”
In her welcome remarks, Ms. Edlam Yemeru, acting Director of ECA’s Gender, Poverty and Social Policy Division, said: “Africa’s urbanisation is a game-changer. The shift is not just demographic but is also reshaping economic and social outcomes substantially. Cities must therefore be placed at the core of national economic policymaking.”
Other findings from the report include:
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Urbanisation boosts GDP by creating agglomeration economies. Approximately 30% of Africa’s GDP per capita growth in the last 20 years has been due to urbanisation.
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Urbanisation drives economic transformation. Skilled workers account for nearly 36% of total workers in urban areas while in rural areas, they make up just under 15% of the workforce.
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Urbanisation improves access to financial services. Approximately 49% of urban households have a bank account compared to only 17% of rural households.
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Urbanisation increases education levels. The average urban dweller receives 8.6 years of formal education, while their rural counterpart attends school for only half as many years.
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Cities benefit rural areas. Rural areas close to cities perform better than remote rural areas in terms of employment, education, access to finance and infrastructure. For example, the share of rural households that has a bank account is twice as high among rural households that live within 5 kilometres of a city as compared to those that live 30 kilometres from the closest city.
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Clusters of cities provide new opportunities. Five out of six major African urban clusters cross national borders, providing new pathways for economic development and regional integration.
Nevertheless, the report notes that economic and political constraints continue to limit the potential of cities to contribute more meaningfully to economic growth and social development, running the risk of leaving many people behind. It further identifies an urgent need for timely data and new locally tailored approaches to meet the existing and emerging challenges of African cities.
Against this backdrop, the reportproposes actions that policy makers can take to maximise the benefits of urbanisation and unlock the full economic potential of Africa’s cities:
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National governments should anchor cities in urban planning through better co-ordination of national and local development policies by leveraging cities as drivers of development and investing in infrastructure that connects cities and increases productivity.
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National governments should empower local governments by considering them as equal partners in shaping economic development, allowing city authorities to manage their investment decisions and build their skills.
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National governments should boost local investment capacity through improved finances by implementing predictable and stable intragovernmental transfers, increasing local revenues through taxes, tariffs and fees, and facilitating greater access to debt financing.
In his closing remarks at the virtual launch, Mr. Solomon Quaynor, African Development Bank Vice President for the Private Sector, Infrastructure and Industrialisation, said: “Urbanisation is one of the most important transformations the African continent will undergo this century.”
The Africa’s Development Dynamics 2022 report is available online here and a digital info-story can be viewed here.
Media contacts:
ECA: Snober Abbasi | snober.abassi@un.org
SWAC/OECD: Lia Beyeler | Lia.BEYELER@oecd.org
AfDB: Solange Kamuanga-Tossou | s.kamuanga-tossou@afdb.org