Choosing Time for African Urbanization: Choose WiselyYuwa Hedrick-Wong |
A policy of rapid urbanization is not without risk. It can lead down one of two paths, and there is no middle route between these two paths – it is either one or the other.
Africa, with its population of more than a billion, is undergoing a fundamental transformation that will—according to the United Nations Department of Economic and Social Affairs, Population Division—see its urban population triple by 2050, with 60 percent of its people living in cities or urban areas.
This population shift will come with immense challenges and opportunities for the people living in its cities.
The first path for rapid development of cities is one of inclusive urbanization, where a city evolves as a gateway to investment and global markets, a generator of wealth, a hub of innovation and business formation, all leading to prosperity and a rising quality of life for its citizens—a pleasant path indeed.
The second path is one of exclusive urbanization where a city becomes an agglomeration of poverty, congestion and bottlenecks, with pools of unemployed and under-employed labor, and rising costs of living, all resulting in effectively choking its own economic growth—a rather undesirable path.
I recently had the privilege of participating in the second MasterCard Africa Knowledge Forum in Johannesburg, South Africa, where stakeholders from both the public and private sectors explored these challenges and opportunities, as well as the increasing roles that cities and urbanization have in stimulating economic growth across the continent.
The Forum saw the launch of the first African Cities Growth Index, ranking the growth potential of 19 African cities over the next five years. Accra, Lusaka and Luanda, the capital cities of Ghana, Zambia and Angola respectively, were revealed to have the greatest growth potential, and the greatest likelihood of yielding positive results for inbound investment.
Despite a slowdown in GDP growth worldwide, the level of inward investment into developing markets has increased significantly. By taking advantage of this investment to stimulate urbanization, and the increased economic growth that it brings, developing markets can fuel private domestic consumption and insulate themselves from the negative effects of the global slowdown.
A path of inclusive growth that has the ability to sustain strong growth in a weak global economy can only be achieved through public-private partnerships, as neither sector can flourish without the help and support of the other.
The reality is that in this increasingly complex, interdependent era, the challenges of rapid urbanization far exceed the capacity and interests of any one industry, sector, or country. All stakeholders now stand at a fork in the path of African economic growth: Inclusive or exclusive? Only time will tell. Let’s hope they have a good roadmap.
Topics: Payments Strategy