A new World Bank report has stated that in Lagos, two out of three people live in slums.
The report released on Monday also noted that Africa’s cities had been growing in population, stating that adding the size of another Nigeria to cities in the continent, by 2025, would have a critical role to play in their countries’ economic growth.
According to the report, improving conditions for people and businesses in African cities by aggressively investing in infrastructure and reforming land markets would be the key to accelerating economic growth, adding jobs, and improving city competitiveness.
The report: “Africa’s Cities: Opening Doors to the World,” noted that to grow economically as they are growing in size presently, Africa’s cities must open their doors and connect to the world. Africa’s urban population stands at 472 million people today.
“As cities grow in size, another 187 million people will be added to urban areas by 2025. In fact, Africa’s urban population will double over the next 25 years, reaching one billion people by 2040.”
“What Africa needs are more affordable, connected, and liveable cities,” World Bank Vice President for Africa, Makhtar Diop said.
“Improving the economic and social dividends from urbanisation will be critical as better developed cities could transform Africa’s economies.”
The report noted that Africa was urbanising at lower incomes than other developing regions with similar urbanisation levels.
In 1968, when countries in the Middle East and North Africa region became 40 per cent urban, their per capita Gross Domestic Product (GDP) was $1,800 (2005 constant dollars). And in 1994, when countries in the East Asia and Pacific region surpassed the same threshold, their per capita GDP was $3,600.
“By contrast, Africa, with 40 per cent urbanisation, today has a per capita GDP of just $1,000. This means that every dollar of public investment in cities needs to be done as efficiently as possible, and leveraging as much as possible other sources of finance – from private sector, international partners, and citizens.
“Rapid urbanisation at lower incomes has meant that capital investment in African cities has remained relatively low in the region for the past four decades – at around 20 per cent of GDP.
“In contrast, urbanising countries in East Asia – China, Japan, and the Republic of Korea – stepped up capital investment during their periods of rapid urbanisation,” the report added.
Lacking capital investment, the report emphasised that investments in African cities’ infrastructure, industrial, and commercial structures have not kept pace with concentration of people, nor have investments in affordable formal housing. In addition, the report explained that because of this lack of connection, African cities have been among the costliest in the world both for businesses and for households, leaving cities “out of service and closed for business”.
It noted that African cities are 29 per cent more expensive than cities in countries at similar income levels.
African households face higher costs relative to their per capita GDP than do households in other regions – much of it accounted for by housing, which costs them a full 55 per cent more than in other regions.
“In Dar es Salaam, for example, 28 per cent of residents live at least three to a room; in Abidjan, 50 per cent. And in Lagos, Nigeria, two out of three people live in slums.
“Adding to this, city dwellers pay around 35 per cent more for food in Africa than in low-income and middle-income countries elsewhere. Overall, urban households pay 20 – 31 per cent more for goods and services in African countries than in other developing countries at similar income levels.
“In addition, urban workers in Africa are also forced to pay high commuting costs, or they cannot afford to commute by vehicle at all, and the informal minibus systems are far from cost efficient, leaving many to have to walk to work.
“The need for higher wages to pay higher living costs makes businesses less productive and competitive, keeping them out of tradable sectors. As a result, African cities are avoided by potential regional and global investors and trading partners.
“Given these costly conditions, the opportunities for tremendous gains in efficiency and productivity can lead to African cities becoming a strong catalyser of economic development,” it added.
According to the report, the key to freeing Africa’s cities from their low-development trap would be to set them on a path toward physical and economic density, connecting them for higher efficiency and boosting expectations for the future.
“The first priority is to formalise land markets, clarify property rights, and institute effective urban planning that allows land to be brought together.
“The second priority is to make early and coordinated infrastructure investments that allow for interlinkages among housing, infrastructure, commercial, and industrial development,” it added.
Lead Urban Economist at the World Bank and author of the report, Somik Lall added: “From an investment standpoint, Africa’s leaders and policy makers need to focus on early, coordinated infrastructure investments.
“Without this, they will remain local cities, closed to regional and global markets, trapped into producing only locally traded goods and services, and limited in their economic expansion.
“African cities need to create an internationally competitive tradable sector in order to stay open for business. For that to happen, city leaders must urgently have a strong and new urban development path for Africa.”