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World Economic Forum on Africa




 

 From Megacities to Mega-opportunities?

 
By 2030, the 18 largest cities on the African continent will have a combined spending power of US$ 1.3 trillion. How can the needs of a growing urban community create opportunities for investment and growth? 

The following dimensions will be addressed:

  • Infrastructure and energy
  • Social challenges
  • Business opportunities

Key Points

  • Nearly half the African population is forecast to live in cities by 2025. The challenges are huge, but so are the opportunities, particularly as most people who are moving to cities are young.
  • Africa’s growing cities are facing water and energy shortages. New, “enabling” infrastructure is needed for smart cities. Technologies such as smart grids and smart metres can help to meet these shortages and create jobs.
  • Africa should learn from the mistakes of the Middle East where urban housing was designed to accommodate upper-income people. As a result there is a huge shortage in affordable housing for middle- to low-income wage earners.
  • Public-private partnerships are needed to build and rebuild Africa’s cities, as well as to create satellite cities.
  • Financial services are a driver of urban growth and prosperity.

Synopsis

In 2010, 14 African cities had a total population above 3 million. All African cities are growing at an accelerating pace. Energy, water and sanitation challenges exist today and are being exacerbated as increasingly people move to cities in search of a better life. New technologies are needed to meet these challenges.

New, “enabling” infrastructure is needed, which will require public-private partnerships. There is a huge incentive for renewable energy and “smart water” powered by technology. Jobs will be created as smart cities are developed.

Cities – and megacities – can be incubators for innovation. Resource efficiency in these urban centres and their satellites could become a competitiveness factor as they attract domestic and foreign investment.

The Middle East focused too much on building housing for middle- and high-income people. Today, most cities in the region face critical housing shortages for low-income residents. African city planners should not make the same mistake. In Egypt, for example, there is a shortage of 1 million units. There is room for public-private collaboration to address this need. Building affordable housing is a growing market, which will create jobs.

Myriad opportunities exist for the financial services in Africa’s growing cities. Consider that in Lagos and Accra, for example, an estimated 25% of residents have access to bank accounts. Economic clusters in cities and their satellites are driven by SMEs, but most entrepreneurs, particularly women, have no access to finance to grow their businesses. By offering competitive products, financial services – particularly commercial banks – can be a driver of growth in Africa’s cities.

Cities are becoming increasingly congested and, in Africa, cholera outbreaks are commonplace. To relieve this pressure, it is important to fund rural development and satellite cities. Local government involvement is key to ensure that planning meets the needs of citizens.

Megacities offer mega-opportunities, but there are no mega-solutions. Customized solutions, new technologies and new ways of thinking are needed to retrofit today’s cities and to build the sustainable urban centres and satellites of tomorrow. Future cities cannot be built on old models that do not work.

Mohamed Alabbar, Chairman, Emaar Properties, United Arab Emirates

Ruben Atekpe, Executive Chairman, Merchants Company of West Africa – MECOWA Group, Ghana; Regional Agenda Council on Africa

Carlos Poñe, Chief Executive Officer South Africa and Southern Africa, ABB, South Africa

Macky Sall, Mayor of Fatick, Senegal

Christian Wessels, Head, Sub-Sahara Africa and Partner, Financial Services, Roland Berger Strategy Consultants, Germany

Moderated by

Kobie Brand, Chief Executive Officer and Regional Director, ICLEI Africa, South Africa

Disclosures

This summary was prepared by Dianna Rienstra. The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.

Copyright 2011 World Economic Forum

This material may be copied, photocopied, duplicated and shared provided that it is clearly attributed to the World Economic Forum. This material may not be used for commercial purposes.

Contributor

  • Kobie Brand
  • Christian Wessels
  • Mohamed Alabbar
  • Carlos Poñe
  • Macky Sall
  • Ruben Atekpe