•While Sub-Saharan cities are expected to witness marginal gains in productivity compared to global counterparts, total incomes are forecasted to more than double.
•An analysis by Oxford Economics ranks Kenya’s capital in fourth place behind Lagos, Johannesburg, and Agola’s capital city Luanda.
Nairobi is projected to become the fourth largest city by GDP in sub-Saharan Africa by the year 2050.
An analysis by Oxford Economics ranks Kenya’s capital in fourth place behind Lagos, Johannesburg, and Agola’s capital city Luanda.
Other regional cities projected to grow faster are Nigeria’s Abuja, Abidjan in Ivory Coast, Accra in Ghana, Addis Ababa, Ethiopia, Cape Town in South Africa, and Kampala in Uganda closing the top 10 list.
Oxford says that East African cities are poised for strong economic growth between 2024 and 2050, outpacing other regions on the continent.
“Over our forecast horizon, 65 of the world’s 100 fastest-growing cities will be sub-Saharan, with the top 10 all comprised of cities from the region,” the report reads in part.
On overall growth, Burundi’s Bujumbura will lead the global growth table, with its population set to triple over the next two decades. Mali’s Bamako and Rwanda’s Kigali will closely follow behind in the rankings.
It further indicates that these cities will experience an average GDP growth rate of 3.5 percent annually, largely fueled by significant inflows of foreign direct investment and strategic initiatives implemented by the East African Community (EAC), to bolster sectors such as business services and manufacturing.
The top five performing cities are dominated by Eastern cities such as Kampala, Antananarivo, Mwanza, and Dar Es Salaam.
Kampala, in particular, is projected to triple its economy by 2050, with growth primarily stemming from the industrial sector and burgeoning consumer and business services industries.
In contrast, Southern African cities are anticipated to face the weakest outlook, with a projected GDP growth rate of 1.7 percent per year, attributing this trend to political instability and structural unemployment issues prevalent in major urban centers like Cape Town.
While Sub-Saharan cities are expected to witness marginal gains in productivity compared to global counterparts, total incomes are forecasted to more than double by 2050 due to population growth.
However, the lack of growth in GDP per person employed may result in low purchasing power relative to global standards. For instance, North American cities are expected to achieve significantly higher annual gains in income per capita compared to Sub-Saharan cities.
Despite the substantial increase in total consumer spending in major Sub-Saharan cities by 2050, the composition of spending is expected to remain skewed towards essential categories such as food and utilities, reflecting the limited growth in income per capita.
“By the year 2050, total consumer spending in the major cities of sub-Saharan Africa will stand at $1.7 trillion (in nominal terms), implying a net increase of $1.3 trillion from 2023 levels. The two largest consumer markets, Johannesburg and Lagos, will account for just under a fifth of this expansion,” the report notes.
However, while the scale of the increase is striking, the composition of the spending provides a clear reminder of where sub-Saharan cities sit on the development spectrum.
Reflecting the lack of growth in income per head between 2023 and 2050, consumer spending will continue to be heavily skewed towards non-discretionary, essential categories such as food and utilities.