Cities in Africa have been recognised as the 21st century engines of economic growth by the Africa CEO Forum recently held in Abidjan, Côte d’Ivoire.
Key among the drivers shaping the cities is the rapid urbanisation, technology breakthroughs, a youthful population and a growing middleclass.
Globally, Africa is expected to experience the highest population growth rate, at 115 per cent, between 2013 and 2050.
In the same period, Europe will have the slowest growth rate and its population is expected to shrink by four per cent.
The discussion on the role of cities was guided by a PwC report – Africa’s Cities of Opportunity – as presented by its partner in charge of Africa Business Group, Paul Cleal.
Nairobi was recognised for having the highest investor interest with significant foreign direct investment, ahead of Lagos and Cairo that follow closely.
It also came third in terms of opportunities available for investors, behind Dar es Salaam and Lusaka.
In the overall suitability as an investment destination based on current developments, Nairobi came seventh, with Cairo taking the lead followed by Tunis and Johannesburg.
Cities are critical as drivers of Africa’s growth story because this is where economic activity is concentrated.
They are the centres of communication and in the forefront of social trends.
Nairobi produces over 60 per cent of the country’s wealth in spite of having about 10 per cent of the population, making it the pillar of the economy.
The city’s rapidly growing middle class is giving rise to business opportunities, technology, infrastructure, financial services and tourism.
The attractiveness of Cairo and Tunis in North Africa as most suited for investment based on current development, stem from their maturity.
This means they have infrastructure such as roads, public transport, schools and hospitals.
They also have established regulatory frameworks and rules of the road for the transparency and inviolability of contracts and the legal regime as a whole.
Third is a social and cultural ecology within which human capital can expand and thrive in the form of universities and libraries and also for fun such as theatres, cinemas and other recreational areas that make city life appealing.
On the other hand, Johannesburg, also highly developed, is relatively recent compared to Cairo and Tunis.
It was a city that diligently planned and put in place an infrastructure, social and cultural base that would allow it to thrive and prosper in the future.
Nairobi is recognised for its achievements in mobile banking anchored on M-Pesa.
Karen Kandie is a financial & risk consultant and a PhD candidate in finance.