The Economic Power of Africa's Cities

Joint publication launch by the African Development Bank (AfDB), the Organisation for Economic Cooperation and Development / Sahel and West Africa Club (OECD/SWAC) and the United Nations Economic Commission for Africa (UNECA), Africa’s Urbanisation Dynamics 2022, The Power of Africa’s Cities. Based on data from more than 4 million individuals and firms in 2 600 cities in 34 African countries, the report shows compelling evidence that urbanisation in Africa contributes to better economic outcomes and higher living standards. The session will first present these results, which show that across most socio-economic dimensions — wages, share of skilled employment, education levels, access to services and infrastructure — African cities significantly outperform the rural areas of the countries in which they are located . African businesses benefit from the agglomeration economies generated by growing cities. Urbanisation accounts for approximately 30% per capita gross domestic product (GDP) growth of Africa in the past 20 years. Importantly, the gains from urbanisation on economic performance and quality of life extend beyond city boundaries, benefitting smaller towns and rural areas close to urban areas. Despite these results, economic and political constraints continue to limit the potential contribution of cities to economic growth and social development. Doubts about the impact of urbanisation on Africa’s development have reduced the political ambitions required to support urban economies, slowing down policy processes to make urbanisation a central part of development strategies and promoting local government’s role in economic development. As a result, key investments on infrastructures and services – the enablers of existing and future economic performance - stall, hindering the potential contribution of cities to economic growth and social development. This session will present and discuss policy priorities that can empower cities to embrace fully their role of economic drivers. Firstly, public policies should put urban economies at the centre of national development plans. Embedding local economies in national economic planning will be a prerequisite to the development of coherent policy packages that leverage national and local economic strengths. Secondly, economic planning and policies need to be paired with investments that accompany cities’ growth. Thirdly, local governments will need increased fiscal capacity to follow the implementation of economic policies and provide the infrastructure and services required to maintain and increase their economies’ performance. Regular and predictable governmental transfers, wider fiscal capacity and accessible debt financing will be essential to ensure that insufficient infrastructure and public services are no longer an obstacle to economic development. PRELIMINARY AGENDA Report presentation (25 minutes) Roundtable discussion (20 minutes) Q&A session with the audience (15 minutes)