Development solutions: Prosperity in the city

By Jean-Philippe Stijns and David Morgant

Across the globe, people are moving to cities faster than ever before. They are seeking jobs, better health care, education and clean water.

A little more than half of the world lives in an urban area today. By 2050, this could reach 70 percent, according the United Nations. African cities will experience some of the biggest growth. The continent’s urban population is expected to rise from around 470 million today to more than 820 million by 2030.

Life in a big city is tempting for young, rural Africans. Once they get a cellphone, they surf the internet and see all the advantages of city life. But when they get there, surviving can be hard. The newcomers might not have family or community support. It’s easy to end up on the streets or in the slums. This transfers rural poverty to the cities.

How Africa urban planning can fix problems

For African cities to prosper, they first need to make plans that address congestion and urban sprawl. When an urban population spreads out, this compounds the challenge of weak infrastructure. It makes it harder to provide good services such as water and sanitation. Education and health care are harder to deliver over a larger area, especially if roads and infrastructure are deficient. It’s harder for workers to commute to quality jobs or afford the transport costs. Land areas of cities could increase four- to eight-fold in Africa by 2050. With urban poverty rates higher than on any other continent, many of Africa’s cities could see their slum populations triple by 2050.

The European Investment Bank’s projects address the rising population, as well as global economic troubles and climate change. The Bank is working directly in more than 20 African countries to improve transport, expand renewable energy, increase access to clean water and sanitation, create jobs and offer better education, especially to youth and women. We are following the UN Sustainable Development Goals, which aim to eliminate poverty and hunger, ensure good health and education as well as clean water, good jobs and, on the top of that, sustainable cities.

Another solution to better jobs and investment projects for cities and business are the industrial clusters being tested across Africa.

Firms relocating to the Kigali Special Economic Zone in Rwanda have reported big increases in sales and a rise in the numbers of employees. In Ethiopia’s Hawassa Industrial Park, 60,000 people are employed in textile, leather, agrifood processing, pharmaceutical development and other fields. Morocco has established a successful automotive and aeronautics cluster in the port area of Tangier-Med that supplies many European manufacturers.

The need for special economic zones is high, because 29 million young people in Africa will reach working age between now and 2030. This will create an even higher demand for jobs, especially in secondary cities with fewer than 500,000 people, where most of the urban expansion is occurring.

We also need to encourage more outside investment in African cities. More than 40 African cities attracted a total of $583 billion in foreign direct investment from 2013 to 2016. For Cairo, Johannesburg, Tangiers, Lagos and other locations, these outside investments bring knowledge and technology to local communities and enhance the growth of local firms.

Over the last 10 years, the European Investment Bank has invested nearly €22 billion in Africa. These investments attract much more money from the private sector, because our stamp of approval encourages other banks to get involved. Over the next seven years, we plan to mobilise €100 billion for the continent by encouraging the public and private sectors to work together on projects.