For the first time in history over half the world’s population live in cities — more than 54% of us did in 2014.
Mass urbanization is proving to be “the single most important transformation” the world is seeing in the 21st century, according to Jamal Saghir, director of sustainable development at the World Bank, and it shows no signs of letting up. By 2050, the U.N. predicts 66% of us will call a city our home.
It is generally accepted that cities are the engines of economic growth, and nowhere are these engines firing harder, or populations growing faster, than in the developing world.
With burgeoning higher education systems and enviably young workforces, African cities in particular are booming. Commended for their diversity, adaptability and enterprise, investors are taking note.
Global auditing firm PwC has now quantified and ranked Africa’s urban hubs in a new report listing the continent’s top “Cities of Opportunity.”
With the caveat that only one city per country could be assessed, PwC set out ranking locations in terms of infrastructure, human capital, economics and society and demographics.
North African cities dominated the top five, with Cairo claiming pole position, followed by Tunis, Johannesburg, Casablanca and Algiers. Analysts cited the age of North African cities as a determining factor, with strong infrastructure across the board, incubating an environment for human capital to thrive.
However, sub-Saharan cities registered among the highest in terms of society and demographics, excelling in diversity and population growth, both useful when looking towards future investment.
Indeed, the report also offered an alternative ranking, gauging the strongest trajectories in terms of investment. GDP growth, ease of doing business, attracting FDI, middle class and overall population growth all took precedent.
Under these criteria, Cairo could only achieve a mid-table ranking and was the only city in the top 10 north of the Sahara. Dar es Salaam, Lusaka, Nairobi, Lagos and Accra made up the top five, suggesting a new generation of African powerhouse economies is waiting in the wings.
That being said, one city’s development does not preclude another’s. What is certain is that the battle for economic dominance is on.
What makes an African city one of opportunity?
The report concentrates on the continent’s cities that were judged to be among the most dynamic and future focused– particularly pertinent to critical issues of the business community, as well as those of the office holders and other public authorities who are responsible for improving the collective life of each city examined.
What does it mean for investors
- African cities when being assessed need to be looked at through a different lens, as current standings and future potential tell different city stories. So when measuring today remember to overlay tomorrow.
- Location can provide access to wider markets, and good choices require knowledge on the ground as well as objective analysis.
- Look inward, then outward, as focusing on the needs of your own business will help carve out your direction into Africa.
- Access to markets (middle class consumers in the city and the country/region to which it is a gateway) is more of a long term determinant of success than natural resources.
- Know your deal breakers (and deal makers) as critical city factors can make or break your deals.
- Money now or investments for the future? Align decisions with your time horizons for results.
What does it mean for policy makers
- The methodology and selected variables provide a vast range of public policy issues to consider. So policy makers can assess what needs to be strengthened and prioritized and plan wisely to meet the current requirements and future demands from citizens and businesses alike.
- Know your short-term goals and devise a more integrated long-term “big picture” strategy that demonstrates how each part interacts and contributes to the greater whole.
- Infrastructure and human capital take time to develop but are both often critical to success. Lack of adequate infrastructure and human capital investment can limit the economic potential of a city.
- Your role (and related development of institutions) in guiding a city is important to the private sector. The building blocks are infrastructure, human capital but also security. Where these building blocks are in place, the culture and society have the platform start to flourish and even accelerate down the path of flourishing.
Here is the list:
1. Cairo, Egypt
2. Tunis, Tunisia
3. Johannesburg, South Africa
4. Casablanca, Morocco
5. Algiers, Algeria
6. Accra, Ghana
7. Nairobi, Kenya
8. Lagos, Nigeria
9. Addis Ababa, Ethiopia
10. Kampala, Uganda
Sources: CNN; PwC
