PwC Into Africa: the continent’s ‘Cities of Opportunity’

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Africa’s population, expanding at a far faster rate than any other region, will double its current size by 2050. Where other parts of the world, notably Europe, will increasingly be home to greater numbers of older people, Africa’s future is decidedly youthful. Such demographic shifts are one of the five megatrends that PwC identifies as decisively shaping the world in which we’ll all live. Another of them is urbanisation. And that’s also a major force in Africa’s future, as cities increasingly become the theatres of the most dynamic development across the world.

We’ve recently published a report that examines the forces driving the growth of some key African cities, along with analysis of their social and economic performance and the opportunities and challenges they face. One interesting outcome of the report is that it’s the continent’s potential, rather than its problems, which is now attracting close business attention. The narrative about Africa is probably more positive today than it’s been since many countries achieved independence in the 1950s and 60s. That’s not to say that there aren’t some large and persistent challenges to overcome; of course there are. But there’s also considerable and growing optimism about the prospects for growth and transformative development in many African cities. The interplay of urbanisation and fast-changing demographics will be critical to realising those high hopes.

Our analysis covered four broad categories and ranked cities according to their performance across them: infrastructure; human capital; economics and society and demographics. What we found is that older, and more established cities, such as Tunis, Cairo and Johannesburg, tended to lead the rankings compiled using current data, but when cities were examined with data that highlighted their potential, a much more diverse picture of the future emerged. What the results show is that if many of the cities in sub-Saharan Africa can harness the tremendous potential afforded by their fast-expanding, urbanising and youthful populations, then they have a huge chance to secure rapid economic advance. They’ll have the ability to make rapid progress in tackling the enduring structural political and economic challenges, that have long bedevilled some African economies. And as greater political stability takes hold, the potential for economic growth rises with it.

Another of our megatrends – technology – is also going to be essential in determining how far and how fast (literally in some cases, ie transport) African cities move forward. As we’ve already seen with the adoption of mobile communications in Africa, technology can be key to creating and accelerating whole new markets. Not having to deal with legacy infrastructures (ie fixed telephony) has allowed some African countries to leapfrog to mass adoption of new technologies, for example in developing a thriving mobile consumer banking sector . Much the same hope is held out for broadband, which could help to address some of the major challenges that African cities face – severe traffic congestion in Lagos for example. And that’s just one example of how technology might address the two main areas for investment and policy-making that our study points to: infrastructure and human capital.

City infrastructure comprises all the basics of transport, power, communications, water and so on.  But, over time, it also expands to include amenities that contribute to a more nuanced view of quality of life, such as culture and green spaces. What our analysis shows is that a thriving city rests on its ability to develop every aspect of infrastructure in a connected way. Effective infrastructure in turn enables human capital – people – to flourish and develop. Investments to support the expansion of education through better schooling and the extension of life expectancy through improved healthcare  – both worthy ends in their own right – will also greatly accelerate economic development.

In a city, people and their environment are intimately connected and inter-dependent. And it’s a link that, if effectively forged and strengthened over time, will help secure a prosperous future for many African cities.

Source:http://pwc.blogs.com/