Urbanisation’s Store of Value

The rate of urbanisation is growing in both developed and developing countries, and the rapid rise in Africa in particular has received wide attention around the world. Indeed, urbanisation can mean that there is an improvement in the social status of people living in rural areas, or the upgrading or renaming of rural areas as urban centres, or it can represent the physical growth of urban areas as a result of rural migration and even suburban concentration into cities, particularly the very large ones.

The realities of rapid urbanisation and population growth in Africa are objectively patent, with a diversity of challenges, constraints and threats to service delivery in urban centres. Urban centres attract rural populations and, through multiplier effects, population sizes continue to grow concomitant with the demand for the services – hospitals, schools, industrial and commercial zones, security etc.

The United Nations projected that half of the world’s population would live in urban areas at the end of 2008. By 2050, it is predicted that 64.1pc and 85.9pc of the developing and developed world, respectively, will be urbanised.

More than 90pc of future population growth will be accounted for by the large cities in developing countries, according to the African Development Bank (AfDB). In the developing world, Africa has experienced the highest urban growth during over the last two decades at 3.5pc a year and this rate of growth is expected to hold into 2050.

Yet, urbanisation in Africa has failed to bring about inclusive growth, which, in turn, has resulted in the proliferation of slums, urban poverty and rising inequality. Inequality in African cities remains the second highest in the world, with an average Gini Coefficient of about 0.58. Rural-urban migration and natural population growth rates in cities are the major causes of the increasing rate of urban growth and slum proliferation in Africa.

The rapid rate of urbanisation in Africa can be associated with people moving into cities to seek economic opportunities. In rural areas, for instance, it is difficult to improve one’s standard of living beyond basic sustenance.

Cities, on the other hand, are known to be places where money, services and wealth are centralised. Cities are where fortunes are made and where social mobility is possible. It is easy to see why someone living on a farm might wish to take their chance in moving to the city and trying to make enough money to send some back home to their struggling family.

There are better basic services, as well as other specialist services, which are not found in rural areas. There are more job opportunities and a greater variety of jobs.

Health is another major factor. People, especially the elderly, are often forced to move to cities where there are doctors and hospitals that can cater for their health needs. Other factors include a greater variety of entertainment (restaurants, movie theatres, theme parks etc) and a better quality of education, especially universities.

Urbanisation occurs with individual, commercial, and governmental efforts to reduce time and expense in commuting and transportation, while improving opportunities for jobs, education, housing and transportation. Living in cities provides opportunities of proximity, diversity and marketplace competition. Businesses, which provide jobs and exchange capital, are more concentrated in urban areas. Whether the source is trade or tourism, it is also through the ports or banking systems that foreign money flows into a country, commonly located in cities.

Urbanisation in Africa has largely been translated into rising slum establishments, increasing poverty and inequality. According to the UN Population Fund’s State of World Population report, some 72pc of sub-Saharan Africa’s urban population currently lives in slum conditions.

However, the relatively fewer slums in North African countries is mainly attributed to better urban development strategies, including investment in infrastructure and in the upgrading of urban settlements. In contrast, sub-Saharan Africa has the lowest proportion of urban population (32.8pc), but the highest proportion of slum dwellers (65pc).

Most sub-Saharan cities are characterised by insufficient basic infrastructure, particularly in low-income areas. Only 20pc of the region’s population has access to electricity, and in 2010, three percent and 53pc of Africans had access to fixed or mobile phones, respectively; 84pc of the continent’s urban dwellers have access to potable water and 54pc to sanitation.

More broadly, 60pc of African citizens live in places where water supplies and sanitation are inadequate.

As most of the migrants from rural areas are uneducated or unskilled, they end up in the informal sector, which accounts for 93pc of all new jobs and 61pc of urban employment in Africa. As a consequence, many African cities have to deal not only with slum proliferation but also with increasing insecurity and crime. Weak institutions have contributed to poor urban enforcement, resulting in dysfunctional land and housing markets, which in turn has caused the mushrooming of informal settlements.

Another challenge for Africa’s rapid urbanisation is the increasing pressure of urban populations on natural resources and the environment. The expansion of cities is generally at the expense of the destruction of forests and other natural environments and ecosystems, and increasing pollution (especially air pollution) with the related diseases.

Furthermore, African governments have neglected the key drivers of productivity, which include small and medium-sized enterprises, human resource and skills development, and technological innovation. These factors are essential in advancing predominantly informal, survivalist and basic trading activities to higher value-added work.

In order to address the challenges of urbanisation facing many African cities, some key reforms should be pursued by governments. These include the provision of integrated infrastructures and services that target the marginalised groups, including the poor, youth, women and elderly people, thus upgrading the informal settlements. In addition, governments should act proactively to ensure orderly urban development by defining and implementing clear urban development strategies.

Again, mobilising urban financing from local and foreign investors is a strategy that can be used. These resources should be efficiently and adequately allocated between central and local governments’ urban projects and should encourage strengthening the role of municipalities.

Governments on the continent must also make a concerted effort to improve human capital through equal access to education and healthcare services and facilities for all categories of citizens, in order to meet labour market needs.

Moreover, diversification of economic activities through the creation of new economic hubs should be oriented towards highly sustainable and value-added production and exportation. These reforms should be more inclusive to ensure that all categories of citizens, regardless of their age, race, gender, ethnicity or socio-economic conditions, have equal access to adequate housing, basic infrastructure and services, and equal job opportunities.


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