Urbanization: Africa's opportunity or curse?

May 23, 2016, 11:55 AM EDT
(Source: Dolapo Falola/flickr)
(Source: Dolapo Falola/flickr)

The African Development Bank Group (AfDB) began its annual week of meetings on Monday in Lusaka, Zambia, with a very ambitious agenda. They intend to create 25 million jobs for young people across the continent over the next decade, aiming for "nothing less than the social and economic transformation of Africa." To do this, they will have to surmount the number one challenge limiting growth: lack of electricity.

Some 650 million Africans lack power, but the real trick will be generating additional power without exacerbating climate change. Better planning can solve many problems at once, including energy, urban sprawl, unemployment, and pollution. By 2050 two thirds of Africa’s population will live in cities, so it is crucial to avoid the mistakes of the past — where all too often haphazard growth and unclear land titles led to very uneven growth and persistent urban poverty. Additionally, the lack of reliable power meant overreliance on dirty generators for electricity, and burning trash, coal, wood, or trash for heat -- which when not properly ventilated is a major source of preventable respiratory illnesses.

However, the African Economic Outlook 2016 report, also released on Monday, asserted that Africa’s rapid urbanization is “an immense opportunity.” The report noted that two thirds of Africa’s investments in urban infrastructure to 2050 have yet to be made, meaning that cities and towns could become engines of sustainable development and job creation. Integrating mass transportation and renewable energy into municipal planning would set the stage for modern service-oriented economies rather than over-relying on the export of natural resources without regard for domestic infrastructure.

“We need to invest in building economic opportunities, especially those of women of which 92% work in the informal sector. Cities and towns have a key role to play in that process, but only if governments take bold policy action,” said Abdoulaye Mar Dieye, the Director of the Regional Bureau for Africa at the U.N. Development Programme. 

The AfDB will do its best to help African governments throughout this transition, by focusing on five priority areas: Light up and power Africa, Feed Africa, Industrialise Africa, Integrate Africa, and Improve the quality of life for the people of Africa. AfDB President Dr. Akinwumi Adesina said that the lack of affordable and reliable access to lighting and power inhibits businesses from growing, new jobs from being created, and the provision of critical services. Therefore, he pledged that the AfDB would invest $12.5 billion over five years to boost the continent's energy capacity.

Getting the financing right for all of this is essential, because in recent years over a dozen sub-Saharan African countries issued billions in sovereign bonds at market rates and they are now having major troubles paying back the annual interest and the principal. For example, Ghana had to get an IMF bailout at the end of 2015. In the face of a budgetary crunch, even the best ideas won’t get off the ground.