Africa is not urbanising rapidly. Now what do we do?
Africa is not urbanising as rapidly as we think. What are the implications for the business world, which has been counting on an emerging urban middle class? Or for the possibilities for local economic development, whether led by consumers, entrepreneurs or the state?
Kerwin Datu
As Deborah Potts' lead article shows, Africa is not urbanising as rapidly as we think. In many countries, the proportion of the total population living in urban areas has been growing at no more than 1 or 2 per cent for the past decade, much slower than they did in the 50s, 60s and 70s. For many countries, structural adjustment brought in such a severe period of deindustrialisation from which they never fully recovered. Instead their urban economies have informalised, as people find little other than makepiece work to survive, and almost as many people leave the cities again as join them.
What does this mean for business and the economy? Firstly, while we can count on a sizeable middle class arising in many of the largest, most vibrant cities, we cannot count on such a middle class expanding rapidly throughout the entire family of African cities and towns as many agencies and consultancies might sometimes imply. The fact that many cities are growing more slowly than the natural population growth rate of their countries shows that these urban economies are stagnating, and that residents are opting out of them in favour of the countryside, where opportunities still exist in agriculture and primary commodities, or leaving for a small handful of 'global cities' at the continent's fringes or beyond.
While we can count on a sizeable middle class arising in many of the largest, most vibrant cities, we cannot count on such a middle class emerging across the entire family of African cities and towns as many agencies and consultancies might have us believe.
The growing consumer market, which many foreign businesses have their eyes on, may in fact be limited to a few sporadic cities separated by vast distances which make economies of scale more elusive than might have been expected.
And the lack of urban growth in recent decades suggests that many regions are failing to exploit the potential for knowledge exchange and innovation that urban environments normally induce, and thus failing to kickstart indigenous businesses that would otherwise form the basis of sound local economic development and resilience against foreign competition.
A longer road to development
If Africa's urban economies are by and large not the embryonic powerhouses we hoped for, then a lot of our recent optimism about urban-led growth risks looking like complacency.
If the urban middle classes will be fewer, and their disposable income smaller, there will be much less opportunity for trickle-down development fueled by the growing consumption, savings and investment habits of this segment of the population.
It also suggests that the growth in taxation receipts that governments may have looked forward to will be outpaced by natural population growth amongst the urban and rural poor, making it harder to fund state-led investment and development strategies, and spreading their impact ever more thinly.
What is the silver lining here? Perhaps it is the fact that African workers themselves are not complacent. The stagnant pace of urbanisation is accompanied by high rates of circular migration, from rural areas to urban areas and back again, as a highly mobile workforce pursues employment opportunities in whichever sectors are offering them.
In many countries the population is youthful, and this demographic bubble represents a great opportunity to spark a wave of local entrepreneurialism if national leaders are willing to encourage it. And there is still solid growth in the services sector, especially the great success story of mobile telecommunications, upon which new ideas and new businesses can be built.
In the meantime many governments will have to readjust their mentality to a situation in which national populations are growing faster than their cities can create opportunities to absorb them. Many will also have to desist from the caricature that their cities are simply being overrun by migrants from rural areas, accept that urban sprawl and growing informality are a product of natural population growth as much as circular migration patterns, and start working out how to provide infrastructure and opportunity to all residents of their urban areas instead of cleaving artificial divisions between them.
