Africa from the Bottom Up - Cities, Economic Growth and Prosperity in SSA

This is a comprehensive report looking at the prospects,critical challenges and opportunities that African urban areas offer to lead growth in sub-Saharan Africa.

Three focus areas for investment are highlighted: Infrastructureⁱ, human resources and foreign direct investment. These are also amongst the key functional competences of our LEDNA approaches to local economic development.

This report will provide context and ideas to Governments addressing the need to develop better frameworks for local economic development as well as for towns and cities developing their own local and regional economic development strategies and plans. Thanks to Monitor for producing this work- Gwen Swinburn, Local Economic Developmentⁱ Adviser (gwen.swinburn@gmail.com)

Cities, Economic Growth and Prosperity in Sub-Saharan Africa

Amid signs of incipient recovery, the long-term development trajectory of sub-Saharan Africa (SSA) remains uncertain: will the region resume the healthy growth rates in the decade before the global economic crisis, or will its well known political, economic, and social challenges hold it back yet again?

Africa from the Bottom Up acknowledges SSA’s very real problems but also points out sustained structural reasons why this time, at last, a better outcome may be in the offing. Drawing on Monitor’s long experience in SSA as well as its understanding of the sources of global economic prosperity and the drivers of regional economic competitiveness, we argue that SSA’s growth before the downturn was a sign of healthy and increasingly diverse development—growth that we expect to resume with the recovery of the global economy. The subcontinent is becoming more prosperous despite its obvious challenges, as cities and competitive urban clusters lead the way. SSA’s fortunes are building from the bottom up.

In SSA and elsewhere, rapid urbanization turbocharges economic growth and diversification, enhances productivity, increases employment opportunities, and improves standards of living. Cities bring people together to transact business and share ideas; they provide enabling infrastructure such as offices, power, transportation, and telecommunications; most importantly, they concentrate talent, innovation and entrepreneurship in a single location to create competitive economic clusters. All these are vital for economic development and improving competitiveness.

In this report, Monitor focuses on three themes critical to the development and future prosperity of SSA’s cities and competitive urban clusters:

1. The fundamental imperative to upgrade infrastructure.Compared to the regional leader (Mauritius), poor infrastructure in SSA is estimated to reduce economic growth by an average of 4.7 percent. Sufficient transport networks, a reliable power supply, clean, reliable drinking water and sanitation, and fast, extensive telecommunications services all attract commerce to a city and facilitate economic growth. Without these SSA will not fulfill its economic potential, as local ventures struggle to grow and foreign businesses locate their operations in other regions with better services and lower costs.
2. The vital importance of cultivating human assets. Economic prosperity in a global, knowledge-based economy is not solely derived from natural resources and agricultural commodities, which today account for nearly all of SSA’s wealth. Rather, the source of sustainable economic prosperity is human assets working in productive and value-adding companies and sectors. SSA’s economic future lies with its peoples, who are enhancing their skills and knowledge as entrepreneurs, managers, and workers in existing and emerging competitive clusters.
3. The critical role of foreign direct investment. Achieving economic prosperity of course requires investment, which comes in many forms. Among these, FDI brings with it multiple benefits in a globalizing economy: money, ideas, talent, and connections to the wider world. It is the single most effective source of investment in contributing to economic growth, strengthening companies and sectors, and increasing employment and incomes. In the case of Africa, FDI originates not only outside the continent but also, increasingly, within it as more advanced economies themselves invest in Africa’s future beyond their own borders.

The report highlights numerous findings around these themes based on an examination of ten countries and four cities in SSA selected for their contrasting and complementary patterns of economic development and their distinctive geographic and cultural variety.

For more information about the study, contact:
Christoph Andrykowsky (Christoph_Andrykowsky@Monitor.com)
Bernard Chidzero, Jr. (Bernard_Chidzero@Monitor.com)
Jan Schwier (Jan_Schwier@Monitor.com)
Jude Uzonwanne (Jude_Uzonwanne@Monitor.com)