As the world prepares to adopt a new urban agenda for the next 20 years at the Habitat III United Nations conference in Quito next month, Africa’s mix of demographic boom and fast urbanisation grabs the attention of its leaders and partners.

The number of people living in African cities, which nearly doubled in 20 years, from 237 million in 1995 to 472 million in 2015, is expected to double again in the next 20 years. By the mid-2030s, more than half of Africans will be city dwellers.

Such rapid urbanisation represents immense opportunities for accelerating Africa’s economic transformation: growing cities provide new markets for food producers, create enabling conditions for industrial development and foster social innovation. Besides, two thirds of the investment needed by 2050 to bolster Africa’s urban infrastructure have yet to be made: this is a huge economic prospect for domestic and foreign investors, and could create millions of jobs.

Moreover, as they develop, African cities can avoid past missteps – such as car-centred urban sprawling – and promote more ecological models of service delivery. All African development partners and actors including multinational companies operating in Africa should collectively integrate these concerns in their programmes notably by prioritising the use of green technology with an inclusive access to affordable, reliable, sustainable and modern energy (goal 7 of the Sustainable Development Goals).

And yet, because it is often coupled with slow economic transformation, insufficient planning and inadequate investment, Africa’s fast urbanisation generates too many of the disadvantages – such as pollution, slums, lack of productive jobs, unequal access to public goods – and not enough of the advantages. Seizing Africa’s urbanisation dividend therefore requires bold and ambitious policy reforms. National urban strategies should foster rural/urban linkages, prioritise the development of intermediary cities and promote the participation of urban communities in city planning.

Rising up to the challenge of turning African cities and towns into engines of growth and sustainable development will not come cheap. In sub-Saharan Africa alone, the financing needs for basic urban infrastructure and services delivery today is estimated at USD 29-60 billion per year, and at least twice more by 2035. Municipal governments of African cities do not have the resources to tackle the challenges of rapid urban growth by themselves. Bridging the gap requires harnessing innovative financing instruments while strengthening local tax collection capacities and access to credit.

These topics are at the heart of Thursday’s 16th International Economic Forum on Africa: “African cities for Africa’s development”, which was opened by Angel Gurría, Secretary-General of the Organisation for Economic Co-operation and Development (OECD) and Dr Rene N’guettia Kouassi, Director of Economic Affairs Department, African Union Commission.

High-profile leaders from Africa as well as from OECD and other partner countries, including Marcel Alain de Souza, President of the Commission of the Economic Community of West African States (ECOWAS), and Jean Pierre Elong Mbassi, Secretary General of United Cities and Local Governments for Africa (UCLGA), gathered in Paris to share their experiences and visions with more than 500 Forum participants.

Co-hosted for the first time by the OECD Development Centre and the OECD Sahel and West Africa Club in partnership with the African Union Commission (AUC) for the third consecutive year, the Forum also provided the occasion to renew the 2014 Memorandum of Understanding between the OECD and the AUC, with a view to deepening high-level dialogue and co-operation on a citizen-driven pan-African agenda of integration and transformation. Areas of co-operation include a continent-wide, geo-localised dataset on African cities, known as Africapolis; increased comparability of African revenue statistics; innovative policies for making the most of natural resources and insertion in global markets; and promoting Africa’s sustainable urban development.

The debates build on the conclusions of the African Economic Outlook 2016, a joint report by the African Development Bank (AfDB), the OECD Development Centre and the United Nations Development Programme (UNDP).

Further reflecting the OECD’s commitment to supporting better policies for better lives in Africa, the OECD Emerging Markets Network (EMnet) is holding a meeting on “Investing in Growing African Cities” on Friday, 30 September and the Development Centre’s publication Education and Labour Market Togo: How to upgrade the skills? was launched in Lome on Thursday in the presence of Mr. Octave Nicoué Broohm, Togo’s Minister of Higher Education and Research.

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Africa Forum 2016: African Cities for African Development

Opening remarks by Angel Gurría, Secretary-General, OECD in Paris, 29 September 2016

It is a great pleasure to open the 16th International Economic Forum on Africa. Your presence here testifies to the importance of this event, where we will discuss the key role of African cities for African development. A special word of gratitude goes to the African Union for their commitment and support in making today’s Forum possible.

Africa: A rapidly urbanising continent

We are living in a rapidly urbanising world. In the next five years, it is estimated that the world’s population will increase by more than 400 million. 90% of this increase is projected to occur in urban areas and Africa is a crucial part of this unprecedented story. The continent will become more urban than rural in the next 15 years, and some 55% of African city dwellers will reside in towns and cities of less than one million people.

These trends have far-reaching implications for policymakers in Africa, which is why we’ve decided to have this timely conversation with you. As the world prepares to meet in Quito for Habitat III, urbanisation is already part of Africa’s agenda for achieving the Sustainable Development Goals. The objective of sustainable cities and communities is covered by SDG 11 but is very closely linked to the SDGs for sustainable water management and sanitation, clean energy, decent work, industry, innovation and infrastructure. The issue of sustainable cities is also about sustainable livelihoods.

That is why African urbanisation is also at the centre of our attention here, as we develop the OECD Initiative for Africa. On that basis, allow me to offer the OECD perspective on five key considerations to make Africa’s urbanisation more sustainable.

African cities can be engines of sustainable growth

First, we need to adopt a territorial approach to development that goes beyond the classic rural-urban dichotomy, and instead thinks of urban-rural linkages. Distances between cities are decreasing and the interdependence between urban and rural areas is growing. Cities of all sizes are now centres of intense mobility and trade, and engines of growth and development for entire regions. When it comes to policymaking, we can no longer think of the urban and the rural separately.

Second, urbanisation must translate into greater decentralisation of government services. African mayors – of which we have some representatives here today – need the authority to further mobilise fiscal resources locally, as well as the capacity to plan, implement, supervise and evaluate the policies that they are putting in place. Mayors need to report back to their constituencies with hard facts and figures. For this to happen, central governments must support local authorities with funds, human resources and autonomy. Africa’s partners must also make decentralisation and devolution a key development theme, in order to strengthen accountability and transparency and bring policymaking closer to local needs.

Third, central governments need higher revenues to be able to devote resources to the local level. With local taxes representing hardly 1% of national revenues in many African countries, and with only 10% of national revenues on average going to local administration versus some 26% in the European Union, we should do more.

However, government resources alone, even if increased, are insufficient to address complex challenges such as inadequate urban infrastructures, erratic access to electricity and limited basic services. This year’s African Economic Outlook estimates that some USD 205 billion will be required for sub-Saharan Africa to increase its electrification rate from 30% today to 70% by 2040.

What will make a difference is the push by African countries themselves to create the conditions – from business-friendly reforms to stronger rule of law and a more effective public governance – to attract and retain private investments, both domestic and foreign. 

Fourth, governments, both at the central and local levels, must pay greater attention to the supply of basic services, including to the informal sector. The informal economy dominates the African urban context. It accounts for some 61% of all urban employment and informal settlements shelter some 62% of the urban population. Creative solutions are being engineered every day by those living in informal settlements to access basic services. We must help them. Improving access to basic services and enlarging the coverage of social safety nets are key to reducing poverty for better livelihoods but also to gradually reducing informality.

Fifth, investments in urban infrastructure should aim at being green investments. Two-thirds of the urban infrastructure needed by 2050 in Africa has yet to be built. We must get it right, and avoid past mistakes made by industrialising countries in the 20th century. For example, African cities cannot afford to let car-centred urban sprawling be the model for their growth. Recent projects providing mass transportation systems have been promising. Inaugurated in 2015, the Addis Ababa Light Rail has the capacity to transport 60,000 passengers per hour over 31.6 km for the two lines. In Lagos, the Bus Rapid Transit system carries as many as 200,000 passengers per day who pay on average 30% less in fares and spend 40% less time travelling. And there are other benefits: the infrastructure has provided 2,000 direct jobs and as much as an estimated 500,000 indirect jobs.

The OECD is ready to help

The OECD is ready to support Africa’s way forward. I am pleased to announce that, today, the OECD and AUC signed a new Memorandum of Understanding that will further cement our co-operation. This new MOU is a starting point for a rejuvenated and broader co-operation, and I am counting on both the OECD and the African Union to maximise the joint opportunities ahead. 

The OECD has already strengthened its collaboration with African institutions, from the African Union, to the African Development Bank and several other regional economic commissions. We are ready to support these institutions in measuring the implementation of the SDGs as well as Agenda 2063. We are already contributing to the development of comprehensive and homogenous sets of data. We intend to strengthen our partnership on a wide array of issues, such as industrialisation, the informal economy, and decentralisation. And, last but not least, I am proud to announce that we will provide a comprehensive data set on African cities – Africapolis – in the next two years.

Ladies and Gentlemen, through this commitment to co-operation, we can better understand and plan for the opportunities Africa faces and the challenges it must meet, without forgetting that the specific solutions must be designed by Africans, for Africans. You can count on the OECD to boost dialogue, exchange best practices and share knowledge to advance Africa’s sustainable development. The OECD is ready to design and implement better policies for more inclusive, safe, resilient and sustainable African cities.

Thank you!