The rapid urbanization of Africa is a pressing issue that requires immediate attention and action. Experts predict that Africa’s urban population will triple in the next 25 years, necessitating significant investments in urban development to prevent the proliferation of shanty towns. At a recent round-table discussion during the Africa Investment Forum in Rabat, Morocco, stakeholders emphasized the importance of mobilizing finance for urban planning and development.
Hastings Chikoko, Senior Director for Cities at Big Win Philanthropy, highlighted the challenges posed by uncontrolled urbanization and stressed the need for proactive solutions. Eric Gumbo, Associate Director of G&A Advocates LLP in Kenya, pointed out the lack of adequate housing infrastructure and the negative impact of high debt/GDP ratios on urban development in African countries.
Abimbola Akinajo, Managing Director of Lagos Metropolitan Area Transport Authority (LAMAT), echoed the sentiment that many African cities are facing funding shortages, necessitating a diversified approach to investment. The panelists emphasized the importance of engaging the private sector, development finance institutions, investment funds, and pension funds in urban development initiatives.
To address the funding gap, national governments and urban authorities must implement better governance practices, enhance urban planning capabilities, and modernize revenue collection mechanisms. Ednick Muswell from eThekwini showcased the success of their urban management strategy, highlighting the municipality’s strong credit rating and ability to attract investments from American pension funds and banks.
Despite the potential for urban development in Africa, investors often perceive the region as high-risk, leading to expensive borrowing costs. Mohan Vivekanandan of the Development Bank of Southern Africa emphasized the importance of well-thought-out urban development plans to attract investors and drive sustainable growth.
Abdouraman Diallo, Managing Director of the African Solidarity Fund, stressed the need for increased support from financing institutions to meet the infrastructure needs of African cities. Capital markets are adapting to accommodate the growing demand for urban development projects, with initiatives like green bonds and municipal bonds gaining traction.
Thierno Habib-Hann of Shelter Afrique Development Bank highlighted the massive housing deficit in Africa, calling for $1000 billion in investments to address the shortage. He emphasized the viability of low-cost housing solutions and urged investors to tap into the lucrative African housing market.
Solomon Quaynor, Vice President of the African Development Bank Group, reiterated the Bank’s commitment to facilitating urban development projects and promoting public-private partnerships. The Bank has already seen significant investor interest in projects worth over $4 billion, signaling a positive outlook for urban development in Africa.
As Africa’s premier development finance institution, the African Development Bank Group plays a crucial role in driving economic growth and social progress across the continent. With a presence in 34 African countries and a focus on sustainable development, the AfDB is dedicated to supporting the urbanization process and fostering inclusive growth for all African nations.
About the African Development Bank Group:
The African Development Bank Group (AfDB) is Africa’s leading development finance institution, comprising the African Development Bank (AfDB), the African Development Fund (ADF), and the Nigeria Trust Fund (NTF). With a focus on economic and social development in its 54 regional member states, the AfDB is committed to promoting sustainable growth and prosperity in Africa.
