Five African cities of opportunity
17 March 2015
Johannesburg, South Africa's economic capital, is in the top five cities when it
comes to opportunity, according to PricewaterhouseCoopers (PwC), the
multinational professional services network.
Joburg is named in PwC's report,
Into Africa – the Continent’s Cities of
Opportunity. It details the potential of 20 African cities believed to be among
the most dynamic and future-focused on the continent. The report is part of PwC's
global
Cities of Opportunity series, and was released on 17 March at
the African CEO Forum of 2015 in Geneva, Switzerland.
The report's analysis is structured around the critical issues of the business
community as well as those of the office holders and other public authorities who
are responsible for improving the collective life of each city examined, according to
PwC.
The continent is crossed by five trends: demographic change, urbanisation,
technological changes, the
transfer of economic power, and climate change.
Urbanisation is of particular importance, as by 2030, half of Africa's population will
live in cities where economic activity and growth will be focused and which will
become communication centres and hubs for social trends.
The global megatrends are colliding across Africa, says PwC. "The growing middle
class, strong demographic growth with an improving age mix, technological
innovation that we have already seen in mobile payments and a growing choice of
investment partners from the global south, as well as fast-paced urbanisation are
all shaping what the future of Africa will look like."
Stanley Subramoney, PwC's head of strategy for Southern Africa, says: "We have
sought to answer 'What makes an African city one of opportunity' by developing a
set of questions that investors should ask themselves and themes which city
politicians and officials can work on to improve their competitiveness.
"This
report assesses how the cities are performing not only on a regional level but
also on an international one, which is hugely important in terms of these cities
being able to compete and prosper on both of these stages."
PwC studied four indicators: the economy, infrastructure, human capital and
population/society (which itself contains 29 variables). From this analysis, two
rankings emerged: general and opportunities for cities.
"We believe that these cities demonstrate the relative strengths and weaknesses of
Africa's urban future. Our evaluation and re-evaluation of that future is, of course, a
continual work in progress," adds Kalane Rampai, the company's leader for local
government for Southern Africa.
North African cities lead the way
Four of the top five cities in the report are in North Africa: Cairo, Tunis, Algiers and
Casablanca; the fifth is Johannesburg.
The preponderance of North African cities at the top is mainly due
to how long they
have been established. This has given them time to develop infrastructure and a
regulatory and legal framework, and to establish a socio-cultural ecosystem.
Johannesburg is the only exception to this pattern since it was established more
recently, in 1886, compared to the other cities with which it is ranked highly, and
was developed rapidly for political reasons. Therefore, its infrastructure and
services are comparable to those of the more established African cities.
African cities with promise
Another major criterion of a city's potential is the vision it has for its future. Accra,
the capital of Ghana, for example, has a good reputation throughout Africa and
beyond for the quality of its communications infrastructure, low crime rates and
steady democracy. Economically, it ranks second for both its attractiveness as a
destination for foreign direct investment (FDI) and the diversity of its gross
domestic product
(GDP).
Most of the African cities with promise can (and will), with a little effort and
organisation, climb to join those cities at the top of PwC's overall ranking, says the
company. Moreover, many of them have already become key regional platforms,
such as Dar es Salaam and Douala as centres for telecommunications, Accra and
Lagos for culture, and Nairobi for financial services.
"Outside our top five cities, Kigali finishes at the very top for both ease of doing
business and health spending; Abidjan ranks number one in both middle-class
growth and diversity; Dar es Salaam is first in GDP growth; and Nairobi outscores
all African cities in FDI."
With 5% growth, dynamic demographics and a growing middle class, Africa is
extremely appealing to investors. After undergoing a period of pessimism about the
future of Africa with some exaggerated optimism, leaders today share a more
realistic view of the economic climate of the continent. This is what
PwC calls Afro-
realism.
Source: APO
An artist's impression of what Modderfontein, east of Johannesburg, could look like 20 years from now.
