By Jean-Philippe Stijns and David Morgant

Across the globe, people are moving to cities faster than ever before. They are seeking jobs, better health care, education and clean water.

A little more than half of the world lives in an urban area today. By 2050, this could reach 70 percent, according the United Nations. African cities will experience some of the biggest growth. The continent’s urban population is expected to rise from around 470 million today to more than 820 million by 2030.

Life in a big city is tempting for young, rural Africans. Once they get a cellphone, they surf the internet and see all the advantages of city life. But when they get there, surviving can be hard. The newcomers might not have family or community support. It’s easy to end up on the streets or in the slums. This transfers rural poverty to the cities.

Two-thirds of the infrastructure that Africa will need over the next 30 years has not been planned or built.

How Africa urban planning can fix problems

For African cities to prosper, they first need to make plans that address congestion and urban sprawl. When an urban population spreads out, this compounds the challenge of weak infrastructure. It makes it harder to provide good services such as water and sanitation. Education and health care are harder to deliver over a larger area, especially if roads and infrastructure are deficient. It’s harder for workers to commute to quality jobs or afford the transport costs. Land areas of cities could increase four- to eight-fold in Africa by 2050. With urban poverty rates higher than on any other continent, many of Africa’s cities could see their slum populations triple by 2050.

The European Investment Bank’s projects address the rising population, as well as global economic troubles and climate change. The Bank is working directly in more than 20 African countries to improve transport, expand renewable energy, increase access to clean water and sanitation, create jobs and offer better education, especially to youth and women. We are following the UN Sustainable Development Goals, which aim to eliminate poverty and hunger, ensure good health and education as well as clean water, good jobs and, on the top of that, sustainable cities.

With a mobile phone and an internet connection, a new resident in the capital of Burkina Faso can open a bank account, get a loan, pay bills.

>@EIB
©EIB
>@Liana Mbako
©Liana Mbako

In Africa, we’re building affordable and energy efficient homes in Namibia, helping microfinance firms in cities in Burkina Faso give loans to women entrepreneurs, and improving mobile connections in many countries to help people use online banking and make digital payments. With just a mobile phone and a good internet connection, a new resident in the capital of Burkina Faso can open a bank account, get a loan, pay bills and safely receive a salary.

We’re also working with UN agencies to assist immigrants and refugees. In Uganda, we helped offer training programmes that teach refugees how to get loans, understand financial terms and create a business. This programme reduces unemployment in communities where refugees are settling. In Dakar, we’re easing urban congestion and encouraging residents to take public transport by adding a high-quality bus system that offers fast, comfortable and affordable transport. There will be nearly 20 kilometres of new bus lanes and 144 buses. We’re also investing in a programme in Senegal that will give thousands of small loans to small businesses, especially those run by women, and we’re supporting an initiative to add health care centres dedicated to women and children in the suburbs.

Expanding the right way by working together

To unlock cities’ economic potential while making urban life more sustainable and investments more feasible, it is also vital for public authorities, civil society, development partners and the private sector to collaborate. If all parties work together to build proper infrastructure and correctly plan projects in transport, electricity supply, digital communications systems and sanitation, this can boost economic growth across Africa. We also need to encourage the general public to participate in city planning: Africans have a strong ability to innovate and adopt solutions to their local situations.

Many African governments now understand the challenges of rampant urbanisation, and they are ambitiously prioritising city development and sustainable growth. The programmes they are implementing address economic and social space management, governance, investment financing and institutional collaboration.

To help cities make even better plans, the European Investment Bank is increasing its advisory services and financial blending. Blending refers to the mixing of loans and grants. Our grants help cities and companies hire experts to plan projects and perform studies. We help project leaders understand their markets, perform environmental tests and prepare for climate risks such as flooding, droughts or extreme weather. We help city leaders or company managers improve their organisational skills to better manage every step of a project. We help cities understand the risks of growing quickly and then outline the financing possible to pay for the services this new population requires.

Good assistance is crucial to planning development, adopting new building codes and improving licensing procedures for correct construction precesses.

>@David Blumenfeld/EIB
©David Blumenfeld/EIB
>@Kenya Power and Lighting Company Ltd (KPLC)
©Kenya Power and Lighting Company Ltd (KPLC)

Sound investing in Africa urban planning

African cities also are held back because investors can’t find financially and technically sound projects.

One attempt to fill this gap is the Global Climate City Challenge, launched in 2018 by the European Investment Bank and the Global Covenant of Mayors. Six of the 20 selected projects are African--in Cocody, Cotonou, Makindye, Monastir, Sekondi-Takoradi and Yaoundé. Three of these six projects are frontrunners in the competition. Those involved in the projects will receive expert guidance and grants to make sure their plans meet the requirements to receive financing.

Another solution to better jobs and investment projects for cities and business are the industrial clusters being tested across Africa.

Firms relocating to the Kigali Special Economic Zone in Rwanda have reported big increases in sales and a rise in the numbers of employees. In Ethiopia’s Hawassa Industrial Park, 60,000 people are employed in textile, leather, agrifood processing, pharmaceutical development and other fields. Morocco has established a successful automotive and aeronautics cluster in the port area of Tangier-Med that supplies many European manufacturers.

With the right investments and proper urban planning, Africa could leapfrog to a green and sustainable economy.

The need for special economic zones is high, because 29 million young people in Africa will reach working age between now and 2030. This will create an even higher demand for jobs, especially in secondary cities with fewer than 500,000 people, where most of the urban expansion is occurring.

We also need to encourage more outside investment in African cities. More than 40 African cities attracted a total of $583 billion in foreign direct investment from 2013 to 2016. For Cairo, Johannesburg, Tangiers, Lagos and other locations, these outside investments bring knowledge and technology to local communities and enhance the growth of local firms.

Over the last 10 years, the European Investment Bank has invested nearly €22 billion in Africa. These investments attract much more money from the private sector, because our stamp of approval encourages other banks to get involved. Over the next seven years, we plan to mobilise €100 billion for the continent by encouraging the public and private sectors to work together on projects.

A sustainable economy is within reach

With the right investment philosophy and proper urban planning, Africa could leapfrog to a green and sustainable economy, particularly by taking advantage of its enormous potential for renewable energy, such as solar power farms or wind parks. 

The European Investment Bank will help Africa’s transition every step of the way. In 2020, we aim to provide €4 billion in private and public investment on the continent, up from €3 billion in 2019. We are also constantly expanding our work with partners to make an even bigger impact, cooperating closely with the African Development Bank, the World Bank and the European Bank for Reconstruction and Development and other international and bilateral financial institutions.

We aim to support not just jobs, digital connectivity, gender equality and better health care for Africa, but also sustainable urban growth. With the right investments and policies, we can create sustainable African cities and better lives for everyone.

Jean-Philippe Stijns and David Morgant are senior economists and urban development specialists at the European Investment Bank

Further reading: Find out more ways to help sustainable cities in Africa by downloading the recent Banking in Africa report.