Many African countries are urbanising rapidly despite limited growth in manufacturing. Although other sectors could spur job creation and development, much like manufacturing, they need active public policy to support urban connectivity and business scale.
Although the growth of cities in Africa has been closely linked to rising incomes across the continent, many countries have rapidly urbanised without the same gains in economic growth and poverty reduction that have been seen elsewhere.
One potential reason is that urbanisation in Africa has not promoted a sustained period of structural transformation: shifting from growth dominated by agriculture and small-scale local services towards growth led by manufacturing and knowledge-intensive industries. This has led some observers to question Africa’s long-term prospects for development (UNECA, 2015; African Union, 2015).
For many countries, manufacturing has played the dominant role in the early stages of structural transformation. However, these historical patterns do not certify manufacturing as the only pathway to development. Recently, it’s been recognised that several non-industrial sectors – such as food processing, tourism and information communication technologies (ICT), among others – share many of the positive growth characteristics of manufacturing, as well as other economic and societal advantages (Newfarmer et al., 2019).
Manufacturing might still play a crucial role in the future growth of Africa’s cities; in fact, several countries, such as Nigeria, Ethiopia, and Rwanda are pursuing ambitious city-led industrial strategies. However, policy should recognise high-value job creation – not just limited to manufacturing employment – as the essential step in the growth process.
Improving the connectivity of cities would be a crucial first step allowing businesses across all sectors to grow and increase productivity.
- Africa’s urbanisation has not gone hand-in-hand with structural transformation. The limited growth of urban industry −
manufacturing in particular − has caused most observers to question why Africa is urbanising so quickly and what kind of jobs its cities offer.
- Despite the lack of large industrial sectors in urban Africa, moving to cities still offers substantial gains over rural life. Average incomes are much higher in African cities compared to rural areas and these incomes are not offset by the extra costs of living typically associated with urban density.
- There are a growing number of successful sectors outside of manufacturing that could offer a new growth path for Africa. Many other industries share the same characteristics as manufacturing: in that they create higher-value jobs for low-to-medium skill workers and they are innovative and scalable. African cities should harness their growth potential.
- Policies to promote urban connectivity are critical to supporting high value job creation. As well as traditional, non-spatial policies that influence industry competitiveness, spatial policies around land use, transport, and energy infrastructure are critical for firm growth and investment.