World Bank: Africa’s cities can learn from EU experience

Road construction in Kigali. "Every road is decently built." [@gateteviews/Twitter] spoke to Somik Vinaj Lall, the lead author of the World Bank flagship report Africa’s cities: Opening doors to the world. Meeting with EU counterparts, Lall identified areas where the EU experience could be valuable in the urbanisation of the African continent.

The 162 page report finds that unlike other parts of the world, sub-Saharan African cities are closed to the world. At the same time, 472 million people live in urban areas in Africa already and that number will double in the next 25 years, as more people are pushed from the countryside to the cities.

Lall, who is the lead economist for Territorial and Spatial Development at the World Bank, was in Brussels at the invitation of the Maltese Presidency of the Council of the EU, who convened a group of development experts on Tuesday (13 June) for a meeting focusing on Africa’s development.

The global narrative of the report, as he described it, is that cities grow as economies grow. With increased productivity in agriculture, people move from rural areas to the cities. Manufacturing in cities creates links with the world, but in the case of Africa, this link has been very weak. Rather than producing tradable goods and services, in Africa cities produce goods and services consumed in the cities themselves, Lall explained.

“The lack of investment is a challenge, but it doesn’t change the basic premise is that moving to cities is a good thing,” Lall said, adding that the real question was whether governments are doing the right thing to match the urbanisation of people with the urbanisation of capital.

Asked about positive examples of African cities successful at “growing”, Lall started by giving two examples outside Africa – Shanghai, and and Ho Chi Minh City, in Vietnam, where the growing number of inhabitants was matched by growing infrastructure.

“Infrastructure investments have gone hand in hand with that, in a coordinated manner,” he said, adding that such cities have globally become household names for the products made there, as the textile and garment industry for example.

“In Africa that story has been much limited, paradoxically because African countries discovered national resources,” he said, explaining that the commodity boom created the “Dutch disease” phenomenon. “Dutch disease” is the negative impact on an economy of anything that gives rise to a sharp inflow of foreign currency, such as the discovery of large oil reserves. The currency inflows lead to currency appreciation, making the country’s other products less price competitive on the export market.

As a good African example, Lall named Rwanda’s capital city Kigali.

Rwanda is small and landlocked, with a dramatic recent history. At first sight, there isn’t much chance of a success story to happen there. But the authorities did a lot of work upfront, made land available, and got property rights assigned, he explained.

“And the way they do it is not piecemeal, but in a coordinated manner,” he said, adding that the result has been a remarkable economic growth in the last few years.

Another example the World Bank official gave was Ethiopia, where the country developed an industrial sector by following the correct urbanisation policies.

Asked if success was more likely in countries where state authority is centralised, like in China, Vietnam or Ethiopia, Lall said that it was more a matter whether the state was doing the right things.

“In Kigali, the big thing that the state wanted to do, was to create the environment for urban development, that was the role of the state. But it was not going to create big state enterprises. That’s not the role of the state,” he said. asked the World Bank official what was his impression from his talks with EU colleagues and counterparts. He said that the first idea was that the private sector and the informal sector should be encouraged as important partners in urban development in Africa.

“Job creation is not something governmental, obviously,” he said, adding that the public sector’s role was rather to create incentives for the private sector.

“As decision-makers are trying to come up with a strategy for urbanisation is Africa, this may be something worth thinking about”, he said.

A second idea he identified with his EU counterparts was that there was a need for a “horse race” between strengthening the institutions and investments in infrastructure.

“Our report speaks of that, unless you get the institutions for land management right, the returns for infrastructure are not going to be that high, especially the social returns. And this is something I found resonance in a lot of the discussions we had today,” he said.

A third point he said had struck him was bringing good examples from other parts of the world, and proposing how they could be translated into the African context.

“Our colleagues from the EU could help distill success stories say from Latin America and other parts of the world, to strengthen this conversation,” he said.

Asked about what European cities and communities could do, the World Bank official said that there was a lot of opportunity in twinning partnership programs, in the field of service delivery issues, such as water supply.

“That could have a lot of value in Africa right now,” he said.

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