e-Learning: Economic Report on Africa 2017: Urbanization and Industrialization for Africa’s Transformation
BACKGROUND
Africa, along with Asia, is the epicenter of global urbanization. It is undergoing a rapid urban transition and is set to be the fastest urbanizing region in the coming decades. In 1990 only a third of Africa’s population was urban (31 per cent)—by 2035, the figure is projected to reach 49 per cent. This shift has profound implications for achieving the continental and global targets for inclusive growth and transformation, including Agenda 2063 and the 2030 Agenda on Sustainable Development. Theory and global experience show that urbanization and structural transformation are closely linked—but less so in Africa, which has largely followed its own urbanizing path weakly tied to structural transformation, including industrialization. It has thus lost many opportunities for enhanced growth and productivity, for poverty reduction and for social development.
Urbanization in many African countries has not been driven by improving agricultural productivity. Indeed, most countries are urbanizing rapidly amid declining or stagnant industrial output and low agricultural productivity. In resource-rich countries, natural resource exports and related spending, largely on non-traded services, appear to be driving urban growth, generating “consumption cities.” Africa’s target of structural transformation is to shift labour out of low-productivity agriculture into higher-productivity manufacturing and modern services. But the long-run trend of this shift has been dominated by the informal sector—often services—where jobs remain concentrated, many in urban areas, with detrimental effects for economy wide productivity. African cities thus face low productivity, tepid job creation, high informality, huge infrastructure and service gaps, weak linkages with rural areas, high levels of informality, increasing inequalities, growing environmental damage and vulnerability to climate change and weak institutional systems and capacities. Unless resolved, these impediments will undermine Africa’s urban potential for structural transformation. The challenge confronting Africa is thus to accelerate structural transformation by harnessing the rapid urban transition to promote economic diversification, with a special focus on industrialization that will create jobs, enhance access to basic services and reduce inequality and poverty. The links between urbanization and industrialization have generally been weak or absent in Africa, underlining the urgent need to connect urban and industrial development given their interdependence and growth impacts. This Economic Report on Africa 2017 examines how to accelerate industrialization as a vehicle for structural transformation in Africa by harnessing opportunities from rapid urbanization. It analyses the challenges and opportunities, as well as the drivers, enablers and policy levers for strengthening linkages.
In order to provide interested stakeholders from government, business, civil society and academia with a better understanding of how urbanization can serve as an instrument of accelerated industrialization and structural transformation in Africa, the United Nations Economic Commission for Africa (ECA) together with its training arm, the United Nations Institute of Economic Development and Planning (UN-IDEP), has partnered with the United Nations Institute for Training and Research (UNITAR) to offer this e-learning course based on ECA’s Economic Report for Africa 2017 (ERA 2017).