ECA Policy Brief - Urbanization and industrialization for Africa’s transformation: opportunities and policy priorities

Africa, along with Asia, is the epicentre 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 31 per cent of Africa’s population was urban; by 2035, the figure is projected to reach 49 per cent.

Most countries are urbanizing rapidly amid declining or stagnant industrial growth 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 and generating “consumption cities”. The challenge confronting Africa is 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, in general, been weak or absent in Africa, underlining the urgent need to connect urban and industrial development, given their interdependence and growth impacts. The present policy brief highlights the key policy messages of the Economic Report on Africa 2017, which presents an examination of how to accelerate industrialization as a vehicle for structural transformation in Africa by harnessing opportunities from rapid urbanization. It contains an analysis of the challenges and opportunities, as well as the drivers, enablers and policy levers, for strengthening linkages.

Drawing on a wide array of sources, including case studies from Cameroon, Côte d’Ivoire, Ethiopia, Madagascar, Morocco, Mozambique, Nigeria, the Republic of the Congo, Rwanda, South Africa and the Sudan, the report provides an outline of policy intervention areas that are essential for ensuring that Africa’s urbanization supports its industrialization.