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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION ECA
LINKING URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATIONBySemia Tapia, Urbanization Section, SDPD/ECA
Launch of the Economic Report on
Africa 2017:
Friday, 8 December 2017
10:00am -12:00pm, UNHQ
Conference Room 11, New York, USA
ECONOMIC REPORT ON AFRICA 2017
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
UNECA.ORG
URBANIZATIONAND INDUSTRIALIZATIONFOR AFRICA’S TRANSFORMATION
ECA
ECONOMIC REPORT ON AFRICA 2017
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
.
MAIN MESSAGES
✓Structural transformation, industrialization and
urbanization are linked in theory and practice
✓Africa is undergoing a rapid urban transition
✓ In Africa, linkages between urbanization and
industrialization are weak
✓Policy and institutional frameworks need to be
adjusted, if urbanization is to be harnessed for
Africa’s industrialization and structural transformation
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
1. The imperative of Structural Transformation
2. Structural Transformation and Urbanization
3. Linking Urbanization and Industrialization: A
Theory of Change
4. Policies and Institutions to Harness
Urbanization for Africa’s Industrialization
PRESENTATION
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
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1. The Imperative of Structural Transformation
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
Impressive economic growth
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Cu
mu
lati
ve P
erc
en
tage
C
han
ge in
GD
P
World Sub-Saharan Africa
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
However, this growth is exclusive and jobless
7
350
370
390
410
430
450
470
490
1999 2001 2003 2005 2007 2009 2011 2014 2016 2018
Number of poor people 1999-2018, Africa
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
Africa’s growth model: Constraint to inclusive growth
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Low productivity agriculture dominant
Commodity dependent economies
Low manufacturing share of GDP
60-70% of workers in informal economy
Highest average GDP share of
services
Vulnerability to exogenous shocks
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
2. Structural Transformation and Urbanization
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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
STRUCTURAL TRANSFORMATION AND URBANIZATION ARE LINKED
Declining share of agriculture in GDP &
employment
Rural to urban migration with increased rural
productivity and urban development
Rise of modern industrial and service economy
Demographic transition to low birth and death rates
URBANIZATION
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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
Value added by sector and urbanization, Africa, 1970-2014
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
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200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
1980 1990 2000 2010 2020 2030 2040 2050
Po
pu
latio
n in
th
ou
sa
nd
s
Year
Urban Rural
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
3. LINKING URBANIZATION AND
INDUSTRIALIZATION: A THEORY OF CHANGE
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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
THE URBAN-INDUSTRIAL NEXUS
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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
Demand generated by urbanization should be leveraged for
industrialization:
✓ Investment in urban infrastructure
✓ Growing urban consumer class
✓ Urban housing demand
✓ Greening and climate change
✓ The productive potential of transforming the informal
economy
1
5
DRIVERS
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
Africa’s import of selected food categories, 1990-2014
Opportunities in the food value chain
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
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II.a) The urban productive advantage:
Proximity, Mobility, Interaction – Inputs, markets, labour force, innovation
Better linkages to suppliers- Input matching- Input sharing
Location matching;Infrastructure and service sharing
Better linkages to labour pools- Skills matching- Labour sharing
Better market
access for
products
Knowledge sharing
Enablers/ CITY LEVEL
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
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URBANIZATION IS ASSOCIATED WITH INDUSTRIAL PRODUCTIVITY THROUGH AGLOMMERATION
ECONOMIES
AGGLOMERATION
Sharing
Matching
Learning
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
1
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ENABLERS/System Level II.b) Systems of Productive Geography:
Right distribution of functions and good
connections
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
2
0
II. EnablersUnder-development of linkages, geographic advantage and
value chains undermines industrial development
X Under-development of
secondary cities
SEZs isolated from
labour marketsX
X
Poorly developed urban-
rural linkages
Import of value-
added goods
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
BARRIERSUndermine agglomeration economies and increase the costs of production:
➢ Urban forms (spatial lay out of cities):
➢Low density➢Disconnected ➢Segregated cities.
➢ Urban infrastructure:
➢Transport➢Electricity
21
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
Inefficient institutions
Undermine agglomeration economies and increase the costs of production:
➢ Inefficient land and urban property markets
➢ Difficulties in doing business (permits, tax payments, contract enforcement, regulations)
➢ Limited public trust in government can make a city less competitive and increase costs to firms
22
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
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Rank
in
Africa
CityGlobal
Rank
Country GDP
per capita
(US$)
More expensive than…
1 Luanda, Angola 2 $4,102 Zurich, Switzerland (per capita GDP $80,215)
2 Kinshasa, DRC 6 $456 Shanghai, China (per capita GDP $7,925)
3 N'Djamena, Chad 9 $776 New York City, USA (per capita GDP $55,837)
4 Lagos, Nigeria 13 $2,640 Seoul, Korea (per capita GDP $27,222)
5 Victoria, Seychelles 16 $15,476 London, UK (per capita GDP $43,734)
6 Abuja, Nigeria 20 $2,640 Dubai, UAE (per capita GDP $40,438)
7 Brazzaville, Congo 23 $1,851
Copenhagen, Denmark (per capita GDP
$52,002)
8 Libreville, Gabon 28 $8,312 Chicago, USA (per capita GDP $55,837)
9 Conakry, Guinea 36 $531
Washington, D.C., USA (per capita GDP
$55,837)
10 Djibouti, Djibouti 40 $1,813 Paris, France (per capita GDP $36,248)
11 Accra, Ghana 47 $1,381 Milan, Italy (per capita GDP $29,847)
12 Yaoundé, Cameroon 50 $1,251 Vienna, Austria (per capita GDP $43,439)
13 Abidjan, Cote d'Ivoire 56 $1,399
Amsterdam, Netherlands (per capita GDP
$44,433)
14 Douala, Cameroon 70 $1,251 Doha, Qatar (per capita GDP $74,667)
15 Cairo, Egypt 91 $3,615
San Jose, Costa Rica (per capita GDP
$10,630)
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
4. Policies and Institutions to
Harness Urbanization for Africa’s Industrialization
Or
“how to urbanize to industrialize”
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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
The Centrality of National Development Planning
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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
INDUSTRIAL POLICY
•Focus on existing comparative advantages in specific areas
• Prioritize labour extensive manufacturing
•Support existing sub-sectors
•Target sub-sectors driven by urban demand
•Integrate spatial considerations
26
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
SPATIAL TARGETING
Urban system
• Support a more balanced national urban system
• Cater to spatial needs of targeted sub-sectors
• Leverage special economic zones in a connected geographical context
• Support complementarity among cities
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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
URBAN POLICY:
City level
• Better manage emerging urban form and increase density
• Improve land and property markets
• Invest in multi-modal mobility
• Ease housing bottlenecks
• Prioritize strategic infrastructure investments
• Prioritize industrial development in local economic development plans
28
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
IMPLEMENTATION:
Policies,
institutions and
budgets
➢Link national and sub-national budgeting with industrial and spatial targets
➢Cross-cutting coordination and implementation platform
➢Strengthen sub-national spatial economic data
➢Tools and guidelines on coordinated urban and industrial planning
➢Finding the financing29
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
To strengthen and ensure coordination between urban and industrial sectors:
Recommendation 1: A Policy note or “white paper” to articulate key principles of
drafting urban and industrial policies; this paper could inform the National
development planning vision. Paradigm change.
Recommendation 2: Establish mechanisms to coordinate urban and industrial
development policies with other sectors and sub sectors, respectively (energy,
transport, trade, education, ICTs...),at national and local levels.
Recommendation 3: Strengthen competencies and provide technical, financial and
institutional support to sub-national levels of governance in the area of economic
planning and industrial development.
Recommendation 4: Expand cooperation between urban and industrial sectors with
national statistical offices and think tanks to generate new spatial economic data,
especially at sub-national and city levels.
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
https://www.uneca.org/publications/economic-report-africa-2017
https://www.uneca.org/fr/publications/rapport-%C3%A9conomique-sur-
l%E2%80%99afrique-2017
31
ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
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ECAECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION
THANK YOU!
MERCI!
UNECA.ORG
more info: guermastapia@un.org
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