Northern African cities lead the way as continent changes – report

PARIS, France – North African cities are leading the way as the continent and its growing middle class lay down “solid economic roots” which are very appealing to investors, according to a new report published Tuesday, March 17.

The report highlighted 20 African “cities of opportunity” with the Egyptian capital Cairo heading the list, with Tunis, Casablanca and Algiers also in the top 5.

Coming in third place only Johannesburg, the largest city in South Africa, breaks northern Africa’s monopoly of the top 5 cities as ranked in the report by accountancy firm PricewaterhouseCoopers.

“The preponderance of North African cities at the top is mainly due to the length of time they have been established. This has given them time to develop infrastructure, regulatory and legal frameworks as well as establishing socio-cultural ecosystems,” the report said.

Johannesburg, formed more recently in 1886, “was developed rapidly for political reasons,” allowing it develop infrastructure and services are comparable to the more established African cities.

“With 5% growth, dynamic demographics and a growing middle class, Africa is exceptionally appealing to investors,” said the PwC report, launched Tuesday at the Africa CEO Forum 2015 in Geneva.

‘Historic crossroads’

Africa is at “an exceptional, historic crossroads, if there was ever a moment for an entire continent to seize the day, this is it,” it added.

In choosing its 20 “cities of opportunity” – limited in the report to one city per country – the researchers considered four main indicators: economy, infrastructure, human capital and demographics.

Along with technical advances and demographic change a major trend identified by the report was urbanization.

“By 2030, half of Africa’s population will live in cities which are where economic activity and growth will be focused as well as becoming communication centers and a hub for social trends,” the report said. 

PwC’s Africa Business Group Leader Paul Cleal said the study should help answer the questions of potential investors in the continent and help city politicians and officials improve their competitiveness.

Cairo’s infrastructure was particularly praised, while Tunis ranked top in the “human capital” category – which included health systems, graduate numbers and literacy and numeracy.

The report also looked at other criteria such as GDP growth, ease of doing business and the ability to attract foreign direct investment.

In this list Dar Es Salaam, Lusaka, Nairobi, Lagos and Accra polled well.

“Most of the African cities with promise can (and will) climb to join those cities at the top of our overall ranking, with a little effort and organization,” the report said.

“Moreover, many of them have already become key regional platforms such as Dar es Salaam and Douala as ports, Accra for telecommunications, Lagos for Culture and Nairobi for financial services.”

But the report also said Africa still has “fundamental problems”.

These challenges ranged from “disease (whether AIDS, Ebola, or river blindness) to internecine conflict” as well as a decline in commodity prices down to the most basic requirements of urban infrastructure, clean water, ample electricity, public transport. – Rappler.com