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URBANIZATION AND INDUSTRIALIZATION FOR AFRICA ’ S TRANSFORMATION

URBANIZATION AND INDUSTRIALIZATION FOR AFRICA ’ S TRANSFORMATION. ECA. PART II: URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION. ECONOMIC REPORT ON AFRICA 2017. 11 December 2017, Addis Ababa, Ethiopia. UNECA.ORG. ECA. Key policy messages

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URBANIZATION AND INDUSTRIALIZATION FOR AFRICA ’ S TRANSFORMATION

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  1. URBANIZATIONAND INDUSTRIALIZATIONFOR AFRICA’S TRANSFORMATION ECA PART II: URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION ECONOMIC REPORT ON AFRICA 2017 11 December 2017, Addis Ababa, Ethiopia UNECA.ORG

  2. ECA • Key policy messages • Structural transformation, industrialization and urbanization are linked in theory and practice • Africa is undergoing a rapid urban transition offering opportunities to accelerate industrialization • 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 UNECA.ORG ECONOMIC REPORT ON AFRICA 2017 | URBANIZATION AND INDUSTRIALIZATION FOR AFRICA’S TRANSFORMATION

  3. The imperative of Structural Transformation

  4. Impressive economic growth • xxxxxxxxxxxxxxxxxxxxxxxx

  5. However, this growth is exclusive and jobless

  6. Africa’s growth model: Constraint to inclusive growth

  7. Urbanization and Structural Transformation

  8. ECA Urbanization in Africa • In 2014, Africa was 40 percent urbanized but it is projected to reach 50 percent in less than 20 years by 2035 • The number of urban residents in Africa nearly doubled between 1995 and 2015 and is projected to double again by 2035 reaching 867 million • Africa, together with Asia will account for nearly 90 percent of the world’s urban population growth • Africa’s urban growth rate of 3.4% is the highest in the world (Asia- 2.10%; Latin America & the Caribbean – 1.28%) • Urbanization is taking place within 30 years in Africa unlike the 100-150 years span experienced by developed countries UNECA.ORG

  9. Urbanization in Africa Urban and rural population growth rate, 1980-1950

  10. 10 • Structural transformation is necessarily tied to urbanization • Urbanization as a outcome • Rural modernization sheds labour to cities • Urban manufacturing and services absorb labour • Declining share of agriculture in GDP & employment • Demographic transition (low birth & death rates) Urbanization as a driver Cities offer economies of scale for productive sector expansion labour productivity increase productive sector expansion An Urban Lens in National Development Planning | HLPD, Abuja 2017 UNECA.ORG

  11. URBANIZATION ENHANCES INDUSTRIAL PRODUCTIVITY THROUGH AGLOMMERATION ECONOMIES

  12. Urbanization and industrial employment in Africa, 2007-2015 HOWEVER, AFRICA IS URBANIZING WITHOUT INDUSTRIALIZING

  13. Linking Urbanization and Industrialization: A Theory of Change

  14. THE URBAN-INDUSTRIAL NEXUS

  15. DRIVERSUrban demand could be a driver of industrial development • Middle class and urban consumption are rising with changing consumer patterns leading to increasing demand for manufactured and goods • This presents significant opportunities for industrial policies to select and support high-growth sectors such as the food, housing, automotive, infrastructure • Yet, increasingly, imports are meeting rising urban demand (e.g. processed foods)

  16. ENABLERS- CITY LEVEL Well planned and managed cities offer large productive benefits for industrialization, yet barriers persist • Disconnected and sprawling urban forms • The spatial layout of cities, on whether urban form is compact and connected, or sprawling and disconnected, is important to economic functioning. • Infrastructure deficits • Infrastructure deficits are widely recognized as one the greatest barriers to industrial success in Africa. • Poorly functioning land and property markets • The functioning of urban land markets underlies the arrangement of urban space and is fundamental in both private finance and public revenues.

  17. ENABLERS- SYSTEM LEVEL Diverse, balanced and connected national systems of cities play a vital role in enabling industrial development African countries often have unbalanced national urban systems (large primary city and less competitive smaller cities)

  18. BARRIERS • Undermine agglomeration economies and increase the costs of production

  19. Urbanizing to Industrialize: Key Policy Entry Points

  20. The Centrality of National Development Planning

  21. 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.

  22. https://www.uneca.org/publications/economic-report-africa-2017https://www.uneca.org/publications/economic-report-africa-2017 • https://www.uneca.org/fr/publications/rapport-%C3%A9conomique-sur-l%E2%80%99afrique-2017

  23. ECA THANK YOU! More info: Yemeru@un.org UNECA.ORG

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