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Africa's Urban Growth Sparks New Opportunities For Investment
- The urban population of Africa is set to reach 722m by 2026, up from 286m in 2000.
- Mega-cities face overtaxed infrastructure and urban planning constraints.
- Ambitious charter city plans to help reshape the continent’s investment landscape.
- Secondary cities poised to absorb population growth alongside talent and investment.
With Africa’s population projected to double by 2050, countries are planning new cities to house increased industrial activity and urban populations, and address the constraints of many of the continent’s mega-cities.
New urban developments around the globe are working to tackle issues surrounding population growth, sustainability and economic resilience. In 2015 Egypt announced that it would build a new capital. In addition to administrative offices, the New Administrative Capital is expected to host a stadium, various religious buildings, a theme park and more. Once completed, it is envisioned that the city will house some 5m residents in hopes of relieving congestion in Cairo. While construction was still under way, some 14 government ministries had relocated to the capital as of May 2023. The country plans to build some 20 new cities for 30m people over the next decade.
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Africa has a history of urban development projects, and many cities on the continent – such as Abuja in Nigeria and Yamoussoukro in Côte d’Ivoire – were built or expanded shortly after decolonisation for economic or administrative purposes. As Africans are projected to make up 40% of the global population by 2050, these new urban centres will help house future generations, as well as drive investment and economic activities to new locales.
New urban developments
Africa’s building boom is reflected in foreign direct investment (FDI) inflows, with the continent’s FDI levels rising from $39bn in 2020 to $97bn in 2021 – an increase of 147%. With private entities driving much of the continent’s urban development, the creation of special economic zones (SEZs) featuring tax breaks and land rights grants have further incentivised investment. Kenya’s Tatu City, the construction of which began in 2016, represents the country’s first operational SEZ and houses 60 businesses attracted by incentives such as low corporate taxes and exemptions on import duties.
