Africa is facing a critical challenge of urbanisation, as its population is expected to nearly triple in the next 25 years, reaching 1.5 billion inhabitants by 2050. This rapid growth will put immense pressure on the continent’s cities, which are already struggling with inadequate infrastructure, poor services, and environmental degradation.
To address this challenge, the African Development Bank (AfDB) has launched a new initiative to support the development of green and sustainable cities in Africa. The initiative aims to increase investment and autonomy for municipalities, which are the engines of economic growth and social development.
The initiative was announced at a high-level forum for mayors titled Leveraging Cities and Municipalities for National Development, held on the sidelines of the Africa Investment Forum (AIF) 2023 Market Days in Marrakech, Morocco. The forum brought together mayors and governors of several major African cities, such as Lagos, Dakar, Addis Ababa, Abidjan, Kigali and Nairobi, and representatives of governments and financial and development institutions.
The AfDB president, Akinwumi Adesina, said the forum was the beginning of a new collaboration between financial institutions, states and municipalities, to accelerate the growth and development of Africa. He pledged greater commitment to the development of green cities and stressed the need for investment in services, green spaces, highly diversified markets and decent, well-paying jobs.
The forum also featured the launch of a new report by the International Growth Centre (IGC) and the AfDB, titled Financing African Cities: Strategies, Opportunities and Challenges. The report provides a comprehensive analysis of the fiscal and financial situation of 10 African cities and offers recommendations on how to improve their revenue generation, fiscal autonomy and creditworthiness.
The report highlights the huge potential of African cities to drive economic transformation and social inclusion, as well as to mitigate and adapt to climate change. However, it also warns that African cities face significant constraints in accessing finance, due to weak institutional frameworks, low tax collection, and limited access to capital markets.
The report suggests several key strategies for cities to overcome these challenges, such as creating enabling environments, increasing revenue flows to cities, developing clear visions and plans, and improving their financial management and transparency.
The report also showcases some success stories from across the continent and the world, such as China, Brazil, Cape Town and Abidjan, where cities have made bold and intentional investments in transport, energy, water, sanitation, waste management and urban planning.
The AfDB intends to take its initiatives even further, Adesina said. He announced that the AfDB board of directors had approved the establishment of the Urban and Municipal Development Fund (UMDF), which will provide $50 million for the period 2023-27, to support cities and municipalities in urban project preparation, urban planning and municipal access to financial support ecosystems.
He also announced that the AfDB would provide projected lending of approximately $2 billion in 2024 toward African cities and municipalities and that the AIF would prioritise bankable projects from governors and mayors inside cities and municipalities.
Adesina said the time to think big was now, and that African cities held the power to transform the continent’s future for generations to come.
Source: ESI Africa
