Accra, Lusaka and Luanda, the capital
cities of Ghana, Zambia and Angola respectively, have been
identified as the Sub-Saharan African cities that have the highest potential
for growth over the next five years, according to the MasterCard African Cities Growth Index. As the entire African continent with
its population of over 1 billion people is going through a fundamental
transformation, this new Index puts a spotlight on the economic and human
factors driving urban growth over the next five years.
The Index, produced on behalf of MasterCard by Professor George
Angelopulo of the University of South Africa (UNISA), was launched today at the
second Africa Knowledge Forum hosted by MasterCard in Johannesburg, convening
thought leaders from academic, business and government sectors. The Forum
explores how cities across Africa are playing an increasingly important role in
driving national and regional growth, how they need to compete on the global
stage in order to attract inward investment, and how these cities urgently need
to manage their natural and human resources more effectively as they grow.
The MasterCard African Cities Growth
Index was developed in the final quarter of 2012 and analysed 19 cities across
Sub-Saharan Africa ranking them according to their growth potential between
2012 and 2017. The Index rankings were developed from published historical and
projected data on typical factors that impact cities’ growth rates, including:
economic data, governance levels, ease of doing business, infrastructure and
human development factors, and population growth levels.
Of the 19 researched cities, Accra, the
capital city of Ghana, was ranked as having the highest growth potential,
followed by Lusaka and Luanda, that were both identified as having medium-high
growth potential.
“Some of the key reasons for Accra
emerging as a high growth city include: its gross domestic product per capita
growth over the past three years, its projected population and household
consumption growth, its strong regulatory environment, and the relative ease of
doing business in this city, compared to other African cities,” said Professor
Angelopulo.While many of these larger and more established cities offer the
expected potential for growth, other less prominent ones are quietly
establishing themselves as those with even higher growth potential. This is
primarily due to high scores on accelerated growth factors that include health,
education, governance, infrastructure development, and the ease of doing
business in those cities.
Johannesburg, although already a strong
economic powerhouse city in Africa, achieved lower scores in certain categories
as a result of lower growth expectations due to its relative maturity when
compared to other African cities. For example, the expected growth of the
middle class population is higher from cities such as Accra and Luanda than it
is for Johannesburg, which has seen a growing middle class since the change of
government in 1994.
Explaining why MasterCard chose to
develop this new Index specifically for Africa, Michael Miebach, president,
MasterCard Middle East and Africa says, “Africa is a region where the lines
between the developed and developing worlds are dissipating owing to various
economic, demographic and technological factors. Most of these factors have
been associated with the increased urbanization of the continent. Therefore,
understanding the long-term growth potential of Africa’s cities, and the
resultant increase in African urban consumers, has never been as important.”
“We are committed to understanding the
needs and challenges that consumers, businesses and financial institutions face
as we partner with local
stakeholders to enable economic growth through the increased
adoption of electronic payments. African nations have taken the lead in moving
toward a world beyond cash that
is also a world of greater financial
inclusion and economic empowerment,” said Miebach.
He noted that, according to the United Nations Human Settlements Programme,
the urban population of Africa is expected to triple by 2050 to 1.23 billion
(from 395 million in 2009), by which time 60% of all Africans will be living in
cities or urban areas.
“This growth in urbanization, combined
with the fact that the center of global economic gravity is shifting to dynamic
emerging markets such as those found in Africa, means that the continent’s
cities will play a much bigger role in driving the economic growth of their
respective countries,” Miebach continued.
Harare (Zimbabwe), Kano (Nigeria),
Abidjan (Côte d’Ivoire), and Khartoum (Sudan) were deemed to have the lowest
growth potential of the 19 cities examined in the study.
Although these cities scored well in
some categories, such as the overall health index and the levels of foreign
direct investment, their potential for growth was negatively impacted by low
scores in areas such as their political and regulatory environments, lower
historical economic growth and the challenges of doing business.
“One of Africa’s key economic and
social challenges is how its cities attract significant inward investment by
being globally competitive, serving as magnets for investment and growth,
hot-spots of innovation and, most importantly, developing attractive and
thriving business environments,” concludes Professor Angelopulo.
