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East Africa to lead African cities’ expansion

Anna Lyudvig
Jan. 8, 2018, 2:17 p.m.
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Word count: 571

Bujumbura (Burundi), Freetown (Sierra Leone) and Dar Es Salaam (Tanzania) will experience the fastest GDP growth over the period 2017 to 2035, according to an annual report from Oxford Economics.

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Bujumbura (Burundi), Freetown (Sierra Leone) and Dar Es Salaam (Tanzania) will experience the fastest GDP growth over the period 2017 to 2035, according to an annual report from Oxford Economics.

In addition to Dar Es Salaam, Tanzania accounts for a further three of the ten fastest growing African cities, the report said.

Overall, seven of the top-ten fastest growing African cities in the forecasts are located within East African countries “thanks to their greater economic diversification”.

According to the findings, the relatively strong performance of these cities can be explained by political and institutional stability providing a basis for increased private sector investment, rises in regional infrastructure expenditure and expansion within the tourism sector.

“Yet despite such robust economic growth, we forecast that the majority of African cities will continue to remain relatively small in terms of scale and therefore do not expect any of the ten fastest growing African cities to enter the top 100 global cities in 2035 based on GDP,” the report said.

The relatively strong performance of these cities can be explained by political and institutional stability providing a basis for increased private sector investment, rises in regional infrastructure expenditure and expansion within the tourism sector.

“Yet despite such robust economic growth, we forecast that the majority of African cities will continue to remain relatively small in terms of scale and therefore do not expect any of the ten fastest growing African cities to enter the top 100 global cities in 2035 based on GDP,” said Oxford Economics.

According to the report, Cairo is a notable exception and it is on track to maintain its position as the largest African city in terms of GDP and is also set to become the only African city to enter the top 100 global cities by 2035, in 84th place.  

The Egyptian capital is forecast to record 4.4% average annual GDP growth to 2035.

“ Cairo will continue to experience growth in services such as commerce and finance as well as an expansion within consumer services. Despite its economic scale, we forecast that Cairo will fall to third among African cities in terms of total population.”

In West Africa, Oxford Economics forecasta Lagos to become the most populous African city, with population growth of 4% per annum.

Lagos is also forecast to overtake Johannesburg as the second largest African city in terms of GDP by 2035, with the city set to gain from policy reforms focused on improving the support infrastructure for private sector firms.

Oxford Economics said that the growth prospects of African cities greatly depend on their ability to diversify their industrial structure and establish institutional stability whilst also developing in terms of education, health and infrastructure.

Industrial structure has played an important role in recent economic performance. 

“During the 2000s and early 2010s commodity-rich African countries such as Nigeria and Angola greatly benefitted from the rise in global commodity prices, leading to significant increases in aggregate demand. However, following the collapse in commodity prices in 2014, a reversal in this trend has emerged with economically diverse East African countries, such as Tanzania and Mozambique, outperforming countries more reliant on natural resources.”

“Although the expected recovery in commodity prices in upcoming years will help reduce the gap in economic performance, we forecast that commodity-rich African cities will continue to lag behind the more diversified East African cities in terms of GDP growth,” the report said.
 

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