Opportunities in Africa’s top 20 cities

Nairobi is ranked the most attractive destination for foreign direct investment (FDI) in Africa and a regional financial services hub. However, North African cities and Johannesburg dominate the continent in an interesting report “Into Africa, The continent’s cities of opportunity” published by consultants PWC recently.
The report highlights key aspects of 20 African cities, along with photos and charts, ranking all in their score on different areas. This is because cities are the engine of growth worldwide and particularly in Africa, where increasing numbers of the fast-growing population are moving to cities and mega-cities are emerging and growing very fast.
The report points out a strong correlation between infrastructure, human capital and economics and makes it clear that Africa’s future will partly depend on developing infrastructure and human capital, partly that smart and ambitious people will live where it is easier for them to flourish.
It highlights how many of the cities in the report have had millennia to establish themselves, but newcomers can catch up fast if the leaders become complacent. Johannesburg is 3rd among the 20 but was officially founded in 1886 and opened the stock exchange and the theatre next year. Accra, which grew from 20,000 resident to 2 million in a century, is number 6 but only fractionally behind Algiers and is forceful and dynamic, with a good vision, ranking 1st for communications infrastructure and low crime, 2nd to Nairobi in attracting FDI and to Casablanca in GDP diversity, 3rd for political environment, 4th for ease of doing business.
The report highlights how some effort and planning can help cities develop: Dar es Salaam and Douala are key ports and Douala also for transshipments, Accra for telecommunications, Lagos in culture, both music and Nollywood film (Johannesburg has top spending in Africa for entertainment and media and Nairobi has the fastest growth in E&M spending with projected increase of 12.5% in 2013-2018), and Nairobi in financial services along with Johannesburg. Abidjan is top in middle-class growth and diversity, Dar es Salaam in GDP growth.
According to the authors: “The entire purpose of this analysis, of course, is to facilitate the decisions and actions of both investors and policymakers. Therefore, we’ve structured this report, as much as possible, around the critical issues of the business community, as well as those of the officeholders and other public authorities who are responsible for improving the collective life of each city examined here. And that leads to our third – and, we believe, most important – group of readers, the actual citizens of the 20 cities in this report. Every element of this study – from infrastructure and human capital to the economy and society – directly concerns the more than 97 million people who live in the cities described here.”

The rankings
This is the order overall, including top rankings in each of the 4 main categories:
1. Cairo – top in infrastructure
2. Tunis – top in human capital
3. Johannesburg
4. Casablanca – top in economics
5. Algiers
6. Accra
7. Nairobi
8. Lagos
9. Addis Ababa
10. Kampala – top in society and demographics
11. Dakar
12. Abidjan
13. Kigali
14. Lusaka
15. Dar es Salaam
16. Douala
17. Antananarivo
18. Maputo
19. Kinshasa
20. Luanda

Gauged by opportunity, the ranking is headed by Dar es Salaam, followed by Lusaka, Nairobi, Lagos, Accra and Abidjan.

Urban infrastructure development
Urban infrastructure development

How Nairobi attracts FDI
This report on Ventures Africa website highlights the FDI figure, where Nairobi comes top. It reports that in the 2013/2014 financial year, FDI to Kenya was estimated at $1.6 billion, despite the increased terror attacks. Writer Emmanuel Iruobe analyzes steps for success:
Rapidly developing infrastructure: Infrastructure plays a fundamental role in attracting investors and Kenya is investing into energy, maritime, aviation and rail, including major financing from China, Japan, Western Europe and the United States.
Leading technology adoption: The country is a leader in technology adoption and advancement within the African continent and abroad including for deepening financial inclusion and he says Nairobi is the only African smart city among the list of top 20 smart cities globally and highlights plans to build Konza technology hub as part of Kenya’s Vision 2030, which has attracted the interest of IBM (which set up the first African research lab in Nairobi last year), Google, Microsoft and Intel. Dubbed the African “Silicon Savannah”, the project is expected to be a key economic driver for the country in the coming years.
High value mineral resources: In addition to natural resources such as coal and titanium, the recent discovery of oil and gas has contributed to FDI inflows into Kenya over the past 3 years with firms from the UK, US and Canada setting up operations in Nairobi.
Growing consumer base: The growing consumer class in the country, anchored on a fast-expanding middle class, has provided business opportunities for consumer goods. South African retail giant Massmart is expected to make an entry into Kenya in May under the “Game” brand name. French retailer Carrefour has reportedly signed up.


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