Growing cities pose challenges for African economies

Luanda, Angola skyline at night
Rapid population growth will create many difficult challenges for cities like Luanda, Angola’s capital, as social and environmental stresses multiply (source: dpa)
  • Urbanization is happening quickly in Africa
  • Adjustments in infrastructure and services are lagging behind
  • Growing cities are more likely to prosper in diversified economies
  • Failed cities could occur in countries with weak institutions, deepening instability

Urbanization is at the top of Africa’s agenda as more local, regional and global leaders recognize the link between growing cities and economic development. Throughout history, cities have been a source of economic growth and innovation, as higher population densities offering large pools of labor and capital allow for economies of scale, reduce transaction costs and increase productivity. To improve living standards, urbanization must be accompanied by structural transformation.

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