Urban Transition in Sub-Saharan Africa: Implications for Economic Growth and Poverty Reduction

This report describes current conditions and trends in urban areas in sub-Saharan Africa and discusses both the current and the potential role of such centres in economic growth and poverty reduction. It also exposes some of the myths and misunderstandings about urban development in the region that have long constrained appropriate urban policies. For instance, the report highlights the following:

- The economic growth that has taken place since 1990 derives mainly from the growth in urban-based industries and services, especially in the better performing nations. But cities have not lived up to their productive potential because of widespread neglect and poor management.
- Urban poverty is not mainly a function of urban growth nor is it a sign of failure of urban economies. Much of the deprivation in cities, including the very serious public health problems, relate to institutional failures that perpetuate social exclusion and inequalities between the urban poor and the urban non-poor.
- Most internal migration flows in the region are logical responses to changing patterns of economic opportunity and have importance for reducing poverty; they are also not even the main source of urban growth and are not responsible for urban poverty.
- African countries are not urbanizing faster than other countries (and the region does not have unprecedented rates of increase in urbanization levels), although urban population growth rates in recent decades have been very rapid.
- The distribution of urban populations within nations between large and very small cities is not unusual for their level of development.

The report also highlights the importance of cities and towns for all nations’ development agendas – in developing a stronger and more competitive national economy, in supporting and complementing agricultural and rural development, in supporting poverty reduction and in building the competence and capacity of local governments. It also highlights the costs to any nation of neglecting an appropriate urban agenda, while also warning of the inappropriateness of many conventional policies – for instance, attempts to decentralize urban development.

Among its key conclusions:
- Population mobility is much more fluid that the rural-to-urban model would indicate and households wisely diversify their activities across both areas.
- Much of the development dialogue over the past 30 years has been and remains obsessed with the view that attention to cities represents “urban bias”. Yet cities all over Africa suffer the effects of genuinely bad urban policy and neglect (no financial security, paltry investment in local public goods), misguided incentives that distort the use of land and other investments, and hostile treatment of much of the population on which cities depend.
- Cities can stimulate agricultural and rural development by providing market demand for agricultural goods (including higher-value goods) and supporting non-farm economic activities in rural areas. Cities should be a key link in the “virtuous cycle” of urban and rural livelihoods.
- Cities nurture entrepreneurs by providing centres of demand (larger markets), information sharing, relatively easy access to credit and support for risk taking. But because of failures in urban institutions and services, many firms are not getting the cost advantages urban locations should provide.
- Successful, well-functioning cities require good quality governance and financial management. Development in Africa requires systematic improvements in accountability and service delivery at the local level.
- Better-managed urban development is needed to launch African economies onto a stronger, more sustained path of economic growth. Releasing the potential of Africa’s cities by addressing basic weaknesses in land markets, public transport and the provision of urban services could reduce “binding constraints” to future growth.
- Urban local governments can become th