As Africa undergoes rapid urban growth, there is a narrow window of opportunity to harness the potential of cities as engines of economic growth. The rapid decline in oil and commodity prices has adversely affected resource-rich countries and signaled an urgent need for economic diversification in Africa. Urbanization and well managed cities provide a major opportunity to offer a springboard for diversification. Although it is not possible to predict the specific sector opportunities for diversification, the investments chosen need to be generic, supporting many specific activities.

Cities are just such generic capital: virtually whatever niches prove to be viable, they will take place in cities, and their success will require that cities work efficiently. This presentation, based on ongoing World Bank, research examines if African cities are strengthening these springboards through higher economic density and proximity—to support clusters of firms, and to connect workers with firms more efficiently. Further, the research examines the extent to which cities are livable for poor and middle-class residents, through access to services, amenities, and housing – as these amenities keep a rein on workers’ living costs. The research highlights that African cities are on a development trajectory that poses excessive costs to residents and firms: Cities in Africa today cannot be characterized as economically dense, connected, and livable -- instead, they are crowded, disconnected, and costly for households and firms. The research also examines the implications of these development patterns for growth and inclusion and highlights the importance of reforming land markets and urban regulations, alongside coordinated early infrastructure investments.