The emergence of the African city
Africa’s rate of urbanisation and the development of cities has been slow. Africa is the least urbanised region on the planet. But while this is still in its early stages, the rise of emerging African cities has coincided with the continent’s growth and rejuvenation over the past decade. Cities have emerged as the epicenters of growth, representing a new era of economic modernisation with new market opportunities.
Africa will have the largest workforce on the planet by 2040, and consumer spending in these urban centers is expected to triple by 2030, reaching $2.2 trillion. On the cusp of an economic boom, there are two key features altering the course of economic development for Africa’s future: a rich demographic dividend and urbanisation. Together these will drive modernisation and increasing connectivity across the continent.
Africa on the cusp of an economic boom
These are essential prerequisites for sustained economic progress in Africa. Cities are at the center of these new determinants of economic prosperity. With over 60% of Africans under the age of 30 – a figure that surges well above 70% in more populous countries like Nigeria and Ethiopia – Africa’s youthful population is behind the urban migration to cities and the economic revolution that’s leapfrogging new technologies in telecoms, driving consumerism, and enticing entrepreneurship and diversification.
This is bringing with it an increase in investment, deeper labour markets, higher per capita incomes, small-scale industrialisation, much-needed improvements in infrastructure, and better services.
Only three African cities – Lagos, Cairo, and Kinshasa – fall within the true definition of ‘megacities’, a category of cities boasting 10 million people or more. But this is likely to change very soon. The growth of African cities will push at least another six cities into the ‘megacity’ class within the next 20-30 years.
They are Johannesburg, Luanda, Nairobi, Addis Ababa, Casablanca, and Khartoum; and that’s not to mention a long list of others, from Maputo to Dakar, that may fall short of the head count, but carry just as much vibrancy as their ‘megacity’ counterparts. With an estimated population of over 17 million people, boasting a consumer spending around $25 billion, Lagos in Nigeria is one of the best examples of why a city-specific understanding or strategy may prove more useful in understanding growth prospects and business opportunities in one of the fastest growing nodes of Africa.
Lagos has a per capita income of just $1,400 per year (compared to Johannesburg’s $7,500), but its growth rate is nearly three times that of its South African counterpart. This is a city that is still relatively un-banked and underserviced, but with a vibrancy and energy unparalleled on the African continent. Most visitors and Nigerians themselves would agree, there’s no place on Earth quite like Lagos…
Lagos – “The City of Excellence”
This is precisely what’s driving change and growth in Lagos. Coined “The City of Excellence” on the license plates of motor vehicles across the city, Lagos has made great strides in improving the work and living environment through improved mobile connectivity, services, and infrastructure in an effort to become the ‘go-to’ business capital of the continent.
One interesting observation around consumer behaviour vis-à-vis Lagos and the rest of Nigeria is in the culture of smoking. There seems to be very few (if any at times) local smokers in Lagos. One might assume that Nigeria, in general, isn’t a smoking nation. But just outside Lagos and throughout the country, and especially in the north, there is a vibrant smoking culture.
The remaining 160 million-strong population is therefore a potential consumer market, which would’ve been neglected if one were just visiting Lagos with a view of understanding consumer behaviour across Nigeria in general. This is just one illustration of how the consumer behaviour and operating environment vary drastically from country-to-country and city-to-city in the broader African context.
Do you know of other examples? Share them here…
About David Okwara
Addis Ababa, African cities, African city, Cairo, Casablanca, consumer behaviour, Consumer Market, consumer spending, Dakar, development, economic development, economic progress, emerging african cities, entrepreneurship, Ethiopia, growth opportunities, investment opportunity, Johannesburg, Kenya, Khartoum, Kinshasa, Lagos, Luanda, Maputo, market opportunities, megacities, Mozambique, Nairobi, Nigeria, per capita income, urban migration, urbanisation, World Economic Forum