From millions to billions: Financing the development of African cities

Urbanisation is the mega trend reshaping Africa. The continent’s population is rapidly growing and is expected to reach 4 billion people by the end of the century. This is coupled with unprecedented rural-to-urban migration, driven largely by young people. As a result of this demographic confluence, the number of people living in African cities is expected to nearly triple – reaching approximately 1.5 billion by 2050.

With numbers rising so quickly, the need to equip cities to prosper in an uncertain future is urgent. City, national, and global leaders must seize the opportunity to ensure African cities achieve their potential to become bastions of economic competitiveness and vitality. How well Africans plan for rapid urbanisation will set the continent’s trajectory for centuries to come.

African cities are not yet the engines of economic growth that they could be. Smart investments in infrastructure, quality service delivery, and job creation are desperately needed. The infrastructure gap alone is immense: closing it will require a more than doubling of existing investment to an estimated $130-$170 billion per year, the bulk of it deployed in cities.

This report first offers a landscape analysis of city financing in Africa. It illuminates the demand-side and supply-side constraints that prevent financing from reaching most African local authorities, drawing on in-depth analyses of 10 cities. The paper moves beyond existing analyses that simply conclude, ‘African cities need more finance’ or ‘African cities need bankable projects'. Although constraints vary in type and severity across cities, the case studies reveal common themes and highlight options for improving both the supply and demand of subnational finance if city and national governments collaborate and financiers are alerted to opportunities.