May 19, 2024

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African Development Bank officials pledge to stimulate city investment as the backbone of the continent’s economic expansion.

AfDB President, Akinwumi Adesina

Akinwumi Adesina, the president of the African Development Bank, emphasized the need for more funding and autonomy for municipalities, which are the continent’s main driver of economic growth, on Thursday. She also promised a stronger commitment to the development of cities.

The head of the bank gave a speech at a high-level forum for mayors in Marrakech, Morocco, on the fringes of the Africa Investment Forum 2023 Market Days, with the theme of “Leveraging Cities and Municipalities for National Development.”

Mayors and governors from several major African cities, including Lagos, Dakar, Addis Ababa, Abidjan, Kigali, and Nairobi, as well as representatives from governments and financial and development organizations, attended the conference, which was co-organized by the African Development Bank and Big Win Philanthropy.

Adesina said in welcoming remarks, “The Mayoral Forum launches what we hope is the beginning of new collaboration between financial institutions, cities, states and municipalities, to accelerate the growth and development of Africa,”

“It also shows the priority that the partners and investors in the Africa Investment Forum will place on improving investments in sub-national level projects,” he added.

A presentation on a recent study on African cities that was commissioned by the African Development Bank and titled From Millions to Billions: Financing the Development of African Cities was also part of the session.

Deputy Mayor Professor Khadija Bouhrachi spoke on behalf of the mayor of Marrakech, stating that all guests are welcome in the city.  Although the promise of higher incomes in cities draws people in, governments must invest in services, green areas, highly diversified markets, and respectable, well-paying jobs. she said, “Economic performance plays a crucial role in the smooth running of our economies.”

According to United Cities and Local Governments of Africa (UCLG Africa) Secretary General Jean Pierre Elong Mbassi, the future of this continent depends on how policymakers can make cities more enticing and inviting for citizens, especially the youth.

“Bankers need a change of perspective when dealing with local governments. Thanks to this event for trying to push for this,” Mbasse said, adding that innovation and research would also be crucial factors.

A new report highlights the opportunities and challenges facing Africa, as it moves from millions to billions. The findings indicate a sharp increase in population: The number of people living in cities throughout Africa is predicted to almost triple over the next 25 years, to reach 1.5 billion by 2050. According to the report, Lagos will have a population of about 24.5 million in 2050, which is more than 32 times that of the city when Nigeria gained independence in 1960.

It is projected that African nations will have to invest roughly $140 billion annually, or 5.5% of their GDP, in their cities in order to meet this challenge.

Dr, Astrid Haas, economist and co-author of the report said the report took a “bottom-up” look at the diverse budgets of 10 African cities. “Urbanization is the megatrend that is reshaping the African continent,” she said, “No country has ever developed without an urban plan.”

The report highlights a number of crucial city strategies, including vision, enhancing fiscal autonomy and credit worthiness, fostering supportive environments, and raising revenue flows to cities.

Haas shared success stories from around the continent and the world, including China, Brazil, Cape Town, and the city of Abidjan, with its “bold and intentional investments in transport,” stating that “cities provide the engine of economic growth.”

“The time to think big is now; African cities hold the power. Let’s act boldly to ‘transform Africa’s future for generations to come,” Haas said.

Ethiopia has been a leader in reducing malnutrition, and Jamie Cooper, CEO of Big Win Philanthropy, commended the country’s mayor, Adanech Abebe, who was in attendance, for her role in changing her city. Less than a year has passed since Addis Ababa banned cars from more than 100 streets on Sundays, allowing kids and families to play and stroll. According to Cooper, Abebe has also committed to building 12,000 playgrounds in the nation’s capital.

“Everyone has their own vision. We look forward to continuing your plans with you,” Cooper said.

African Development Bank increases its commitment to urban areas and cities, According to Adesina, it provides $2 billion annually to initiatives and projects that directly improve urban areas throughout Africa. Numerous topics are addressed by these projects, such as housing, transportation, clean water availability, and enhanced sewage and sanitation systems.

Additionally, it boasts an Urban and Municipal Development Fund (UMDF) that provides technical support and capacity building to fifteen cities in the areas of integrated urban planning, governance, project preparation, and broader urban management, which includes municipal fiscal management.

However, the organization will continue, Adesina said. “While the Mayors are working hard to tap into this and other sources of public financing, greater priority needs to be given to attracting private investments into cities.”

He listed four ways to accomplish this: giving cities and towns more fiscal responsibility and autonomy; using debt securities to provide more financing; improving mortgage financing to make cities more livable by providing access to affordable housing; and granting more regulatory leeway to raise money on local capital markets by posting municipal and green bonds to strengthen their own financing.

The UMDF, which has $50 million mobilized for the period 2023–27, will be directed to support cities and municipalities divided in a ratio of 60% for urban project preparation, 20% for urban planning, and 20% for municipal access to financial support ecosystems, according to Adesina, who also shared some more good news regarding approvals by the institution’s Board of Directors.

Moreover, Adesina declared that the African Development Bank would lend an estimated $2 billion to your cities and municipalities in 2024.

“The Africa Investment Forum will now start to prioritize bankable projects that can secure investments for cities in order to support your efforts as mayors to expand investments in your cities,” Adesina declared.

Adesina said, “We will dedicate the AIF for special sessions on cities as a permanent agenda. AIF will give mayors and governors’ bankable projects inside cities and municipalities priority.”

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