Economic Report on Africa 2017

Urbanization and Industrialization for Africa’s Transformation

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The 2017 Economic Report on Africa focuses on the linkages between industrialization and urbanization. Urbanization is one of Africa mega trends with profound implications for the social, economic, environmental dimensions of growth and transformation. Theory and experience demonstrate that industrialization and urbanization can be mutually reinforcing processes. It is therefore imperative to explore the linkages between urbanization and industrialization given the profound implications for structural transformation in Africa. So far, current policy narratives and frameworks on structural transformation and industrialization in Africa have largely failed to factor in the spatial and urban dimensions of industrialization, and in particular the advantages presented by productivity enhancement and agglomeration effects generated by cities. Yet, the nexus between urbanization and industrialization is of particular relevance for Agenda 2063 and the 2030 Agenda on Sustainable Development. Both agendas recognize urbanization as a critical factor for sustainable development. It is also important to consider urbanization and industrialization in light of Africa’s engagement with the Third United Nations Conference on Housing and Sustainable Urban Development (Habitat III) to be held in Quito, Ecuador in October 2016. In this context, African policy makers have clearly recognized urbanization as an engine of structural transformation for inclusive and sustainable growth.

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Urbanizing to industrialize: Policy responses

Africa is undergoing a rapid urban transition with considerable implications for industrialization, a key imperative for inclusive structural transformation. Urbanization and industrialization are closely linked elsewhere, but in Africa these links are weak or absent. And where they exist, have often developed organically rather than through deliberate policy responses, even though the importance of coordinating industrial and urban development was recognized by African policymakers as far back as the 1960s (UNECA, 1962). The challenge for Africa is thus to transform its economic growth into sustained and inclusive development by harnessing urbanization to promote economic diversification, with a special focus on industrialization that creates jobs, reduces inequality and poverty, and enhances access to basic services.

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