Despite Nairobi ranking as the second worst city to live in globally, a recent study produced on behalf of MasterCard identified Nairobi as the 6th city out of 19 cities in Sub-Saharan Africa with economic growth potential. Nairobi ranked two places above Johannesburg, four places above Durban and five places above Cape Town.
Also on the list was Mombasa which ranked 12th, standing one place above Lagos and featured among the medium-low growth potential cities in Africa.
The index, released yesterday, January 29, 2013, at the second Africa Knowledge Forum hosted by MasterCard in Johannesburg explored how cities across Africa are playing an increasingly important role in driving national and regional growth, how they need to compete on the global stage in order to attract inward investment, and how these cities urgently need to manage their natural and human resourced more effectively as they grow.
The MasterCard African Cities Growth Index was developed in the Final quarter of 2012 and analysed 19 cities across Sub-Saharan Africa ranking them according to their growth potential between 2012 and 2017.
The index ranking was developed from published historical and projected data on typical factors that impact cities’ growth rates, including: economic data, governance levels, ease of doing business, infrastructure and human development factors, and population growth levels.
Of the 19 researched cities, Accra, the capital city of Ghana, was ranked as having the highest growth potential, followed by Lusaka and Luanda, that were both identified as having medium-high growth potential.
Harare, Kano, Abidjan and Khartoum were deemed to have the lowest growth potential of the 19 cities examined in the study.
Explaining why MasterCard chose to develop this new Index specifically for Africa, Michael Miebach, President, MasterCard Middle East and Africa says, “Africa is a region where the lines between the developed and developing worlds are dissipating owing to various economic, demographic and technological factors. Most of these factors have been associated with the increased urbanization of the continent. Therefore, understanding the long-term growth potential of Africa’s cities, and the resultant increase in African urban consumers, has never been as important.”
“We are committed to understanding the needs and challenges that consumers, businesses and financial institutions face as we partner with local stakeholders to enable economic growth through the increased adoption of electronic payments. African nations have taken the lead in moving toward a world beyond cash that is also a world of greater financial inclusion and economic empowerment,” said Miebach.
He noted that, according to the United Nations Human Settlements Programme, the urban population of Africa is expected to triple by 2050 to 1.23 billion (from 395 million in 2009), by which time 60% of all Africans will be living in cities or urban areas.
“This growth in urbanization, combined with the fact that the center of global economic gravity is shifting to dynamic emerging markets such as those found in Africa, means that the continent’s cities will play a much bigger role in driving the economic growth of their respective countries,” Miebach continued.
Professor George Angelopulo, of the University of South Afica (UNISA), who produced the index said, “One of Africa’s key economic and social challenges is how its cities attract significant inward investment by being globally competitive, serving as magnets for investment and growth, hot-spots of innovation and, most importantly, developing attractive and thriving business environments.”
Below is a breakdown of how the 19 cities ranked:
