Economic data confirms that cities are the world’s engines of growth, and more so in the developing world. A recent PricewaterhouseCoopers (PwC) report has ranked Johannesburg third out of a list of Africa’s top 20 cities. Today’s Nedbank-NBF Networking Forum unpacked this further, allowing investors to assess how cities are performing both at a regional level as well as internationally.
Keynote speaker Jonathan Cawood, Director of PwC Southern Africa, discussed the findings of the comprehensive PwC report Into Africa: The Continent’s Cities of Opportunity, with a specific focus on Johannesburg. He also shared the factors that drive African cities’ abilities to compete for relevance and competitiveness on the global stage.
Thabang Chiloane, Divisional Executive Public Affairs of Nedbank clarifies, “The report highlights the fact that most African cities are on an economic growth trajectory and embracing social development. The ‘opportunity indicator’ that PwC has developed represents an excellent estimation of Africa’s top 20 cities and is a gauge for investors to compare them across different economic variables. These are grouped within four indicator categories, namely infrastructure, human capital, economics and society and demographics.
“Further, the report offers five ‘lenses’ for investors to evaluate a city in investment opportunity terms, namely its current development or future potential, its location, the nature of the opportunity that is offered, ‘must-have’ vs ‘knock-out’ factors and the time scale for the investment opportunities.”
Four of the top five cities in the report are located in North Africa, with only Johannesburg, ranked third, being sub-Saharan. The top five are Cairo (Egypt), Tunis (Tunisia), Algiers (Algeria) and Casablanca (Morocco).
The North African cities are all of ancient origin – Tunis, for example, can date its origins to the fourth century BC. Their longevity has given these cities time to develop infrastructure and social systems, including regulatory and legal frameworks. In contrast, Johannesburg is unusual in being a relatively young city – officially founded only in 1886 – but it developed rapidly for political and economic reasons.
Cawood says, “The report focuses specifically on African urban issues. This allows the countries themselves to learn from each other to increase their appeal in the global marketplace. For example, when it comes to infrastructure, the report ranks Cairo first, closely followed by Tunis. Johannesburg is ranked fourth after Addis Ababa, Ethiopia, which interestingly is also a relatively young city.
Johannesburg’s good showing as a municipal centre with a strong infrastructural network has been historically supported by its mining heritage and associated resources.
“It is interesting to note that despite Johannesburg’s fourth placed ranking overall in the infrastructure segment, there are some inconsistencies that come in when you delve deeper into the data in this segment of the report. For example, the city ranks top for both airport connectivity and power, comes second in communications and fifth in transport, but then drops down to 19th position overall when it comes to road safety. This kind of useful information is what allows potential investors to compare different African cities and investment opportunities in an informed and truly holistic manner.”
The infrastructure index section of the report scores the cities according to the costs of housing and business occupancy, airport connectivity, communications, transport infrastructure, road safety, water risk and power. Other noteworthy variables across the report include ease of doing business, health spending, middle-class growth, GDP growth and foreign direct investments.
“Accurately predicting Africa’s urban potential calls for one eye on a city’s tangible building blocks and both feet on the ground locally,” concludes Cawood.