Effects of urbanization on economic growth and human capital formation in Africa

Effects of urbanization on economic growth and human capital formation in Africa

Africa’s population is expected to grow to 2.3 billion by 2050, of whom 60% will be urban. This urbanisation is an important challenge for the next few decades. According to several research papers and reports, Africa’s urbanisation was, in contrast with most other regions in the world, not associated with economic growth in past decades.

The objective of this chapter is to investigate the impacts of urbanisation on human capital and economic growth in Africa. It seeks to contribute to the urbanisation–growth debate by investigating how urbanisation is linked to human capital accumulation and economic growth

More precisely, compared to previous studies on the urbanisation-growth nexus, it:

  • focuses exclusively on African countries
  • considers both direct and indirect channels through which   urbanisation may influence economic activity
  • examines a long period including the evolutions observed in recent years

Empirical findings suggest several policy implications. Sub-Saharan Africa now has inadequate planning systems, planning laws and building standards, bureaucratized and inefficient land policy and a shortage of qualified and active planners. Urban policies need to be revised in depth to foster human capital. At least five topics should be considered: training and education for urban decision makers; location management and subsidies, development of secondary towns, data for urbanisation management, and management of the informal economy.

 

 

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