The Sahel and West Africa Club (SWAC) is an independent international platform. Its Secretariat is hosted at the Organisation for Economic Co‑operation and Development (OECD). Its mission is to promote regional policies that will improve the economic and social well‑being of the people in the Sahel and West Africa. Its objectives are to produce and collect data, draft analyses and facilitate strategic dialogue in order to nurture and promote public policies in line with rapid developments in the region. It also promotes regional co‑operation as a tool for sustainable development and stability. Its current areas of work are food dynamics, cities and territories, and security.

Urbanisation is one of the most profound transformations that the African continent will undergo in the 21st century. Since 1990, the number of cities in Africa has doubled—from 3 300 to 7 600 —and their cumulative population has increased by 500 million people. Africa’s cities are the most rapidly growing cities in the world; they are the youngest and they are changing fast. Their impact on Africa’s economic, social and political landscape in the coming decades is likely to be profound. Urbanisation, therefore, presents immense opportunities to accelerate progress towards the 2030 and 2063 development agendas and for promoting continental integration in the context of the African Continental Free Trade Area (AfCFTA). For African policy makers, it also entails very important challenges in planning, managing and financing urban growth, both at the local and the national levels. In many places in Africa and beyond, there is a prevailing negative perception of the externalities of urbanisation and its impact on development. This has slowed policy processes to make urbanisation a central part of Africa’s development strategies.

The policy debate on urbanisation in Africa has long suffered from a paucity of robust evidence. This report provides a new perspective on the economy of African cities, based on the most comprehensive analysis of data on African cities to date. It uses information from more than 4 million individuals and firms in 2 600 cities across 34 African countries to describe the economic performance and social conditions in cities of different sizes across the continent.

This chapter presents new indicators on the economy of African cities that are based on data from more than 4 million individuals from across Africa. The indicators provide a new perspective on African cities that is unprecedented in its breadth and level of detail. They make it possible to compare the performances of cities of different sizes, document the corresponding evolution over time and analyse the effects of cities on nearby rural areas. The results show the positive impact that urbanisation has on economic performance and quality of life in almost all measurable dimensions.

This chapter analyses the implications of the emergence of city clusters across Africa. It provides a new methodology to identify clusters of cities and shows that Africa has a large and growing number of such clusters. Subsequently, the chapter outlines the economic potential that clusters offer and discusses the main obstacles to closer economic integration that cities within clusters face. It highlights the need for better infrastructure and provides new metrics of the African road network. Applying a gravity model of trade, the chapter shows that even small border costs can lead to major reductions in trade flows between cross-border cities.

This chapter outlines how important it is to draw up a roadmap for thefuture of cities in national economic strategies. Co‑ordinating and designingpolicies at both the national and the local level is vital for every region of acountry and every sector of the economy. The chapter offers an overview ofseveral aspects of national policy that national governments can consider tosupport and boost the economic performance of cities and, in particular, itemphasises the importance of investing in human capital, infrastructure andpublic institutions. The final section of the chapter describes a variety of policy packages and measures that governments can draw upon to bring cities to the forefront of national economic policy.

This chapter discusses the role of local economic development policies inAfrica. It highlights the need to develop policies targeted to the local contextand explains why local governments should play a greater part in supporting economic development. The chapter emphasises the increasingly important role of metropolitan governance in Africa and discusses strategic planning as an instrument for developing coherent policy packages. While it is impossible to develop one‑size‑fits‑all solutions for local economic development policies, the chapter presents five principles around which targeted local economic development policies can be built.

This chapter provides an overview of the fiscal capacity of African local governments. It shows that local governments in Africa have exceptionally low local fiscal capacity. They are heavily reliant on transfers from national governments, raise few own‑source revenues, and with few exceptions, do not have access to debt financing. The chapter analyses instruments that can be used to increase fiscal capacity of local governments. It emphasises the importance of debt financing for funding investments in growth‑enhancing infrastructure and service delivery.

This chapter includes contributions from five high‑level policy makers and experts who follow, contribute to and influence the evolving policy debate on urbanisation in Africa. The essays represent a diversity of views on the potential of urban economies, the challenges and the policies needed to achieve sustainable and inclusive economic prosperity.