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June 15th, 2015

Elephants in the room: urban primacy and economic growth in Africa

4 comments | 3 shares

Estimated reading time: 5 minutes

Blog Editor

June 15th, 2015

Elephants in the room: urban primacy and economic growth in Africa

4 comments | 3 shares

Estimated reading time: 5 minutes

Kris Hartley recommends geographically balanced growth as a way of countering the negative impact of dominant cities on national economies.

Africa is rapidly urbanising, and the UN projects that a majority of the continent’s residents will live in cities within the next 20 years. Around the world, urban growth is receiving increasing interest, from governments to academia. “Never before has urbanisation mattered as much to humanity as it does today,” insists Hubert Klumpner of the Swiss Institute of Technology. Images of skylines and dazzling light shows may be an inspiration to leaders of aspirational developing countries, but urbanisation can negatively impact growth if not geographically balanced.

Cities undeniably generate economic opportunities. The clustering of companies facilitates trade, exchange of ideas, and reduced infrastructure costs. The diversity accompanying urbanisation also generates lively environments, cultural hybridisation, and business innovation. However, the recent enchantment with cities often overoptimistically justifies policies that concentrate growth, while hinterland regions suffer neglect and lack of investment. In contrast, mature economies pursue geographically balanced development that has a history of supporting long-term growth.

Half  of the population of Eritrea live in its capital city, Asmara. Credit: D-Stanley via Flickr (https://flic.kr/p/dHZszD)
Half of the population of Eritrea live in its capital city, Asmara. Credit: D-Stanley via Flickr (https://flic.kr/p/dHZszD)

Despite its challenges, rapid urbanisation remains the growth path of choice for Africa’s developing countries. According to the UN, 15 African cities will grow by 20% or more between 2010 and 2025. Dar es Salaam, Nairobi, Kinshasa, Luanda, and Addis Ababa are all projected to grow by more than 60% during the same period. Economic opportunities are luring African workers to large cities and their informal sectors, which now account for more than half of all employment. This migration will have transformational effects on national economies, as it already has in China, where an emerging middle class signifies upward mobility. The difference, however, is that China has several major coastal megacities to absorb such growth; in African countries, there is often only one viable destination city for migrants.

Scholars use the terms “urban gigantism” and “urban primacy” to describe the dominance of a single city within its own country. In concept, primacy is a ratio of the characteristics of a country’s dominant city (e.g. population, economic activity, and political influence) to the same for smaller cities. According to 2012 World Bank data, of 141 non-city state countries for which both data were available, 13% have a dominant city with over half the country’s population (e.g. Asmara, Eritrea; Cairo, Egypt; Luanda, Angola; Djibouti). As this statistic alone is neither alarming nor insightful, it is more helpful to measure economic performance within the context of urban concentration. This can be called the primacy-productivity quotient, which is obtained by dividing the country’s GDP per capita (data source: World Bank) by the percentage of its total population living in the largest city. Using primacy as the denominator favours “non-primacy” (urban dispersion), implying the higher contribution of balanced urban growth to GDP.

Urbanprimacy_fig1

The top 10 countries in economic performance and urban dispersion (Figure 1), as measured by the primacy-productivity quotient, include advanced economies (Germany, United States, Australia, etc.) and one “resource economy” (Qatar at #9). None of the top 10 has more than 30% of residents living in the largest city (primacy), and five have fewer than 20%. By contrast, nine of the ten lowest ranking countries are in Africa. Each has above 30% primacy, and eight above 40%. Of the bottom 50, 34 are in Africa and have an average primacy of 40%.

The primacy-productivity quotient would seem to favour large countries having dispersed populations. However, the top 10 is a relative balance (six above 10 million inhabitants and four below); the bottom 10 is likewise balanced (four above 10 million and six below). For the 19 countries with primacy above 50%, the average primacy-productivity rank is a lowly #100. By contrast, of the 30 countries with primacy below 20%, the average primacy productivity rank is #41. These data indicate that a geographically-balanced population is potentially associated with economic growth.

UrbanPrimacy_Fig2

This primacy-productivity study identifies several cases for closer investigation. Figure 2 shows primacy trends between 1960 and 2014 for seven African countries in the worldwide bottom-10 for primacy-productivity. Each effected a more nationally-dispersed population over the past four decades, with Liberia experiencing primacy volatility due to political and military unrest. Figure 3 shows the primacy-productivity performance of the same countries between 2000 and 2012. Each maintained or improved performance, with the highest gains realised by Eritrea and Liberia. Both economies are driven by the natural resources sector, which creates jobs in hinterland mining sites and in cities that provide related professional services. Nevertheless, resource extraction may be fool’s gold for countries and their “boomtowns,” particularly as sustainable economic growth moves beyond commodities.

UrbanPri_Fig3

Monrovia, Dakar, and Bangui are examples – among many – of Africa’s domestically dominant cities; they monopolise economic and population growth within their respective countries. The situation is not significantly different in parts of Asia. According to Kolomiiets (2013), the capitals of many Southeast Asian countries (e.g. Jakarta and Phnom Penh) represent urban primacy. Cities in both regions are beset with the usual problems of hyper-urbanisation, including congestion, infrastructure deficits, and population displacement. Some countries are pursuing economic dispersion, and this provides possible models for Africa. For example, in response to Bangkok’s congestion, the Thai government recently committed US$ 3 million for infrastructure development in the country’s eastern seaboard, supporting a decades-long initiative to balance national development. Further, some countries have relocated their government capitals to remote regions to balance development (e.g. Kazakhstan, Turkey, and Brazil). In some cases, de-concentration even comes naturally, as itinerant companies abandon crowded and expensive megacities for secondary cities with lower labour costs, alluring investment incentives, and even a better quality of life.

The negative impacts of urban primacy, like dominant cities themselves, are the “elephant in the room.” The challenges of unmanageable urbanisation and hinterland neglect are obvious but few wish to confront them, particularly when GDPs and skyscrapers are rising. However, geographically-dispersed growth does not always imply settling for agricultural development; secondary cities can bolster a country’s competitiveness in urban-based industries (e.g. manufacturing, services, and knowledge). African leaders should therefore beware the false promise of primacy-based national development, lest economic potential be sacrificed at the altar of hyper-urbanisation and its illusion of progress.

 

Kris Hartley is a visiting researcher at the Center for Government Competitiveness at Seoul National University, and a PhD Candidate at the National University of Singapore, Lee Kuan Yew School of Public Policy.

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