1st Africa Urban Forum ends with call to innovate resource mobilisation for climate-resilient urbanisation

Urbanisation is an “irreversible trend” that African governments should carefully plan and set resources aside for if the continent is to avoid the problems of infrastructure deficits, housing shortages, informal settlements, environmental degradation, social inequalities, economic disparities and poverty. This was the conclusion reached by African political leaders, government bureaucrats, policy and decision makers, business leaders, urbanisation and human settlements experts, civil society representatives and other stakeholders that were gathered for a three-day Africa Urban Forum (AUF) that ended in the Ethiopian capital Addis Ababa September 6, 2024.

The forum was convened for African leaders to strategise for building cities that are environmentally sustainable, socially inclusive and economically resilient.

In a statement issued at the end of the three-day forum, representatives from the 54-nation continent concluded that the success of the future development of Africa depends on how well-planned its urban space would be since that is where a majority of its people would be living.

“The ‘Africa We Want’ is dependent on the way African urban areas and cities are planned, governed and managed so that they become true engines of economic growth, social inclusion and sustainable development,” the statement said.

The co-creation of solutions is particularly timely as Africa faces numerous structural challenges, including the persistent funding gaps in infrastructure estimated at $130 billion annually, declining public resources and increasing impacts of climate change and environmental degradation.

“Urbanisation is an irreversible trend that must be harnessed for the structural transformation of Africa where the bulk of the Gross Domestic Product, wealth and prosperity are produced and most people are living,” the statement added.

As African cities expand, they require massive investments in infrastructure, housing and essential services, investments that will not only support urban growth, but also drive long-term development, said experts. 

Leveraging innovative financing mechanisms such as public-private partnerships, development finance, green bonds, impact investing, crowd funding, infrastructure investment trusts and municipal bonds is vital, they added.

These mechanisms will help attract the capital needed to build cities that are not only functional but also vibrant, inclusive and competitive on a global scale. 

Every dollar invested in sustainable urban infrastructure is expected to yield up to $4 in economic returns, the panelists noted.

Search for innovative financial models

The forum urged African governments and development partners to conduct a massive resource mobilisation campaign in order to attract the necessary financial investment needed for the continent’s accelerated urban development.

To this end, it encouraged national governments to put in place transparent mechanisms for sharing public financial resources to ensure investment and operations costs of managing urban development are met at the appropriate level of governance. This should adhere to the subsidiarity principle promoted by the African Charter on the values and principles of public service, decentralisation, local governance and local development based on the locally determined priorities for development.

It called on the African and international finance communities to explore innovative ways and financial models responsive to the needs of the low-income groups to finance investments in African cities and regions. 

These models include “leveraging funds for investments in cities and regions through bonds issuing on the capital markets; the creation of special purpose vehicles, equitable access to climate finance, and public-private-partnerships, in line with optimising the role of sustainable urbanisation for Africa’s structural transformation with due consideration that the African countries should take up the funded programmes based on their self-determined development pathways”.

The forum also called upon financial institutions to support the development of fit-for-purpose housing policies to address the need of low-income earners, basic services and to unlock the potential of the housing sector (job creation, industrial development, revenue generation) embedded in a green industrialisation and economy framework as defined by the African Union, African Development Bank and United Nations Economic Commission for Africa (UNECA), and also based on the set priorities of the countries. 

It also resolved to encourage development banks in collaboration with other development finance institutions, multilateral and bilateral institutions, to anchor the mobilisation of concessional financial resources from both domestic and international sources, including public funds, private sector investment, and development assistance, to bridge the financing gap in housing and urban development industries.

It also emphasised the need to enhance the capacity of cities and municipalities for utilising green climate financing to create inclusive and equitable urban climate resilience strategies. This includes both mitigation and adaptation measures, achieved through the development and execution of viable climate-related action plans and projects.

“These should be designed to be compatible with country platforms to accelerate just transitions, with an acknowledgement that the African countries should be allowed to utilise their natural endowments to drive their own development agenda as part of the just transition on a timetable determined by the countries themselves.”

Sustainable development in face of climate change 

The forum also highlighted the role played by climate change in driving Africa’s rapid urbanisation.

With the ongoing expansion of African cities amid climate change, there is an increasing acknowledgment of the necessity to foster sustainable and resilient urban development practices that harmonise economic growth with environmental preservation and social inclusion. The Nairobi Declaration, deriving from the Africa Climate Summit held in September 2023 in Kenya, recognised cities as hotspots for climate vulnerability, thus the nexus between urbanisation and climate change. 

Climate change poses a major threat to sustainable urban development in Africa, according to researchers. Changes in the frequency, intensity and duration of climate extremes (droughts, floods, and heat waves, among others) will affect the livelihoods of the urban population, particularly the poor and other vulnerable communities who live in slums and marginalised settlements.

Extreme changes in weather patterns will increase incidences of natural disasters and impact on all key sectors of the economy, including the urban economy, agriculture and forestry, water resources, coastal areas and settlements as well as health.

Unlocking potential of Africa’s urbanisation

Co-organised by the government of Ethiopia and the African Union Commission, in partnership with UN-Habitat and UNECA, the event was held under the theme ‘Sustainable Urbanization for Africa’s Transformation – Agenda 2063'.

In 2022, the African Union Commission and its member-states established AUF in response to the rising consciousness of rapid urbanisation in Africa, its opportunities and challenges, and the need to create a continental scale forum to support an inclusive and holistic approach to unlocking the potential of urbanisation in the continent.

This was a result of the realisation that African cities and towns will be built one way or another in the next three decades. How they are built, experts said, will determine the prospects for the continent and the viability of global sustainability efforts for the remainder of the century. 

It was also realised that it has never been more important for new multi-level governance arrangements and continent-wide programmes to harness the current urbanisation phase to ensure economic diversification, reduced cost-of-service delivery and climate resilient development.