A view of the Johannesburg skyline. Picture: THE TIMES on Business Day Live
By Bekezela Phakathi, on Business Day Live
JOHANNESBURG will be the biggest city in Africa by 2030 in terms of gross domestic product (GDP), while the continent’s cities will experience fast population growth as they urbanise from a low base.
These are some of the forecasts made in a new Oxford Economics report, which predicts how 770 cities around the world will look by 2030.
The Global Cities 2030 study, which forecasts and examines how the urban landscape will change and look by 2030, estimates that Johannesburg will be the biggest city on the continent in 2030 in terms of GDP, contributing $196bn, followed by Cairo ($168bn), Luanda ($138bn), Lagos ($76bn) and Cape Town ($73bn).
On the road to 2030, Asia’s cities will remain the factories of the world, but huge changes are afoot, the Global Cities 2030 study says.
Industry employment, notably in manufacturing, will decline in many advanced Asian cities such as Tokyo, Osaka, Seoul and Taipei. They will be joined in that trend by cities Bangkok and Shanghai, the industrial powerhouses of Asia, as they become increasingly space-constrained and expensive locations.
The report also states that, by 2030, Africa’s cities will feel fundamentally different to those in Asia and other continents: they will be overwhelmingly young. The report says that an explosion in the under-14 population, even as birth rates decline, represents a great demographic "gift" opportunity.
But this also represents a significant risk for the continent, as it seeks to absorb millions of young people into the urban labour force, while managing the political stability risks that could entail if youth unemployment soars.
Unemployment affects about 25% of South African society and remains a major problem. The government’s National Development Plan targets a jobless rate of 14% by 2020 and 6% by 2030.
Youth unemployment has increased since 2008 in part because of the global recession, rising from 32.7% in 2008 to 36.1% in 2011, and has remained between 35% and 37% in subsequent years, according to Statistics SA.
According to the Global Cities 2030 study, Lagos will be the most populous city in Africa, with 25-million people in 2030. It will be followed by Kinshasa (16.7-million), Cairo (14.1-million), Luanda (9.8-million), and Dar es Salaam (9.4-million).
In 2015, the Brookings Institute, an independent research firm, highlighted the growth patterns in the world’s 300 largest metro economies on two key economic indicators: annualised growth rate of real GDP per capita and the annualised growth rate of employment. It found that Johannesburg, with a population of just more than five million, ranked 173rd compared to Cape Town at 188th and a population of about 4.2 million.
Meanwhile, Francois Viruly, an independent property economist and associate professor at the University of Cape Town (UCT), said on Monday that the success and long-term sustainability of African cities was a function of vibrant property markets.
Prof Viruly said the risk of letting the African real-estate sector boom take place without the accompanying research and understanding of the effects of property development, was huge.
"A great example of this was the 2008 global financial crisis, which clearly demonstrated the social risks of an unmanaged property boom."
The Department of Construction Economics and Management at UCT has partnered with Nedbank Corporate and Investment Banking, to form the UCT-Nedbank Urban Real Estate Research Unit under the directorship of Prof Viruly.