Of the 19 Sub-Saharan African cities examined in the MasterCard African Cities Growth Index, capital cities of Ghana, Zambia and Angola has been adjudged as having the highest economic growth potential in the next five years.
According to the MasterCard African Cities Growth Index produced by Professor George Angelopulo of the University of South Africa (UNISA) on behalf of MasterCard; Accra, the capital city of Ghana, has the highest growth potential, followed by Lusaka and Luanda.
On the other hand, Harare (Zimbabwe), Kano (Nigeria), Abidjan (Côte d’Ivoire), and Khartoum (Sudan) were deemed to have the lowest growth potential of the 19 cities examined in the study.
Angelopulo said “Some of the key reasons for Accra emerging as a high growth city include: its gross domestic product per capita growth over the past three years, its projected population and household consumption growth, its strong regulatory environment, and the relative ease of doing business in this city, compared to other African cities.”
He added that “One of Africa’s key economic and social challenges is how its cities attract significant inward investment by being globally competitive, serving as magnets for investment and growth, hot-spots of innovation and, most importantly, developing attractive and thriving business environments.”
Johannesburg which is already a strong economic powerhouse city in Africa was ranked eight on the index. The South African city achieved lower scores in certain categories as a result of lower growth expectations due to its relative maturity when compared to other African cities. Durban and Cape Town, both cities in South Africa also assumed the 10th and 11th positions, respectively.
According to a statement released on the report, “While many of these larger and more established cities offer the expected potential for growth, other less prominent ones are quietly establishing themselves as those with even higher growth potential.”
It explained that this is primarily due to high scores on accelerated growth factors that include health, education, governance, infrastructure development, and the ease of doing business in those cities.
On the cities that ranked low in economic growth potential, the report stated that although these cities scored well in some categories, such as the overall health index and the levels of foreign direct investment, their potential for growth was negatively impacted by low scores in areas such as their political and regulatory environments, lower historical economic growth and the challenges of doing business.
The MasterCard African Cities Growth Index aims to put a spotlight on the economic and human factors driving urban growth over the next five years. The Index was developed in the final quarter of 2012 and analysed 19 cities across Sub-Saharan Africa ranking them according to their growth potential between 2012 and 2017.
The index which was launched at the second Africa Knowledge Forum hosted by MasterCard in Johannesburg conveys the thought leaders from academic, business and government sectors. The Forum explores how cities across Africa are playing an increasingly important role in driving national and regional growth, how they need to compete on the global stage in order to attract inward investment, and how these cities urgently need to manage their natural and human resources more effectively as they grow.
The Index rankings were based on published historical and projected data on typical factors that impact cities’ growth rates, which includes: economic data, governance levels, ease of doing business, infrastructure and human development factors, and population growth levels.
Explaining the rationale behind the new Index, President, MasterCard Middle East and Africa, Michael Miebach said, “Africa is a region where the lines between the developed and developing worlds are dissipating owing to various economic, demographic and technological factors. Most of these factors have been associated with the increased urbanization of the continent. Therefore, understanding the long-term growth potential of Africa’s cities, and the resultant increase in African urban consumers, has never been as important.”
He added that MasterCard is committed to understand the needs and challenges that consumers, businesses and financial institutions face as it partners with local stakeholders to enable economic growth through the increased adoption of electronic payments.