10 African cities whose economic importance will triple by 2030

Downtown Dar es Salaam. Image: Daniel Hayduk/AFP/Getty Images.

Global Economy Watch, a monthly report released by PwC, usually leads with stories on US employment figures or an analysis of the Eurozone crisis. In August, though, it turned its attention to a more neglected part of the world, running an article titled, “Africa: Growth is on the horizon but where should you look?”

The audience for such reports are the senior executives (CEOs, CFOs and COOs) referred to as occupants of “the C-suite”. Most of these guys haven’t spent a great deal of time thinking about sub-Saharan Africa’s potential as an investment target. But, it turns out, they should.

Historically, foreign investment has focussed on the “top 3” cities in the region – Johannesburg, Kinshasa, and Lagos. They have the largest populations in the region, and that alone gives them a significant economic footprint, and most multinational companies will now have a presence within them.

But PwC predicts that, over the next 15 years, most of the growth will come from the “next 10” biggest cities in Sub-Saharan Africa. These include Nairobi (Kenya), Abidjan (Cote D’Ivoire), Addis Ababa (Ethiopia) and Dakar (Senegal). Here are the full 10, mapped:  

There are several reasons why PwC have focused on these 10. First, there’s demographics. By 2030, the region’s population will have overtaken every continent but Asia, and Africa will account for around a third of the world’s population. By 2040, PwC predicts, the continent will have the biggest labour force in the world (the result, one assumes, of a youthful population). 

UN predictions suggest that, thanks to the process of urbanisation, the “next 10” cities will grow even faster than the region as a whole: most of these cities will double in size by 2030. The populations in Dar es Salaam and Luanda will both rise to around 10m by 2030, putting them on a par with Paris or London.

Add to that the standard processes of growth, and the fact that many of these countries are sitting on oil and gas reserves, and the economic importance of these cities is going to soar. In all, the IMF predicts, the size of their combined economy will triple by 2030, rising by about $140bn in total.


There are, of course, obstacles to this type of swift development. One major difficulty is overpopulation, and the accompanying shortfall in infrastructure and resources.  In Nigeria, which contains three of these top 13 cities, only 20 per cent of the roads are paved (in the UK, it’s, er, 100 per cent). All 10 cities have low levels of literacy, and schools that aren’t good enough to plug the gap.

Many of the countries’ governments also lack the legal infrastructure required to manage bigger, more developed economies. The path to business deals in some countries is still occasionally smoothed by bribery: no less a figure than Albert Stanley, one time CEO of Halliburton, was jailed after paying officials bribes to secure a natural gas contract in Nigeria.

The motivations of potential investors may cause problems of their own. As an explanation for why Africa will become increasingly attractive, PwC points to the expectation that labour costs in Asia are going to soar. There’s a danger that the firms most likely to invest in the region will be those seeking cheap labour and ways to cut corners.

PwC advises its C-suite readers to invest in these cities. But it wants them to support infrastructure, (by building roads, say); and to pay for skills development programmes for the cities’ rapidly expanding workforces. Whether they’ll listen is another question.

 
 
 
 

Two east London boroughs are planning to tax nightlife to fund the clean up. Will it work?

A Shoreditch rave, 2013. Image: Getty.

No-one likes cleaning up after a party, but someone’s got to do it. On a city-wide scale, that job falls to the local authority. But that still leaves the question: who pays?

In east London, the number of bars and clubs has increased dramatically in recent years. The thriving club scene has come with benefits – but also a price tag for the morning clean-up and cost of policing. The boroughs of Hackney and Tower Hamlets are now looking to nightlife venues to cover these costs.

Back in 2012, councils were given powers to introduce ‘late night levies’: essentially a tax on all the licensed venues that open between midnight and 6am. The amount venues are expected to pay is based on the premises’ rateable value. Seventy per cent of any money raised goes to the police and the council keeps the rest.

Few councils took up the offer. Four years after the legislation was introduced, only eight local authorities had introduced a levy, including Southampton, Nottingham, and Cheltenham. Three of the levies were in the capital, including Camden and Islington. The most lucrative was in the City of London, where £420,000 was raised in the 2015-16 financial year.

Even in places where levies have been introduced, they haven’t always had the desired effect. Nottingham adopted a late night levy in November 2014. Last year, it emerged that the tax had raised £150,000 less than expected in its first year. Only a few months before, Cheltenham scrapped its levy after it similarly failed to meet expectations.


Last year, the House of Lords committee published its review of the 2003 Licensing Act. The committee found that “hardly any respondents believed that late night levies were currently working as they should be” – and councils reported that the obligation to pass revenues from the levy to the police had made the tax unappealing. Concluding its findings on the late night levy, the committee said: “We believe on balance that it has failed to achieve its objectives, and should be abolished.”

As might be expected of a nightlife tax, late night levies are also vociferously opposed by the hospitality industry. Commenting on the proposed levy in Tower Hamlets, Brigid Simmonds, chief executive at the British Beer and Pub Association, said: “A levy would represent a damaging new tax – it is the wrong approach. The focus should be on partnership working, with the police and local business, to address any issues in the night time economy.”

Nevertheless, boroughs in east London are pressing ahead with their plans. Tower Hamlets was recently forced to restart a consultation on its late night levy after a first attempt was the subject of a successful legal challenge by the Association of Licensed Multiple Retailers (ALMR). Kate Nicholls, chief executive at the ALMR, said:

“We will continue to oppose these measures wherever they are considered in any part of the UK and will urge local authorities’ to work with businesses, not against them, to find solutions to any issues they may have.”

Meanwhile, Hackney council intends to introduce a levy after a consultation which revealed 52 per cents of respondents were in favour of the plans. Announcing the consultation in February, licensing chair Emma Plouviez said:

“With ever-shrinking budgets, we need to find a way to ensure the our nightlife can continue to operate safely, so we’re considering looking to these businesses for a contribution towards making sure their customers can enjoy a safe night out and their neighbours and surrounding community doesn’t suffer.”

With budgets stretched, it’s inevitable that councils will seek to take advantage of any source of income they can. Nevertheless, earlier examples of the late night levy suggest this nightlife tax is unlikely to prove as lucrative as is hoped. Even if it does, should we expect nightlife venues to plug the gap left by public sector cuts?