Two-thirds of the African population dwell in rural areas. These areas house some of the poorest people of the continent and a general lack of infrastructure development. The inadequate focus on rural infrastructure development has led to the continued growth of the African urban population, as rural citizens migrate to urban-city centres in hopes of finding employment and improved access to public services. This is reflected in the projected increase of the urban population from 36% in 2010 to 50% by 2030. Thus the effects of urbanization in Africa, in particular the lack of policy focus in rural development and how the formation of the BRICS New Development Bank (NDB) could assist with financing rural development in Africa, will be discussed herewith.
Africa is one of the poorest continents and is urbanizing rapidly. While urbanization is often associated with industrialization and economic growth; in Africa it is met with lower levels of income and insufficient infrastructure investments. A country’s quality of infrastructure can positively impact its economic performance, yet in many African states the slow paced infrastructure development is hindering economic growth; the lack of roads, rail networks and connectivity are thus persisting problems limiting growth. The Programme for Infrastructure Development in Africa (PIDA) has also been unable to address the infrastructure deficit on the continent; despite the rise of urbanization accentuating the need for infrastructure development in Africa.
The NDB is founded to “mobilize resources for infrastructure and sustainable development projects” for emerging and developing countries. Urbanization presents an opportunity to foster economic growth in Africa, connecting people to basic services such as water, electricity and health facilities; making them healthier and thus more productive. Alternatively, it also presents the risk of overwhelming public goods, including power, education, health and infrastructure. Furthermore urbanization shifts the development focus away from rural areas into city-centres.
Poverty in Africa is predominately a rural phenomenon, approximately 70% of the continents poor live in rural areas depending on subsistence farming for their livelihood. In many African states rural areas are marked by “continuing stagnation, poor production, low incomes and the rising vulnerability of poor people”. The rural population remains poorly organized, isolated from safety nets and poverty programmes. Additionally, AU policies on rural development concentrate on the agricultural economy. The lack of investments in rural development in terms of infrastructure access to public services, has led to the migration of young Africans to urban-cities. African governments are faced with the pressure of creating jobs to sustain the new urban populations, thus making infrastructure development predominantly urban-centred. Furthermore, employment and working conditions in rural areas are not appealing to the young population residing in those areas.
As countries develop, the demand for infrastructure increases, which ensures that the biggest challenge to developing countries is financing its own infrastructure needs. It is estimated that $96 billion per annum is needed for infrastructure development in the sub-Saharan Africa region. Although Africa has programmes to finance infrastructure development on the continent, they have proven insufficient to meet the infrastructure backlog. There is a need for additional financing; the BRICS development bank aimed at providing loans to its members as well as other developing countries could be beneficial to sub-Saharan Africa’s urgent need for infrastructure development.
The BRICS NDB will provide resources for infrastructure development projects for its members as well as other developing economies; with the South African government playing host to the African regional centre in Johannesburg. As a powerhouse on the African continent, and as a member of BRICS, South Africa will play an important role in facilitating and coordinating engagement between the African Development Bank and the NDB to achieve the continent’s main objective of Infrastructure development.
The NDB should finance rural development as the main cause of urbanization is the inadequate development in rural areas. Infrastructure development should focus on expanding transport routes to remote areas, opening potential trade routes for small scale farmers in rural parts of the continent and connecting them to markets. Financing infrastructure development in remote areas will expand the access to new services to the poorest Africans, ensuring economic and social transformation.
Ms Naledi Plaatjies is a NRF – DST research intern based at the Institute for Global Dialogue associated with UNISA. Her views do not necessarily reflect those of the IGD