Sustainable Cities and Structural Transformation

Opening Speech at the Presentation of the African Economic Outlook 2016 by Thomas Silberhorn, Parliamentary State Secretary to the Federal Minister for Economic Cooperation and Development, Berlin 6 September 2016

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Your Excellency Houadja Leon Adom Kacou,
Professor Grosse,
Ladies and Gentlemen,

The African Economic Outlook is a "must have" resource for anyone interested in the future of Africa. And this is because it is the important reference site for information about Africa. That is why the BMZ decided to co-finance this year's report again.

Our thanks go to the African Development Bank, the OECD and UNDP for their outstanding analyses and recommendations, which are, as always, just what is needed. I would like to comment briefly on a few.

As the report illustrates quite clearly, the African continent is changing at a very rapid pace.

For instance, Africa's economy as a whole is growing, and continues to do so at a considerably quicker rate than the global economy. 2015 saw Africa's economy grow by 3.6 per cent, with a similar rate expected for this year. That is more than in Latin America or the Middle East – and certainly more than in Europe.

Investments are being made in Africa. The level of foreign direct investment on the African continent has grown fivefold since the year 2000, reaching 55 billion US dollars in 2015. These investments are expected to reach some 66 billion US dollars this year, in 2016.

And Africa is growing closer together as a continent. African countries are investing in their neighbouring countries. And the African Union is driving the political and economic integration of Africa forward. This regional integration is important for ensuring peaceful and sustainable development in Africa.

Africa is, above all, a continent of opportunities. Real incomes are rising, and poverty is declining. A young and dynamic middle class is emerging and already counts 100 million people. Health and education indicators are pointing upwards, and the standard of living is rising.

On this burgeoning continent, urbanisation is also an important phenomenon. Large numbers of Africans are drawn to the cities in their search for work and better educational opportunities.

However, the extent to which people benefit from growth and urbanisation varies widely. Inequality is a hindrance to progress – be it inequality between countries, within a country or between men and women. Progress is also hampered by infrastructure that is still waiting to be built, governments that fail to provide for the public good, or young people who have little prospect of a future.

This year's African Economic Outlook, the focus of which is on "Sustainable Cities and Structural Transformation", addresses many of the challenges the continent is currently facing.

The speed and scale at which urbanisation is occurring, and the impact it is having, mean that the African countries are facing some major tasks.

For one thing, cities are drivers of climate change. Although they only cover 2 per cent of the Earth's surface, they manage, on this very small area, to produce 75 per cent of the world's CO2 emissions and 70 per cent of all waste, while consuming 60 per cent of the world's energy. Africa will need to build twice as much new urban infrastructure between now and 2050 as was built during the whole period from 1960 to the present day. Not only that, but this massive increase in built-up infrastructure must also meet climate-friendly standards!

Many cities are already struggling to cope with hardship and squalor, and are choking in a cloud of smog. Nowhere else do poverty and wealth live so closely together as in large cities and mega-cities. Only in cities of that scale do slums border on exclusive residential districts. Already, some 60 per cent of Africa's urban population live in slums. By 2050, the number of slum dwellers could double. All of these people urgently need better living conditions. That means they need housing, clean water, energy and toilet facilities. They also need a safe and secure environment, education, employment and political participation.

But for all that, cities also offer vast opportunities. Because of their size and density, they help use resources more efficiently; they improve social cohesion and people's chances of taking part in political life and having a share in economic life; and they help set in motion and speed up economic growth. Nowhere else do so many people have access to education and training and, hence, the chance to improve their lives.

We must make the most of the opportunities that urbanisation brings, whilst dealing with the challenges. And now we have a chance to do just that, for October sees the Habitat III Conference taking place in Quito. At that conference, delegates will adopt an agenda for urban development that is to last for the next twenty years. The German government is guided in its urban development policies by the 2030 Agenda and is focusing on three goals in particular. We want to:

  • recognise and empower cities as development actors;
  • create liveable cities;
  • and carry out integrated and sustainable urban development.

Already, over 50 per cent of our Financial Cooperation projects and more than 20 per cent of our Technical Cooperation projects are helping to ensure that urban development in our partner countries is sustainable. Let me give you two examples:

Traffic and transport is already responsible for more than a quarter of all greenhouse gas emissions that have an impact on our climate. City traffic is often very costly in terms of its impact on the environment, the economy and society. That is why we are working to support sustainable solutions for mobility in our partner countries – in order to move away from air pollution, traffic congestion and the wasting of resources by introducing solutions that are climate-friendly, economically sound, energy-saving and socially inclusive. The first ever tramline in Africa was funded by the BMZ and built in Tunisia back in 1985. Currently, we are helping Tunisia to build its first modern suburban rail system to serve the capital, Tunis.

Let me give you another example: Extreme inequalities and densely built-up but neglected settlements often breed high rates of unemployment and violence – for example in South Africa. That is why the BMZ is supporting the South African government in its efforts to implement measures to prevent violence in its cities. These measures have reached more than 20,000 children, youths and women. In some pilot provinces, the murder rates have gone down by as much as 30 per cent.

Ladies and gentlemen, this year's African Economic Outlook again shows what huge potential there is on the African continent. We are glad to keep on supporting our African partners in their efforts to create the liveable cities of tomorrow.

Therefore, let us act in this spirit. Let us make cities and human settlements inclusive, safe, resilient and sustainable – as agreed in the 2030 Agenda!

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