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Business Reporter

NET financial inflows to Africa declined by 1,8 percent last year due to contraction in investments, according to latest figures released by the African Development Bank. In its Economic Outlook for 2016, the AfDB said financial flows were estimated at $208 billion. Diaspora remittances remained the most stable and important single source of external finance at $64 billion while official development assistance increased by 4 percent.The bank projected Africa’s economy to expand grow 3,7 percent this year and 4,5 percent next year, driven by the gradual improvement in commodity prices. It said the economic performance remained firm in 2015 despite global headwinds and regional shocks. The continent remained the second fastest growing economic region after East Asia.

“African countries . . . have shown remarkable resilience in the face of global economic adversity. Turning Africa’s steady resilience into better lives for Africans requires strong policy action to promote faster and more inclusive growth,” AfDB acting director, development research department Abebe Shimeles said in a statement.

With two-thirds of Africans expected to live in cities by 2050, the population would be critical to the continent’s future growth and development, the bank said. The continent is urbanising at a rapid pace coupled with an unprecedented demographic boom. The population living in cities has doubled from 1995 to 472 million in 2015.

This phenomenon is unlike what other regions, such as Asia, experienced and is currently accompanied by slow structural transformation, says the report’s special thematic chapter.

If harnessed by adequate policies, urbanisation could help advance economic development through higher agricultural productivity, industrialisation, services stimulated by the growth of the middle class and foreign direct investment in urban corridors.

It also can promote social development through safer and inclusive urban housing and robust social safety nets.

“Africa’s ongoing, multi-faceted urban transition and the densification it produces offer new opportunities for improving economic and social development while protecting the environment in a holistic manner. These openings can be better harnessed to achieve the Sustainable Development Goals–(especially goal 11) on sustainable cities and communities – and the objectives of the African Union’s Agenda 2063,” said Mario Pezzini, Director of the OECD Development Centre.

According to the report, seizing this urbanisation dividend requires bold policy reforms and planning efforts. For example, tailoring national urban strategies to specific contexts and diverse urban realities and patterns is essential. And harnessing innovative financing instruments is critical.

Ongoing endeavours to promote efficient multi-level governance systems, including decentralisation, capacity building and increased transparency, at all government levels, should be strengthened.

“In 2016, the emerging common African position on urban development and the international New Urban Agenda to be discussed in Quito in October provide the opportunity to begin molding ambitious urbanisation policies into concrete strategies for Africa’s structural transformation,” said Abdoulaye Mar Dieye, the Director of the Regional Bureau for Africa at the United Nations Development Programme.

“We need to invest in building economic opportunities, especially those of women of which 92 percent work in the informal sector. Cities and towns have a key role to play in that process, but only if governments take bold policy action.”