Inequality, Infrastructure Gaps Keeping African Cities from Unleashing Sustainable Development Potential, Deputy Secretary-General Tells Africities Summit Forum

Following is the text of UN Deputy Secretary-General Amina Mohammed’s video message to the opening ceremony of the Africa Trade and Investment Forum of the Africities Summit in Kisumu, Kenya, today:

Honourable Ministers and Mayors, dear participants,

I am pleased to join this opening session of the Africa Trade and Investment Forum.

Africa is facing unprecedented, irreversible and rapid urbanization.  Africa has the world’s youngest and fastest-growing population.  Cities will receive 30 million new inhabitants per year by 2030, almost double the current rate.  What’s more, intermediary cities — the focus of this edition of Africities — are experiencing the fastest rates of population growth.  This trend accompanies other transitions affecting Africa’s development path, including on energy, digital and food systems.

African cities already produce about 60 per cent of the continent’s GDP [gross domestic product], currently valued at $700 billion and expected to reach $1.7 trillion by 2030.  Still, Africa faces deepening inequalities and infrastructure gaps.  These challenges are preventing African cities to unleash their full potential to foster sustainable development and respond with opportunities for young people and addressing the needs of women.

For African cities and territories to play their role as “heartbeats” of trade and investments, adequate infrastructure and facilities must be created to attract investors, including in the fields of energy, transport, housing, communications, industrial and agricultural production.  And as we build this infrastructure, we cannot lose the opportunity of making them inclusive and green.

Dear friends,

This first African Trade and Investment Forum of UCLG [United Cities and Local Governments] Africa aims to become a matchmaking platform between local authorities in Africa and investors, to identify business opportunities and investment strategies.  Local investment needs can be structured to match and attract national, regional, and international investments — through the definition of pipeline of projects.

We have successful examples to draw from.  As Kenya has shown, decentralizing public administration provides county governments with the authority to raise endogenous resources.  However, local governments in Africa still have a long way to go directly accessing capital markets.  Challenges range from institutional constraints, limited capacities, and regulatory hurdles to looming debt burdens and repayments following the expiration of the Debt Service Suspension Initiative.

At the global level, the Secretary-General has been advocating for greater debt relief and liquidity to support countries across Africa.  This includes re-channelling unused special drawing rights to countries most in need and better aligning public and private finance with the Sustainable Development Goals.

Today, I see four priorities.

First, local governments’ capacities need to be strengthened to fully play their role as catalysers in mobilizing public and private capital for growing cities.

Second, local policies should be implemented to create an enabling business environment to facilitate investments, including by providing targeted public investments and skilled human capital.

Third, we must accelerate the implementation of the African Continental Free Trade Area (AfCTA) in African cities and territories.  The AfCTA is the largest trade area in the world since the formation of the World Trade Organization and is expected to boost intra-African trades by 52 per cent in the coming five years.  And business and trade will happen at the level of cities and territories.

And fourth, cities need to venture into national and international bond markets.  At present, only a few African cities have done so.

Two centuries ago, the City of New York issued the first municipal bond to finance a new canal.  Today, the global municipal bond market is worth $3.8 trillion, around 10 per cent of the entire US bonds market.  In Africa, only South African and Nigerian cities have so far succeeded in developing a municipal bond market.

Dear participants,

The United Cities and Local Governments for Africa (UCLG-Africa) initiative has put forward a proposal to set up a financing facility that would improve subnational and local governments’ access to capital markets.  This is certainly a step in the right direction, particularly if local governments are willing to work together and share risks.  Furthermore, this proposal complements efforts by the United Nations System through the Cities Investment Facility launched by UN Habitat and UNCDF [United Nations Capital Development Fund] to support investment portfolios in 250 cities from least developed countries by the year 2025.

Last year, we launched the Local2030 Coalition, a United Nations system initiative to turbocharge innovative solutions that can accelerate SDG progress at the local level by harnessing urban dynamics.  It aims to engage and empower every local actor, everywhere.  This Africities Trade and Investment Forum is a great opportunity for us to build a coalition between the United Nations, UCLG Africa, and other partners to unleash the power of trade and investments on the continent’s cities and territories.

Together, we can ensure that African cities and territories gain access to capital markets and raise the financing they need to build a more prosperous and sustainable future for all.  I wish you fruitful deliberations.

Thank you.  Asanteni Sana.