The flagship African Union initiative Agenda 2063 initiative focuses on the development of large-scale infrastructure which pledges to “link the continent by rail, road, sea and air”.
The process is happening alongside efforts to boost the integration of economies. In 2021, the 54 nations across the continent became history by launching trade inside the African Continental Free Trade Area. It is the biggest free trade zone in the world.
The advocates of a method of development that concentrates specifically on infrastructure assert that increasing connectivity will encourage industrialisation and planned urbanisation. It provides policy makers with the tools to develop well-planned urban zones that are able to be competitive in the global market and draw foreign direct investment. These, in turn, can encourage industrial growth.
The argument is that the establishment of the development corridors, special economic zonesand ‘ new cities as well as the creation of urban masterplans will result in the creation of urban areas which can be connected into global networks of production. This will improve the efficiency and efficiency of African manufacturing. The end result is that African countries are expected to export more high-end manufactured items, instead of raw materials and unprocessed agricultural products.
Our study exposes these claims as a the question. We evaluated the effects of transnational corridors for development within Kenya as well as Ghana. We discovered that both times the improvement in connectivity didn’t encourage industrialization. Instead, it increased speculation on land as it opened new opportunities for real estate investments.
This is a serious issue. Failure to spur industrial growth is a risk of locking Africa in the global economy by becoming an exporter of raw materials. Additionally cities with no industry experience greater levels of inequality in comparison to their more industrialized counterparts.
We concluded that the infrastructure that connects ports to mines isn’t enough. It must be accompanied by policies to stop speculation on land, and encourage investment in factories that transform raw materials and offer jobs for the continent’s growing urban population.
Development driven by infrastructure in Africa
Infrastructure that is of poor quality is an result of the structural adjustment neoliberal programs which were imposed upon African nations through the International Monetary Fund in the 1980s and the 1990s. Governments who received these loans were generally not allowed to invest in infrastructure. Private investors, however, showed no desire to build large-scale transnational logistics or infrastructure for energy.
The 2008 financial crisis revolutionized everything. A number of governments took action with adopting national development plans. This included massive construction projects. The projects could be funded due to low interest rates in advanced industrial countries meant borrowing was inexpensive.
In the year 2018 More than 50 of the development corridors were in different phases of development across Africa. A lot of governments were fully committed to infrastructure-driven development. Energy grids and transportation networks were developed at an incredible rate in the context of a global contest.
Case study 1. Ghana
The Abidjan-Lagos Corridor is a plan that aims to build a transnational, six-lane highway linking Ghana’s capital city, Accra with Abidjan, Lome, Cotonou and Lagos.
The project was announced at the end of 2014, by the Economic Community of West African States with assistance from the African Development Bank and African Union. More than 50 percent of the corridor is Ghanaian territory.
The policy has wide-ranging approval from the political establishment in Ghana. With the One District, One Factory strategy President Nana Agyekum Akufo Addo from the National Patriotic Party has sought to encourage industrialisation across a variety of economic sectors, ranging from pharmaceuticals to textiles. He has been able to speed up his Corridor Project and worked to make it the managing authority for the Corridor.
The highway is a cornerstone of a rapidly growing West African ‘ megacity region‘. Real estate projects span from the planned city that is 50km in distance from Accra to a sprawling, unplanned city sprawl that stretches across the highway.
The corridor has not substantially contributed to the growth of Ghanaian capacity for industrial production. As per UNIDO information manufacturing was the main source of 14 percent of Ghana’s GDP in the year 2008. In 2022, this number was reduced to 11.8 percent. However, it has provided opportunities for speculation on real estate.
Case study 2: Kenya
We have seen similar results in Kenya. In 2008, the Kenyan government launched the Kenya Vision 2030. It targeted a variety of crucial industries in the economy. Agro-processing and textiles, as well as construction materials, and leather are a few. The idea was that it would double the share of manufacturing in GDP.
The Kenyan government went into an era of massive infrastructure spending. In the year 2019 Kenya was investing in more large-scale infrastructure projects than every of the other countries in Africa.
A majority the projects within the Lamu Port-South Sudan-Ethiopia Transport Corridor. This project is designed to incorporate northern Kenya and the borderlands surrounding it into a transnational zone which boasts world-class logistics infrastructure. Furthermore to this, it is also home to the Standard Gauge Railway was constructed to connect Mombasa and Nairobi and a number of roads around Nairobi were designed to reduce congestion in the city’s central area.
However, the manufacturing sector in Kenya has been generally disappointing. Based on UNIDO, the value of manufacturing as a percentage of GDP fell from 11.8 percent in 2008 to 8.9 percent in 2022.
The growth in infrastructure has, however, led to an increase in the pace of urbanization and speculation. Investors have rushed to buy land in the vicinity of new developments located in Isiolo in the Isiolo region and Lamu. North of Nairobi The Thika Superhighway has triggered an peri-urban real property boom. For instance, an international developer Rendeavour is constructing an brand new town equipped with modern amenities for 150,000 people.
In other areas along the highway, local landlords have constructed high-rise tenements in order to capitalize on the rising rental market in the low-end.
What can we do?
Our research findings don’t eliminate the possibility that infrastructure-driven growth could spur industrialization in the near future. However, they suggest that it should be accompanied by a policy that stops speculation on real estate and land.
The property market in a lot of African cities isn’t taxed and so elites view it as the most secure option. Taxes on properties would deter speculation and create revenue that could be put to use for public expenditure. This strategy has proved successful for a number of East Asian countries that have achieved a successful industrial transformation.