Africa is rapidly urbanizing and willlead the world’s urban growth in the coming decades.Currently, Africa is the least‐urbanized continent,accommodating 11.3 percent of the world’s urban population,and the Sub‐Saharan region is the continent’sleast‐urbanized area. However, the region’s cities areexpanding rapidly, by 2050; Africa’s urban population isprojected to reach 1.2 billion, with an urbanization rate of58 percent (UN‐HABITAT 2014). With this rate of growth,Africa will overtake Asia as the world’s most rapidlyurbanizing region by 2025 (UN 2014). Although the nature andpace of urbanization varies among countries, with over aquarter of the world’s fastest growing cities, Africa isundergoing a massive urban transition. Globally, cities aremajor drivers of economic growth, and the quality andlocation of housing has long-term consequences for inclusivegrowth. However, in Sub-Saharan Africa, urbanization is notaccompanied by the level of per-capita economic growth orhousing investment that is observed elsewhere in globaltrends. Incomes in Sub‐Saharan Africa (SSA) have not keptpace with urbanization, which, in many African countries,has not necessarily been accompanied by industrial growthand the structural transformation as has occurred in otherregions. Housing stocks, along with investment andemployment in related construction and finance industries,constitute a major component of national economic wealth.The key challenge for African cities, however, has been thecomparatively low growth in per‐capita income, which limitsthe resources that households have to consume or invest inhousing. At the same time across the region, the formalchannels through which quality housing is produced andfinanced face major constraints that limit access to a largeshare of urban households. Hence, the formal housing sectoris only a small part of the economy because the constructionand finance services have very little effective demand,evidenced by the lack of formal investment in housing acrossthe region. Recent studies have found that in Africa, formalhousing investment (in national current accounts data) lagsbehind urbanization by nine years (Dasgupta et al. 2014).Furthermore, the capital investment in infrastructure neededto handle rapid urbanization typically happens (if at all)after housing has already been built, often in informal settlements.
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