The rapid urbanisation in Africa, if well managed, can be the essential motor of economic development, rapidly lifting societies out of mass poverty. Rapid urbanisation, however, should be kept in perspective. Africa faces serious infrastructure gaps, and the inadequate and poor state of existing infrastructure continues to hinder economic growth in the region.
Within the built environment, over 55% of the population on the continent lives in slums. The African Development Bank estimates that the continent’s infrastructure financing needs will be as much as $170bn a year by 2025, with an estimated gap of around $100 billion a year.
The economic disruption caused by the ongoing war, in terms of sanctions and physical upheaval of trade routes, has resulted in a steep rise in commodity prices, this is in addition to the existing post-Covid inflation.
In the built environment, the war has exacerbated and exposed the dangers of overreliance on importing building materials. Prices of building materials have increased, a burden that the homeowners will ultimately share
Russia is considered the fourth-largest steel exporter globally, serving over 150 countries and territories. The price of steel in Kenya, for instance, has significantly shot up over the past few months. The prices of steel bars and nails have risen by between 80 per cent to 90 per cent and 13% to 43%, respectively, in the past few months in the country.
Additionally, the war has resulted in a shortage of coal, which is a crucial source of energy in cement production through clinker manufacturing.
It would be a safe wager that the situation is similar in most African countries, making the argument for affordable housing even more difficult. Considering the more significant socio-economic context, soaring food and energy prices could be a potential trigger for additional instability in the continent. According to a study by Mo Ibrahim Foundation, Russia and Ukraine account for 40.4% of Africa’s wheat imports and 39 African countries import wheat from Russia to feed their population.
Coupled with the adverse impact of Covid-19 on food and energy prices, which has already increased inequality, poverty and marginalisation, these price increases can trigger new domestic unrest and instability. Instability threatens the conducive environment that spurs social and economic development.
Opportunities for Africa emanating from the war
On the other hand, the war can serve as an opportunity for African countries to step up and fill in the commodities and supply chain gap created by the war and the pandemic.
For instance, African countries with vast gas reserves such as Algeria, Nigeria and Egypt, can leverage the existing market gap to expand energy access on the African continent and also secure the European Union’s energy supply whilst transitioning to a low-carbon economy.
However, this can only be achieved by ramping up their production and improving the related infrastructure.
Additionally, financing is also needed to achieve this ambition, which could be hampered by the recent pledge at COP26 to stop funding overseas gas projects. This commitment does not consider the dire situation of energy access in Africa, where an estimated 600 million people lack access to energy.
In the end, the war serves as an opportunity for Africa to re-strategise and put in place appropriate measures to enhance industrialisation, regional integration and food security in the region.
African countries need to leverage the recent progress in the Africa Continental Free Trade Agreement (AfCFTA) and the New Urban Agenda, which will create new market opportunities for the region.
The AfCFTA will create the world's largest free trade area by the number of countries involved. The AfCFTA will connect 1.3 billion people in 55 countries with a total GDP of US$3.4t. According to the World Bank, the AfCFTA could improve Africa's revenue by $450bn and its exports by $560bn, mainly in manufacturing. The imprint of a successful AfCTA will directly affect the Built Environment, as it will dramatically reduce the dependence on the import of building materials and significantly increase capacity and know-how.
Winston Churchill once quipped ‘Never let a good crisis go to waste and while there is great human suffering, the ongoing Russia-Ukraine war can be an opportunity for Africa. Many posit that the world will be remade after the war. Now is the time to create measures to enhance the region’s industrial capacity, consequently resulting in improved regional integration and shared economic prosperity on the continent.