According to Abimbola Akinajo, Managing Director of Lamata in Nigeria, major African cities face a common challenge: a glaring lack of financing.
During the “Mobilization, Financing for Urban Development and Planning” roundtable at the Africa Investment Forum held from December 4-6 in Rabat, Morocco, experts underscored a shared reality across Africa’s major cities: a significant lack of financing.
Hastings Chikoko, Senior Director of Cities at Big Win Philanthropy, highlighted the challenges of unchecked urbanization, observing that migration to cities will persist. He posed the critical question, “What can be done?” Eric Gumbo, Deputy Director at G & A Advocates LLP in Kenya, noted the lack of urban planning, pointing to insufficient housing infrastructure and the proliferation of informal settlements. “Our countries lack the fiscal margin, which reflects in our cities,” he added, referencing the average 65% debt-to-GDP ratio in Africa.
Abimbola Akinajo, Managing Director of Lamata in Nigeria, reiterated the acute financing gap in African cities. Panelists proposed solutions, including diversifying funding sources by attracting private-sector investors, development finance institutions, investment funds, and pension funds. They also stressed the importance of municipal governance, planning, capacity building, and modernized revenue collection to strengthen urban investment strategies.
In South Africa, Ednick Muswell of eThekwini municipality illustrated how good fiscal discipline and governance can enhance investor confidence, sharing his city’s success in securing investments from U.S. pension funds and banks. However, Hastings Chikoko cautioned that African cities remain victims of perceived high risks among investors, leading to prohibitively expensive borrowing.
Mohan Vivekanandan, Executive Director at DBSA, called for well-structured urban projects to attract private sector participation, while Abdouraman Diallo of the African Solidarity Fund emphasized the need for significant support to address critical urban infrastructure needs such as roads, housing, and sanitation.
Highlighting financial innovation, Nezha Hayat of Morocco’s Capital Market Authority showcased the country’s success with green and municipal bonds. Thierno Habib-Hann, CEO of ShafDB, advocated for affordable housing solutions, urging investments in a market valued at $700-800 billion.
Closing the session, Solomon Quaynor of the African Development Bank noted the Bank’s efforts to provide competitive financing to urban enterprises and support public-private partnerships. He announced that six projects totaling over $4 billion had attracted significant investor interest during the Forum.
