Accra, Ghana’s capital, has emerged as the number one African city with the highest economic growth potential over the next five years, according to the MasterCard African Cities Growth Index released January 29, 2013.
Accra is ahead of Johannesburg in the Index. MasterCard explains that Johannesburg, although already a strong economic powerhouse city in Africa, achieved lower scores in certain categories as a result of lower growth expectations due to its relative maturity when compared to other African cities.
Of the 19 researched cities, Accra was ranked first followed by the Zambian capital, Lusaka and Angolan capital, Luanda – both identified as having medium-high growth potential.
“Some of the key reasons for Accra emerging as a high growth city include: its gross domestic product per capita growth over the past three years, its projected population and household consumption growth, its strong regulatory environment, and the relative ease of doing business in this city, compared to other African cities,” said Professor George Angelopulo of the University of South Africa (UNISA) who produced the Index on behalf of MasterCard.
Explaining why Johannesburg scored low in the Index, MasterCard said “While many of these larger and more established cities offer the expected potential for growth, other less prominent ones are quietly establishing themselves as those with even higher growth potential. This is primarily due to high scores on accelerated growth factors that include health, education, governance, infrastructure development, and the ease of doing business in those cities.”
With an example, the study said, the expected growth of the middle class population is higher from cities such as Accra and Luanda than it is for Johannesburg, which has seen a growing middle class since the change of government in 1994.
Harare (Zimbabwe), Kano (Nigeria), Abidjan (Côte d’Ivoire), and Khartoum (Sudan) were deemed to have the lowest growth potential of the 19 African cities examined in the study.
According to the study, although these cities scored well in some categories, such as the overall health index and the levels of foreign direct investment, their potential for growth was negatively impacted by low scores in areas such as their political and regulatory environments, lower historical economic growth and the challenges of doing business.
The MasterCard African Cities Growth Index was developed in the final quarter of 2012, 19 cities across sub-Saharan Africa were studied and ranked according to their growth potential between 2012 and 2017.
The Index rankings, MasterCard indicated were developed from published historical and projected data on typical factors that impact cities’ growth rates, including economic data, governance levels, ease of doing business, infrastructure and human development factors, and population growth levels.
By Ekow Quandzie