Financial Sector Development in Africa: Opportunities ... - World Bank

120 Walley
and 2.5 million in cities. The balance of urban to rural need varies from
country to country, with many less-urbanized countries seeing the primary
need in rural areas. The proportion of urban to rural need has
important policy implications of how to finance the housing gap. For
example, in Nigeria, which is fast urbanizing, 550,000 houses are needed
in cities and just 144,000 in villages. Contrast this with the situation in
Kenya, which requires just 65,000 urban dwellings but 136,000 rural
dwellings on an annual basis. As the figure shows, this balance for Africa
as a whole is gradually shifting, so that by 2050 almost the entire housing
need will be in urban areas.
Alongside this analysis, it should also be remembered that most
African countries are not starting in a position where all housing needs
are met. Housing shortages already exist, and meeting only the forecast
housing needs would preserve the status quo. Housing production needs
to go beyond this if the pre-existing housing gaps are to be closed. These
existing gaps are very difficult to quantify, however. Estimates often vary
by several million within the same country, depending on the source of
the data. The gaps also tend to reflect a qualitative shortage in housing
rather than an absolute lack of shelter. The number of truly homeless
households will be small, but those living in overcrowded or unsanitary
conditions will be much higher.
The forecasts in the housing need analysis are from the United Nations
and do presuppose a growing level of urbanization. The world as a whole
now lives predominantly in cities, with the 50 percent urbanization mark
passed in 2009. However, Africa remains largely rural. The extent of
urbanization does vary across the continent by country. Nigeria, for
example, has eight cities with over 1 million inhabitants and one of the
largest urban metropolises in the world, Lagos. In contrast, some countries
with large populations, such as Ethiopia, have four out of five inhabitants
still living in rural areas. Sub-Saharan Africa, which now accounts
for 12 percent of the world’s population, will account for more than a
third of the global population by 2100 by many projections.
The debate about urbanization is a complex one, and it meets a lot of
resistance in African policy circles. Urbanization is often perceived as a
threat to a traditional way of life. The important point to realize is that
setting deliberate policy to slow the urbanization process has rarely succeeded
and ignoring it completely is likely to result in unplanned cities.
Once informal settlements appear, it is difficult to then reorganize a city
in line with a central urban plan. The data in this report give a clear indication
of what is likely to happen in the coming years. Planning the