URBANIZATION AND INDUSTRIALIZATION

5.4 OVERCOMING BARRIERS TO AGGLOMERATION
ECONOMIES WITHIN CITIES
The power of agglomeration economies gives
large cities a major productive advantage. Firms
in cities have better access to labour, markets,
inputs and knowledge. But many large cities in
Africa are underperforming, with the potential
of agglomeration economies undercut by poorly
functioning land and property markets, inadequate
mobility options and disconnected and sprawling
urban forms including residential segregation.
The power of agglomeration
economies gives large cities a
major productive advantage.
Firms in cities have better
access to labour, markets,
inputs and knowledge.
CITY COMPETITIVENESS AND
INDUSTRIAL DEVELOPMENT HIT BY
WEAK LAND AND PROPERTY MARKETS
The poor functioning of land and real estate markets
poses fundamental challenges to cities, undercutting
economies of agglomeration and undermining
basic urban functions. African countries often
score particularly low on the Quality of Land
Administration Index, relative to other regions
(figure 5.4), putting Africa’s cities at a competitive
disadvantage.
Land is a cross-cutting issue for economic
competitiveness: “In all [studied] countries there is
a lack of a clear process for making land available
for development and much of the urbanization and
industrialization that is occurring is happening in the
informal sector” (Roberts, 2014). Poorly functioning
land markets lead to a disconnect between the
productive potential of a city and the cost of land
Figure 5.4 Quality of land administration index, 2016
no data
0 - 5.0
5.1. - 7.0
7.1 10.0
10.1 - 12.0
12.1 - 15.0
15.1 - 18.0
18.1 - 22.0
22.1 - 24.0
25.1 - 30.0
Quality of land administration
0=worst; 30=best
URBANIZATION AND INDUSTRIALIZATION IN PRACTICE
Source: Based on World Bank (2016b).
177