Johannesburg, 01 December 2015 - The United Nations Human Settlements Programme (UN-Habitat), the Institute for Housing and Urban Development Studies of the Rotterdam Erasmus University (HIS/Erasmus) and Oxford Economics today revealed, at the AfriCities Conference in Johannesburg, a major new programme to assist urban economic development in Africa through foreign direct investment.

This new programme will form the main basis for the next State of African Cities Report to be published in 2017. Drawing on the combined findings of its State of African Cities reports of 2008, 2010 and 2014, UN-Habitat has joined forces with IHS/Erasmus and Oxford Economics, with support from the African Development Bank, the UK Department for International Development, NKC African Economics, the United Cities and Local Governments of Africa (UCLGA) and Witwatersrand University on the analysis of urban economies in Africa.

This new and ground-breaking United Nations research programme aims at assisting Africa’s cities in addressing the challenges of very rapid urban growth, urban poverty and youth unemployment. It will do this by providing recommendations that will relate to city’s economic strategies, inward investment strategies and spatial planning.

According to UN-Habitat, African nations need to steer away from the type of urban development approaches used by the developed countries in the 1950s and 1960s and radically review their urban development philosophy to become better aligned to the 21st century conditions. African nations, according to UN-Habitat, need to develop their own visions and contemporary approaches to address very rapid urban growth, the consequences of a globalized economy and the challenges posed by climate and environmental change.

African cities also need to avoid replicating the economic and FDI development pathways of advanced economy cities. Such new visions and the associated interventions will require huge new and additional investments in cities that are mostly not available domestically. Financial sectors in many African countries are under-developed and the cost of financing is typically very expensive.

African countries should therefore improve attracting foreign direct investment flows, but at the same time improve the governance of FDI and make sure that FDI produces maximum economic and social benefits. Hence, UN-Habitat’s new and ground-breaking research focuses on the analysis of cities’ comparative FDI advantages and location attractiveness factors for FDI to better position them as true competitors in the global economy.

The overall aim of the programme is to inform cities and investors alike which particular sectors of the economy should be pursued to make best use of cities’ local advantages and what location factors need to be improved. The research is expected to increase foreign direct investment flows into and among African nations and to improve African cities’ economic performance and make inroads into urban unemployment and poverty.

Prof. Oyeyinka Oyebanji, Director Regional Office for Africa, highlighted that the research initiative was highly welcome in providing cities with more evidence base for their development planning. Fruitful discussions with panelists and the audience further highlighted the need to closely scrutinize the quality of FDI and to carefully contextualize within the national and local level, recommendations that UN-Habitat will fully integrate in its research programme.