“Poor urban infrastructure reduces cities’ economic prospect and competitiveness”
African political leaders need to intentionally build proper infrastructures like roads, ports, power grids, IT backbone, and create policies for massive investment in real estate as well as tourist attraction projects to boost economy. Advanced economies in Europe, North America and Asia have done that for decades. The result was continuous inflow of immigrants, which of course contributes significantly to economic growth. For citizens, more people will migrate from rural areas in addition to natural urban demographic growth. The National Commission for Industries Development (NCID) as part owner of some industries in the country can generate revenue enough to fund this project. Loans from financial institutions should be avoided at any cost.
Needless to add, Governments should draw lessons from US economic slump where a combination of financial innovations and Federal policy to encourage home ownership allowed borrowers who might otherwise not qualify for a loan, to obtain generous home loans with expectations that interest rates will remain low and housing prices will continue to rise indefinitely. As at the time of the recession in 2001, following the World Trade Centre attack of September 11 2001, the Federal Reserve pushed interest rates to the lowest levels seen up to that time in the post-Bretton Woods era. Their aim was to achieve economic stability. Because US Federal Reserve held low interest rates through 2004, combined with government policy that encourages home ownership, US experienced a steep boom in real estate and financial sector.
From 2004 through 2006, the Federal Reserve then increased interest rates steadily in an attempt to maintain stable inflation rate in the economy. Market interest rates rose in response, and flow of new credit through traditional banking model into real estate moderated. The rates on adjustable mortgages at the time, as well as more exotic loans began to reset at much higher rate than many borrowers expected or were led to expect. This led to the Great Recession. The Great Recession was an economic downturn in the United States from 2007 to 2009 after the bursting of US housing bubble. It was the most severe economic recession in the United States since the Great Depression of the 1930s. The US Bureau of Labor statistics reported the recession to have cost the United States 8.7 million jobs, causing unemployment rate to double. The contagion spread to other economies in the world, notably Europe. It ended in June 2009.
The strategy recommended in this chapter will usher rapid development across Africa. Foreign Direct Investment (FDI) will maintain a record high, standards of living will improve and the continent will be more connected for trade purposes… These are the hallmark of a proper society. Unplanned and unsustainable patterns of urban development make developing cities focal points for many emerging environment and health hazards.