Inclusive growth in the face of increasing urbanization: What experience for African countries?

Abstract

AbstractUrbanization and inclusive growth in Africa are very closely linked, and the literature is extremely fertile. The objective of this paper is to determine the effects of urbanization on inclusive growth in a sample of 48 African countries. We specify and estimate respectively a panel data model, fixed effects, Driscoll and Kraay, generalized least squares, robustness via Lewbel two‐stage least squares, and system generalized method of moments over the period 1995–2020. Our results show that urbanization significantly and statistically improves inclusive growth in Africa. We obtain the same result for each regional area (North Africa, West Africa, East Africa, and Central Africa) except for Southern Africa where we find that urbanization rather contributes to worsening inclusive growth. We propose that African policymakers take advantage of current urbanization patterns to effectively plan, manage and deliver U infrastructure technology services such as transport and ICT infrastructure. This will enable the growing population moving from underdeveloped regions to urban centers to access better services and employment opportunities, thereby contributing to economic progress.