Accra, the capital of Ghana is the African city with the highest potential for inclusive growth,according to the 2014 MasterCard African Cities Growth Index (ACGI). This is the second consecutive year that Accra has taken the top spot on the Index.
Launched in 2013, the ACGI maps the continent’s economic outlook according to the inclusive urbanisation of its cities. Sets of lagging (historical) and leading (forward-looking) indicators were used to rank the cities’ level of inclusive urbanisation, forecasting potential for inclusive growth. The 74 analysed cities were organised into three categories by population size: large (over one million),medium (between 500,000 and one million) and small (under 500,000). Once ranked, the cities fell into one of four bands describing their inclusive growth potential – high, medium-high, medium-low or low.
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“Inclusive growth occurs when the benefits of an expanding economy are widely shared with the population,” says Dr Yuwa Hedrick-Wong, co-author and Chief Economist at the MasterCard Center for Inclusive Growth. “We believe that inclusive urbanisation is a prerequisite for inclusive growth, and so the ACGI is a lens through which African cities can be assessed as future investment destinations.”
Accra was the top-ranked city overalland in the large city category. The only African city with high inclusive growth potential, Accra has legislation, policy and resources in place to increase and sustain economic inclusivity among its citizens. This contributes to Ghana’s potential for inclusive economic growth and development.
“For the second year, Accra ranked well across the assessment criteria and received one of the highest governance scores,” says Professor George Angelopulo, of the University of South Africa and co-author of the ACGI. “The city is not Africa’s most populous or richest in terms of per capita GDP, but has made progress towards conditions that are conducive to inclusive urbanisation.”
Professor Angelopulo says that while the city, and Ghana as a whole, does face macroeconomic challenges, the country has had four successful elections following a peaceful transition of power in 2000. The ACGI affirms the importance of advancing and protecting individual freedoms to ensure ongoing economic development.
Casablanca (Morocco) and Freetown (Sierra Leone) are ranked second and third in the large city category, both with medium-high inclusive growth potential. According to the ACGI, this suggests that while cities in this ranking might not currently have the adequate structural foundations or governance for inclusivity, the necessary resources exist to address these issues in future.
Tunis (Tunisia) is the top ranked medium city, followed by Libreville (Gabon) and Nouakchott (Mauritania), all three with medium-high inclusive growth potential.
Interestingly, the large and medium cities withthe highest inclusive growth potential are located predominantly in North and West Africa, while the small cities with the highest rankings are located in Africa’s island states. São Tomé (São Tomé and Príncipe)ranks highest in the small city category, followed by Victoria (Seychelles) and Port Louis (Mauritius). All three cities have medium-high inclusive growth potential.
Explaining MasterCard’s investment in the ACGI, Michael Miebach, President, Middle East and Africa, MasterCard, says, “Inclusive growth and increased financial inclusion, which is a solid component of MasterCard’s business strategy in Africa, are closely interlinked. Sustained and inclusive development is not possible without appropriate financial services and instruments in place to benefit the under-banked and those excluded from the formal banking system.”
“By supporting and investing in academic research like the ACGI, which provides insights into the opportunities for investment in Africa, MasterCard is providing valuable business intelligence to our teams, our customers and the investment community at large,” says Miebach.