The JLL research report “Globalisation and Competition: The New World Cities” defines Emerging World Cities as business and political capitals of large or medium-sized emerging economies that function as gateways for international firms, trade and investment. Some of the key characteristics of these cities include rapid urbanization, infrastructure development, increase in FDI’s, young and growing population, rapid adoption of technology and innovation, governance or modern government structures, strengthening of legal and law enforcement institutions, rise of mixed use schemes or trophy assets etc. According to Charles Robertson from Renaissance Capital, these are the key characteristics that have catapulted historically challenged nations such as those in Asia or Eastern Europe to new heights in performance, and the same is expected for Sub-Saharan Africa.
In his book “The fastest billion, the story behind Africa’s Economic Revolution”, Charles Robertson and his Renaissance Capital colleagues lay out a compelling argument as to how Africa should be considered or viewed. For Charles, the correct approach is not to benchmark emerging cities and emerged cities within the same calendar year/timeline, but to benchmark them against phases in global economic transformation which for OECD countries occurred in the 18th and 19th centuries. According to Charles and his team, SSA is at the cusp of a great out performance, one that will be equivalent to or possibly surpass many seen in the newly emerged 21st century nations – though this will not be uniform across the continent.
There are clear signs that the SSA region in general is preparing for this next economic evolution phase. Looking at the boom in the mobile phone industry and the rapid adoption of broadband across the continent, it’s clear that not only will Africa evolve, but it will skip evolutionary steps which will enable it “catapult” to the next phase of development. Certain countries are further ahead than others though. SSA clearly represents a “mixed-bag” as no one nation in SSA can arguably state it embodies all the attributes mentioned above. Nonetheless, some key hubs have a solid enough mix and match, and these are the next rising stars to look out for. One of these hubs worth mentioning in the SSA region is Lagos.
As the economic capital of Nigeria, the city of Lagos is undergoing a rapid urbanisation trend. According to statistics, the 3,577 km2 city is home to a population of 21 million people (6% annual growth) making it one of the most populous cities in Africa – behind Cairo and the Republic of Congo. Representing 45% of the skilled labour force of the country and 90% of Nigeria’s sea port activities, Lagos alone is responsible for up to 25% of the country’s GDP. (To put this in context, Nigeria is a nation of 36 states with a population of 173.6 million people). Due in part to the location of both the international airport (one of only two in the country) and the seaport in this city, the Lagos economy is highly diversified with leading sectors such as Banking, Real Estate, Hospitality, Telecoms, FMCG and Manufacturing.
Recently the greater Lagos Island skyline has become lined with a number of iconic class A office and mixed use building projects built by reputable international developers and private equity firms. These include green rated projects such as the Wings (27,000 m2), Heritage place (15,000 m2) and Nestoil (11,000 m2 – the first green rated mixed use development).
All together over 30 projects representing over 150,000m2 of office stock is expected in the market over the next 12-24 months. Unfortunately the city is currently being impacted by the oil crisis that has seen prices drop to 12 year lows. This together with the currency woes and acute FX shortage, has greatly affected the take-up of these new developments. Economic stabilisation and recovery is nonetheless expected mid to late 2017.
The city of Lagos is also home to one of the most ambitious mixed use development projects on the continent, the Eko Atlantic. Representing 10 million sqm of reclaimed land, this city within a city project is expected to house 250,000 residents with 150,000 daily commuters who will live work and play within its walls. The expansive mixed-use project is expected to include its own gas power plant and sewer system, and an 8.1km length sea wall dubbed the “great Wall of Lagos”. When completed, Eko Atlantic is expected to change the face of the city of Lagos.