Washington, DC, July 30, 2019 --  

The growth of African cities will turn the continent into the world's next low-cost manufacturing center.

With an ebola epidemic triggered by bushmeat consumption ravaging the eastern rainforest, Congo is about the last place you'd expect to get a glimpse of the world's future. But on the western side of the country, in the capital of Kinshasa, a quiet revolution is taking place that will reshape the world economy.

That revolution is made possible by Africa's urban population growth. Kinshasa is growing at breakneck speed.  There has been no census since 1984, when just 2.6 million people called it their home.  Extrapolations since then put the city's size at 12 million residents today. By 2075, it is expected to be the largest city in the world.¹

To look at a satellite photo of Kinshasa is to see endless sprawling neighborhoods with corrugated metal roofs ringing the city. The peasants who arrive in Kinshasa are poor -- per capita income in the country is only $800. When faced with such large concentrations of poverty, it's easy to despair. But history shows that people who move to cities ultimately improve their lives.

Latin America provides some good recent examples. Back in the 1970s, exploding urban populations in places like Mexico City and Sao Paulo led to predictions of third world urban doom. But no malthusian nightmare ever came to pass. Instead of starving, the poor gradually improved their fortunes, just as happened a century before in once squalid places like Manhattan and London.

The population of Mexico City and Sao Paulo stabilized at about 20 million residents each. What were once shantytowns ringing the city have slowly evolved into neighborhoods with electricity and running water. The grandchildren of the peasants who moved there are now third generation urbanites.

The same evolution will eventually come to Kinshasa and other African cities. And when it does, an urban workforce will be waiting, ready to become an engine of world growth. For those who have witnessed Africa's economic stagnation over the past half century, that may be a hard prediction to believe.

There are plenty of reasons that sustained economic growth has not come to Africa in the modern age. Extremely poor governance in decades following the colonial era saw rent-seeking dictators focus on spiriting away the national wealth to Swiss bank accounts. Congo's longtime despot Mobutu Sese Seko, who ruled until his overthrow in 1997, was one of the worst.

By the time African governance began to improve, the world economy had already established its manufacturing growth centers in Asia. Waves of development first hit the Pacific Rim, spread to China and then on to South Asia.

Low levels of education, poor infrastructure and historically low population densities made Africa unable to compete while with Asian manufacturing. But the competitiveness equation is beginning to change. As wages rise in Asia, the African continent remains the world's largest untapped reservoir of low-cost labor.

The vanguard of low-cost manufacturing, the export-driven textile industry, will be where Africa's industrialization begins. The industry has been chased successively out America, the Pacific Rim and China by rising labor costs in each locale. Bangladesh, the center of the global rag trade for the past decade, may have seen wages triple last year.² Textile manufacturing is poised to move again.

In Africa, pilot project has already arrived. Garment workers at the Hawassa Industrial Park in Ethiopia are stitching clothes for Levi's and Guess³. But the site, chosen for political purposes, is hundreds of miles from the nearest international port, and may not prove viable. Coastal cities like Congo's Matadi, with existing container ports nearby, should be easier bets.

At first glance, garment jobs may not seem like much. The workers in Ethiopia have the dubious distinction of being called the lowest paid factory workers in the world.⁴ But consider that this is exactly the kind of development that got China started as a manufacturing power 30 years ago.

As economies mature in Asia and wages rise, development will inevitably shift to the rapidly growing African continent. As hard as it is to see now, the African century will soon be upon us.

Notes:

1. Hoornweg, Daniel and Pope, Kevin, Socioeconomic Pathways and Regional Distribution of the World's 101 Largest Cities, January 2014

2. Sourcing Journal, Wages in Bangladesh's Garment Sector Could Triple This Year, February 2, 2018

3. Bloomberg Businessweek, China Is Turning Ethiopia Into a Giant Fast-Fashion Factory, March 2, 2018

4. CNBC, Report: Ethiopia's Garment Workers are World's Lowest Paid, May 7, 2019