(Bloomberg) -- The African Union and a unit of Temasek Holdings Pte are considering backing a plan to develop as many as 123 new cities across Africa.
The plan, developed by Cape Town-based Africa123, envisages the construction of the cities over the next two decades at a cost of as much as $150 billion. The aim is to meet a continent-wide housing deficit, with the World Bank predicting that 216 million people in Sub-Saharan Africa will live in shanty towns by 2063.
Under the plan Africa123 plans to incorporate designs that include sustainable energy and water supplies as well as transport, education and health infrastructure and employment opportunities. The African Union Development Agency is in talks to develop a pilot project with the company and the programs will include the provision of home loans through arrangements with financiers.
“We like the program,” said Kossi Toulassi, head of industrialization at the AUDA, in an interview. It’s “bringing together education, health and employment together under one shop,” he said.
The capital cities of many African nations — such as Harare in Zimbabwe or Luanda in Angola — were built by their former colonial powers for much smaller populations. Today authorities are struggling to keep up with providing services to cities that have been subject to an unplanned sprawl for decades as people move to urban areas in search of work.
“We expect that there are going to be 3 billion people in the continent by 2063 and 150 million families that will need housing, decent housing,” said Gita Goven, chairwoman of Africa123. “The ability to continue tacking onto those cities and trying to revive and extend the city has exhausted itself.”
Africa123 is proposing building new, better planned cities to provide housing and other amenities, starting with three settlements in Ghana. Land for those has been secured and the plan is to build 800,000 residential units to house 3 million people.
“We are assisting with funding applications” for the projects, said John Anderson, the chief operating officer for the Africa division of SMEC Holdings Ltd. “We support the concept of sustainable cities” and could back future projects under the program, he said.
SMEC is a global infrastructure advisory firm that’s owned by a unit of Singapore’s Temasek, which has a roughly $300 billion portfolio.
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