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Economic Impact of Smart Cities in Africa

17 March, 2014

Source: ICT Africa

Kihara Kimachia

When most people think of smart cities, the picture that comes to mind is high-tech digital infrastructure and perfect traffic flow. Actually, much of what we see in documentaries and expos does little to dispel this idea. The reality, though, is that a smart city is one that is efficiently designed to catalyze economic growth, competitiveness, prosperity and a better way of life for its citizens.

A smart city comprises infrastructure, operations and people. These are the three ingredients that make up a smart city. According to IBM, "a smart city is an interconnected system of systems. A dynamic work in progress, with progress as its watchword. A tripod that relies on strong support for and among each of its pillars, to become a smarter city for all".
Leaders of smart cities have the tools to analyze data, anticipate problems and resolve them in a timely manner. They can also coordinate resources effectively. The entire infrastructure in a smart city is viable and ready for constant change. The human services such as social programs, healthcare and education, needed to support the citizen as an individual are also highly developed.

Many African cities are now well on their way to becoming smart cities. Several studies have been conducted in cities such as Accra, Lagos and Nairobi with a view to finding ways of making the cities more effective. There are also many smart technology cities either under construction or in the planning stages. The best examples are the Ghana Cyber city, Konza Techno City in Kenya and Eco Atlantic City in Nigeria.
A number of economic benefits can accrue when a city becomes a smart city.

Job Creation
Smart cities create employment in several ways. Greenfield smart cities which are built from new land have the potential to create a large number of jobs. For example, Konza Techno City in Kenya is estimated to cost $8.5 billion upon completion with job creation estimated at 200,000 jobs. The special economic zones that will be created have attracted large foreign companies such as Huawei, Samsung, and Telemac that all want to set up shop in the city.

Foreign Direct Investment
The huge capital requirements of smart cities, both greenfield and retrofit, means that foreign entities have to be encouraged to participate through the establishment of special economic zones and tax friendly policies. Well conceived projects in Africa will benefit from massive foreign direct investment which is an effective antidote for job loss through globalization.

Whether it is visitors travelling on business, investors searching for opportunities or simply students on an educational tour, smart cities are crowd pullers. In fact, turning destinations into 'smart destinations' is one of the ways to encourage the growth of tourism. A few examples of this kind of packaging can be seen in Barcelona, Amsterdam and Vancouver. These cities are reaping the benefits of packaging experiential tourism products.

So, is Africa ready for smart cities? Personally, I think it is but careful planning is needed to avoid the false starts experienced by Greenfield projects such as Lavasa in India, Masdar in Abu Dhabi and Kilamba in Angola. Retrofit projects also have their fair share of problems if poorly implemented.


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