For years the country has ignored the urban challenge, and indeed opportunity, it faces
(This article, written by Glen Robbins, first appeared in Business Day on 20 February 2025. The video of Glen’s presentation can also be accessed here: YouTube Link)
In his recent state of the nation address, President Cyril Ramaphosa spoke of “turning our cities into engines of growth and opportunity”. The president suggested that attending to service delivery failures, reforming state housing delivery and restoring urban rail systems would be key to this “engine” role.
Interestingly, after some years of misty-eyed references to “new smart cities”, the president — to his credit — also seemed to acknowledge that the country needs to first urgently confront the challenges of the cities it already has.
Seized by a similar concern to that of the president, Economic Research Southern Africa (ERSA) hosted a city economies conference in late 2024. At this event, cutting edge research such as that by Ivan Turok and Justin Visagie highlighted how SA’s growth prospects were being hindered by cities underperforming in new job creation (“Metros a drag on SA growth, study says”, February 3; see YouTube link for presentation).
The relevance of these insights casted much-needed light on key national economic trends, and highlighted that while SA cities have become the hub for almost two thirds of the national economy, there is little in the way of clear and consistent evidence about them fulfilling a “growth engine” role. While urbanisation has been so central to the economic transformations of many other emerging economies, the welfare gains from SA urbanisation have appeared modest at best. This has been aggravated by declining investment and failures in urban management that have seen cities fail to keep pace with their growing populations.
In this respect, I argue that SA should not be surprised about the generally weak economic performance of its cities. After all, national economic policies have tended to offer little in the way of appreciation of the geographic features of the national economy; nor have they embraced the scope of cities to contribute to national economic growth and development. While national urban policies have acknowledged the importance of the large cities to national welfare, few national economic policy frameworks have engaged with the kinds of spatial shifts that have characterised domestic and global consumption and production.
One of the most obvious consequences of this neglect of cities in national economic policies has been to let city administrations off the hook in terms of their obligations to contribute to key national growth and development goals. In a context in which most metropolitan city administrations appear to be undermining rather than promoting local economic prospects and their potential contribution to national growth, this lack of effort to use national economic policies to help mobilise effective local economic action has also contributed to a series of own goals. For example, with the larger cities spending less in real terms of capital now than they did a decade ago, the consequences of both a national economic policy disinterest in cities, and an often directionless city leadership, has been deeply damaging for the prospects of households and local businesses seeking to grasp economic opportunities.
Despite these issues all is not doom and gloom. For instance, a variety of local stakeholders at the ERSA conference reported on the positive effects of municipal commitments, such as that of the Cape Town metro to ensure infrastructure investment predictability; automotive cluster support being provided in Durban; and effective national-provincial-local-business collaboration, which helped deliver the Tshwane Special Economic Zone.
Yet despite these exceptions many of those active in national economic policy-making expressed deep reservations about the scope of cities to contribute to national economic outcomes more effectively. Some pointed to parades of changing mayors as providing a rationale for not taking cities seriously, while others argued that national priorities would best be served by the national government counteracting the growing economic dominance of metros, something often argued for in national economic policy documents of the recent past.
In a context in which countries as diverse as Columbia, Poland and Indonesia have put the inclusive development of their cities at the heart of their national economic policy agenda, SA has instead spent years seeking to bury its head in the sand about the urban challenge, and indeed the urban opportunity, it faces. This is seen not just in the repeated stumbling of many city administrations, but also in terms of national leadership vacillating around things such as the decentralisation of the key local growth engines of human settlements and public transport. The voices addressing these issues, including those working in business and civil society, need to be heard more clearly.
One place to start to address the lack of a clear city focus in national economic policies is for these policies to provide a clear analysis of the spatial features of the national economy and the factors contributing to the associated trends. Furthermore, national policies should be required to provide frameworks for government and citizen action to help shift cities, and thus the country, towards a more productive and inclusive path. National government actors in national economic policy, whether they be the Union Building-focused national departments or highly centralised parastatals, need to do more to embrace the scope of cities to contribute to national growth and development goals.
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