The Rise of Africa's Super Cities

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Hey there! Welcome to today’s edition of Tech Safari.

Two exciting things are happening in the next week at Tech Safari.

First, we’re hosting a Finance for Founders workshop alongside our friends at Raise!

At the early stages, founders are expected to manage each aspect of their startup. And one of the biggest gaps in the founder toolkit is planning and managing finances.

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Second, we are closing our very first Tech Safari Syndicate Investment: Hulugram.

I wrote an investment memo on Hulugram in June.

This week Hulugram is closing the round with Techstars Toronto, DFS Lab, Kaleo VC and Tech Safari investing.

The Tech Safari Syndicate is closing next week and we have a bit of allocation left.

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Ready? Let’s dive in.

Africa is on a fast and furious boom. And its cities are rising with it.

Right now, Africa is home to 1.4 billion people, twice as many as Europe, and it's growing three times faster than the global average.

The UN projects that by 2050, Africa’s population will double to at least 2.4 billion people, and that one-fourth of the world’s population will be African.

And in Africa’s lineup of 54 countries, four are really leading the charge of Africa’s rapid population growth.

Meet: Nigeria, Ethiopia, Egypt, and the Democratic Republic of Congo.

In 2022, Nigeria’s population was about 223 million, followed by Ethiopia (126 million), Egypt (112 million), and the DRC (102 million)

Together, these countries make up 40% of Africa's population.

And if we go deeper into those countries, we see that the population growth is centered around their cities.

Inside Africa’s rising cities

Since 1990, the number of African cities has doubled—jumping from 3300 to 7600.

Come 2100, Africa is set to become home to 10 of the world’s top 20 biggest cities, up from just two today.

And it’s no surprise that the continent’s fastest-rising cities come from its most populated countries.

Meet Kinshasa, Lagos, Cairo, and Addis Ababa.

In a few years, they’re likely to compete with (and beat) some of the world’s population giants like Beijing, Tokyo, and Shanghai.

Let’s see what Africa’s megacities have to offer.

Lagos

Lagos is Africa’s mega city and Nigeria’s cultural and commercial capital.

This city hosts 24 million people, double New York and London’s tally.

It is in the top 10 fastest-growing cities in the world and could become the world’s most populated city if its growth keeps up

Lagos plays a huge role in Nigeria's economy, hosting two of Africa's largest and busiest ports. It’s a crucial city for import and export operations in Nigeria.

Culturally, Lagos is the heartbeat of Afrobeats—Africa’s biggest cultural export. And a few little artists like Burna Boy and Wizkid call Lagos home.

Lagos is like Africa’s New York - it has everything, and it’s where things get done.

And close to 2,000 people pour into this city every day from all corners of Nigeria.

That’s about 83 people every hour, with the goal of finding and making a living.

But the city is struggling to hold up the weight of its population.

It’s becoming too small for the millions that live there.

The effect? Insane traffic jams, high unemployment, and housing challenges.

Last year, this report placed Lagos’ housing deficit at 3.2 million units.

And in low-income areas, the high population has led to cramped housing setups that typically look like this:

One startup is trying to solve this. Meet Itana: Talent City.

The dream?

To transform almost 18 Acres of land in the Lekki Freezone in Lagos into the “Silicon Valley of Africa.”

Built with the future of work in mind, the startup city will have:

• Super fast internet

• Co-working spaces

• Uninterrupted electricity

• Smart homes for over 1000 residents, and over 2500 remote workers.

If it works, Itana will become a ‘city within a city’ - a new zone for Lagos’ tech founders and within a massively growing city.

Cairo

Cairo, the capital of Egypt, is one of the liveliest metropolises in Africa.

It’s famous for its rich culture and history, being home to world-famous sites like The Pyramids of Giza.

Currently, Cairo’s population is estimated to be around 22 million.

But Cairo’s current boom is taking a toll on the city. It’s becoming too crowded.

Ministries and embassies around Cairo's Tahrir Square are causing traffic jams.

And with streets closed for security, it’s hard to move around.

In 2015, Egypt hatched a plan to fix this: A brand-new capital city, 45 km from Cairo.

The ambition is to set up a new administrative capital - kind of like the Washington DC of Egypt.

This is what it should look like:

But there are questions about how long this will take - and who benefits the most from the new city.

Kinshasa

Kinshasa, the capital of The Democratic Republic of Congo, is Africa’s third biggest city.

Out of DR Congo’s 102 million people, 17 million call Kinshasa home.

Worldwide, it’s the largest French-speaking city, seconded by Paris.

And despite its turbulent past, Kinshasa is a vibrant hub of diversity.

It rocks with art, dance, and traditions. Its vibrant music scene, propped by Rumba and Lingala, jams to its lively history.

Kinshasa is mineral-rich too.

The DRC shines in mineral reserves, producing over 70% of the world’s cobalt and holding 60% of coltan reserves.

It's also the fourth largest producer of copper globally, a mineral that Goldman Sachs calls the “new oil.”

With these minerals needed for building electric car batteries, the DRC is getting attention in the EV industry.

In 2020, Tesla was getting 6,000 tonnes of cobalt yearly straight from Glencore's mines in the DRC.

Kinshasa, which holds about 49% of the world's cobalt reserves, should benefit from the EV boom.

Sadly, it doesn’t.

Kinshasa remains a poor city in one of the world's poorest countries, with a GDP of $55 billion.

Up until now, the DRC mainly supplies unprocessed minerals to foreign manufacturers. And the locals that do the mining are sold short.

But, things might change for Kinshasa.

The government recently teamed with (Afreximbank) and the United Nations Economic Commission for Africa (ECA) to set up the world’s largest EV battery factory.

This move could help the DRC shift from mining to production.

If successful, it will help the country capture more revenue and mark a positive shift in how the country keeps its wealth.

Addis Ababa

Ethiopia is Africa’s second most populated country.

It’s known as the “birthplace” of coffee and as Africa’s top coffee exporter.

Ethiopia is home to about 126 million people. And by 2050, this could grow to 205 million.

Addis Ababa, its capital city, is buzzing with about 5.4 million. Addis Ababa translates into “New Flower” in Amharic.

And speaking of new, Ethiopia's mobile money market is new and buzzing right now.

In May this year, Safaricom got a license to bring Mpesa to Ethiopia.

Safaricom plans to pump in $300 million every year into their Ethiopia operations.

But Mpesa faces tough competition from Ethio Telecom's Telebirr, boasting 34.3 million subscribers.

Addis is also known as Africa’s political capital, hosting the headquarters for the African Union, and United Nations Economic Commission for Africa (UNECA)

But recently, Addis has been on the edge of trouble.

In 2020, Ethiopia faced the worst conflict of the 21st century, leaving hundreds of thousands killed and almost spilled into the capital.

Economic growth dropped to 3.8% as the government spent over $2.5 billion on the war, and will spend $20 billion to fix things.

Hopefully, the city is on the path to recovery.

The Rise of Africa’s Super Cities

Just like Lagos, Kinshasa, and Cairo, Addis Ababa is going head-to-head with the world’s biggest cities.

Africa’s Super Cities will become major global hubs which host Africa’s population.

But with all these people, new problems are popping up.

Problems like poor infrastructure, unemployment, healthcare, and environmental pressure.

Next week, we're digging into these challenges and how tech is stepping up to solve them.

What do you think of Africa’s rising cities?

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