Into uncharted waters of charter cities • Could it solve Africa’s exploding urban population?

    Economist Mwanda Phiri is a firm proponent of charter cities.

 

JACK ZIMBA

Lusaka

 

AFRICA will have the fastest urban growth rate in the world, with its cities taking up an additional 950 million new residents by 2050 through urbanisation, according to the Organisation for Economic Co-operation and Development.

Cities across the continent are growing at an alarming rate of 70 million new residents annually, with already densely-populated ones such as Cairo, Egypt, and Kinshasa, DRC, expected to double their tallies in three decades.

Even Lusaka, which was initially designed as a Garden City for 100,000 residents, is now swelling with three million dwellers, and growing at over four percent annually.

And so what is preoccupying the minds of many development experts and economists now is how to match that population growth with industrialisation that can guarantee decent incomes, jobs and decent housing for city dwellers so that they do not have to live in slums and add to social problems such as crime.

When it comes to development, different kinds of models exist – some practical and tried while others more futuristic and untested.

One development concept that is yet to be tried is charter cities.

The concept was first expounded by economist Paul Romer over a decade ago.

What the Nobel Peace Prize laureate envisaged was a territory within a country that has its own set of “good” rules, with another richer county acting as guarantor. His argument was that this territory, under good rules, would then flourish and offer opportunities to citizens such as jobs.

Romer went on to put the concept to test in Madagascar and Honduras, but soon faced opposition and abandoned the idea.

But the dream of charter cities did not die; it was picked up by Mark Lutter, who went on to found the Charter Cities Institute (CCI) to take a second look at the idea, although not entirely using Romer’s lense, especially when it comes to the issue of a guarantor nation.

“…charter cities deserve another look. But entrusting a high-income country as guarantor of a developing city smacks of neocolonialism,” argues Lutter.

What he proposes, instead, is to establish charter cities under a public-private partnership (PPP) model – setting up a governance structure that doesn’t infringe on the sovereignty of the host country, but that still prioritises economic and governance success.

Mwanda Phiri is regional manager for CCI and is absolutely sold out to the concept of charter cities.

“How do we address all these challenges of the 21^st century? We need an unorthodox approach to development, and the charter cities model feels like that unorthodox approach, something that can really catalyse development, spark a certain type of transformation that can bring about the outcomes that we envisage,” she says with passion in her voice.

The 34-year-old economist previously worked as a researcher on economic zones for an economic think tank before she was recruited by CCI to advance the concept of charter cities.

“It’s a different idea, it’s almost novel,” she tells me.

So is this the future of development? I ask her.

“I have to emphatically say yes,” she says.

Mwanda says the projected population explosion in African cities is something we should all be paying attention to.

And she sees charter cities as the solution to poverty and unemployment plaguing millions of Africa’s 1.3 billion residents.

But, again, charter cities is not an entirely new concept. From time immemorial, people have always tried to break away from the norm and establishment; to have something that they feel works better for them, even if that something is as wayward as Kalakuta town of Fela Kuti or Akon’s outlandish Akon City in Senegal.

Charter cities – as the name implies – is all about rules or drawing up a charter; setting up a city that has its own rules separate from the rest of the country; it means setting up good rules first, or a charter, that is attractive enough to investors.

Like Romer observed when he first explained the idea, when it comes to development, rules can make all the difference, and blanket rules covering everyone in a country can end up being a roadblock rather than an enabler of development.

It means having market-based rules, best practices and cutting the red; for example, how about having a 24-hour approval system for licences? It means having rules that work for development.

Although economic or industrial zones operate more or less on the same principle as charter cities, they vary in scale and impact.

For Lutter, charter cities take the concept of special economic zones a step further.

Mwanda argues that there is little spill-over effects from economic industrial zones such as the ones currently existing in the country, a problem that can be taken care of through charter cities.

“If you can allow a greater area to operate under good rules, then you can have greater spill-over effects on the economy, you can have better linkages with the rest of the economy,” she says.

Decentralisation sits at the core of charter cities.

“When you set up a zone you are telling the investors when you come here things will be done differently, everything will be done in an efficient manner,” says Mwanda.

The idea of charter cities is meant to overcome one of the constraints governments, especially in poorer nations, usually face when it comes to financing large-scale projects such as building entire new cities, and building decent housing for citizens – lack of finance.

Mwanda says the idea of charter cities is to leverage private capital to solve economic, infrastructure and social problems.

“We are saying let these cities be developed ideally through a private-public partnership, and the private entity can be foreign or local,” she says.

She says a charter city can also be built on an anchor industry such as mining or agriculture, with other support industries adding to the city’s growth.

When it comes to charter cities, there are no typical examples, although one city in China called Shenzhen is usually given as the best example of something that comes really close to a charter city.

Shenzhen’s economic transformation is remarkable enough to earn it the title “Miracle City”.

Shenzhen was established in 1979 during the first wave of China’s economic reforms, which allowed private enterprise to play a role in the state-controlled system.

The zone was allowed to be governed with its own set of rules, different from the rest of the country. This allowed it to emerge from a collection of agricultural villages into a major world port that is home to some of China’s leading technology, finance, real estate and manufacturing companies.

In the last four decades, the city posted at least 20 percent annual economic growth.

What is critical now for Mwanda and CCI is to get a buy-in from Government and other key institutions into the concept.

“We need to do more work of socialising it,” says Mwanda.

And about a week ago, CCI signed a partnership agreement with the University of Zambia (UNZA) to, as they put it, “tackle the urgent and complex challenges facing African cities”.

“CCI and UNZA are joining forces to build and exchange knowledge, ideas, and information on issues related to poverty alleviation, urban development, and the future of cities in Zambia and Africa at large,” said Mwanda at the signing ceremony of the deal.

She added: “This partnership with the University of Zambia represents a significant step in realising CCI’s goal of lifting tens of millions of people out of poverty by creating vibrant, prosperous, and opportunity-rich cities. Our focus will be on creating innovative approaches that can be replicated across the country and the continent.”

Anne Sikwibele, who is UNZA acting vice-chancellor, said “new partnerships and collaborations between the private sector, NGOs, and learning institutions need to be formed to rethink, study and reimagine the future of urbanisation in the region, to address major challenges and unleash the potential of cities to foster inclusive and sustained economic development.”

Under the partnership, the university will have a short-term interdisciplinary course, “Rethinking African Cities”.

Mwanda says there are a number of charter city projects in the pipeline in parts of Africa, including Malawi.

So, given a chance to build a charter city, where would Mwanda site it?

Top of her list is Mpulungu at the northern tip of Zambia, on the border with Tanzania, but she also mentions Kalumbila, Rufunsa, Kafue and Siavonga.

But all that for now is but a dream, although Mwanda hopes she will be able to work or live in a charter city in her lifetime – one day.