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What urbanization means for development

Nicholas Aoama Oyiek, a garage owner in Nairobi, Kenya and team

Multiple OPIC projects address urban development challenges, often by supporting financing to small businesses that will create jobs. Nicholas Aoama Oyiek is a garage owner in Nairobi, Kenya, who employs 20 people and was able to obtain financing to build his business with the help of an OPIC backed private equity fund. Read more.

In 1950, less than one-third of the world’s population lived in cities. Today, 54 percent of the world’s population is urban and that is expected to increase to 66 percent by 2050, according to the U.N.’s World Urbanization Prospects report, released earlier this year. This shift is being driven primarily by large demographic changes in the developing world, especially Africa and Asia, which today are home to nearly 90 percent of the world’s rural population but are also seeing some of the most dramatic shifts.

This ongoing shift from a primarily rural society to an urban one impacts virtually every aspect of life, from the places people live and work, to how they obtain education, healthcare and financing for mortgages and small businesses. While many major development challenges such as food production, off-grid power and mobile banking will continue to address the needs of remote populations, the world’s increasingly urban population will require more on-grid power, and more modern infrastructure and healthcare.

Some highlights from the U.N. report that underscore this dramatic shift:

  • The world’s most rural countries (with urbanization below 20 percent) are all based in Asia and Africa. They include Burundi, Ethiopia, Malawi, Niger, South Sudan and Uganda in Africa; and Nepal and Sri Lanka in Asia. All these countries are expected to see urban populations double by 2050.
  • The largest total increases in urban populations are projected in Nigeria, Ethiopia and Uganda.
  • By 2030, Africa is expected to be 56 percent urban and Asia is expected to be 64 percent urban.
  • Cities are getting bigger. The number of “megacities” in Africa housing more than 10 million people is expected to double from three to six by 2030, with Dar es Salaam, Johannesburg and Luanda, Angola joining existing megacities Cairo, Kinshasa and Lagos.

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