Brand New “Sustainable City” in Central Africa?

By James Cody Birkey

In discussion of the King Abdullah Economic City in Saudi Arabia, our class discussion not only argued the financial feasibility, but ultimately the rationale for building “new cities” in the first place. What could KAEC do that couldn’t be done somewhere else in Saudi? If the same money and resources were allocated to upgrading existing cities, or even dispersed as cash as was alluded to at one point, would it have greater effect?

One of the most difficult and inherent problems that “cities from scratch” face is a problem of raison d’être. A city from scratch implies that it is located in a place that has little to no population—a place that market forces have not naturally selected for to date. If the only reason why a city is being built in that place is because it has been decided so, from inception the city must overcome all the market forces that prevented this site from being urbanized before.

Government, however, may have been one of the most successful ways to give a new city a “reason for being.” Many capitals were re-established as new cities in previously under-populated areas. Brasilia, Washington, and Helsinki all serve as examples of this. So why would it seem far-fetched for a nation like Equatorial Guinea to do the same?

The tiny nation of Equatorial Guinea, the only Spanish-speaking nation in Africa, is made up of two parts—an island that holds its major city and capital, and a slice of central African jungle on the mainland. Because the recent discovery of oil off its coast, the nation of 700,000 people now sees over $1bn in annual oil revenues. This has made Equatorial Guinea the twentieth-wealthiest per capita in the world in real dollars—ahead of even Spain, its former colonizer. Its president has decided to build a new capital city deep in its mainland interior, and may just have the finances to do it.

The city is to house not only government, but a new university, sustainable transit systems, opera houses, museums and all the trappings of a modern city. The president hopes that by the time he hands power over to his son the new capital will house over 200,000 in an idyllic jungle destination—powered entirely by renewable energy.

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Far-fetched? Mostly likely. Even if the government can afford to build such a city, will the people come? Will business actually locate to this remote place? If history is any indicator, it would at best take a long time.

But despite a major effort to grow the aforementioned capital cities by infusing them with a nation’s largest employer, they nearly always still require decades upon decades to actually flourish. Washington, for example, was conceived in the 1790’s and failed to amass significant urban population until the American Civil War in the 1860’s—seventy years later. In the meantime it mostly consisted of seasonally occupied buildings in the midst of estuarial swamp.

So, then, could a project like Oyala last the 70 years it may take before it will become effectively established? Fortunately, the irony of building a “sustainable city” by clearing the rainforest will likely not outlive the embargoed regime financing it.

The presidential regime in power in Equatorial Guinea makes this perhaps a perfect example of money that could be better spent. While it is true that the GDP per capita in the country is on paper one of the wealthiest in the world, over 90% of the population lives on less than $2 a day. Surely, if any new city project should suffer from an issue of raison d’être, it is this one.

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2 thoughts on “Brand New “Sustainable City” in Central Africa?

  1. By Nour El Hoda Farrag

    Relating to this idea, I thought that KAEC leadership was on track when it decided to start by attracting oil-based/ related industries, as opposed to venturing into new spaces such as high-tech. Considering Saudi Arabia’s oil wealth, promoting industries up the value chain seemed like a rational thing to do. Participating companies could have been local, or multinationals with carefully drafted contract agreements that ensured involvement of local nationals/investors. That said, Saudi Arabia operates within a region, which in my view, can still use greater manufacturing capacity across basic consumer industries. As such, barring oil-related industries, KAEC still stood a chance for attracting local and foreign investments that cater to basic consumption needs for both the domestic and regional markets. KAEC’s competitive advantages accordingly were numerous, and chief among them was the promised access to the Seaport that offered potential regional export opportunities.

    Dubai, in my mind, is another example of a city that was not built on specific local comparative advantage. Rather, Dubai’s model was partially built on bridging a gap that existed in the region, namely the lack of a financial services hub that was at par with the standard of living that local, regional and foreign talent aspires to. Notwithstanding, such value proposition was also delivered in a package of tax incentives to attract investors. In conclusion, while focus is key foundation for new cities to succeed and prosper. Such focus need not be industry-specific, but rather opportunistic, far-sighted, scalable and demand-driven.

    This blog brings up another very interesting point, and that is how new cities take decades to get traction and achieve their objective. If that is typically the case, it makes me question whether new city planners indeed have to assume responsibility for providing a comprehensive solution (ie residential, schools, public facilities, commercial malls, etc), or are they better off focusing on the main infrastructure / capital investments around which the City’s economics are centered, and let market forces take care of the rest in its own time and after proof of concept.

  2. By Jessica Asinogo

    Like you, I find it hard to believe that this new capital city will a) be completed with all the planned bells and whistles, and b) spur any kind of significant economic growth. Instead of using their oil wealth to build an entirely new nice and shiny capital city, Equatorial Guinea would be better served by taking a page out of neighboring Gabon’s book. Gabon is also an oil-rich nation with a small population (~1.5 million). Keenly aware of the pitfalls of having an undiversified economy that is dependent on rents from extractive industries, in 2009, the government established a coordinated plan to promote other industries and attract investors; they did this through the creation of special economic zones (SEZ’s).

    Rather than adopting the ‘build it and they will come’ mentality of the new Equatorial Guinea capital city, Gabon created targeted SEZ’s to promote and protect their timber industry. The government banned the export of raw timber from the country, and in a joint-venture with Olam, dedicated the SEZ’s to timber processing and logistics. The country is now able to export higher value timber goods and is thus not only able to capture high economic value, but also is able to promote skills transfer. This more nuanced approach of creating industry specific SEZ’s rather than entire new un-focused cities is a more prudent path forward, particularly for sub-Saharan nations.

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