Reflections on the Hamburg Sustainability Conference
For those of us working on the megatrend of Africa’s urbanisation it can be difficult not to glaze over when a new headline bemoans the extent of the urban infrastructure gap and the struggles in closing it. It is not that the infrastructure deficit in Africa’s rapidly evolving cities is not acute or the cause of humanitarian and economic challenges. Rather, that the work sometimes seems fixated on getting the number right as if that would solve everything. Much of the conversation amongst financiers appears stuck in diagnostic mode and, at best, articulating high-level demands for “bankable projects”, “credit worthy local governments” and “risk-reward ratios” that seem blind to the lived reality of urban life, or the stubbornly centralized political economy that defines governance and investment in these urban spaces.
It was refreshing, then, when Elisabeth Mansfeld – a former banker and now strategic advisor working at the intersection of sustainable finance, urban governance – invited the African Centre for Cities (ACC) and the African Union Commission (AUC) to co-curate a panel discussion that would explore what can, and is, being done to build sustainable infrastructure despite the challenges. Held on the opening day of the Hamburg Sustainability Conference, the panel comprised leaders working on continent-wide governance, multi-lateral development finance, private investment in emerging markets, housing and informal settlements under the provocative title, How can Africa scale urban innovation and unlock capital for resilient, sustainable cities?
In encouraging panelists to go beyond generalisations, Elisabeth began her moderation of the session by running through what is accepted as the high-level features behind the panel’s title:
- Roughly $160 billion is required per year for urban infrastructure, 2.5 times what is currently being invested.
- Subnational governments in Africa have limited fiscal agency. On average they collect just 4.9% of public revenue (vs. 14.5% globally) limiting their ability to plan, borrow, and invest.
- African countries pay roughly 2.9% percentage points more for their borrowed capital than countries with the same risk-return profile in the Global North. The premium translates into at least $74bn per year in borrowing costs.
- Economic activity classified as ‘informal’ predominates but is under-counted in GDP numbers. This, in turn, misrepresents the ability (and willingness) of urban residents to pay for infrastructure and services that meet their needs and budgets.
- The risk of inaction is carried by everyone. If, for example, African cities are built using the same materials and energy mix as OECD cities, an additional 18.3 GtCO₂e will be emitted in the next 10 years alone, accelerating the climate crisis for every country.
With this context clearly stated, panelists were asked to focus on the ‘so what’ question – what they and their institutions were doing to address the infrastructure deficit.
- Ambassador Moses Vilakati, African Union Commissioner for Regional Policy and Collective Governance highlighted the importance of regional co-ordination to ensure infrastructure unlocked the value chains that span regions. With the technical validation of the Africa Urban Resilience Programme (AURP) and the establishment of the Africa Urban Forum, it was pointed out that the AU underscores urbanisation not only as a megatrend but as a transformational force that must be strategically harnessed as part of Agenda 2063. In this context, regionally anchored resilience programs like Aqiline – which supports local adaptation planning in coastal cities—and the Resilience Infrastructure Accelerator (RIA), which helps structure and de-risk infrastructure projects in secondary cities, exemplify how innovation, institutional coordination, and local knowledge can converge to scale impact. Moses’ call was for urban infrastructure engineers to pay more attention to social context and climate resilience.
- Mr Stefan Atchia, Infrastructure and Urban Development Manager at the African Development Bank highlighted the need for project preparation skills and exchange rate exposure. He noted that preparation costs—typically 1–2% of capital—are frequently unfunded, leading to bottlenecks in moving ideas to implementation. The African Development Bank is working with revenue authorities to improve collection and make the amounts and timing of fiscal transfers from national governments to cities more predictable. Stefan’s call was for cities to borrow in their local currencies, ideally from their local markets. If foreign finance or investment is required, the currency risk should be carried by national governments not cities.
- Mr Martijn Proos manages the Emerging Markets Fund for African and Asia at asset manager NinetyOne. He explained how a focus on existing payments by end-users had allowed them to identify ability to pay for infrastructure and services, and design their private investments accordingly, often without government guarantees. He offered two examples, student housing in Kenya that replaced daily commuting costs with affordable rent payments, and Kigali’s water treatment plant, financed privately, but only once public funding had covered the upstream dam infrastructure as examples of innovative finance. Martijn’s call was for more accurate risk allocations, hinting at the idea that foreign investors often frame their unfamiliarity with African projects as a financial risk, resulting in more expensive capital.
- Anacláudia Rossbach, Executive Director of UN Habitat, identified the need for a new social contract for the coordination of land management, urban planning and housing. She asked what might be learned from the infrastructure programmes constructed in African cities over the past decade. The implication was that some large infrastructure projects had inadequately planned for housing and land value capture, and as a result had failed to unlock virtuous cycles of investment and socio-economic progress that would have enhanced the investment prospect. Continuous learning from Africa’s urbanising context was a prerequisite for identifying opportunities and making African cities more legible to financiers. Anacláudia’s callwas for housing policies at the centre of the urban political agenda. It is through the planning and enabling of housing that governments would be able to generate their own revenue from land value capture, which in turn could mediate the excessive cost of capital paid by African countries.
- Finally, Anni Beukes from the Know Your City programme at Slum Dwellers International, powerfully explained how citizen science and community enumeration under the Open Streets programme had been aided by drone technology. Referencing her own research in Freetown, Anni highlighted how street-scale data enabled tailored and cost-effective urban planning and the mobilisation of domestic resources. Anni’s call was for the creation of data systems in every African city.
Forty-five-minute panel discussions do not allow for in-depth scrutiny or deliberation, but there was a lingering positivity in the air following the panel discussion. Africa’s cities were recast by the panel as places of innovation that could attract investment when financiers were prepared to understand the local context. It was a sentiment that percolated the two-day Hamburg Sustainability Conference, part of the city’s sustainability week. The conference attracted global dignitaries and decision makers with healthy representation from African countries across the 93 events, 40 of which related to the African continent.
The conference provided a timely contribution to South Africa’s hosting of the G20 summit – the first time the G20 will gather on African soil – and particularly the Sustainable Finance Working Group meeting in Cape Town on 11-12 June. It was clear that the organisers of the Hamburg Sustainability Conference were looking to grasp this moment to build on the momentum established at their inaugural event in 2024. True to form, delegates were fueled with a supply of strong coffee and good food from the Hamburg State House kitchen, but more importantly Africa’s diverse and growing cities emerged as central to the global investment that is looking to combine innovation, infrastructure and sustainability.
