Developing Smart Cities in Africa

Real Estate insight by Dani Mansour, Head of Project & Development Services, Africa

October 11, 2022
What makes a smart city "smart"?

Developing smart cities is certainly not a new concept, with more than 1,000 cities globally having announced their own initiatives. While the lack of consensus on what a smart city is inhibits direct comparisons and data collection, market intelligence firm International Data Corporation (IDC), estimates that cities will spend in excess of US$158 billion on smart city initiatives in 2022.

Two general principles underpin successful smart city initiatives. Firstly, they are a means of enhancing the quality of citizen’s life. Although different cities have adopted different strategies to create smarter physical spaces, these initiatives need to be seen as a process, not an end state.

Secondly, the key fundamentals of smart cities include physical infrastructure, social infrastructure, innovation and technology, along with data administration. However, at the end of the day, it is both the people and the technology that makes any city truly smart.

Combining people and technology

Smart cities require more than just physical or technical infrastructure, they must ensure all citizens have access to a comprehensive network of touchpoints for the two-way flow of data.

The internet of things (IOT) will form a key component of the digital nervous system, connecting the physical environment to the digital environment. Amongst other things, this will provide citizens with access to strategic data allowing them to identify and evaluate their current and future needs for physical space.

The technology underpinning this data transfer has evolved rapidly over recent years and will inevitably continue to do so, requiring the need to incorporate as yet unknown technologies. Designing for tomorrow doesn’t mean predicting the future, but it does require the creation of an environment which doesn’t become obsolete within a few years, an environment that is evolutionary, flexible and future proof.

Smart cities will involve the increased use of technologies to replicate an existing physical environment digitally through a digital twin. This allows planners, managers and citizens to remotely access data on energy performance, operating conditions, vacancies, rents, lease terms and expiration, availability of space, ownership, and contractual documentation for individual buildings or entire cities.

While smart cities will require less physical movement than at present, they will still need to allow for the movement of people as well as data. This will require the incorporation of a range of autonomous electric or human powered vehicles and changes to land use patterns around the transport infrastructure, reshaping the way roads, sidewalks, crossings, parking, recharging stations and other components are designed, and implemented.

Recent advances in AI allow for a quantum leap in our ability to create smart cities. Focussing on the interaction of people and technology, AI offers a range of applications that are able to connect, interpret and implement masterplanning principles in a manner that will fundamentally change the way we live in, utilize and occupy physical space.

Smart cities are green cities

If there is one topic that has defined the cities debate and the real estate industry more generally over the past decade, it is a growing awareness of environmental issues. 

Designing and building greener cities, landscaping the public realm and creating a healthier environment are assuming a much greater importance in our everyday lives than at any time. COVID proved the importance of access to open space and triggered a flight to higher quality urban environments.

With Africa due to host COP summit in Cairo later this year (building on previous summits in South Africa, Morocco, and Kenya), it is no surprise that much of the discussion in smart city circles has focused on the central role of the environment. Smart cities are less fragmented cities, incorporating a range of sustainable buildings combined into more mixed-use communities, more sustainable requiring less physical travel than in the past. 

Key complexities in developing smart cities

While there has been growing awareness for the need of more sustainable urban environments across Africa, much of the focus is still on the micro level of individual buildings rather than green or smart cities. However, this is now beginning to change with the emergence of several smart precincts or city districts.

Africa faces a number of challenges in relation to developing smart city precincts. These include low levels of market transparency and a shortage of local materials, skills and investment capital in many markets. Most African countries rated opaque in JLL’s transparency index (with a few exceptions such as South Africa and Kenya). This can create challenges in raising finance, resulting in longer pre-development phases and making it more difficult to implement masterplans in general. Therefore, delivering smart cities adds an additional level of complexity to the development process.

Despite this, some countries within the continent have benefitted by learning from the successful implementation of international smart city projects. An indicator is the rapid growth of Development Finance Institution’s (DFIs) involvement in African projects. These funds have traditionally been an important source of financing for infrastructure projects but more recently, they are working closely with developers on innovative real estate projects.

One of the defining benefits of proptech is that it ‘levels the playing field’ and offers less developed markets the ability to learn from the success of projects elsewhere. This is enabling the rise of more local architects and planners which is another encouraging sign, suggesting the likely emergence of a particularly African form of smart cities as it closes the current gap with the rest of the world.

The way forward

While bricks and mortar will always remain at the core of the real estate universe, the sector has evolved beyond the built environment. The drive to create smart cities epitomizes this evolution, with developments in the fields of proptech and big data, allowing citizens to influence their physical space in a manner that makes their lives easier, enabling them to focus on those things that matter most to them. 

Successful smart cities in Africa will share many of the same components as those elsewhere. This includes the realization that it is people and not technology that will ultimately determine a project’s success. Truly smart cities will be those that utilize technology to plan, create and operate urban spaces that offer more efficient, sustainable and attractive places in which to live, work and play.

Some commentators are suggesting the term ‘smart cities’ has become dated and are proposing ‘urban tech’ as a more appropriate replacement. Whichever term is preferred, the key to the success of initiatives in this field will be the extent to which they are able to combine people, technology and real estate in a manner that enhances human wellbeing. This is as true in Africa as it is anywhere else in the world.

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