It has been a tumultuous period for the African continent, as since 2014 there have been many pressures affecting the macroeconomic environment – commodity prices took a significant knock, some economies dipped into a recession and the pressure was on from a number of credit ratings agencies.
However, most countries are weathering the storm, said the Royal Institution of Chartered Surveyors (Rics) at its fourth yearly summit, held on Wednesday and Thursday.
“While we are aware of the major political influences that still play a major role, we are also cognisant of the fact that policy influences and policymakers need to pay attention to what their peers are looking for when it comes to certainty in the built environment,” noted Rics Summit Africa programme moderator Gugu Cele.
The summit is held in light of Rics wanting to bolster the infrastructure environment and property sector across the African continent, where urbanisation is happening rapidly. Three-million people across the continent are moving into cities every week.
The Rics summit convened on how best to ensure urbanisation and discussed the role that Rics can play to contribute to macroeconomic development of African economies.
Rics CEO Sean Tompkins discussed trends that are taking place around rapid urbanisation and how it affects the built environment going forward, while considering resource scarcity and environmental impact.
Global disruption needs to be taken into consideration. “Over the past ten years, we have seen significant things happening, for example, small companies with innovative ideas have dethroned giant companies, digital platforms such as Spotify, Netflix, AirBnB, Google, Facebook and Amazon has demolished business models and redefined markets in their own image.”
Tompkins raised the question whether the built environment is next and said professionals had to get ahead of that change. “Automation and new business models will not come knocking at the door [of the built environment industry], but break it down.”
“Our industry will thrive if we think like those who use the places we help to create. If not, we are in danger of limiting our cities to being smart but not intelligent.”
“We need to become more obsessed by the things that benefit people – health, education, wellbeing, safety and productivity – and how technology can enable that. We need to put the customer experience first,” he pointed out.
Further, the built environment industry needs to create places where cultures can flourish. Crucially, cities succeed when people have a stake in them, which starts with quality, affordable housing and extends to engagement in civic life.
An intelligent city ought to be able to learn from the citizens walking its streets, said Tompkins. Enablers for this concept include the Internet of Things, artificial intelligence, machine learning and big data. “These are fundamental in changing our relationship with the built world, while increasing productivity of built assets and feeding information back to operators.”
While smart technology is awakening the built environment, the goal should be to understand the technology and better use it.
Local infrastructure development in African countries is not keeping up with population growth. Cities need to become independent from state budgets – for example, Kampala, in Uganda, has turned to property taxes as a new source of revenue. However, to keep pace with urbanisation, cities can not solely rely on property charges to retrofit and expand themselves, lamented Tompkins. “Poor access to finance is a key stumbling block when developing a city’s transport, housing stock and utilities.
Low tax bases in many African economies restrict growing cities’ ability to invest in much-needed projects. Additionally, debt across the continent is worrying. Ratings agency Moody’s estimated that the African Development Bank’s exposure to sovereign debt is often 150% of their equity, therefore, a sovereign debt crisis can turn into a banking one.
“But there are ways of improving access to finance in developing countries. Rics professionals have experienced designing and delivering public-private partnerships as a way of paying for major works in South America and Asia.”
“Perhaps it is time to implement a similar programme in Africa,” Tompkins stated.
He added that financially empowered cities can adapt to the changing world faster than nations – for example Lagos, in Nigeria, started an in-house oil refinement industry and, therefore, created a new industry for the city to supply petrol and kerosene. “Lagos is also starting to generate and distribute its own electricity, independent from the national grid.”
In this manner, shocks from the external world are less devastating to its people and business.
Further, Tompkins discussed how a sustainable environment is a global objective that the industry should all work towards – bringing the natural world and built worlds together, where cities give back to, and work in harmony with nature by creating green spaces, carbon-positive infrastructure and garden buildings.
He believes that the capture of solar and wind energy at scale is vital if African nations are to meet their Paris Agreement commitments and to enable energy decentralisation.
Moreover, the built environment needs professionals that are adaptable and able to create intelligent places, which will require investment.
“The industry needs to attract and retain a diverse talent pool. In India, thousands of people graduate yearly from the Rics School of the Built Environment and simultaneously Indian companies, government departments and industry bodies are adapting standards and adopting them within their market place,” Tompkins highlighted.