In Nemba, on the border between Rwanda and Burundi, is a one-stop border post backed by both governments and funded by the African Development Bank (AfDB).
From a historical perspective, this border is relatively new. It was put in by Europeans and divides two major urban areas, Kigali and Bujumbura, which are only about 100 miles apart.
Communities on either side have been trading for generations. Rwandans in Kigali bars sip beer brewed in Bujumbura, while small markets in Bujumbura sell potatoes grown just north of Kigali. Efforts by both governments and the AfDB are making the border less relevant and economic activity easier.
This is happening across Africa. And while many investors continue taking a national approach, business is happening from the ground up. Traders and entrepreneurs look up and see borders as frictions (some only recently imposed or enforced) that are going away as fast as they came.
Thus, investors must also take a new approach. Seeing Africa for what it is: a collection of urban clusters, which are sometimes separated by border frictions that are porous and dynamic.
Africa already boasts more than 50 cities with greater than 1 million people. By 2030, there will be well over 100 cities of that size, and many will be just as close as Kigali and Bujumbura.
These numbers are being fueled by Africa’s growing urbanization. In 1900, less than 5 percent of Africa’s inhabitants were urban. Today, it’s nearly 50 percent and growing rapidly.
And the proximity of these urban clusters offers huge opportunity.
For example, a radius similar to Amtrak’s Northeast Corridor in the U.S. defines a cluster of 10 cities in West Africa that, by 2030, will have a total population of more than 45 million (rivaling the U.S. Northeast Corridor and double the projected size of Beijing).
Thus, investors must consider opportunities that span borders. They also must have informed discussions with African governments regarding how their policies and efforts are creating (or stifling) these opportunities.
In this rapidly changing landscape, pan-African institutions like the African Union and the AfDB, along with Regional Economic Communities, will only grow in importance. They must continue their efforts to support integration and help partner, support and influence governments.
As these changes happen, success for investors will be defined by looking at Africa through a new lens…one without borders.
Top image: courtesy of East African Community
Bobby J. Pittman is the founder of Kupanda Capital and the former Vice President of Infrastructure, Private Sector and Regional Integration at the African Development Bank.