By Wael Youssef, director of Digital Solutions, Smart Cities and IOT at Orange Business Services

“Smart Cities” is a phrase we hear often - usually in the context of China, South Korea or the United Arab Emirates. This is about to change, as Africa and the Middle East region comes to the forefront of smart city growth. Drivers for smart cities exist across the African region and they include a need to support rapidly growing populations, income diversification and a real desire to showcase the region’s capabilities to the rest of the world.  

The region’s rapidly growing populations mean increasing urbanisation - a perfect breeding ground for smart cities. This urbanisation, allied to an increasingly business-focused philosophy and a desire to attract tourists, has encouraged governments to implement smart solutions in order to drive the sustainability of city services.

According to the United Nations Urbanisation prospects report, 2016, Africa’s urban population was reported to be the fastest growing globally, and by the year 2035 over 50% of Africa’s people will be urbanised. This means that in less than 20 years from now, every second person in Africa would likely live in a town or a city. The report further stated that, by 2030, six of the world’s 41 megacities would be in Africa. Cairo, Dar es Salaam, Johannesburg, Kinshasa, Lagos and Luanda are African cities reported as key drivers of their countries’ economic performance and those that are expected to connect Africa to the global economy.

The smart city concept

The smart city concept addresses the process by which municipalities implement smart technologies and innovative approaches to address the challenges present in today’s economies. Without improving the connection between business drivers and technology initiatives, the benefits cannot be realised. From practical experience, all cities are unique from their geographic layout to their architecture. The most commonly faced challenges arise while attempting to secure sufficient resources to maintain and grow the city. Therefore, every city should look to create its own vision to prioritise its challenges and find the right strategy to implement the smart city vision.

In an African context, smart cities have the potential to benefit the economy, the environment, and the public good. There are many challenges that smart cities could help the region to overcome. For instance, in terms of safety, smart technologies are revolutionising how cities locate, mitigate and prevent safety issues. City authorities have a duty to protect the public, and much of this duty is accomplished through the use of first responders. This means that residents and visitors should be in a place with secure neighbourhoods, where police and first responders, faced with dangerous or hazardous situations, use the latest technologies to make smart decisions in real time.

Smart mobility and transport is another area where the implementation of a smart city can assist in effectively facing challenges.  Safe transportation, monitoring and controlling of transport and traffic information, along with intelligent traffic systems, are a key element to the success of any city. Further, technology is playing a pivotal role in reducing the carbon footprint of cities and enabling sustainable resource management. Delivering the ability to gain insight into the city, district or building environment through centralised information means cities and governments will be in a position to drive sustainable environmental approaches that make use of data analytics to identify trends, patterns, and statistics - allowing operational agents in taking actions accordingly.

One of the most significant challenges facing smart cities projects in the region is financing. There are many other factors that affect the financing decision – time frame and huge capital investment are not the only risks. There is also the perception of high risk when investing in innovative solutions. The way in which to operate is another risk to be considered; and one that is usually overlooked during the initial think phase. 

There is no one-size-fits-all approach to financing smart city projects. There are many financing tools that need to be deployed, depending on the nature of the project and their stakeholders, size, scale, and risk levels. One of the solutions to such a challenge is to create an innovated business model where a partnership between public and private sectors could materialise. Traditionally infrastructure projects have been financed directly from public funds. There is, however, a need to better use the limited public financial resources and change the model for financing new, smarter infrastructures. This requires that the funding model realises a smart city shifts from the use of traditional tools such as public resources (e.g. municipal, regional, national) to contractual models of public private partnership (PPP), which are able to attract private capital. 

The third challenge is time. The time frame for smart city projects raises questions for many stakeholders. There is a high expectation for cities that smart projects should be able to demonstrate immediate cost savings in the short term; however the solutions are often still in development and have only been piloted at a small scale, thus the evidence of the achievement of efficiencies and cost savings is likely to take time.

Importantly for a developing region, the growth of smart cities across Africa could provide a unique opportunity to incentivise local business and attract foreign investment. Digital solutions have the potential to transform urban services through creating new network nodes and including new users. 

Smart infrastructure, such as smart water meters and electricity grids, can reduce usage and costs by raising awareness among individuals about how much they are consuming – an aspect that is especially important for South Africa. Smart infrastructure is another area where the smart city provides a business opportunity for investors. 

With the explosion of technologies such as the Internet of Things (IoT), cloud computing, Big Data, AI and Blockchain, cities can deliver innovative solutions and more direct interaction and collaboration between citizens and the local government. Technology is now impacting urban design, mapping the physical world into the logical, open new ways of improving existing services and reinvent things which it was not possible without technology. Technologies are not operating in isolation. They are interconnected and help each other to realise more benefits. Integrating this trending technology under one platform is the right move toward smart city.

Economic growth is vital for African economies; however, the inclusion of both rural and urban communities is paramount. Realistically, smart city initiatives and projects are already taking place across many African countries.  These are growing as technology evolves and expands, with many African governments striving to improve their competitiveness and keep their country relevant. It is important for governments and businesses to note that smart city development requires a holistic and sustainable approach to leveraging the sharing and exchange of information in order to fully generate value for all involved.