Trade Openness and Employment, Implications on Urbanisation in Sub-Saharan Africa

Why are African countries urbanizing so fast? How do cities promote growth and why is it important to solve urban issues in Africa? In the context of higher push for trade liberalisation multilaterally, it is not trivial to ask these set of question. In this study the main objective is to check the influence of trade openness of African economies on their urbanisation rate. We also assess, how evolution of non-agricultural employment has also impacted this rate. We used panel data specifications, both in static and dynamic design. The data used are collected between 1990 and 2019 on 38 African countries. Although generally urbanisation has increased during recent years in Africa, regions have experienced different pathways in the process. The results show that both trade openness and non-agricultural employment have been motivation for people to urbanise over years, in Africa. When we consider countries with high amount of people living in slums, they are more driven by employment purpose. Other variables such as per capita GDP and the fertility rate have positive and significant influence, while FDI and national investment have mixed impact. It is important to collaborate in a continental level to take advantage of the rapid urbanisation.