Investment and economic change are two of the key drivers shaping places on the urban periphery, and people’s experience of them. Literatures exploring these dynamics range from the earlier work on edge cities and later explorations of new forms of economic and residential development on the edge, to older work on satellite cities and recent work on new cities (e.g. Van Noorloos and Kloosterboer, 2018; Cote-Roy and Moser, 2019) to the more recent suburbanism research (Keil, 2018) which includes studies on the development of new centralities. Much of this work, however, focuses on understanding growth and large-scale investment on the edge – there is less attention to decline and to smaller-scale processes of economic change. Keil and Wu (2022) also note that there is little work examining the roles of various agencies and actors in peripheral urban expansion. This is particularly the case in African contexts (Mabin et al., 2013), although South African literature has long considered the generic role of state-planning in driving peripheral growth (Harrison et al., 2008; Charlton, 2014), and some of the ‘new city’ literature considers these issues.

This chapter contributes to this work and provides an understanding of the drivers shaping change in our Ethiopian and South African case studies, in all of which there has been significant private and public investment at some point, evidencing logics of a speculative and vanguard periphery. Some of these places are now experiencing economic decline and show logics of an inherited periphery. The chapter highlights and explains key investment and economic dynamics, focusing on formal sectors (with informal livelihood generation discussed in the following chapter). It considers the contribution of parts of the state and the private sector to investment and economic change and how this has evolved over time, locating the discussion of the cases in an overview of the economies of the two countries.

South Africa

The South African economy developed historically around a ‘mineral- energy’ complex (Fine and Rustomjee, 1996), with a relatively narrow economic base and a highly concentrated ownership (Philip et al., 2014; Black, 2016). In the post-apartheid era since 1994, the economy has shifted away from agriculture, mining and manufacturing towards services and finance, with the tertiary sector now accounting for the largest share of employment. Manufacturing growth has ‘imploded in terms of both output and employment’ (Bhorat et al., 2020: 11), with significant losses in labour-intensive sectors and growth mainly in more capital-intensive firms (Black, 2016). Employment has largely been in high-skill areas, while the demand for low-skilled and semi-skilled workers has declined. After a period of decline in the early post-apartheid period, social inequalities have risen and are some of the highest in the world (Makgetla, 2020). The state has ‘compensated’ the poor through social grants and programmes such as free ‘RDP’¹ housing, but deep structural inequalities remain.

While South Africa’s economic growth post-apartheid has never been rapid, its economic performance since the 2008 global economic crisis has been ‘lacklustre’ (Bhorat et al., 2020: 18), with growth rates averaging 1.7 per cent per annum between 2009 and 2018 (Visagie and Turok, 2020) and with sharp declines since then. Unemployment rose from 23.7 per cent in 2009 (National Treasury, 2019) to 29 per cent² in 2019 even before the impact of the Covid-19 crisis in 2020. Growth rates have declined through the impact of Covid and other shocks, and national unemployment rates have since risen to 32.9 per cent in 2023 (StatsSA, 2023). The effects of an energy crisis, weak governance, political conflict and corruption have also been significant (Swilling et al., 2017).

Spatial patterns of growth and decline within cities in the late-apartheid and post-apartheid era reflect these patterns of economic change and social inequality. Within eThekwini, Johannesburg and Tshwane, major private sector property investment has been concentrated in middle and high-end gated residential complexes, particularly on urban edges where large land parcels are available, and in decentralised office and retail centres, sometimes creating new centralities. Several older industrial areas have declined and lost employment, including those in or near former townships once reserved for black African people. At the same time, post-apartheid state investment in low-income housing projects has largely been on the edge but often close to townships. Hence, private ‘speculative’ and state ‘vanguardist’ property investments have been significant in particular types of peripheral growth, though not necessarily in the same spaces.

Within the context of our research, eThekwini north reflects patterns of both private speculative and state vanguardist investment, while Molweni is located some 10 and 20 km respectively from the growing Waterfall and Hillcrest economic nodes, which have redeveloped following upmarket residential property developments from the 1990s. In Johannesburg, private property development and the growth of new centralities have been concentrated in the north. Our Lufhereng case, in the west, reflects a form of vanguardist state investment, but it is also shaped by speculative private property development of a different kind to that evident in the eThekwini north case. Major areas of private property growth in Tshwane have been distant from our case studies. Ekangala, as discussed below, was the product of an apartheid, state vanguardist logic of investment in housing and industrial infrastructure but is now experiencing decline, while the Winterveld has been bypassed by significant private and state investment logics, although there has been a level of state investment in RDP housing and services, and more recently in the Mabopane station node, some 10 km away. In what follows we explain patterns of investment and economic change in eThekwini north, Ekangala and Lufhereng.

eThekwini north

Among all our cases, the logic of the ‘speculative periphery’ is most evident in the expansion of northern eThekwini, which was driven initially by the major landowner in the area, Tongaat-Hulett. The firm was a large sugar producer listed on the Johannesburg stock exchange, with operations in several countries. From the 1980s it began to pursue a property development strategy, strategically planning for and converting its land in the area to urban development. By 2021 around 3,600 ha had been released from agriculture, although not all in this area. It used its own planning initiatives (Chapter 1), its power as a major landowner and its position as one of the very few large, locally headquartered companies to gain acceptance for the idea of northern expansion and to shape how this was to occur. Hence, a series of largely upmarket retail, residential, industrial and recreational developments were approved from the early 1990s (Todes, 2014a). Tongaat-Hulett controlled the release of its land carefully to maintain property values and to realise its plans. By 2000 there was considerable congruence between Tongaat-Hulett’s strategic plan for the area and actual development (McCarthy and Robinson, 2000). While its developments were largely upmarket, it later entered into a partnership with the municipality to develop Cornubia, a large, mixed, low-/low-middle-income housing development, to some extent countering the class-divided new city which was emerging in the north.

Logics of a ‘vanguardist periphery’ are also very evident in the development of the region. In the late-apartheid years, Waterloo was planned as part of the state’s initiative to create very large townships for black Africans on the edges of cities, although it was only developed in the post-apartheid era as an RDP housing project. Hammonds Farm and Cornubia were also the consequence of post-apartheid state vanguardist planning to deliver low-income RDP and mixed housing (see Chapter 6).

The development of the new King Shaka airport, opened in 2010, is another kind of vanguardist investment logic initiated by other parts of the state. At a cost of R8b, it was one of the two largest infrastructure projects of the decade in eThekwini (Robbins, 2015). Although supported by the private sector, it was primarily driven as an economic initiative of the provincial government, initially contrary to municipal plans. Planned as ‘an aerotropolis’ focused on logistics and a state-supported special economic zone (SEZ) (Dube TradePort (DTP)), it was intended to provide a major economic stimulus to the region. Major state investment in road infrastructure supported these developments.

As a consequence, eThekwini north grew significantly as a site for new property development in the city, dominating such development in the city from 1996, especially in non-residential sectors (see Todes, 2014a; StatsSA, 2021 data³). The growth of economic activity in parts of the north is also evident in a Cities Support Programme (CSP) (2021a) analysis of spatial change in employment and firms from 2013 to 2017, although the central and southern areas of the city are still dominant (see also eThekwini, 2020). Economic growth within the north is more concentrated around Umhlanga than the airport, which has had a more limited impact than expected, giving support to concerns that it would not be economically viable and was ‘premature’ (Todes, 2014a). Hansmann’s (2020) study shows that Durban’s cargo and logistics industry remains focused on the seaport, while OR Tambo airport in Gauteng continues to dominate the air-related industry. Only 1,386 jobs had been created in DTP by 2019, most not focused on logistics. Hence, the effects of speculative and vanguardist investment have been uneven in their impact across the region, and socially, as we demonstrate throughout the book.

Nor is this growth ongoing or secure. StatsSA (2021) data show a sharp decline in private building plans passed from 2016 with a slight uptick only in 2021 in non-residential development, when eThekwini as a whole grew more rapidly. Several factors may explain these changes, including the performance of the economy as a whole and Durban’s position within it, and the Covid pandemic from 2020. Whereas eThekwini municipality was once seen as competent, political divisions and conflict within the municipality in recent years, with accusations of corruption and fraud, have contributed to Durban’s declining image as a place of investment. This has been exacerbated by concerns about municipal financial challenges, capacity losses and poor service delivery (Interviews, SA Academic 3, 2022; SA Councillor 1, eThekwini, 2022). Although development has continued to occur in the north, it is at a much slower pace as the demand for property, particularly offices and upmarket residential development, has declined (Interview, SA Private Sector 1, 2022). With Covid, the reduction in flights and passenger numbers affected the viability of the airport, and the development of DTP stagnated. Plans for DTP to double its land holdings and grow the number of large-scale tenants have not been realised since 2017. Nor has there been much state investment in housing in recent years (Interview, SA Councillor 1, eThekwini, 2022).

Importantly, Tongaat-Hulett itself, once the major driver of growth in the north, has experienced significant crisis affecting the region. Between 2015 and 2018, fraudulent accounting and misrepresentation of profits from land and property resulted in arrests of some executives, a loss of reputation and a sharp decline in the company’s share price. Initiatives to restructure the company to reduce debt ultimately led to the loss of some 8,000 jobs across the firm, a decimation of the property development company, and the sale or bonding of assets and land holdings (Harper, 2022). By the end of October 2022, the company went into business rescue. With its decline and a weakening municipality, the former drive for investment in the region has been lost (Interviews, SA Academic 3, 2022; SA Private Sector 1, 2022).

A violent insurrection with Durban at the epicentre in July 2021 and major floods in April 2022 have also had devastating effects on Durban’s economy and on the north. This has been exacerbated by municipal underspending on infrastructure maintenance, with little done to address the effects of these crises in the north and elsewhere (SA Councillor 1, eThekwini, 2022). Hence, the years of speculative and vanguardist development in the north seem to be over, at least for now, demonstrating the temporality of these processes.

Ekangala/Ekandustria

Ekangala and Ekandustria evidence logics of ‘inherited peripheries’, in this case the long-term consequence of historic vanguardist apartheid planning coupled with state investment to support the establishment of ethnic homelands (or Bantustans). Ekangala was created in 1982 by the East Rand Administration Board, which was responsible for controlling the ‘influx’ and settlement of black African people as part of the state’s ‘orderly urbanisation’ policy. The area was later incorporated into the KwaNdebele homeland, which had been established in 1977. Ekandustria was established in 1984 through the apartheid state’s industrial decentralisation policy, which offered large subsidies on employment to designated ‘deconcentration’ and ‘decentralisation’ points in or near homelands at the time. The policy had been established in 1960 and evolved in its aims and orientations until its demise in 1996 (Todes and Turok, 2018). However, its main focus in the apartheid era was to contain the growth of the black African population within the big cities through limiting industrial development there (and specifically the growth of labour-intensive industries) and encouraging its growth within or close to the Bantustans. Unions were banned in Bantustans, and minimum wages did not apply there, so wages could be lower than in the cities. The establishment of Ekandustria occurred in a period when the state was extending the policy, increasing levels of subsidy to businesses there as part of its ‘state reform’ to divide the black African population between those with urban rights in the cities and others who would be ‘citizens’ of Bantustans.

Ekandustria was run by the KwaNdebele Development Corporation (KDC) and expected ultimately to support a population of around 300,000. Harrison and Dinath (2017) note that although this was never achieved, it grew relatively rapidly in the early period, attracting a range of industries, offering around 10,000 jobs by 1991. Industries included a large contingent of Taiwanese firms, attracted in part through proactive recruitment by the nearby Bronkhorstspruit municipality and their establishment of a residential area for Taiwanese residents (Hart, 2002; Harrison and Dinath, 2017). Taiwanese firms, which accounted for half of the new jobs created in decentralisation points in the 1980s (Lin, 2001; Xu, 2019), were also drawn to apartheid South Africa by its diplomatic relations with the Taiwanese state and by structural changes in its economy, which undermined the viability of low-wage industries (Hart, 2002).

Conditions changed in the post-apartheid era with the South African state severing ties with the Taiwanese government and with the withdrawal of industrial decentralisation policy and incentives. The rapid dropping of international tariff barriers also had its effects. Ekandustria, like many other industrial decentralisation points, experienced severe decline as firms moved out. There was some revival and investment by new firms in Ekandustria from the late 2000s (Harrison and Dinath, 2017), but overall employment has declined (CSP, 2021b), especially since 2015. Interviews with City of Tshwane officials (SA Government Officials 2, 5, 2018) indicated that firms were moving out, and it was difficult to attract new companies into the area: firms were seeking more central locations, accessible to major highways, and more skilled workers. The poor state of infrastructure – graphically demonstrated in Figure 2.1 – and the levels of criminality (including the operation of gangs) also underpinned decline. A 2018 figure of 6,000 jobs given by the deputy minister of the national Department of Trade and Industry (ePropertyNews, 2018) seems high in the light of the apparent state of the area but nevertheless showed considerable decline. By 2019 only 56 per cent of the sites were occupied (Industrial Property News, 2019). Part of the problem has been that while the area was incorporated into the City of Tshwane and Gauteng in 2011, Ekandustria itself is still managed by the Mpumulanga Economic Development Agency (MEGA), which inherited the assets of the KDC. MEGA amasses revenue from the area but has not been using it to maintain infrastructure there. A programme to revitalise the area by improving infrastructure was launched by the Department of Trade and Industry in 2019, but there are concerns that it has not been effective as the governance problems remain.

In this case, investment in the area has been driven by the state with varying logics, with changing responses by private industrialists. Meanwhile, state investment in RDP housing and related infrastructure in the area has continued. In this and other later chapters, we explore the social implications of these dynamics and how they have been experienced in the area.

Figure 2.1Declining Ekandustria (source: Mark Lewis)

Lufhereng

Along the edge of Soweto on the western boundary of Johannesburg, diverse forms of residential development include a vanguard state-sponsored housing development, a long-standing speculative initiative incubated decades ago under apartheid (Butcher, 2016) and a precarious auto-constructed settlement at the time of our research undergoing relocation to make way for commercial development. Although reflecting significant government and private sector investment, this expansion of the city is at odds with spatial plans and economic trajectories in Johannesburg, as the subregion is disconnected from priority growth areas and was identified as an area where further extension should not be supported through state infrastructure (Ahmad, 2010; Charlton, 2017). This anomaly is at least in part explained by the relationship between its vanguard aspects in the form of the state-driven, mixed-income housing project Lufhereng and the longer-rooted speculative component, the large Protea Glen development. It illustrates close private–public connections historically but also differing priorities, political relations and power dynamics between levels of government.

The privately driven development of Protea Glen contains multiple extensions of mostly mortgage housing for ownership, often aimed at first-time homeowners. Butcher (2016) shows how the plan for the area originated under apartheid and resulted from a perceived but also constructed opportunity. Township Realtors, with connections to the governing National Party and involved in its spatial tactics, started acquiring land in the area in the 1980s with an eye to future residential property demand from black urban residents. This aligned with a change in political strategy during the late-apartheid era from preventing to promoting urban homeownership, discussed in Chapter 6. Township Realtors saw an opportunity to build housing on inexpensive land, available as it was undesirable or uncontested for other development (Butcher, 2016). While the land had some unfavourable geotechnical aspects, the plan would attract ‘no white NIMBYism to prevent it’ (Butcher, 2016: 57). However, even the state took some persuading to support the development: for decades expansion of Soweto to the west of the natural boundary of the Klipspruit water system was considered inappropriate, with the company itself noting that ‘it took four years to persuade the then Department of Community Development to grant [us] the right to develop across the Klipspruit’ (Township Realtors Land Developers, n.d.).

In 1990 the first 1,315 stands in Protea Glen were serviced, and over time a further twenty-seven extensions with over 34,000 residential units were built. By 1996 the developers had secured Nelson Mandela to do the ceremonial opening of Extension 11 of the development, seemingly securing a post-apartheid stamp of approval despite the area’s location. More than thirty years later, the area now includes a large shopping mall, many smaller shops and government investment, including the Rea Vaya rapid bus transit route and wi-fi service. As we discuss in Chapter 6, for some people it is now a highly desirable area to live in, a successful example of the development strategy of a core group of private sector players operating across the city: what Butcher (2016) describes as the network of developers, financiers and landowners that is shaping the city by how and where they build affordable housing. Responding to a demand for low-cost residential units, these new schemes are often in peripheral areas where established developers have acquired land over decades, capturing a market that has almost no alternatives in their price range in better locations (Butcher, 2016).

On this western edge of Soweto, the affordable housing momentum of Protea Glen has arguably drawn in a major vanguard development. A few kilometres away, the flagship mixed-income project of Lufhereng began construction in 2008 but had been mooted by provincial authorities at least a decade before (Urban Dynamics, n.d. a). Celebrated in its early stages as ‘the biggest single planned development area in the country’ (Urban Dynamics, n.d.b), it was anticipated to eventually house between 65,000 and 100,000 people (City of Johannesburg, 2015) in both fully subsidised and mortgage-linked accommodation, aimed at easing some of the pressure on state housing waiting lists and in particular the housing backlog in Soweto (Urban Econ, 2014; Charlton, 2017).

Provincial planners and their consultants contend this area is ‘a natural extension of Soweto’ (Charlton, 2017), close to Protea Glen and ‘a natural extension of the Dobsonville and Protea Glen communities’ (Urban Econ, 2014: 95). However, the location was not supported in city spatial plans. Despite their opposition, city officials speak of having to fall in line with, invest in and support the Lufhereng development as it was pushed by the provincial sphere of government (Charlton, 2017), often politically dominant. For the province, wider interests beyond the housing demand in Johannesburg come into play: neighbouring smaller municipalities affected by the decline in the once thriving mining industry are also under pressure to deliver the housing benefit to poor communities, and more generally they seek to connect with the relative strength and dynamism of the Johannesburg metropolitan municipality (Interview, SA Government Official 8, Gauteng Province, 2018). Edge developments of various kinds both in the metro and across its border help the province to foster these ties, and the province is supporting other ‘mega-human settlements’ in the wider area. Though a contested view, these are couched by the province as contributing to the spatial transformation of the Gauteng city-region, with renewed calls to somehow ensure the necessary economic opportunities and social facilities are created and function in these developments (Gauteng Department of Human Settlements, 2022). At the same time, there are paradoxical actions by authorities: residents in the auto-constructed informal settlement of Waterworks to the south of Protea Glen were accessing precarious, low-paid jobs within walking distance just across the border in Johannesburg but have now been relocated (at least those who qualified for the housing benefit) further away into the Rand West municipality, in anticipation of a private shopping centre development near the land they had occupied.

These peripheral developments have a high price. Concerns with Lufhereng include the huge investment in infrastructure needed to develop this former farm and mining land, and significant delays have manifested while the city attempts to fund this and to overcome technical difficulties on site. Residents who have moved into the early phases of subsidised housing experience its disconnect from existing transport infrastructure, its distance from significant economic opportunities and the difficulty of stimulating local economies. A confident-sounding economic development plan produced for the Lufhereng area by consultants envisioned agricultural activities, small-scale manufacturing linked to household needs and the provision of goods and services to the local residents (Urban Econ, 2014). But there is little evidence of this economic activity to date, with provincial officials fearing it will take decades to materialise. This leaves virtually indigent beneficiaries of state housing largely disconnected from income-generating opportunities and affordable transport. In Protea Glen decades of promotion by a private sector with the power to channel what is termed ‘affordable housing’ development into certain parts of the city has eventually resulted in a more consolidated set of neighbourhoods with retail and other investment; however, the viable realisation of the follow-on, state-led development of Lufhereng is lagging far behind.

Ethiopia

The Ethiopian economy has been the subject of significant fascination in recent decades given its tumultuous history alongside recent world-leading levels of economic growth. Following centuries of imperial rule during which there was little investment in urban centres or manufacturing, the first factories were established in the 1920s and 1930s, along with inter-city roads and a renewed attention to the banking sector (Bekele, 2019). These activities increased during the Italian occupation from 1936 to 1941, with the occupiers upgrading major roads to asphalt as well as investing in a range of industries in Addis Ababa and Dire Dawa (Zewde, 1991). When Haile Selassie returned to power in 1941, there was a period of significant American influence during which foreign capital began to trickle into import-substituting industries in the mid-twentieth century as the Emperor attempted to pursue a transition to a modern, capitalist economy (Markakis, 1974). This, however, was radically cut short by the 1974 revolution and the radical socialist policies of the Derg regime, which instituted a range of sweeping nationalisations not only of key industries but also, as noted in the previous chapter, of land and ‘extra houses’. By the end of the Derg period in 1991, as well as the formal capitalist property market having been shut down through state ownership, the majority of key industries were controlled by the state – including large proportions of transport and communications, mining, construction, electricity, banking and communications (Lefort, 2015). The Ethiopian People’s Revolutionary Democratic Front (EPRDF) thus inherited a state-dominated economy in which there had been very little investment in physical infrastructure and technological innovation (Oqubay, 2019).

Economic policy under the EPRDF has been extensively documented, both in terms of how it sought to find a path between its Marxist-Leninist ideological orientation and the neoliberal prescriptions of eager foreign donors (Demissie, 2008; Vaughan and Gebremichael, 2011; Clapham, 2018) and in terms of its success in producing sustained economic growth rates of over 8 per cent from the early 2000s until 2018 (Lefort, 2015; Oqubay, 2015; Cheru et al., 2019). Central to the trajectory of investment was a shift from a relatively unsuccessful policy of raising agricultural productivity through the paradigm of ‘Agricultural Development-Led Industrialisation’ (ADLI), initiated in 1993, towards an increased emphasis on direct support to industry and infrastructure. This began with the Industrial Development Strategy in 2002, followed by a more concerted focus on infrastructure investment under the Plan for Accelerated Development to End Poverty (PASDEP) from 2006 and a further ramping up of public investment under the Growth and Transformation Plan (GTP) from 2010 (Cheru et al., 2019; Oqubay, 2019).

It was with PASDEP and the GTP that major investments in critical infrastructure such as roads, rail, power generation and irrigation soared, with the aim of stimulating an industrial transition (Ali, 2019). In 2015 the GTP was supplanted by GTP-II, which explicitly recognised the importance of urbanisation for Ethiopia’s industrial transition (Gebre-Egziabher and Yemeru, 2019). In the GTP-II period, gross fixed capital formation reached 41.3 per cent of GDP in 2019/20 (Manyazewal, 2019: 176). Much of this growth in fixed capital took the form of new roads, other infrastructure, housing construction and industry in the new peripheries of Ethiopian cities as Ethiopia experienced unprecedented levels of urban physical expansion.

Addis Ababa

The major investments in Addis Ababa in recent decades need to be understood against this historical and contemporary policy backdrop. However, there is also a distinct story to be told at the city scale. Having been founded by Emperor Menelik and his wife Taitu in 1886, Addis Ababa itself (initially conceived as another temporary capital in a long line of such temporary capitals) soon became the Ethiopian empire’s permanent capital, following the growth of the state bureaucracy as the imperial boundaries grew and consolidated. A first major wave of investment into the urban built environment came in 1904–5 when the palace ordered the demolition of all wood and mud houses with thatched roofs, before having them rebuilt in stone with corrugated iron roofs – a move that was seen as an important harbinger of urban modernity (Bekele, 2019: 22). The city’s growth was given a major impetus by the Addis Ababa–Djibouti railway, which was initiated in 1896 but only reached the Ethiopian capital in 1917. The railway became the primary means through which Ethiopia was integrated into the world economy (Zewde, 1991), and consequently the city flourished and became a space of substantial investment in housing of various kinds. By the second decade of the twentieth century, Addis Ababa had overtaken Harar to be the most significant city in the Ethiopian empire (Bekele, 2019). The Italian occupation, though only five years long, had a disproportionate effect on the city – not only in terms of expansion and investment in some infrastructure but also with regard to the racial policy that resulted in the dispersal of many Ethiopians to a large new ‘native’ area of the city around a new marketplace (Merkato). Following this, Haile Selassie’s own modernisation drive involved a massive expansion of the state bureaucracy, bolstering the city’s population with large numbers of people on the government payroll as well as a growing student population (Zewde, 1991; Clapham, 2017; Bekele, 2019).

As discussed in Chapter 1, a rentier economy evolved under the emperors that fuelled the property market as the city’s bureaucratic and emergent middle classes expanded but which was abruptly halted by the Derg’s land and housing policy from 1975. Under the Derg there was little incentive to invest in properties that one did not own – and indeed there was a range of regulations and restrictions that prevented properties from being substantially improved, as well as some limiting how much new housing was built (Tiruneh, 1993; Duroyaume, 2015; Zewdie et al., 2018; Larsen et al., 2019). This had profound effects for the housing shortages that have shaped investment decisions in Addis Ababa in more recent years, with the major undersupply of property even for middle- and higher-income residents driving the majority of domestic and diaspora investment into the real estate sector (Goodfellow, 2017a). At the same time, the nationalisation of land – and the EPRDF’s decision to maintain state ownership despite the introduction of a leasehold system – has enabled the government to distribute large amounts of land for priority investments with relative ease. This too has had profound consequences in the peripheries. As noted in the previous chapter, in the first decade and a half of its rule, the EPRDF showed little interest in urban areas – but from 2005 onwards the peripheries became spaces of expansion and speculative real estate investment, followed by large-scale vanguardist government projects. Figure 2.2 illustrates how condominium sites have come to be concentrated in the city’s eastern peripheries particularly, while over the same period the concentration of the population in mud and wood houses in central areas has declined.

Figure 2.2Condominium sites and informal settlements in Addis Ababa (source: Larsen et al. 2019: 10, adapted by Tilahun Fikadu, 2023)

Our two Ethiopian case study areas demonstrate some similarities but also contrasting dynamics when it comes to both vanguardist and speculative private sector investment, as we explore below. In general, however, it is difficult to overstate the degree to which the Integrated Housing Development Programme (IHDP; discussed in Chapters 1 and 5) has impacted on the extent and rapidity of public investment in these areas more generally, including with respect to roads, water and sanitation infrastructure, telecommunications and other infrastructural systems (see Chapter 9). Accompanying this in both areas have been rather different dynamics of private sector investment, which has flourished particularly around Yeka Abado, with the emergence of gated communities that, in general, are uncharacteristic of Ethiopian urban development.

Tulu Dimtu

Tulu Dimtu was selected as a location for major government housing and infrastructure investment partly because it was close to existing industrial areas in an area called Akaki in Oromia, along the corridor between Addis Ababa and the nearby town of Dukem. The condominium settlement at Tulu Dimtu, which consists of around 10,000 households, sits at the intersection of two major expressways, including the recent $612m Chinese-built and financed Addis Ababa–Adama Expressway, as well as the older A1 road that runs through various towns and industrial areas. The scattered industrial investments along this corridor culminate in the Chinese-owned Eastern Industrial Zone, a very large (223 ha), privately run industrial park and the first of its kind in Ethiopia. This zone, which became operational in 2013, has generated significant amounts of investment and employment – at least 8,000 local jobs according to one study (Fei and Liao, 2020: 633) – while also playing a major role influencing Ethiopia’s broader industrial park development strategy and ushering in further Chinese investment (Brautigam and Tang, 2014; Lin et al., 2019; Goodfellow and Huang, 2021). It has, however, been criticised on the basis of not building sufficient linkages with the wider economy (Giannecchini and Taylor, 2018). Around the same distance from Tulu Dimtu is the first government-run industrial park, Bole Lemi, a 156-ha site operational since 2014, the second phase of which (186 ha) is under development (Ethiopian Academic 1, 2018).

Even closer to the Tulu Dimtu condominium site, less than 5 km due north, is Kilinto Industrial Park. This has been under construction since 2016 on 279 ha of former farmland and is aimed specifically at stimulating the pharmaceutical industry (Ethiopian Academic 1, 2018; Ethiopian Consultant 1, 2018). However, in the context of Ethiopia’s civil strife since 2018 and ongoing disputes between the Industrial Parks Development Corporation, the city government and the electricity utility, both Kilinto and Bole Lemi phase II are still not operational despite having received $425m in financing from the World Bank and apparently being ‘98% complete’ as long ago as 2018 (Endale, 2022). Meanwhile, alongside these vanguard investments there have been some private investments in industrial zones and large factories, including an IT park and a Heineken beer factory. In keeping with the industrial and IT focus of investments in the area, the new Addis Ababa University Technology Campus (where 30,000 students study) is also very close by, midway between Tulu Dimtu and Kilinto (Ethiopian Consultant 1, 2018). Moreover, while the area to the north of Tulu Dimtu was until very recently primarily farmland, this has radically changed with the construction of Koye Feche condominiums, which is by far the largest single condominium site with some 60,000 housing units. Koye Feche condominiums are clearly visible as the largest single block of condominiums (see Figure 2.2 above, where the substantial block is evident in the bottom-right corner of the map). The creation of space for transport infrastructure has also been a feature of investment in Tulu Dimtu, which is close to some of the most significant transport routes out of Addis Ababa, including the railway to Djibouti and the expressway to Adama, which runs via a major dry port at Mojo (as is evident in Figure 0.3 in the Introduction).

Although we found it difficult through our key informant interviews to establish a clear rationale for Tulu Dimtu condominiums being sited so far out on the Oromia border, there is therefore a logic to the overall focus of investments in the wider area and the function of a large housing settlement within this. These developments also mean that the construction sector – including many small and medium-sized enterprises – and construction workers themselves are a feature of the area. Moreover, the displacement of farmers has resulted in new displacement sites in which former farmers and construction workers often live side by side, right next to the condominium site, as indicated by the area circled on the very right-hand side of Figure 2.3. Also evident in Figure 2.3 is the extent to which the Tulu Dimtu condominiums border an area of cooperative housing to the west, which is much more geographically expansive than the condominium site itself. This kind of housing, which involves small-scale private investment by families and groups that come together to form cooperatives under a specific government scheme, will be discussed in Chapter 5. As is also evident from Figure 2.3, there is a stark spatial divide within the condominium settlement between the areas east of the main road and junction and the area to the west – nicknamed ‘Eritrea’ due to its isolation from the main part of the settlement.

Figure 2.3Tulu Dimtu area (adapted from Google)

Yeka Abado

While Yeka Abado has seen similar dynamics in terms of public investment in trunk infrastructure associated with the IHDP sites, it is more of a residential and service-based area, with significant private investment in housing and real estate of various kinds. This in many ways is a natural extension of the explosion of property development in the Ayat area to the east of the city centre and the more general eastward expansion of residential development in the city where there are fewer geographical constraints to expansion than in the north and west. Yeka Abado has thus been described as a ‘showcase’ for real estate development that can attract significant domestic and private investment, as well as somewhere with relatively little pollution and noise and with pleasant mountain scenery (Addis Ababa Housing Official 2, 2018). Seen increasingly as an area for middle-income settlement, Ayat and the surrounding areas have seen a massive property boom both through the allocation of land to private real estate developers and through various condominium sites around the city’s east and north-east fringes, including Yeka Abado condominiums themselves at the very edge. Straddling the border with Oromia, Yeka Abado condominiums incorporate 18,169 units that house over 100,000 people in 746 separate housing blocks across 250 ha of land. Most of these are five storeys high and of the 20/80 typology (see Chapter 5), though with some 10/90 and some 40/60 blocks as well. To give some sense of the scale of activity involved, 287 separate contractors were involved in the construction of this condominium site, though with 668 micro and small enterprises (MSEs) playing a role if all of the materials and infrastructure provision are taken into account, and around 12,000 people were employed in the process (data provided by the IHDP branch office, 2018). Despite this large-scale public investment in housing and infrastructure – on an even larger scale than in Tulu Dimtu – Yeka Abado is seen as an area in which private investment dominates over public investment to a much greater extent than Tulu Dimtu. There have been some major investments in real estate in the neighbouring Legetafo area bordering Yeka Abado but on the Oromia side of the border – most notably the Country Club Developers’ (CCD) gated community, clearly visible as the largest of the contiguous blocks of development outlined on the top right-hand side of Figure 2.4. According to the Developers’ website, a fully finished, four-bedroom house in CCD currently retails at around 30,000,000 Ethiopian birr (US $560,000).⁴ West of this is an older and somewhat less upmarket real estate project (Ropak). Being in Oromia, both projects have been controversial in view of concerns about the expansion of the city into Oromo territory, which fuelled protest movements in Oromia from 2014. On the Addis Ababa side of the boundary, the growth and transformation of Yeka Abado areas were so substantial as to lead the city government to carve out a new sub-city (Lemi Kura) in October 2020 to ensure that residents could have access to improved services and administration (see Chapter 5).

The rapid expansion of the Yeka Abado area has again meant that both displaced farmers and construction workers need to be accommodated, which mostly takes the form of establishing temporary or permanent homes in informal settlements, visible in the circled areas on the left-hand side of Figure 2.4. Like most of the city’s eastern and southern peripheries, Yeka Abado was predominantly agrarian land held by Oromo farmers through forms of rural tenure.⁵ Policymakers in Addis Ababa conceded that farmers were made landless as a result of these processes and that inadequate attention was given to the wellbeing of these people – with one commenting that ‘we created a huge mess in the peripheries’ (Addis Ababa Labour Official 1, 2018). Compensation was widely agreed to be inadequate, with monetary compensation generally being offered to farmers without sufficient guidance and support regarding how this might be used to establish a new livelihood (see Chapter 3). Moreover, while some people displaced from city centre areas under the urban renewal drive discussed in Chapter 1 were offered small condominium units in Yeka Abado, this was not the case for displaced farmers who usually ended up in informal settlements (Ethiopian Government Official 2, 2018). Despite these challenges, and the political upheavals since 2018, the area has continued to see widespread investment in facilities such as health centres, schools and business centres and is considered a thriving part of the city (Addis Ababa Housing Official 5, 2022).

Figure 2.4Yeka Abado area (adapted from Google)

Conclusion

This chapter has shown the diverse trajectories and dynamics of investment and economic change in the case studies, the various actors and the agencies involved. All of the cases show the significant role of a vanguardist state in driving investment – very often in housing but also through infrastructure development. Some of this infrastructure development has been focused on promoting economic development. Airports and industrial sites have been developed, transport infrastructure has been created and in some cases other strategies have been put in place to support economic development, with varying degrees of success. In eThekwini north and Yeko Abado, some state-led housing projects have followed or come after economic activity on the periphery, although they may also have been driven by other logics.

The private sector has also been key in investment and economic change on the periphery – as speculative landowners, through their long-term strategies to revalorise property on the periphery, and as property developers and investors in (often upmarket, gated) housing estates, large industrial zones, offices, retail and tourist developments. Direct investment in transport infrastructure has also been evident in the Ethiopian cases. Different parts of the private sector have been involved, with variations in the scale and sector of firms and encompassing both foreign and domestic companies. In some cases, as in Yeko Abado and eThekwini north, private investment dominates in the region or has driven growth in the area. But there are also intricate, varying and changing relationships between the state and the private sector. The state is not monolithic either: different sectors of the state and spheres of government may play diverse and sometimes contradictory roles, promoting competing agendas, as the South African cases demonstrate.

In the following chapter we explore the experience of these developments from the perspective of jobs and livelihoods. The extent to which economic development has occurred in these speculative and vanguard peripheries varies. In some cases these areas have become stable parts of the city, with diverse activities. Some industrialists have been drawn into the public and private industrial sites developed on the periphery, especially in the Ethiopian cases where considerable new industrial growth is occurring. In other instances promises of ‘economic development’ have not materialised or private sector responses to the creation of industrial zones have been more limited than expected, or have declined after a period of growth. Some areas are predominantly housing areas, forcing people to rely on commuting. It is not certain that economic activities will emerge there or that existing ones will remain there over time. There is a temporality, and continuous change. The flip side of ‘development’, of course, may be the displacement of people and their place-centred economic activities, as farmers, waste-pickers, domestic workers and more – as the Ethiopian and Lufhereng cases demonstrate. These dynamics, and the social implications of investment and economic change, are explored more fully in later chapters.