Lowered expectations for Ghana's Hope City?

ACCRA, Ghana — It began with a groundbreaking ceremony led by the president, followed by a lavish launch party at the national stadium that featured a performance by American R&B star Chris Brown. On the eve of the country’s independence day in 2013, Ghanaian developers announced their plans to build a $10 billion tech hub on the outskirts of the capital. Even the name they chose for the project, Hope City, underscored ambitions to once again make Ghana — the first country in sub-Saharan Africa to achieve independence — a beacon for the rest of the continent.

Two years later, though, construction on Hope City has yet to begin. The project’s Italian architects have gone back to the drawing board to redesign their blueprints. The CEO of home-grown tech company RLG Communications, Roland Agambire, who is Hope City’s driving force, has been caught up in high-profile scandals. And a protracted economic downturn in Ghana, which has led to crippling power cuts and a steep slide in the value of the Ghanaian cedi, has made some question whether such an ambitious project will even get off the ground.

“Hope City is dead,” said one tech industry analyst, who requested anonymity because of the politically sensitive nature of the project. “There’s no hope.”

The trials of Hope City — which, its developers maintain, will someday rise over this West African metropolis — offer a telling case study at a time when similar splashy, multibillion-dollar developments are rising across the continent. Growing Internet technology sectors, fueled by a mobile phone boom, are spurring hopes that African economies long dependent on natural resources and foreign aid can drive growth through skilled industries harnessing local capital instead. But as African governments and real estate developers begin casting those ambitions in steel and glass, critics wonder whether the sky-high hopes surrounding these projects might be brought back down to earth.

When President John Mahama broke ground at the 2013 ceremony for Hope City, he had reason to be optimistic. Buoyed by the discovery of oil in 2007, Ghana already boasted one of the world’s fastest-growing economies, its GDP averaging nearly 8 percent growth per year for a decade. A history of political stability fueled hopes that the country might be able to avoid the resource curse that plagued so many other African nations. And in 2011, the World Bank declared that Ghana, its economy growing by 15 percent, had officially achieved middle-income status.

For Agambire, Hope City was the latest venture in his meteoric rise as an entrepreneur who started with a single Internet café in 2002 and grew it to become one of the country’s leading tech companies. The story of RLG, which bills itself as “the first indigenous African company to assemble laptops, desktops, and mobile phones,” and has in recent years expanded into Gambia and Nigeria, seemed to be a fitting symbol for the country’s recent boom.

But according to Agambire, RLG still hadn’t achieved his larger goal to create a distinctly African product. While the company’s electronics are assembled in plants across the region, 90 percent of the hardware’s components are manufactured in Asia. With the discovery of oil in Ghana, Agambire recognized the potential of using plastic and other petroleum byproducts to manufacture hardware from scratch locally. Not only would that give his company a competitive boost, by reducing the cost of importing pricy electronic components, but it would offer a psychological shift “to change the thinking of products made for Africa, in Africa,” he said recently.

From that ambition sprung Hope City, a massive mixed-use development that would eventually include a research-and-development hub, an IT university, office parks for local tech firms, housing for 65,000 residents, and a skyscraper that was designed to be Africa’s tallest. “We need a full-fledged city that can house professionals to be able to do research and development and create things within the natural resources that we have in Africa,” Agambire said. Microsoft was among the foreign companies who were initially reported to have shown interest.

Yet just weeks after the ground breaking, the proposed site for Hope City was moved to a larger area about a 30-minute drive from downtown Accra. According to Agambire, the move was necessary because of the unprecedented interest from investors after the project was launched. The new location would also provide easy access to a new international airport being built nearby. But the process of drawing up new blueprints and acquiring the necessary permits has set the project back. While the first phase was initially slated for completion by 2016, no new timeline has been set.

In the past two years, Agambire’s AGAMS Holdings — of which RLG is a subsidiary — has also been implicated in controversies surrounding the Ghana Youth Employment and Entrepreneurial Development Agency, a government program created to fund youth-training projects around the country, and the Savannah Accelerated Development Authority, a government agency tasked with boosting development in impoverished regions in northern Ghana. After an investigation launched by the government’s auditor-general in 2013, RLG and two other AGAMS subsidiaries were ordered to repay an amount in excess of 55 million cedis (about $14 million at the current exchange rate) in government loans, after the youth agency was found to have suffered from poor corporate governance practices, inadequate financial oversight, and other irregularities.

 “We are committed to making those payments, and we are paying,” Agambire said recently. He added that the controversies would have no impact on the future of Hope City.

“Sometimes you are misunderstood based on your vision,” he said. “Sometimes, yes, in the process of conducting a business, you can probably make mistakes. But having made a mistake in business is not a crime — it’s part of business. And what you need to do is to make corrections."

The uncertain future for Hope City hasn’t diminished enthusiasm for the glitzy, multibillion-dollar developments that are projected to rise across the continent in the coming years. In Lagos, Nigeria, construction is underway on a new financial hub that will anchor Africa’s biggest economy, while Kenya’s Konza Techno City is at the forefront of that government’s plans to establish a “silicon savannah” in the east African nation. Meanwhile, in Ghana, the booming oil sector has prompted investors to bankroll lavish new developments in the oil hub of Takoradi. With their luxury condos, manicured boulevards and Singapore-style business districts, these projects seem to be about aspiration as much as real estate. For the growing ranks of upper- and middle-class Africans who the developers hope will be calling the residences home, the new construction is a vote of confidence that, after the rise of the Asian Tigers, the “African lions” will be roaring their way into the 21st century.

But not everyone is convinced that such splashy new developments are the best way to capitalize on the continent’s recent boom. “There are very few of these developers who are actually thinking through quite carefully what will work for the continent,” said Vanessa Watson, a professor at the University of Cape Town’s School of Architecture, Planning and Geomatics. “Many African cities will double in size over the next 20 years, and there is an assumption that brand new cities like Hope City are needed.” Watson noted, however, that most of Africa’s metropolises were planned during the colonial era. In everything from housing to bridges and roads to sanitation, they’ve failed to keep pace with growth.

Addressing those challenges — what Watson calls “modernization through basic, necessary infrastructure” — is an urgent need for Africa’s urban planners. But many governments are susceptible to the promise of massive foreign investment in upmarket, showpiece developments. “Hope City is aimed at a middle class of well-paid and employed people,” she said. “It does not address the immediate needs of the majority of urban populations.”

Architect DK Osseo-Asare, meanwhile, called the plans for Hope City “an enormous missed opportunity” to transform the urban sprawl of Accra. “Look where the tech businesses are already,” he said, referring to areas, like the trendy Osu neighborhood, that have attracted clusters of tech hubs and start-ups. Rather than develop an “isolated and insulated” area on the city’s outskirts, Osseo-Asare suggested finding a solution that would “redevelop parts of the entire city [and] support the tech industry in a more grassroots way.” (Citing the congestion of downtown Accra, an AGAMS representative noted that recent governments have deliberately tried to encourage development in outlying areas.)

For some, the futuristic blueprint of Hope City has a surprisingly familiar feel. William Senyo, co-creator of Hub Accra, a gathering place for local techies, noted that a project looking to position Ghana as a hub of  21st-century innovation is ironically hewing to the model of mammoth, prestige projects that proliferated across Africa in the 1960s and '70s. “It has a very top-down, government feel to it that doesn’t sit well with the organic community that we’re trying to build,” he said. 

For members of that community, the bigger question is whether Hope City will bring any tangible benefits to their growing industry. Executives at a number of Ghana’s leading tech firms said they were never approached by RLG during the planning stages of Hope City about how the development could find synergy with existing companies within the ICT ecosystem. (An AGAMS representative disputed this claim, adding that the project was “widely publicized for the sake of awareness,” and that as a private venture, Hope City is not obligated to be “executed based on broad-based consultation.”)

Around the small but vibrant tech scene in Accra, there was frustration that such a massive injection of capital would be channeled into a single project. “Why spend so much money on one community?” asked Fiifi Baidoo, co-founder of the iSpace technology hub. Like other critics, he wondered if it would be more practical to “spread that money across the country to have many Hope Cities.”

Stimulating growth is a challenge the government has tried to address in recent years, with the ongoing construction of at least two major IT parks and the distribution of thousands of free RLG laptops and tablets to schools, many in rural areas. The government also announced last year a roughly $3 million fund geared toward fostering innovation and supporting young Ghanaians looking to start their own businesses.

Still, the government’s track record has been spotty, with critics maintaining that it has failed to put together a comprehensive strategy to develop the IT sector. And the crippling effect of the rolling blackouts of the past year underscores how difficult it will be to jumpstart a tech revolution. “Students who are supposed to be studying ICT don’t even have electricity in their schools,” Baidoo said. “They’re writing ICT exams and they’ve never even seen computers before.” 

Nevertheless, there’s lingering hope that, should Hope City be completed, it could succeed in “placing [Ghana] on the map” as a global tech player, according to Baidoo. That attention, in turn, could attract some much-needed investment and become a catalyst for growing the industry.

It’s a long-term play. “Most investors in Ghana don’t understand tech,” said Senyo, who has worked with the Rockefeller Foundation and the Tony Elumelu Foundation to help stimulate investment in local innovation across the continent. “Facebook is something their kids use to send them pictures. They don’t understand how you get from product to profit with technology.” Part of the challenge, he said, is developing the idea of “patient capital” by teaching investors that the industry’s evolution won’t happen overnight.

“It’s not about building for today,” he said. “It’s about building for the next big thing.”

Time is also on the mind of RLG’s Agambire, who noted that “it doesn’t take a day or a moment to change people’s minds. It takes centuries and time.” Sitting in his office, where he deftly tapped at the screen of his company’s Uhuru tablet, he expressed confidence that Hope City would ultimately prove the skeptics wrong.

“Once they begin to feel the change by being part of it,” he said, “the same people will tell you, ‘Yes, we believe it.’”

Correction: This version of the story corrects the spelling of Fiifi Baidoo's name.