The rise of the African middle class

African pool Credit James HallAfrica’s US$1.8 trillion economy is being fuelled by consumer spending, writes James Hall. (Image source: James Hall)A third of all Africans are now classified as middle class. Their incomes allow them to inhabit an economic bracket that is variously defined, but by any definition is growing

With this growth is greater political clout as larger numbers of Africans with possessions from cars to homes to stock portfolios seek social stability and good governance to ensure the continuing comfort of their lifestyles.

For a continent long perceived as economically challenged, the rise of an African middle class represents laudable progress. According to the African Development Bank (AfDB), 34 per cent of Africa’s 326 million people were earning middle class incomes in 2010, compared to 27 per cent of Africans in 2000.

Mostly upward mobility accounts for the increase. Greater economic opportunity translated into more formerly poor households advancing into middle class. A move toward accountable democratic governments, however, has resulted in fewer individuals whose fortunes are based on corruption and government theft. During the past decade upper income earners decreased from five per cent to four per cent of the continent’s population, the AfDB reported.

The past decade’s increase in the number of middle class Africans continues a decades-long trend. A generation ago, in 1980, 70 per cent of Africans lived in poverty and only a quarter could be considered middle-class.

Income figures vary from country to country – homeownership is less expensive in Mozambique compared to South Africa, for example – but guidelines based on family possessions are sometimes used for surveys. Families are asked about such things as car ownership, education levels of family members and leisure time activities to ascertain whether they enjoyed middle-class possessions and lifestyles.

Private sector marketing firms, meanwhile, have been conducting their own surveys to determine how middle-class Africans disposed of their incomes. Increasingly, Africa’s US$1.8 trillion economy is fuelled by consumer spending. To what extent is brand loyalty important to Africa’s middle-class? How swayed is this group by advertising, to the status of purchasing imported foreign brands, to the comfort and familiarity of locally produced goods?

In Nigeria, following a quintupling of GDP from US$46 billion in 2000 to US$247 billion in 2011, the financial group Renaissance Capital conducted a survey in 2011 and found that half of middle class Nigerians intended to purchase "big ticket" white goods such as refrigerators, stoves and similar domestic appliances. The survey suggested Nigerian middle class households prioritized spending on home improvements.

Nigeria’s large population is skewed toward youth, and 70 per cent of middle class Nigerians were under the age of 40. Younger consumers tended to spend more and save less for a future that for them still seemed relatively distant.

Africa’s middle class is not a unified demographic throughout the continent. Impoverished and war-disturbed Central Africa is still developing a stable civil service and entrepreneurial business class to create positions for middle class income earners. Northern Africa appears to be home to the greatest percentage of middle class per national populations, but at the same time the middle class of the region is less secure.

Of Egyptians, 80 per cent of the population has been classified as middle class, 85 per cent of Moroccans are in the middle class and 90 per cent of Tunisians. The AfDB, however, considers a large number of middle class nationals from those three countries as "floating middle class". If such economic shocks as job loss or unexpected medical or educational expenses should incur or debt increases beyond an individual’s ability to service, some middle class members can slip into poverty.

Africa’s middle class accounts for more wealth on the continent, but is also exerting influence on population growth and governance. Middle class families tend to be urban residing and have fewer children than rural residents for whom large families are required for the agricultural production needed to sustain the family. Middle class children, by contrast, contribute little if anything to a family’s wealth and are generally consumers of food and goods purchased by parents. Children’s educational needs tend to be prioritized by their parents. Having fewer children means less school tuitions to pay and better schools for existing children.

Looking ahead 50 years, the AfDB projects that by 2060 a majority of Africans (60%) will belong to the middle class. If this projection holds true, this will have a profound impact on Africa’s population growth. Unsustainable population growth has put irreversible pressure on ecosystems, water resources, wild animal populations and food supplies in many parts of Africa because, as The Population Institute noted, the continent’s poor considers having more children rather than less children the way to cope with poverty.

The middle class’ emergence is having a salutary effect on governance. For decades, African leaders have sought election by appealing to the poor on a continent comprised mostly of the poor. This was usually done by promising goods and services that, if they were ever delivered, were paid by tax revenues levied on middle and upper income taxpayers.

A growing African middle class, which will in a generation equal and then surpass the poor in number, is showing the conservatism inherent to any middle class by demanding accountability and efficient and effective governance. Educated, they involve themselves in public policy matters on the local and national level. With the age of “Presidents for Life followed by rule of the president’s progeny” coming to an end, more candidates will be emerging from the middle class. They will be demanding equitable tax policies, business and investor-friendly policies and competent and reasonably-priced public services. All of this will be in the name of self-interest: done to create a climate of governance and business regulation that will allow the sustainability of the middle-class and, ultimately, ensure an expansion of that group.


James Hall

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

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