One in three Africans is now middle class, report finds

Findings challenge view of continent as a place of famine and poverty

guardian.co.uk, David Smith in Cape Town, Thursday 5 May 2011

Young women try on shoes at a store in Johannesburg, South Africa
(Photograph: Per-Anders Pettersson/Getty Images)

One in three Africans is middle class, a rising group of consumers to rival those of China and India, researchers have found.

Record numbers of people in Africa own houses and cars, use mobile phones and the internet and send their children to private schools and foreign universities, according to the African Development Bank.

Mthuli Ncube, the bank's chief economist, said the findings should challenge long-held perceptions of Africa as a continent of famine, poverty and hopelessness.

"Hey you know what, the world please wake up, this is a phenomenon in Africa that we've not spent a lot of time thinking about," Ncube said. "There is a middle class that is driven by specific factors such as education and we should change our view and work with this group to create a new Africa and make sure Africa realises its full potential."

Ncube said the study used an absolute definition of middle class, meaning people who spend between $2 and $20 a day, which he believed was appropriate given the cost of living for Africa's nearly 1 billion people.

The study found that, by last year, Africa's middle class had risen to about 34% of the continent's population, or about 313m people – up from around 111m (26%) in 1980 and 196m (27%) in 2000.

The growth rate of the middle class over the past 30 years was about 3.1%, slightly faster than that of the total population. Tunisia, Morocco and Egypt had proportionately the biggest middle classes in Africa, while Liberia, Burundi and Rwanda had the smallest.

The Africa middle classes are more likely to have salaried jobs or own small businesses. They tend not to rely entirely on public health services, seeking more expensive medical care. The middle classes tend to have fewer children and spend more on their nutrition and schooling.

Sales of fridges, TVs and mobile phones have surged in virtually every African country in recent years, the report said. Possession of cars and motorcycles in Ghana, for example, has gone up by 81% in the past five years.

"They own houses and they account for the bulk of housing ownership," Ncube said. "They own cars – people are driving cars in Lagos, in Kampala, in Harare, in Ouagadougou – it's the same middle class. You can even see it in the consumption of petrol. The bulk of them are consuming ICT services and mobile telephony, although the poor are also consumers of mobile telephone services.. They would also send their children to school, preferably private schools, but also schools outside the continent. The same class is sending their children to universities outside their home country, in South Africa, in Australia, in Canada, naturally Europe – France is a bigger absorber from the French-speaking countries – and the US."

The middle class was responsible for at least half of Africa's GDP of $1.6tn, he added. The trend reflected years of sustained economic growth, with sub-Saharan Africa projected at 5.5% this year.

"This has implications," Ncube said. "How should the rest of the world engage with Africa, given this middle class? I think it means that those who want to invest should take the opportunity and look for partners within Africa to invest jointly with."

The focus of aid and development assistance would also have to change in the next 10 to 15 years, he argued. "It will have to concentrate less on the bottom of the pyramid and move to the middle, which means it has to be supportive of private sector initiatives, which then are the way middle class people conduct their lives."

Africa has a relatively young population and has seen millions migrate from rural areas to cities, where shopping malls with designer labels and smart coffee shops are springing up across the continent. Ncube acknowledged that a widening, internet-literate middle class could pose a threat to autocratic leaders, as seen in Egypt and Tunisia.

"The middle class is a source of democracy in Africa in a sense that they are custodians of democracy. They are the people who are educated, they know how to vote, they know what they want, they've got interests to protect. Supporting this class in a way also helps institution building in Africa.

But the research found that poverty remains deeply entrenched, with 61% of Africa's population living on less than $2 a day. An estimated 21% earn only enough to spend $2 to $4 a day, leaving about 180 million people vulnerable to economic shocks that could knock them out of the new middle class.

At the top of the pyramid, an elite of about 100,000 Africans had a collective net worth of 60% of the continent's gross domestic product in 2008, the report said.

Related Article:

"The End of History" – Nov 20, 2010 (Kryon channeled by Lee Carroll)
(Subjects: Abraham, Isaac, Ishmael, Muhammad, Jesus, God, Jews, Arabs, EU, US, Israel, Iran, Russia, Africa, South America, Global Unity,..... etc.) (Text version)