Steady rise of Africa’s middle class is critical

Fourteen years ago, The Economist news magazine ran a cover story headlined “The Hopeless Continent”. Inside the magazine, Africa was characterised as a continent deluged by floods and famine (referring to Ethiopia), Zimbabwe was labelled as operating a “government-sponsored thuggery”, and Sierra Leone was described as rampaged with conflict. As you would have thought, this was not a view shared only by the renowned magazine. Long before that, in the eyes of many, Africa was a basket case that required the intervention of Rock n Roll artists such as Bob Geldof to raise humanitarian aid and also gather momentum amongst the wider international community that Africa needed urgent help. During that process, several ‘development practitioners’ marched on Africa with hope that their theoretical models acquired from elite learning institutions such as Harvard and Oxford University would solve Africa’s problems once and for all. But of course, we know that despite these efforts, Africa remained poor and even more dependent on aid. Fast forward a decade and a half later and many aspects have changed. African nations have started to see an economic resurgence which many did not believe was possible. Sierra Leone, which was used in The Economist magazine as the case in point, has registered an average GDP growth of 18 per cent; Niger, and the Ivory Coast have equally impressed; Rwanda, Burkina Faso and Ethiopia have also registered impressive figures. In particular, all these countries have lifted a significant percentage of their people out of poverty in many ways. Some have argued that better economic policies, good governance, combined with more business-friendly policies, and stronger demand for Africa’s commodities from the BRICS nations, have helped create an emerging new social class in Africa – the middle class. It is said that the increase in average incomes and the fall in levels of absolute poverty, in particular during the last decade, suggest that an increasing proportion of the world’s population is neither rich nor poor by national standards, but finds itself in the middle of the income distribution. Yes, even in Africa where the rhetoric about poverty seems to be always in high tune, there has been noticeable increase in domestic consumption in many countries. Sales of refrigerators, television sets, mobile phones, and motor vehicles have all surged in virtually every African country. The McKinsey Global Institute projects consumer spending in Africa to reach $1.4 trillion in 2020, up from about $860 billion in 2008, which will be mostly driven by demand for technology-based products such as smart phones and household appliances. But who exactly is a middle class person and why are they important for maintaining economic growth? For a start, it is tricky to define a middle class person par say. However, according to the United Nations, a middle class person is someone living on $10-$100 a day. This is considerably different from the calculation made by the African Development Bank (AfDB) which uses the measure of $2-$20 a day as its middle class definition. The AfDB argues that its calculation is more appropriate given the cost of living on the continent, and that by those figures, Africa’s middle class had risen to 313 million people in 2010, which is 34 per cent of the continent’s population – compared with 111 million (26 per cent) in 1980, 151 million (27 per cent) in 1990 and 196 million (27 per cent) in 2000. Therefore, if we take the AfDB’s figures at face value, we can safely assume that Africa’s emerging middle class is a reality that is widening by the day. The middle class, which is now marked by changing lifestyles, greater spending power, more recreational time and harnessing of new technology, has the ability to power economic development to new heights provided that we in Africa learn how to produce consumer products that are in high demand. Africa’s emerging middle class is a critical economic and social actor because of its potential as an engine of growth. If economic history is anything to go by, we know that those in the middle have in the past vigorously accumulated capital including both physical and human capital which resulted in increased demand and supply for consumer products. More recently, this was the case with the Asian Tigers. Equally, the middle class’s social role remains equally important as it is believed that well educated, young professionals can influence economic development through more active participation in the political process, and in particular those that promote inclusive growth. The writer is a UK Parliamentary Intern and holds a Master of Science in Public Services Policy. Twitter: @jsabex

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Steady rise of Africa’s middle class is critical