Africa’s middle class grows faster – report
By Kizito Makoye in Dar es Salaam – The number of middle class Africans has astoundingly risen to 313 million people- slightly over34% of the continent’s entire population, according to a new report from the African Development Bank (AfDB).
Customers choose products in Dar supermarket - Photo by Kizito Makoye
Titled, The Middle of the Pyramid: Dynamics of the Middle Class in Africa, the report suggests the rise in purchasing power is due to strong economic growth, and a move towards a stable, salaried job culture and away from traditional agricultural activities.
AfDB report defines Africa’s middle class as people spending between $2 and $20 a day at 2005 market price; thus virtually one out of three Africans would now be categorized as middle class.
The report acknowledges other factors that come into play when defining who is middle class, saying: ‘other variables such as education, professions, aspirations, and lifestyle are also important features that help establish who is in the middle class’.
It, however, warns that despite this phenomenon, income inequality in Africa remains very high, and that the overall middleclass figure includes large numbers of the so called ‘floating class’ whose hold on status is insecure.
According to the report, some 180 million people fit in this vulnerable category, facing the possibility of sliding back below the developing-world poverty line of $2 per person per day.
Over the decades, according to the report, the numbers of growing middle class have steadily risen from approximately 111 million or 26% of the population in 1980 to around 151.4 million (27%) in 1990. The 2010 figure, however, shows a significant surge of 60% from the 2000 figure of 196 million or 27.2% of total population.
“The malls that you see mushrooming everywhere, the cars that you see in the roads, the traffic jams in Lagos, Johannesburg, Nairobi — that speaks of a growing middle class,” Mthuli Ncube, chief economist and vice president of the AfDB was quoted by CNN as saying.
He also stresses that this bourgeoning middle class can entice and reward international investors looking to tap the continent’s growing economy.
Observers, however, were quick to criticize the report “”Two dollars a day, to call that a middle class, I think it’s a stretch concept,” Thandika Mkandawire, a professor of African Development at the London School of Economics was quoted as saying.
“You don’t expect the income of the middle class in Africa to be the same as the United States, but it shouldn’t be so overstretched that it may lose its meaning,” he added, noting that the African middle class should define itself not only in relation to the continent but also in relation to international standards of consumption.
According to the AfDB report, members of Africa’s growing middle class are better educated than their poor counterparts and tend to have salaried jobs or small businesses.
They are also likely to have fewer children as well as own major household durable goods.
“Sales of refrigerators, television sets, mobile phones, motors and automobiles have surged in virtually every country in recent years,” the report notes, citing an 81% increase in possession of cars and motors in Ghana since 2006.
But some economists stress that the focus on consumption as a measure of economic growth can be misleading arguing that a model that is not based on production cannot be sustainable.
“ I do not think these figures in this report reflect the reality on the ground, to most average Africans making ends meet remains an uphill task” says Haji Semboja of the university of Dar es Salaam.
Overall, it is economic growth that determines the rise of the middle class, but economic growth is in turn driven by social and economic factors. The report notes: ‘Africa’s middle class is strongest in countries that have a robust and growing private sector as many middle class individuals tend to be local entrepreneurs. In a number of African countries, a new middle class has emerged due to opportunities offered by the private sector’.
The AFDB report also warns of a massive lag between the continent’s rich and poor. It said that around 61% of Africa’s population fell below the $2 poverty line and 44% below the $1.25 poverty line.
Meanwhile, about 100,000 Africans had a net worth of $800 billion in 2008, or about 60% of the continent’s GDP according to the report.
AfDB economist says inequality will only be dealt if African countries promote more growth that generates employment.”Quite clearly, create jobs is the way to go,” he says, calling for promotion of private sector entrepreneurship and improvement of the quality of education.
Kizito Makoye is a journalist based in Dar es Salaam, Tanzania.
