Business
Africa’s emerging middle class continues to drive growth and democracy
African middle class family in Lusaka, Zambia. PHOTO/Georgina Smith/The Guardian
After years of headlines about Africa’s poverty, its emerging middle class is now grabbing attention as a driver of growth and democracy and an expanding pool of consumers for market-hungry retailers.
Consumer demand is a motor of Africa’s economic and investment surge, and analysts see middle class buyers with swelling disposable income as fuelling this boom from South Africa to Nigeria and Kenya.
In its Africa Pulse report last month, the World Bank said consumer spending accounted for more than 60 percent of Sub-Saharan Africa’s buoyant economic growth, which it forecast would accelerate to more than 5 percent over the next three years, far outpacing the global average.
“It’s probably the fastest growing consumer class in the world, as a region,” said Michael Lalor, director of Ernst & Young’s Africa Business Center in Johannesburg.
From mobile phones, cars, food, and clothes to financial services and entertainment, multinational companies are homing in on lucrative new markets as millions of Africans aspire to claw their way out of still widespread poverty.
“The poor don’t drive demand in an economy, it’s the middle class that drive demand in an economy,” African Development Bank Chief Economist Mthuli Ncube told Reuters.
“Reducing poverty means creating a middle class. Sometimes people think pushing the middle class means forgetting about poverty, but it’s the other side of the coin,” he added.
Global demand for African commodities, driven by China, has also boosted economic growth along with strong investment in productive industries and infrastructure. The World Bank forecast foreign direct investment in Sub-Saharan Africa will reach US$54 billion by 2015, up from US$37.7 billion in 2012.
At the same time, a greater number of African countries are achieving relative stability in politics and economic policy, allowing the middle class to emerge.
Accurately quantifying this African middle class has become an obsession for institutions such as the African Development Bank (AfDB) and World Bank, as well as consultancies advising corporate clients seeking an edge in this booming continent.
Few doubted that the emerging middle class was an important group for defining Africa’s economic and political course.
As keen users of mobile phones and the Internet, including social media networks, they were plugged into the digital world and international news and therefore had a role as opinion makers and agents of reform and change.
“The mobile phone in Africa is creating a politically conscious class,” said Cowan, citing Kenya’s election in March.
Many analysts believe digital media played a part there in keeping tensions in check during the vote and allowing a generally peaceful poll which averted a repeat of post-election violence that occurred in 2007/2008.
Middle class voters are seen more likely to vote according to policies and issues rather than automatic or traditional allegiances to any party or ethnic group.
AfDB’s Ncube believes the better-educated are supporting a perceived and widening trend towards more democratic maturity and better governance on the continent.
“They are your enlightened voters, they will support policies, and not just an affiliation emotionally,” he said. “They are drivers of democracy.”
Reflecting change in post-apartheid South Africa, recent research by the University of Cape Town Unilever Institute of Strategic Marketing shows the black middle class there has more than doubled in eight years to 4.2 million in 2012, and its annual spending has overtaken its white counterpart group.
“The growth in this country, both economically and certainly in terms of spending power, comes from the black middle class,” Unilever Institute Director John Simpson told reporters.
He said the ANC administration, which had long focused on the poor masses as its core voting base, was now being forced to pay more attention to the black middle class – which it has also helped create through affirmative action policies.
Source: Reuters