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.
