Business
Why Global Businesses are Following the Retail Boom in Africa
Since companies can’t use their cookie-cutter approach and models in Africa, the call for flexibility pushes them to re-purpose and adjusts infrastructure to be welcomed as a potential retailer. This allows companies a faster turnaround
Growth of Africa’s Middle Class
Expanding industries, job creation and rising incomes have placed cash in the pockets of Africa’s new middle class. The African Development Bank estimates that 34 percent, 326 million people belong to this class. According to pan-African Standard Bank, the number of households with annual incomes greater than $3,000 at market exchange rates may increase to 100 million by 2015. The continent’s middle class is considered to be made up of those who spend between $2 -$20 a day. This group is targeted and more so than other potential customers, the middle class is interested in trendy, new options retailers have to offer
“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,” Mthuli Ncube, African Development Bank Chief Economist told Reuters. “It’s the middle class that drive demand in an economy.”
In 2013, the World Bank reported that consumer spending accounted for more than 60 percent of the Sub-Saharan’s thriving economy. It was also estimated that growth would continue at a 5 percent rate over the next several years. The middle class has been able to achieve growth due to relative stability, politics and economic policy.
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