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Africa’s Middle Class Is Actually Rising – Report

Africa’s Middle Class Is Actually Rising – Report

Is the ‘Africa Rising’ narrative happening or is it just a fad?

That’s the question a new study by Standard Bank, a South African bank with operations across Africa, sought to answer and its findings was that YES, AFRICA IS INDEED RISING.

The report was released on Tuesday and showed that Africa’s middle class has tripled in size over the last 14 years and the consumer boom is quickly gaining velocity. This The Globe and Mail says  is a genuine phenomenon that is generating huge commercial and political opportunities.

The Bank analyzed 11 of the biggest economies in the region, accounting for about half of sub-Saharan Africa’s population and GDP. Those economies have grown tenfold since 2000, reaching a collective GDP of more than $1-trillion today, compared with a growth of just 25 percent between 1990 and 2000.

“There is an undeniable and powerful rise in income across many of Africa’s key frontier economies, allowing the formation and strengthening of a substantial middle class,” the report said.

The study further found that African households that have entered a true definition of “middle class” total 15 million in the 11 countries sampled, from just 4.6 million households prior to the year 2000.

A further 25 million African households are expected to join the middle class and the lower-middle class in the next 15 years in these countries, the study showed, with most of them being in Nigeria, the continent’s most populous nation and the largest economy.

By 2030, there will be 12 million middle-class households in Nigeria alone, the study predicts.

The other countries in the study were Angola, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, South Sudan, Sudan, Tanzania, Uganda and Zambia. By 2030, the households in these 11 countries will be contributing $820 billion in annual consumption, the report said.

Maturing Democracies

The study said that political maturity and increased democratic space in sub-Sahara Africa has also worked in favor of growing business opportunities for everyone on the continent and creating much need jobs. This has created a “cycle of social, political and commercial gain,” it says.

Prio to this study there has not been adequet research on the growth and study of Africa’s middle class. The only landmark report was in 2011 by the African Development Bank (AfDB), which said that there were 300 million Africans in the middle class. The AfDB report  triggered years of debate and media attention.

According to Standard Bank senior political economist Simon Freemantle, who wrote the report, this estimate was highly inflated because it included millions of Africans who earn just $2 to $20 per day.

“In fact, such individuals would still be exceptionally vulnerable to various economic shocks, and prone to losing their middle-income status,” Freemantle said.

The Standard Bank report only focused on households that consume more than $15 per day, which it says fit to be considered middle and lower-middle class.