Significant economic transformation in Africa has translated in the tripling of the middle class in the continent’s top 11 economies over the past decade and a half.
A new report by Standard Bank entitled ‘Understanding Africa’s middle class’ show there are 15 million middle-class households in 11 of sub-Saharan Africa’s top economies this year, up from 4.6 million in 2000 and 2.4 million in 1990, an increase of 230 per cent over 14 years.
However, of the total number of households across these focal economies, 86 per cent of them remain within the broadly “low income” band, emphasizing the nascent maturation of many of the continent’s markets.
“The new report is cause for optimism among investors as it suggests even greater scope for future growth,” said Simon Freemantle, Africa Standard Bank senior political economist and author of the report.
He adds that the study, which uses a proven methodology based on the Living Standards Measure (LSM), gives investors to Africa reliable data on which to base their investment decisions.
This is because in the past the conventional wisdom was that as many as 300 million Africans are categorised as ‘middle class’ yet majority are highly vulnerable to lose that status in any economic shock.
The lower than anticipated total number of middle class households is attributed to the fact that Africa’s economic performance in recent years and the nominal size of the continent’s middle class had not until now been adequately measured.
According to the report, over the next 15 year the number is expected to increase to about 40 million households.
The report also found that the combined gross domestic product of the 11 measured economies had grown tenfold since 2000. The 11 focus economies are Angola, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, South Sudan, Sudan, Tanzania, Uganda and Zambia.