report forecasts acceleration in the accumulation of middle-class households in Africa. Commenting on the lower than anticipated total number of middle class households, Freemantle says any view “concerning the undoubted ongoing improvement in Africa’s economic performance has to be tempered with the reality that the level of this growth and the nominal size of the continent’s middle class had not until now been adequately measured”. He argues the previous figure of 300 million ‘middle class’ Africans was viewed as a best-estimate that has now been confirmed as to trend if not as to the total aggregate. The report cites the African Development Bank’s (AfDB) influential 2011 study, ‘The Middle of the Pyramid: Dynamics of the Middle Class in Africa’, which by its
The new report is cause for optimism among investors as it suggests even greater scope for future growth”
methodology attached middle class status to individuals earning just USD4 to USD20 a day, and even a “floating class” of individual earning USD2 to USD4 a day, thereby categorising fully one-third of Africa’s people (over 300 million of them) as ‘middle class’. “In fact, such individuals would still be exceptionally vulnerable to various economic shocks, and prone to lose their middle-income status,” explains Freemantle. South Africa’s LSM measure as a methodology is not income-based but rather uses a wider range of analysis. The report covers 11 selected sub-Saharan African countries which combined account for half Africa’s total GDP (75% if excluding South Africa) and half its population. The methodology identified LSM5 and above as middle class and categorises
Essential reading for those who want to keep up to date with African business.