Africa’s middle class is smaller than we thought – Standard Bank

2014-08-19 17:27

There are fewer middle-class Africans than we thought, according to research released by Standard Bank.

There have been numerous reports on how big Africa’s middle class is, and how fast it is growing. Some estimates have gone as high as 300 million middle-class people, but Standard Bank said today there are just 15 million middle-class households in 11 of sub-Saharan top economies.

However, this has increased by 230% over 14 years. According to Standard Bank, there were 4.6 million in 2000 and 2.4 million in 1990.

But 86% of total households in these areas remain in the low-income bracket. This would fall to 75% by 2030.

The report suggests that while the middle class may be smaller than previously thought, two factors should give investors greater comfort: by any methodology Africa’s middle class is growing strongly and Africa’s income accumulation is far more broad-based than had previously been thought.

Standard Bank senior political economist Simon Freemantle, author of the report, 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”.

The figure of 300 million middle-class Africans comes from the African Development Bank’s 2011 study, which defined middle class as earning $4 to $20 a day.

Standard Bank, however, used LSMs, or living standards measures in Angola, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, South Sudan, Sudan, Tanzania, Uganda and Zambia.

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