Johannesburg - Mzamo Masito, founder of Peoples Insights Consultancy and young global leader at the World Economic Forum, said on Wednesday that the black middle class is set to grow from a current 2.6m people and R180bn of value to become a key driver of economic growth.
He advised businesses to start preparing now for this inevitable growth spurt.
"In 20 to 30 years the landscape is going to change when the black middle class grows from 2.6m to 20m and business should then have a 90% market share and not only be starting."
Masito said the black middle class - or "black diamonds" -
accounted for R180bn, or 28%, of SA's spending power or buying value according to first quarter 2007 statistics; as opposed to whites at R235bn.
He said this equated to 54% of total black buying power of R335bn.
"So there is money - but there is also huge black versus black income inequality."
"When it grows from R180bn, then there is money to be made," he added.
Masito said 47% of black diamonds now lived in the suburbs.
However, he pointed to an interesting trend where semi-suburbs would start developing in between townships and existing suburbs. He said these areas would prove accommodation in the R400 000 to R500 000 range as suburbia at asking prices of around R800 000 was becoming too expensive for many emerging classes.
However, he adds that he also sees townships becoming suburbs.
"The market is going to change," he said.
He highlighted that young families would be around 27% of the new class as over 64% of children are born to single mothers.
"The divorce rate is on the up," he added.
Then the youth would make up 18%, and established people 36% at an average age 35. "Start-me-ups" would make up 19% - these are people who "want to be CEOs in five years".
What he says will be noticeable in the new black middle class will be people increasingly projecting their desires through their children.
He noted that the white population was declining and blacks were increasing, but did say that when you move to the middle class an average of three children per mother would be seen.
On empowerment, Masito said that the biggest beneficiaries over the last 12 years have been shown to have been white.
More black diamonds than whites
But he said the politics of the future would be class based -"race will be a card politicians will use now and again, but class will be the issue".
He emphasised that the growth rate of the black middle class of 2.6m was 30% year on year.
"All things constant - the consumer of the future is going to black and if you project forward then there will be more black diamonds than the entire white population," he said.
"The challenge is there are still over 20 million poor black South Africans," he said, prompting him to feel that this would be a serious threat to all the more successful people in the future.
He was speaking at an Association of Corporate Treasurers of Southern Africa (ACTSA) function at The Forum to commemorate its 20th birthday.
- I-Net Bridge