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Middle class in Africa is a nebulous concept

May 21 2017 07:37
Dewald Van Rensburg

Johannesburg - A new estimate of sub-Saharan Africa’s urban “middle class” this week put the number at 100 million people commanding spending power of at least $400 million (R5.3 billion) a day.

This excludes South Africa and defines middle class as being able to buy items other than basic necessities.

Aided by survey group Ipsos, the Unilever Institute of Strategic Marketing, based at the University of Cape Town (UCT), spent 18 months conducting its African Lions project to create a useful database on the consumer market in the continent’s cities.

The study is based on 7 500 interviews conducted with representatives of the middle class of 10 African cities. While the point was not really to quantify the growth of the continental middle class, workers on the project produced what they considered to be a good minimum estimate.

The 100 million figure was likely to be severely conservative, said Paul Egan, head of the UCT Unilever Institute. It was based on the proportion of the population of Nairobi that was deemed to be middle class – 50%.

“We used data sources such as Afrobarometer and proposed that if the proportion of middle class people in all significant urban centres in the region was 50%, then we would have an aggregate figure of well over 100 million,” Egan told City Press via email.

However, Nairobi had the lowest proportion of middle class inhabitants among the 10 cities studied. This is probably the case because of the inclusion of the famous and enormous Kibera slum in Nairobi’s population, said Nanzala Mwaura, a director of Ipsos SA, at a launch event this week.

The definition of middle class starts with a minimum $4 in income a day. “We had to draw a line in the sand as far as income was concerned,” said Egan.

“We made this decision in consultation with our corporate partners. This implicitly means that they see some potential in the grouping of $4 plus, in the sense that they have some discretion with regard to spending – maybe not spending on iPhones, but perhaps on airtime, washing powder, and so on.

“Also, if companies take a long-term view, they may come into play for more expensive products in the future.”

The study was sponsored by Tiger Brands and US multinational PepsiCo.

Why call it a middle class?

“Is middle class a useful or even valid concept?” asked Haroon Bhorat, a professor of economics at UCT, who did work for the project.

“I think we have completely misunderstood the nature of the middle class in sub-Saharan Africa.”

Bhorat pointed to various conflicting estimate numbers of the middle class, ranging from 425 million to 32 million, using different definitions in the past few years.

“Do not call them the middle class. That’s too woolly. Call them low, medium and high spenders. Let us be clear that there are categories,” said Bhorat.

“The simple first order question is: How many people are there in these categories?”

The answer depends heavily on the particular level of consumption you are interested in, with South Africa’s consumer base towering over the continent as soon as you look for people with more than $6 to spend a day.

Middle class markers

The markers of middle class status are not universal, said Mwaura.

The average income of the middle class amounts to $17 a day, but 35% of this group has less than $10 a day.

This middle class includes a mass of people without commonplace rich-world amenities. Half do not possess electric kettles, fridges or freezers, and only 18% own washing machines, according to Mwaura.

This does not necessarily mean people cannot have them. In her native Kenya, it never occurred to Mwaura to own a washing machine because of the plentiful supply of cheap labour and a well-established sector of clothes washers, she said.

Only half of the middle class identified possess an indoor kitchen sink. Less than 42% have running water indoors and only 20% heated water, she added.

Only 69% have flushing indoor toilets. This ranges from 80% in Lagos, Nigeria to 39% in Addis Ababa in Ethiopia.

“In terms of infrastructure, these are not things you can provide for yourself,” she said.

About 68% do not own a car. Public transport is the norm. This, again, may have more to do with the nature of the cities studied than the consumptive power of the middle class.

How the study defined middle class

The definition used was urbanites earning at least $4 and less than $70 a day – and spending less than 75% of this on basic utilities such as rent, power, water and basic foods. Disposable income did not necessarily follow gross income, as shown by Luanda in Angola, which had the highest average income in the sample of 10 cities, but the lowest disposable income because of the high cost of living. The study excluded unemployed people who were not studying and people with no secondary education.


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africa  |  middle class

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