Africa’s middle class hits a speed wobble
Credit Suisse’s 2015 Global Wealth Report suggests Africa’s middle class may not be as large as previous economic studies suggest. Using wealth rather than income alone to measure the middle class, the report says just 3.3% of Africans can be considered middle class, or about 19m people. Roughly a quarter of Africa’s middle class lives in SA, according to the bank. A previous 2011 study by African Development Bank, based on income, put the middle class at around 300m.
The African Development Bank figure has been questioned because of its loose interpretation of middle class, which the authors define as anyone earning between $2 (R28) and $20 (R280) a day. On this basis, more than a third of Africans could be considered middle class.
Though Africa’s wealth more than doubled to $1.63tr over the 15 years to 2015, the middle class has remained surprisingly small due to the uneven distribution of wealth.
An estimated 0.2% of Africa’s wealthiest control more than 30% of the continent’s wealth.
The study by Standard Bank, (a bank that has operations across Africa) suggests that Africa’s middle class has tripled in size over the past 14 years to 15m households.
The study also used a cut-off of $15 (R210) to be considered lower-middle class or middle class. Other studies have used vastly different measures. Consulting group McKinsey defines the middle class as those spending more than $20 000 (R280 000) a year, on which basis it accounts for less than 2% of African households, though it is expected to contribute 40% of spending-power growth in the coming years.
Standard Bank looked at 11 of the biggest economies in the region, and found that these economies had grown 10-fold since 2000 to reach a collective GDP of $1tr (R14tr).
Over the next 15 years, the middle class in these 11 countries should reach 25m households, with 12m of these alone coming from Nigeria, according to the study.
“There is an undeniable and powerful rise in income across many of Africa’s key frontier economies, allowing the formation and strengthening of a substantial middle class,” the report says.
According to Credit Suisse, the US accounts for the world’s largest middle class in absolute terms, but this accounts for just 38% of the population, versus more than 50% of adults in Ireland, the Netherlands and New Zealand. The middle class accounts for more than 55% of adults in Italy, Japan, Spain, Taiwan, the UAE and the UK. “The middle-class incidence rate exceeds 60% in Belgium and Singapore, and is highest of all in Australia, where 66% of adults are in the middle class and 80% belong to the middle class or beyond,” according to the