Friday, May 06, 2011

One in three Africans are in the middle class

A new report that analyzes African incomes may be a breakthrough in correctly understanding the state of the continent's economy. The African Development Bank says that one out of three Africans are considered to be middle class.

The Bank's definition of middle class is earning anywhere from two to twenty dollars a day. Out of that 313 million people in the middle class, 180 of them are right on the edge of the poverty line only earning two to four dollars a day.

From the Guardian, writer David Smith tells us more about the new report.

Mthuli Ncube, the bank's chief economist, said the findings should challenge long-held perceptions of Africa as a continent of famine, poverty and hopelessness.

"Hey you know what, the world please wake up, this is a phenomenon in Africa that we've not spent a lot of time thinking about," Ncube said. "There is a middle class that is driven by specific factors such as education and we should change our view and work with this group to create a new Africa and make sure Africa realises its full potential."

Ncube said the study used an absolute definition of middle class, meaning people who spend between $2 and $20 a day, which he believed was appropriate given the cost of living for Africa's nearly 1 billion people.

The study found that, by last year, Africa's middle class had risen to about 34% of the continent's population, or about 313m people – up from around 111m (26%) in 1980 and 196m (27%) in 2000.

The growth rate of the middle class over the past 30 years was about 3.1%, slightly faster than that of the total population. Tunisia, Morocco and Egypt had proportionately the biggest middle classes in Africa, while Liberia, Burundi and Rwanda had the smallest.

The Africa middle classes are more likely to have salaried jobs or own small businesses. They tend not to rely entirely on public health services, seeking more expensive medical care. The middle classes tend to have fewer children and spend more on their nutrition and schooling.

Sales of fridges, TVs and mobile phones have surged in virtually every African country in recent years, the report said. Possession of cars and motorcycles in Ghana, for example, has gone up by 81% in the past five years.

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