AFRICA – The middle class is essential for economic and democratic growth. The continent of Africa, consisting of 54 independent countries, contains the poorest countries in the world according to the human development index by the United Nations. However, over the last 15 years the African middle class has grown.
As the middle class expands, so does consumerism. The growth of Africa’s middle class not only means more stability for Africa, but also more profit for American businesses. More of the African population is buying televisions, cell phones, and leisure and entertainment items, which Western companies provide.
But, how is the African middle class defined? In the US we are currently struggling with defining the middle class. However, those earning about $20,000 to $120,000 a year categorize themselves as middle class. In Africa, the range is quite different. The middle class consists of those earning $2-$20 a day, or $730-$7,300 a year.
A strong, large middle class would be beneficial to Africa. Africa’s middle class consumed approximately $680 billion in 2008, consisting of nearly a quarter of Africa’s GDP. At this rate, Africa will comprise approximately 3 percent of worldwide consumption by 2020, with about $2.2 trillion of consumer spending. The middle class will help grow the economy as they will have more income to spend and invest in health and education.
However, 60 percent of the African population continues to earn a meager $2-$4 day and are at risk for declining out of the middle class and into poverty. This floating class represents 180 million people. They could slip into poverty with one incident, such as a job loss or the death of the head of household. Therefore, a balancing act is required to help grow the middle class while also preventing the floating class from slipping back into poverty.
Policies that focus on both human capital development and job generation will ensure the growth of Africa’s middle class. Continued improvements in governance, better access to technology, the rapid spread of mobile telephones and the better use of natural resources are necessary. Additionally, social policies that focus on education and health will work to support those earning $2-$4 a day.
The US should continue investing in Africa through aid. History demonstrates that the US benefits greatly by assisting once poor countries. For instance, from 1960 to 1974 the US provided South Korea with $5.6 billion in aid. In 2010, the annual US export to South Korea was $38.8 billion. But this is just one of many examples. More information can be found here.
Now is the time to increase our investment in Africa. As the middle class is beginning to grow, investment in Africa will result in a more stable economy, growth of democracy, and an increase in consumerism. The US and Africa will both benefit from a strong middle class throughout Africa.
– Caressa Kruth
Sources: How We Made It In Africa, UN Development Program, The Borgen Project, National Geographic
Photo: Forbes India