In these times of crisis, local or foreign investors seeking new growth markets. Africa, despite its difficulties, continues to progress slowly, but surely. Estimated between 300 to 400 million people, the African middle class has become a prime target for investors. Why ? Truth or utopia? Are there really Africans, with suitable financial position, working, consuming and enjoy life?
African middle class prime target for overseas investors
Definition of the African middle class
.The middle class is a class of people who, by their standard of living and social status, is between the poor classes and the upper classes. The middle class works, consumes (has a purchasing power), pay their taxes, while enjoying the joys of life.
In its report, the AfDB (African Development Bank) the class into three categories
1 / Vacillating middle class ” floating class ” : they can spend between $ 2-4 per day. This class is extremely fragile because it can fall into poverty.
2 / Intermediate middle class ” lower middle-class ” : they can spend 4 to $ 10 per day.
3 / Upper middle class ” upper middle-class ” : unlike the others, they can spend 10 to $ 20 per day.
In the ranking of the AfDB, Tunisia (89.5%) is the first African economy within the meaning of the middle class percent, followed by Morocco (84.5%), Egypt (79.7%), Algeria (76.6%) and Gabon (75.4%).
Over 34% of the population belong to the middle class and its figures do not stop to enlarge. Why ?
The African middle class profile
The middle class in image (see the solid below)
- Urban more : indeed, there is an urban growth becoming stronger. The middle classes are leaving their rural villages or to settle in the city or on the coast.
Luc Rigouzo quote:
In 1950, there was no city of over 1 million inhabitants; the sub-continent today has 38, 5 of which exceed 5 million. “
80% of the investment is in the building and construction, cement factories popping up everywhere “
Moreover, the great city of Lagos in Nigeria could rise from the ashes thanks to the middle class and entrepreneurial spirit of its inhabitants.
- A smaller family: the middle classes have between 1-3 children. It is observed that the birth rate decreases significantly in cities and educated circles.
- A more educated family: .aware of world issues, African families from the middle class focuses on education. They shall attend to their children’s needs. Do not hesitate to send them to private schools or abroad so that they can receive the best education possible. In the hope that these children build the Africa of tomorrow. Healthier, more stable and less poor, a continent rich or everybody lives in peace.
- Various trades: this class is composed of merchants, officials, bankers, accountants, journalists, business leaders, farmers multiplying investments, lawyers, teachers, artisans, private sector employees and the public sector, technicians, managers, etc.
- The expenses of the African middle class: it spends between $ 2 for the poorest to 20 or $ 30 per day for the wealthy middle class.
- The costs of similar expenses to those of Westerners.. There is the cost of housing increased + + water bills, electricity and telephone + transportation + education + health + Leisure Savings. According to a study by Mckinsey, consumer spending should increase from 86o billion to 1400 billion in 2020.
- Consumption mode is close to the West. The middle classes live in apartments or houses fully equipped. It includes TV (for some flat screens), refrigerator, computer, mobile. They also have a motor vehicle. Moreover, this middle class seeks to consume constantly.
- Open to the world: African middle class have internet at home and surf regularly. For example, the Arab revolution was carried through the internet and social networks such as Facebook and others. They are on Facebook, Twitter. But the social network a hit in Africa and well beyond Facebook is the network Mxit. Mxit The network was created in 2003 for the mobile and has over 10 million users in South Africa.
The mobile phone has become indispensable. For example, more than 500 million mobile phones are in use in Africa. It enables communication, access to banking services, administrative, educational, medical, social or go on other networks. Facebook is aware of this opportunity, developed a strategy to meet these consumers on their mobile phones.
- Electricity : African middle class has some electricity and broadband internet. In case of power failure, they have either a generator or a generator.
- The health: the middle class has health insurance or earn enough to access care.
- The water: Africans in the middle class are doing. Some of the wells where they can draw water. Others can afford drinking water. But it is mainly a case by case basis.
- Hobbies: the lucky ones, can afford to travel abroad or Africa. They are family outings to the seaside for those who live near the coast. They love going to the movies, reading, dancing, barbecues, etc.
- A more ambitious African youth:Indeed, young African talents do not necessarily want to become civil servants, working for public companies. They are ambitious and want to become entrepreneurs. They are very interested in new technologies and do not hesitate to create inventions to help their people. A virtuous circle born of the transmission of knowledge and success of these new African talent. For example, there may be mentioned:
1 / Arthur Zang : he created the touch pad to medical use.
2 /Moctar Dembele & Gerard Niyondiko : they invented the Anti-Malaria Soap.
3 / Edgar Hardy ou Cyrille Bomba who have invented a sunlamp.
4 / Abdoulaye Toure : he invented a solar oven.
5 / Mubarak Muhammad Abdullahi: he created a helicopter.
6 / Sandrine Ngalula Mubenga : she invented a hybrid electric car.
7 / William Kamkwamba : he created 14 years a wind turbine that saves the whole village.
8 / Four Nigerian schoolgirls have devised an electricity generator fueled the factory rather than diesel.
They just are between 14 and 15 years.
9 / Brian Gitta: it create an application against malaria.
10 / Mohamed Lamine Camara: it creates a hydraulic pump.
The number of young African talent is too big. I’ll talk in detail in another article.
- Vision of the lives of African middle classes : the middle classes of consumption patterns that look like Westerners. But they do not think like them. African traditions are inked in the subconscious of these people. For example, they do not eat at the European. They prefer to eat traditional African dishes. The concept of family is super important. If you look Africans or African foreigners, they spend their time sending money to their families remain in Africa. It’s not an obligation. It is a duty that all African regularly performs to his family. They often have elastic families.
- The dream of the West fades : the middle class is educated and looks with pain are treated how their brothers, their sisters, their cousins in foreign countries. Many have lost the illusion of the West. They see some family members, acquire a +5, but after some discrimination, they do not have the chance to find work. So, some refuse to go abroad because the western labor market, increasingly wobbly. Then they all in their country. They realize the potential and wealth of their countries. They love their country, their families, friends and would not leave Africa for the world. Despite the difficulties, corruption, lack of infrastructure, they feel right at home.
New growth markets!
_ The consumer goods industry and retail has a future.
This middle class is hungry for novelty. They want to consume new products and are in favor of positive change in their countries. Africans want to afford designer clothes, telephones, refrigerators, washing machines, cars. All this in parallel with access to health care and housing.
_The sector of information and communication technologies (ICTs)
This is a growth market because it improve connectivity in Africa on telecommunications and information networks. The result is that the number of call centers are increasing.
“For example, in Morocco, a dozen call centers are opening every year. Even if customers eventually opt for Tunisia where Madagascar who are 20 and 50% cheaper than Morocco, an estimated 100 000 jobs can still be created by 2012. “
The implementation of the call center is necessary in African countries. For example, Morocco, Tunisia, Madagascar, Congo Brazzaville, Djibouti, Ghana, Nigeria, Senegal meet all requirements in terms of employment, graduates or the necessary telecoms infrastructure.
“Both partners focus on eight areas of ICT, with the potential to” transform African societies “: agriculture, adapting to climate change, education, financial services, healthcare, ICT in locally, the modernization of government, trade and regional integration. “
The telecom sector has a lot of opportunity. To fill a deficit in infrastructure, Africans flock to the telecom sector. The mobile phone can communicate, access to banking services, administrative, education (distance learning E-learning), medical, social or go on other networks. This trend is very visible in Africa, particularly in Nigeria and Kenya. The M’banking sector is a crucial sector because to overcome the lack of a banking system therefore payment by mobile phone explodes in Africa. Africans are looking for a more secure banking market to shop. This increased demand is the third source of market growth.
_ The renewable energy sector (solar / wind)
The African continent remains crippled by the lack of electricity. All African governments are fighting against this problem. They do not hesitate to bet on renewable energy (solar / wind) to overcome this difficulty. In addition, many African inventors imagine and create inventions using the sun to help their people.
_The industry sector is fundamental
Indeed, the manufacturing sector is strategic. The African industry has no real economic significance, because the continent is focused too much on the mining sector. Yet this sector would allow Africans to poverty reduction. It is a source of employment, innovation, and is reflected in other sectors of the economy.
(Eg Chinese with cars made in china made in Africa)
The science and technology sector.
There are more and more African youth that create a particular invention. But due to lack of funding or financial support, they can not go after their search. So we must invest in education.
Despite the difficulties,African middle class to continue his fight. Entrepreneurship, the support of African states, support for African banks will enable the African middle class to bring a new wind in Africa. What do you think ?