Robust economic growth over the past 15 years has led to visible changes across Africa. Visitors to cities on the continent cannot help but notice the emerging African middle class. Defined as those earning between $2 and $20 a day in 2010, Africa’s middle class is expected to grow from 355 million (34 percent of Africa’s population) to 1.1 billion (42 percent of the population) in 2060. To be sure, about 60% of them – approximately 180 million people – remain barely out of the poor category. They constitute the ‘floating’ class, earning between $2 and$4 a day. They are in a vulnerable position, constantly at risk of dropping back into poverty in the event of any unexpected shocks, such as the loss of income and the death of the head of household.
Not only is Africa’s middle class crucial for economic growth, but they are essential for the growth of democracy and will play a key role in rebalancing the African economy. Consumer spending by the middle class has reached an estimated $680 billion in 2008 – or nearly a quarter of Africa’s GDP. By 2030 this figure will likely reach $2.2 trillion and Africa will comprise about 3 per cent of world-wide consumption.
Despite a reputation for thrift, middle-class households do allocate part of the household budget to leisure and entertainment. Our analysis shows that middle-class households are likely to spend more on private education and health, as well as on household assets such as televisions and refrigerators. In addition to being better off in material terms, the middle class are in general both more satisfied and more optimistic about the future than their poorer compatriots.