Economic growth is essential in Africa to alleviate poverty, build livelihoods, and improve quality of life. Over the past 20 years, despite the successive global food and financial crises, Africa has been growing at an unprecedented rate. The proportion of people living in poverty (below the threshold of USD 1.24 per day) has,in turn,fallen from over 50 percent in 1981 to less than 45 percent in 2012.
Data from household surveys also show some improvements in living standards. Though it will take decades of growth to make major inroads into Africa’s poverty, there is now a growing optimism about Africa’s potential.
At the same time, the dramatic change in the economic landscape has served as both a cause and a consequence of the emergence of a sizeable middle class. Defined as those earning between USD 2 to USD 20 per day, Africa’s middle class has grown to some 350 million people (34 percent of Africa’s population), up from 126 million in 1980 (27 percent of the population).
This represents a growth rate of 3.1 percent in the middle class population from 1980 to 2010, compared with a growth rate of 2.6 percent in the continent’s overall population over the same period. The middle class is projected to continue to grow and reach 1.1 billion (42 percent of the population) by 2060.
The more affluent lifestyle associated with the middle class has contributed to increased domestic consumption in many African countries. Sales of refrigerators, television sets, mobile phones, motors, and automobiles have surged in virtually every country in recent years. Consumer spending in Africa, primarily by the middle class, has reached an estimated USD 1.3 trillion in 2010 (60 percent of Africa’s GDP) and is projected to double by 2030. As such, the middle class is helping to foster private sector growth in
Africa as they offer a key source of effective demand for goods and services supplied by private sector entities. The middle class is also helping to improve accountability in public services through more vocal demands for better services.The middle class is better educated, better informed, and has greater awareness of human rights. It is the main source of the leadership and activism that create
and operate many of the nongovernmental organizations that push for greater accountability and better governance in public affairs, a position that augurs well for creating a suitable environment for growth and development.