Africa's Rising Middle Class

Africa’s rising middle
class
Business In Africa Pays - Ghana

MeetYour Niche
www.meetyourniche.com

Introduction
MeetYour Niche
www.meetyourniche.com
A connection and
consultancy platform
connecting companies to
insights, ideas and people
Working with key local
trusted advisors across
key regions in Latin
America, Sub Saharan
Africa, the Middle East and
SE Asia.

Insights on how to meet your niche,
trends, competitors and culture…
• NICHE – who are they types of people looking to buy in your selected region and what are their
characteristics
• TRENDS – what are the external factors affecting these people which might affect how you develop
your product or service - governmental, political, consumer etc
• COMPETITORS – who is already on the ground in your region of choice and what are they doing?
What will be your USP?
• CULTURE – it’s not so easy to drop a product or service into a new region without identifying
language differences, cultural nuances and be sensitive to local tastes

Africa’s rising middle
class
• What does middle class mean?
• European standards vs.African
• What issues/trends arising from a rising
middle class?

Facts versus Real Life
• 46% of Ghanaians are now classed as middle classed compared to the African average of 34%
• According to African Development Bank - 27% - $2-4 dollars – known as the ﬂoating class - fragile
always at risk of falling below poverty line
• The diaspora now transmits more money into Africa than foreign direct investment, aid to
Africa, and portfolio investment in stock market and bond markets.That supplemental income from
the diaspora is enabling that ﬂoating middle class to consume more.
• Many Africans are optimistic about their economic future; 84 percent say they will be better off in two
years.
• Internet use is far greater than anticipated—more than 50 percent of urban Africans say they have
accessed the Internet in the last four weeks, on par with reported usage in Brazil and China
• African consumers demand quality products and are brand conscious, belying the view that the
continent is a backwater where companies can sell second-rate merchandise.
• African consumers want the latest fashions and a modern shopping experience.

What trends are
arising?
• Urbanisation
• Expanding workforce
• The rise of the African consumer

Urbanisation
• In 1980, just 28 percent of Africans lived
in cities.Today, 40 percent of the
continent’s one billion people do—a
proportion roughly comparable to
China’s and larger than India’s.
• By 2030, that share is projected to rise to
50 percent, and Africa’s top 18 cities will
have a combined spending power of $1.3
trillion.

Young Population
• A youthful population is certainly fertile
ground for innovation, dynamism, and
creativity. Yet everything will depend on
generating enough jobs to satisfy the
aspirations of the rising generation.
• This calls for a single-minded focus on
improving education—and, in particular,
on the potentially massive effects of
technological change on employment.
Looking ahead, factors such as the
internet revolution, the rise of smart
machines, and the increasing high-tech
component of products will have
dramatic implications for jobs and the
way we work. Yet governments are not
thinking about this in a sufﬁciently
strategic or proactive way.
Christine Lagarde – The Dimbleby Lecture
• Africa at the opposite end of the spectrum
compared to ageing countries like Europe, UK
and Japan – a youthful continent
• The continent has more than 500 million
people of working age. By 2040, their number
is projected to exceed 1.1 billion—more than
in China or India—lifting GDP growth.
• Add in the rise of entrepreneurship and the
need for the youth to become job creators
• Africa’s middle class is strongest in countries
that have a robust and growing private sector
as many middle class individuals tend to be
local entrepreneurs. The establishment of
stable, secure, well-paid jobs, and higher levels
of tertiary education further drives middle
class growth

The rising consumer
• 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.
• By 2014, the number of such households could reach
106 million.Africa already has more middle-class
households (deﬁned as those with incomes of
$20,000 or above) than India.

What are the opportunities
- Luxury Goods food and drink
After Asia and part of Europe and US, countries in
Sub Saharan Africa as consuming congac
-Variety of consumer durables - altered and
tweaked to the African tastes - perhaps shame a
few examples of how to do this properly
http://blog.cognac-expert.com/african-cognac-market-
nigeria-south-africa/
http://www.afdb.org/ﬁleadmin/uploads/afdb/Documents/
Publications/The%20Middle%20of%20the
%20Pyramid_The%20Middle%20of%20the%20Pyramid.pdf

• Quality retail infrastructure - frustrating
for goods in but also opportunity for
property devs the Poor retail
infrastructure: a challenge and
opportunity
• One of the problems that international
brands may face is ﬁnding suitable retail
space. In most cases, shopping malls and
supermarkets only exist in large urban
areas in Africa.“This seriously hampers
efforts of international consumer goods
companies to communicate and distribute
to a wide audience,” explained Hodgson.
“However, construction companies and
property developers should not overlook
the vast opportunities presented by this
infrastructure shortage.”

•Financial offerings - mortgages, loans for
business or personal and credit cards - as
well as proper ﬁnancial management
education to increase opportunity for
savings
•Education and jobs - Africa has a youthful
population of over a billion people.This
population is expected to double by 2050,
and is urbanising rapidly with an expanding
working age population
•There is an opportunity for private schools
to go above and beyond state school
offerings, a push for more vocational and
academic centers to cultivate create
•Personal development and soft skills
- technical competence, quantitative,
numeracy skills, career development in
institutions
- Application form theory into practice
isn’t there

Conclusion - Key Takeaways
1. Develop local and relevant high quality product
2. Identify the right price point
3. Focus where it matters for your business
4. Build a strong brand
5. Be speciﬁc with your target market

Local and relevant products and
services
• http://trendwatching.com/africa/
trends/hyperactivebrands/
trends/5trends2014/
trends/seedfun/

Identify the right price
point

Focus where it matters
for your business
Cities offer the best opportunity: urban Africa is forecast to contribute nearly 40 percent of GDP growth. But companies may be
wise to bypass high-proﬁle megacities, such as Cairo, Johannesburg, and Lagos, for midtier cities, like Abidjan and Rabat, which are
more accessible, have less competition, and offer better proﬁt margins http://www.mckinsey.com/insights/economic_studies/
whats_driving_africas_growth

Be speciﬁc with your
target market

Africa's Rising Middle Class

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