A Time Horizon Definition of the Middle Class in Africa

By Yannick Lefang

The Problem of The Middle Class

Everyone’s talking about the size of the Africa’s middle class. To get a reliable estimate of the size, we need to define the middle class in the context of Africa.

That’s actually a much more difficult question to answer than it seems.

While some experts or organizations define the middle class by income, others define it by lifestyle, others say it’s a state of mind. The debate on the middle class has attracted interest from multinational businesses, international organizations and researchers. However, no one has actually looked into what the main actors – the people – think about it, until now.

We have polled over 20,000 urban dwellers in Africa to find out what definition fits the continent and what is important to consider.

The Size of The Middle Class

In our recent survey of urban dwellers in Cameroon, Nigeria, Ghana, Kenya, Tanzania, South Africa and Ivory Coast, 37% believe they are part of the middle class. We didn’t define the middle class for our participants so the notion of middle class was left open to their interpretation. The lowest classification was recorded in South Africa where 21% believed themselves to be middle class and the highest in Ivory Coast where 54% classified themselves as middle class.

These findings demonstrate a big divergence between countries. The concept of middle class should be localized and contextualized as much as possible.

Defining The Middle Class

Back in 2011, the AFDB famously concluded that some 300 million Africans (30% of the continent’s population) were being middle class (using the benchmark of daily consumption between $2 and $20). There has been several estimates ranging from 300 million to 30 million since. Having a benchmark makes it easy to measure and compare between countries but what it means to be middle class in Africa doesn’t have the same meaning in Europe or America. Each continent presents specific social, historical and economic contexts. Therefore, a contextual definition of the middle class is required and it has implications for marketers and businesses.

Our research finds that time horizon and aspirations are among the key attributes of those who define themselves as middle class in Africa:

  • They think in terms of years, not months
  • They have a source or several sources of income (formal and informal)
  • They connect to the Internet at least once a week (on mobile but also desktops and laptops)
  • They like and own tech gadgets (smartphone, tablet, camera, etc.)
  • They want the best education for their kids (private school at home and university education abroad)
  • They invest and save for future (health care, saving & business ventures)

How To Handle The Middle Class

Marketers should focus on habits and aspirations instead of income when it comes to communicating to the middle class in Africa. Companies should focus on innovating from the bottom up instead of top down especially African companies.

Behaviors and habits are better proxies for income especially Localized, Contextual Income Surplus (LOCIS). Indeed, a LOCIS of $10 doesn’t have the same purchasing power in Nigeria as it does in Kenya.

When it comes to capturing the massive consumer market in Africa, marketers and companies should focus on delivering value to the consumers within the local context. It may not be appealing for big multinationals but it is the only way to win in Africa and avoid wasted investments. It is also an opportunity for local champions to emerge and capitalize on the rising African consumer market.

By Yannick Lefang, KASI Insight