A rising middle class, urban Africa drives gains in productivity and consumption
A photo like this captures it all. Check out the photo project Middle Class in Africa.
Have you had a chance to look through the McKinsey Global Institute report, ‘Lions on the Move, the progress and potential of African Economies?’ This is a remarkable work that gives some impressive foundation to the African growth story we are happy to read about every day in our newspapers. Yesterday we highlighted three snapshots from this document and today we follow with three more. All reasons to be looking at Africa! See a copy of the report.
Africa is almost as urbanized as China and has as many cities of 1 million people as Europe.
As of 2010, already 40% of the African population was living in an urban environment. Visit a city like Lagos or Nairobi and we can see these numbers are growing faster than anywhere else in the world. In terms of the size of population Africa only follows China and India. Here again with 43% of the African population under the age of 14, the continent is scheduled to continue its rapid transformation.
Africa’s labor productivity grew for the first time in decades.
There is a marked change in labor productivity. In the period between 1980 and 2000 there was an actual decline, however, between 2000 and 2008 labor productivity accelerated by 2.7%. This is one of the key drivers in the 4.9% gain seen in GDP.
Africa’s consumption has grown by 275 billion since 2000 – similar to Brazil’s and more than in India.
The African middle class is here to stay. Private consumption growth between 2000 and 2008 exceeded that of Brazil or India. Otherwise two of the BRIC countries increasingly recognized as the ‘next hot market.’ The trend is clear. Africa’s middle class is driving the continent’s continued development and opens up an incredible space for introducing new products and services.
There is a lot to be done, but the trends are clear. The continent is urbanizing faster than ever. Productivity is rising and so is the power people have to spend. The middle class, already a force to be reckoned with, is driving increasing demand. Infrastructure remains a key priority, but governments continue to secure gains and increases in equity investments show a growing interest to secure long term gains. Africa is rising and the time is now.